Imagine a World Where Every Leader Was a Variation of Donald Trump

Donald Trump likes to pretend he's shaking everything up. In fact he's tearing everything down and what he can't tear down his instinct is to bog it down. You could say that he's the first poster boy for the Age of Entropy.

Yesterday I reviewed an article by political scientist and historian R.L. Schweller published in the June, 2014 volume of Foreign Affairs.

International politics is transforming from a system anchored in predictable, and relatively constant, principles to a system that is, if not inherently unknowable, far more erratic, unsettled, and devoid of behavioral regularities. In terms of geopolitics, we have moved from an age of order to an age of entropy.

...How did we get here? The shift began in the twentieth century, with the advent of nuclear weapons and the spread of economic globalization, which together have made war among the great powers unthinkable. ...The absence of cataclysmic wars among great powers has obviously been a great boon. But it has also come at a real cost.

In their absence [wars of  major power ascension], we no longer have a force of “creative destruction” capable of resetting the world. And just as seas become foul without the blowing of the winds, prolonged peace allows inertia and decay to set in.

Too much peace. Too little war. Mutually assured destruction. Neoliberalism. Stagnation. Failure of the world order. Chaos. In this Age of Entropy, Schweller thinks Trump is all America needs. Many would disagree.

Merkel, Macron, Trudeau and Abe are trying to bolster the international order but they've been virtually powerless to arrest the decline of liberal democracy and the rise of authoritarianism - Turkey, Hungary, Poland, Austria and even America. It seems chaos is indeed overtaking the world order. Authoritarianism has not only taken hold in these countries, it is a rising force in most others - Germany, France, the Netherlands, Britain and, yes, even our own Canada.

The longer leaders like Trudeau obsessively cling to globalism, the greater the appeal of authoritarian voices. People lose faith in their central governments as being under the sway of corporate interests and not in service to the public interest. If that was a crime you could convict every prime minister going back all the way to and including Mulroney. Democracy stagnated with the adoption of the neoliberal model and now democracy has succumbed to "inertia and decay."

As long as Trudeau's focus is on expanding trade and perpetual, exponential growth in the GDP he cannot focus on what ails us. He needs to be putting all his efforts into restoration of progressive democracy and there's an enormous amount of work that needs to be done in a shrinking window of opportunity. We have seen how other countries have succumbed or are at the cusp of illiberal democracy and worse. Doug Ford's victory yesterday is a wake up call. The election of Stephen Harper was a wake up call. Yet we sail into this becalmed, stagnant and foul sea and pretend nothing is wrong.

Liberal Democracy Cannot Survive Undefended.

Since the advent of the neoliberal era, the reign of Thatcher, Reagan and Mulroney, liberal democracy has been left to its own devices. The warning sign, the red flag, was the extinction of any meaningful vestige of progressivism from the body politic.

The last defender of liberal democracy we knew in Canada was Pierre Trudeau who bequeathed to us the Charter of Rights and Freedoms that, coupled with a courageous Supreme Court, thwarted the worst undemocratic instincts of subsequent prime ministers notably Stephen Harper and even Justin Trudeau.

The decline of neoliberalism was marked by the evolution of a corporate media cartel, a wholesale shift in the balance between labour and capital, and the development of the corporate state whose leaders preferred to operate in the boardrooms rather than the livingrooms of the nation.

Harper may have dragged Canada's political centre far to the right but both the Liberals and the New Democrats followed complacently in his wake. The Liberals became 'conservative-lite' while the New Dems positioned themselves as 'latter-day liberals.' What Harper had wrought they chose not to undo. In the process the Liberal Party of Ignatieff and Justin Trudeau became untethered from the party of Laurier, St. Laurent, Pearson and Pierre Trudeau. The New Democrats of Layton and Mulcair strayed from the party of Douglas, Lewis and Broadbent. In so doing all three parties pulled the rug out from under liberal democracy.

Across the political spectrum, liberal democracy flourishes in a smallish band located at the centre, neither hard right nor hard left. Picture in your mind a circle. At the very top you have totalitarianism. At the very bottom you have liberal democracy. As you move from the bottom, whether to the right or left, liberal democracy is gradually displaced by authoritarianism of the sort we're seeing in today's emerging nationalist/populist movements. Today we're heading mainly to the right, a path that sees democracy steadily displaced by plutocracy and then oligarchy. Beyond that, well, we'll just have to wait and see.

Andrew Sullivan recently wrote of this movement in Europe and the United States. The article was titled, "Is the World Done with Liberal Democracy?" He makes the case that it is.

At the risk of inviting howls of scorn and derision, I mention today's column in The Globe by John Ibbitson, "Ontario has lost its political centre."

The political centre is collapsing in Ontario, polarizing between social democrats and populist conservatives. We thought it couldn’t happen here. It’s happening here. And it poses a grave threat to the Liberal Party, both provincially and federally.

No party has plans to balance the provincial budget, align new spending with available resources, seek practical, incremental change. For both parties, the centre is the enemy. 

Such a polarization between well-to-the-left and populist right challenges the electoral base of the federal Liberals. While Prime Minister Justin Trudeau may be able to work with an NDP government, the PC’s plans to eliminate the carbon tax flies in the face of a core federal commitment to fight climate change.

Maybe a year and a half of Doug Ford would make Mr. Trudeau look good to Ontario voters. Or maybe things would become so toxic that polarization infects federal politics as well. 

Is the social democratic/populist conservative schism in Ontario permanent? That’s impossible to say. Had the PCs chosen a more conventional conservative as leader, had Ms. Wynne stepped aside when there was still a chance for the Liberals to renew the party, we might not be talking about schisms.

It seems odd to read Ibbitson lamenting developments that he and his kind have done so much to nurture and empower.

Here’s the big question: Would a Ford government enable the haters, even though he espouses no such hatred himself? Would the alt-right interpret a Premier Ford as carte blanche to demand an end to immigration, to target visible minorities, to proclaim that Ontario is Christian and white?

We’ll find out the answer if Mr. Ford wins. Ms. Horwath is determined to stop him. All we know for sure is that, at least in Ontario, at least for now, the centre no longer holds.

Ibbitson is beginning to sound much like the NYT's David Brooks' day-late laments about Donald Trump soiling of the Republican Party. A pox on them both.

Yet more disturbing is the notion of Justin Trudeau as the essential gatekeeper of liberal democracy in Canada. There's a huge difference between setting out to destroy liberal democracy and doing anything meaningful to defend it. Trudeau is no Stephen Harper but that doesn't mean that liberal democracy is safe in his hands.

My father planted in his young son's mind the reality that we didn't have a right or freedom that hadn't been paid for, often more than once, in blood. Over the years I came to understand that every right and freedom we hold has a greater value to those who might deprive us of it than we ever perceive it to be worth. Here we are.

Now That You Mention It...

Earlier this month the European Court of Justice issued a ruling that ISDS or Investor-State Dispute provisions in a trade deal between the Netherlands and Slovakia were contrary to European law. It seems that the ECJ found the secret court system invalid. The ruling is expected to call into question other free trade pacts with Europe, possibly including CETA, Canada's trade pact with the E.U.

The EU court decision hasn't created much of a stir in Canada although it's unclear why.

The only party that seems to have addressed it is the Green Party.

“This decision could call into question the legality of ISDS clauses in other EU trade deals, including the EU-Canada Comprehensive Economic and Trade Agreement (CETA),” said Green Party international trade critic Paul Manly. “In CETA, the Investment Court System is similarly structured to allow corporations to sue governments if legislation interferes with a corporation’s ability to maximize profits. The ECJ will soon rule on whether the Investment Court System is in fact consistent with EU laws. 

“The Green Party has long argued against trade dispute settlement mechanisms that allow foreign corporations to override domestic laws designed to protect the environment and community well-being. They are inherently anti-democratic and should be removed from all trade agreements and ISDS measures to which Canada has committed. That means NAFTA’s chapter 11 and the ISDS mechanism in the revised Trans-Pacific Partnership (TPP) must be scrapped as well. Canadian sovereignty is at stake,” concluded Mr. Manly.

What a radical idea that it may offend a nation's laws for its government to bind itself to legal proceedings in secret courts that may impact the citizenry by infringing on labour, environmental or other protections. Hmm, I wonder why we didn't think of that? I wonder why our political caste thought it okay to surrender these essential incidents of national sovereignty without our knowledge or consent?

A Primer for a Prime Minister

It's almost impossible to discern how much our prime minister really understands about globalism and the neoliberal order. He claims he gets it but that's far from clear. The prime ministerial confusion was manifest in his interview today in The Guardian.

It was with some relief that I came upon a helpful treatise on neoliberalism by Sandra Waddock in today's Christian Science Monitor that explains not only how it has failed us but how we might get out of this disastrous rut. Waddock, the chair in corporate responsibility at Boston College contends the way out begins with a new narrative. Hint: sacrificing national sovereignty to a parallel corporate power structure simply in pursuit of endless growth and unfocused wealth creation is not on.

Memes are, I recently argued, an overlooked and vitally important aspect of system change. Recognizable memes form the basis of today's dominant economic narrative: free markets, free trade and globalization, private property, competition, individual but not shared responsibility, and maximization of company and shareholder wealth.

The success of these memes speaks to why business students so readily identify the purpose of the business as maximizing shareholder wealth and with the language of free markets and trade. They are simple, identifiable and based on laudable values like freedom and individual responsibility, after all: things that Americans in particular, with their individualistic orientation, can readily identify with.

Their power to convey the underlying economic "story" illustrates why change that seems to astute observers to be necessary – change toward more sustainability, dealing with climate change and fostering greater equity – is so difficult. Neoliberalism's pursuit of endless growth, efficiency and free trade have led to setbacks in curbing climate change, enhancing sustainability and reducing inequality, all of which are potentially existential crises for humanity.

...What is needed, as happened with the creation of neoliberalism's core narrative, is that a new set of memes framing a new economic and societal narrative needs to be established. An emerging group called Leading for Wellbeing and composed of global organizations, universities and newspapers is attempting to do just this, built on the notion that the world's major institutions and businesses should "operate in service of well-being and dignity for all."

Tomorrow's narrative needs to be framed very differently from today's. It needs to recognize that economies are part of societies and nature but not the only important thing. A new narrative should frame the purpose of business very differently, taking different stakeholders and the natural environment into account. It could also provide a more reasonable and effective basis for resolving the key crises of our time, such as the warming planet and the growing gap between rich and poor.

Dignity and well-being can be enhanced, for instance, by emphasizing job creation and stability, fair wages and fair markets, rather than financial wealth, efficiency and growth. Measures like the Genuine Progress Indicator would incorporate well-being and individual dignity into the measure of an economy, as opposed to merely its activity, making it a great substitute for GDP or GNP.

If we hope to overcome this tide of populism and nationalism sweeping the West, a new, more powerful narrative is desperately needed – a new story that proves more compelling than the one that brought Trump and populists in Europe to power.

For those despairing whether there would ever be a way out of this neoliberal morass, Waddock's essay is a shot in the arm. Just to be able to imagine a society not enslaved to an obsession with wealth, efficiency and growth regardless of the devastation that unbalanced pursuit has created is really quite wonderful.

What she discusses in many ways echoes the basic precepts of early 20th century progressivism. Maybe that's where our future lies.

Monbiot Tackles Neoliberalism's Death Grip on the West

Neoliberalism has been the default operating system of western governments, Canada included, since it was ushered in during the Thatcher/Reagan/Mulroney era.

Justin Trudeau is a neoliberal as were his predecessors over the last three decades.  Canada remains in the clutches of neoliberalism and no one, no leader, no party is putting forward an alternative vision.

We see the muddy footprints of neoliberalism in the latest news about how most of the new jobs in Canada are low wage, real precariat stuff and how huge our monthly trade deficits have become. We make increasingly less of the stuff we want to buy and foreign demand for the stuff we do make isn't great enough to even the books. No wonder Slick is so desperate to build bitumen pipelines to the coast. Silly bugger.

In today's Guardian, George Monbiot argues that neoliberalism is what has put America's democracy in such dire peril.

The events that led to Donald Trump’s election started in England in 1975. At a meeting a few months after Margaret Thatcher became leader of the Conservative party, one of her colleagues, or so the story goes, was explaining what he saw as the core beliefs of conservatism. She snapped open her handbag, pulled out a dog-eared book, and slammed it on the table. “This is what we believe,” she said. A political revolution that would sweep the world had begun.

The book was The Constitution of Liberty by Frederick Hayek. Its publication, in 1960, marked the transition from an honest, if extreme, philosophy to an outright racket. The philosophy was called neoliberalism. It saw competition as the defining characteristic of human relations. The market would discover a natural hierarchy of winners and losers, creating a more efficient system than could ever be devised through planning or by design. Anything that impeded this process, such as significant tax, regulation, trade union activity or state provision, was counter-productive. Unrestricted entrepreneurs would create the wealth that would trickle down to everyone.

[Hayek] begins the book by advancing the narrowest possible conception of liberty: an absence of coercion. He rejects such notions as political freedom, universal rights, human equality and the distribution of wealth, all of which, by restricting the behaviour of the wealthy and powerful, intrude on the absolute freedom from coercion he demands.

Democracy, by contrast, “is not an ultimate or absolute value”. In fact, liberty depends on preventing the majority from exercising choice over the direction that politics and society might take.

...Thatcherism and Reaganism were not ideologies in their own right: they were just two faces of neoliberalism. Their massive tax cuts for the rich, crushing of trade unions, reduction in public housing, deregulation, privatisation, outsourcing and competition in public services were all proposed by Hayek and his disciples. But the real triumph of this network was not its capture of the right, but its colonisation of parties that once stood for everything Hayek detested.

Bill Clinton and Tony Blair did not possess a narrative of their own. Rather than develop a new political story, they thought it was sufficient to triangulate. In other words, they extracted a few elements of what their parties had once believed, mixed them with elements of what their opponents believed, and developed from this unlikely combination a “third way”.

...As I warned in April, the result is first disempowerment then disenfranchisement. If the dominant ideology stops governments from changing social outcomes, they can no longer respond to the needs of the electorate. Politics becomes irrelevant to people’s lives; debate is reduced to the jabber of a remote elite. The disenfranchised turn instead to a virulent anti-politics in which facts and arguments are replaced by slogans, symbols and sensation. The man who sank Hillary Clinton’s bid for the presidency was not Donald Trump. It was her husband.

The paradoxical result is that the backlash against neoliberalism’s crushing of political choice has elevated just the kind of man that Hayek worshipped. Trump, who has no coherent politics, is not a classic neoliberal. But he is the perfect representation of Hayek’s “independent”; the beneficiary of inherited wealth, unconstrained by common morality, whose gross predilections strike a new path that others may follow. The neoliberal thinktankers are now swarming round this hollow man, this empty vessel waiting to be filled by those who know what they want. The likely result is the demolition of our remaining decencies, beginning with the agreement to limit global warming.

The Liberal Order's Obituary

Is the liberalism we have known all our lives a thing of the past? Have we entered a post-liberal era? John Gray, writing in The New Statesman, suggests as much but also examines what we need to do about it.


Accepting that this is a post-liberal moment does not imply that we should give up on values of freedom and toleration. Quite the contrary: the task at hand is securing the survival of a liberal way of life. But the greatest obstacle to that end, larger even than the hostility of avowed enemies of liberalism, is a liberal ideology that sees state power as the chief threat to freedom. Liberal societies have a future only if the Hobbesian protective role of the state is firmly reasserted. Balancing the claims of liberty against those of security will never be easy. There are many conflicting freedoms, among which political choices must be made. Without security, however, freedom itself is soon lost.

Protecting liberty is not just a matter of curbing government, however. Rolling back the state in the economy and society can have the effect of leaving people less free – a fact that was recognised by liberal thinkers of an earlier generation. Maynard Keynes understood that free trade allowed consumers a wide range of choices. He also understood that freedom of choice is devalued when livelihoods face being rapidly destroyed on a large scale, and partly for that reason he refused to treat free trade as a sacrosanct dogma. He never imagined freedom could be reduced to a list of rights.

...Any suggestion that liberal values are not humanly universal will provoke spasms of righteous indignation. Liberals cannot help believing that all human beings secretly yearn to become as they imagine themselves to be. But this is faith, not fact. The belief that liberal values are universally revered is not founded in empirical observation. They are far from secure even in parts of continental Europe where they were seen as unshakeable only a few years ago. In much of the world they are barely recognised.

...Modern liberalism is a late growth from Jewish and Christian monotheism. It is from these religious traditions – more than anything in Greek philosophy – that liberal values of toleration and freedom have sprung. If these values were held to be universal, it was because they were believed to be ordained by God. Most liberals nowadays are secular in outlook, yet they continue to believe that their values are humanly universal.

Gray offers what should be a word of caution to our current Liberal government.

,,,A post-liberal society is one in which freedom and toleration are protected under the shelter of a strong state. In economic terms, this entails discarding the notion that the primary purpose of government is to advance globalisation. In future, governments will succeed or fail by how well they can deliver prosperity while managing the social disruption that globalisation produces. Obviously it will be a delicate balancing act. There is a risk that deglobalisation will spiral out of control. New technologies will disrupt settled patterns of working and living whatever governments may do. Popular demands cannot be met in full, but parties that do not curb the market in the interests of social cohesion are consigning themselves to the memory hole. The type of globalisation that has developed over the past decades is not politically sustainable.

...Adamant certainty mixed with self-admiring angst has long defined the liberal mind and does so now. Yet beneath this, a different mood can be detected. All that really remains of liberalism is fear of the future. Faced with the world they thought they knew fading into air, many liberals may be tempted to retreat into the imaginary worlds envisioned by left-leaning non-governmental organisations, or conjured up in academic seminars. This amounts to giving up the political struggle, and it may be that, despite themselves, those who embodied the ruling liberalism are coming to realise that their day is done.

Just When the Left Has Fallen Silent

Across North America, people need a strong voice from the Left more than they have at any time in the last half century.   America's society is crumbling and Canada is inexorably drawn along in its wake.

In the United States we have witnessed the ascendancy of an imperial presidency, outside the law, above it, supremely extra-constitutional.   They have literally rolled back Magna Carta.  Presidents, Republican and Democrat, commit heinous crimes with impunity, ignore habeas corpus, imprison people - even their own citizens - indefinitely and without charge, spy on all even without cause, monitor and track and even order execution,  without charge or trial.

We may like the current guy, he may say to us things we want to hear, we may need to think of him as one of us but he's not, not at all.

Liberals and Conservatives today loosely resemble the dynamic between Democrats and Republicans. They have their distinctions but they're mainly symbolic and of no real moment to the electorate.   They all support the same corporatist ideology.

Every summer, Jimbo Flaherty gets together with Canada's titans of commerce for a social at which they get to tell him what's on their collective mind.   One of the points they keep making is that he has to get Canadian wages in line with American pay levels which, in case you haven't noticed, have been going steadily downhill.   And the Harper government, in its relentless attack on labour, is plainly doing their bidding.

America's economy was more heavily manufacturing-oriented than Canada's and so the loss of its industrial base to globalization outsourcing has been more devastating on American prosperity.   Even prominent economists are finally coming to admit that globalization was a ruse to advantage capital at the expense of an entire nation.

A ruse, a lie?  Of course it was.   Remember the promise of a new economy - a knowledge-based economy which would far more than make up for the lost industrial base.   They weren't taking, they were giving.   Only what they actually gave was an I.O.U., a worthless scrap of paper, a hollow promise.  The perpetrators of this grand fraud have never been called to account.  Reagan and Thatcher have slipped, unpunished, to their graves.  Mulroney, already disgraced, is laying low.

In a corporatist world, the well-being of corporate interests becomes paramount to the welfare of the people.   For corporate prosperity must work to the benefit of all, right?   No, not for sheeple.  The avaricious do not part with their wealth to those who don't demand it.  Why should they when it is so much easier to capture the political classes to do their bidding?   As J. Stiglitz shows in The Price of Inequality, most inequality is neither market nor merit-based but the product of political intervention to benefit the advantaged at the expense of everyone else.   Our political classes, through deferrals and grants, subsidies and unearned privileges, transmit the wealth of inequality from the many to the few.

In the aftermath of the 2008 meltdown, the myth of recovery has been catalogued by Paul Krugman and others.  They have shown that, what recovery there has been, has gone almost entirely to the richest of the rich, the very charlatans that caused the 2008 recession.  That's why it has been a jobless recovery in which the precariat remain as vulnerable as ever, perhaps even worse off.

Slowly the myths of globalization are being picked apart, shown for the utter fraud that has been perpetrated across North America and most of Europe for the past two decades.   This has been powerfully canvassed by Paul Craig Roberts in The Failure of Laissez-Faire Capitalism.  Using data from the U.S. Bureau of Labor Statistics and other sources, Roberts explains how blue and white collar Americans have been dispossessed economically, socially and politically.

Americans  have \been dispossessed politically, because (1) they have lost representative government,  (2) they have lost the accountability of government to law, and (3) they have lost their civil liberties that protected them from a police state and the use of law as a weapon by government.

Americans have been dispossessed economically, because (1) millions of middle class jobs have been moved offshore to China, India, and other low-wage locations  (2) the burden of massive losses in the financial sector has been placed on taxpayers and on the US dollar's credibility As the world reserve currency, and (3) continued high immigration And work visas for foreigners further impair the ability of unemployed Americans to find a job.

Americans have been dispossessed socially, because (1) the ladders of upward mobility have been dismantled  (2) a university education is no longer a path to a middle class existence, (3) millions have lost their homes and careers, (4) median income has been falling for a number of years, and (5) the income and wealth distribution is so skewed toward the top that a small number of people control the wealth, the income that wealth produces, and the political power that money buys.

Roberts, a professor, former assistant treasury secretary and associate editor of the Wall Street Journal, laments that Richard Nixon was "the last American president to be held accountable to law. ...By failing to hold Bush And officials of his administration accountable for their unambiguous violations of law, the Obama administration has, in effect, accepted the constitutional coup that has elevated the president above the law.  The American president is now a Caesar."

Couple an imperial presidency with a corporatist high court and a bought and paid for Congress and you're left with a government in which all branches are in service to a group other than the people. This is not a government that would reverse the dispossession of  the public it is sworn to serve.

There is little reason, then, to believe that the American economy will recover in any form that is restorative of the middle class.  In Robert's assessment, America's middle class is finished and the nation will become. by 2020, a true Third World nation.  He focuses on the false promise that high-paid jobs in a knowledge economy would replace lost industrial jobs.

The new high-tech knowledge jobs are being outsourced abroad even faster than the old manufacturing jobs.  Only a few establishment economists are beginning to see the light.  ...former Federal Reserve vice-chairman Alan Blinder ...estimates that 42-56 million American service jobs are susceptible to offshore outsourcing.  Whether all these jobs leave, U.S. salaries will be forced down by the willingness of foreigners to do the work for less.

...Jobs offshoring, which began with call centers and back-office operations, is rapidly moving up the value chain.  In 2005, Business Week's Michael Mandel compared starting salaries in 20905 with those in 2001.  He found A 12.7% decline in computer science pay, a 12% decline in computer engineering pay, and a 10.2% decline in electrical engineering pay.

Roberts zeroes in on the shift to service jobs from 'tradable' services - jobs entailing the production of commodities for trade.

A country whose work force is concentrated in domestic nontradable services has no need for engineers and scientists and no need for universities.  

No one seems to understand that research, development, design and innovation take place in countries where things are made.  The loss of manufacturing means ultimately the loss of engineering and science   The newest plants embody the latest technology.  If these plants are abroad, that is where the cutting edge resides.
As for the myth of globalization floating all boats, Roberts adds, "Economists need to inject some realism into their dogmas.  The U.S. economy did not develop on the basis of free trade.  the costs that free traders attribute to trade protection are real, the costs did not prevent America's economic rise.  Indeed, much historical research concludes that trade protection was the reason for America's rise as an industrial and manufacturing power.

As for solutions, Roberts falls well short of calling for revolt.   He does, however, advocate an abandonment of laissez-faire capitalism and its replacement by 'full Earth' or steady state economics.  To Roberts, our ability to make this transition is critical and nothing less than democracy and sovereignty hang in the balance.

Globalism is anti-democratic.  Corporatism is anti-democratic.  The challenge we face is to get past both of them.  We cannot do that with corporatist politics, especially at the federal level.  That means replacing corporatist parties whether they be Conservative, Liberal or New Democrat.   There's a dangerous vacuum in our political spectrum and it is the Left.   Just when we need it most, the Left has fallen silent.

The Guardian's Ominous Warning of Global Capitalism Collapse

It isn't often you find apocalyptic tomes in business publications warning of the imminent demise of global capitalism but that seems to be changing.   Ten days ago the Wall Street Journal, in an interview with noted economist Nouriel Roubini tossed around the idea that perhaps Karl Marx was right, that capitalism inevitably self-destructs.

Today it's The Guardian warning that capitalism is facing its own "Scrooge" moment:

For the past two centuries and more, life in Britain has been governed by a simple concept: tomorrow will be better than today. Black August has given us a glimpse of a dystopia, one in which the financial markets buckle and the cities burn. Like Scrooge, we have been shown what might be to come unless we change our ways.

...It was chastening to see consumerism laid bare. We have seen the future and we know it sucks. All of which is cause for cautious optimism – provided the right lessons are drawn.
Lesson number one is that the financial and social causes are linked. Lesson number two is that what links the City banker and the looter is the lack of restraint, the absence of boundaries to bad behaviour. Lesson number three is that we ignore this at our peril.

 The system is an utter mess, particularly since almost every country in the world is now seeking to manipulate its currency downwards in order to make exports cheaper and imports dearer. This is clearly not possible. Sir Mervyn King noted last week that the solution to the crisis involved China and Germany reflating their economies so that debtor nations like the US and Britain could export more. Progress on that front has been painfully slow, and will remain so while the global currency system remains so dysfunctional. The solution is either a fully floating system under which countries stop manipulating their currencies or an attempt to recreate a new fixed exchange rate system using a basket of world currencies as its anchor.

The break-up of the Bretton Woods system paved the way for the liberalisation of financial markets. This began in the 1970s and picked up speed in the 1980s. Exchange controls were lifted and formal restrictions on credit abandoned. Policymakers were left with only one blunt instrument to control the availability of credit: interest rates.

For a while in the late 1980s, the easy availability of money provided the illusion of wealth but there was a shift from a debt-averse world where financial crises were virtually unknown to a debt-sodden world constantly teetering on the brink of banking armageddon.

Currency markets lost their anchor in 1971 when the US suspended dollar convertibility. Over the years, financial markets have lost their moral anchor, engaging not just in reckless but fraudulent behaviour. According to the US economist James Galbraith, increased complexity was the cover for blatant and widespread wrongdoing.

Looking back at the sub-prime mortgage scandal, in which millions of Americans were mis-sold home loans, Galbraith says there has been a complete breakdown in trust that is impairing the hopes of economic recovery.

"There was a private vocabulary, well-known in the industry, covering these loans and related financial products: liars' loans, Ninja loans (the borrowers had no income, no job or assets), neutron loans (loans that would explode, destroying the people but leaving the buildings intact), toxic waste (the residue of the securitisation process). I suggest that this tells you that those who sold these products knew or suspected that their line of work was not 100% honest. Think of the restaurant where the staff refers to the food as scum, sludge and sewage."

Finally, there has been a big change in the way that the spoils of economic success have been divvied up. Back when Nixon was berating the speculators attacking the dollar peg, there was an implicit social contract under which the individual was guaranteed a job and a decent wage that rose as the economy grew. The fruits of growth were shared with employers, and taxes were recycled into schools, health care and pensions. In return, individuals obeyed the law and encouraged their children to do the same. The assumption was that each generation would have a better life than the last.

This implicit social contract has broken down. Growth is less rapid than it was 40 years ago, and the gains have disproportionately gone to companies and the very rich. In the UK, the professional middle classes, particularly in the southeast, are doing fine, but below them in the income scale are people who have become more dependent on debt as their real incomes have stagnated. Next are the people on minimum wage jobs, which have to be topped up by tax credits so they can make ends meet. At the very bottom of the pile are those who are without work, many of them second and third generation unemployed.

...Together, the global imbalances, the manic-depressive behaviour of stock markets, the venality of the financial sector, the growing gulf between rich and poor, the high levels of unemployment, the naked consumerism and the riots are telling us something.
This is a system in deep trouble and it is waiting to blow.

Like Roubini, Stiglitz, Krugman and others, The Guardian piece lays bare the entirely self-destructive, predatory instincts of unregulated global corporatism.  It's akin to handing the delinquent teenage son the keys to Dad's liquor cabinet and his Corvette.   The outcome is preordained and it's awful.

Miscreants like Cheney, Bachmann, Perry and Harper are the High Priesthood of malignant corporatism that preys upon and ultimately destroys societies.   They don't openly seek the outcome, yet they certainly ensure it.  Decades of right wing politics in the U.S. (Republican and Democratic) have facilitated the ascension of the uber-rich and the massive transfer of wealth from the once vibrant middle classes to the richest of the rich.   Whenever they're criticized they scream "socialism" and raise images of Lubyanka.

We don't need to overthrow our political institutions but we do need to purge the temple of these crooked moneylenders.   We face many challenges this century, a number of them of a potential magnitude greater than anything our civilization has known.   To meet these threats it is essential that we have the strongest, most cohesive societies possible and you simply cannot achieve that without first harnessing corporatism to the service of the public and reversing the utterly cancerous spread of inequality.

As a former Liberal, one thing I found unbearable in the Bay Street Boys' boy, Ignatieff, was his refusal to acknowledge much less promise to reform Canada's own chasm between rich and poor.  Then again I didn't see much of anything recognizably Liberal in that character.   To the contrary, Ignatieff was determined to move the Liberals to the centre-right and the voting public rewarded him and his followers appropriately for that, sending the Liberals from Sussex Drive to Stornoway to Motel 6.

What chance is there to turn this around, to rescue our societies from the jaws of global corporatism?  Slim to none.   There are too many Harpers and Camerons in office.  In the United States there is a truly "bought and paid for" Congress and a timid, feckless man in the White House.   Fire up the Corvette and pass the bottle.


Footnote:   Just as all this unfolds Canada loses Jack Layton to cancer.   His absence will be deeply felt, particularly as we confront the struggles that now befall us.