Attention Earthlings: Please Proceed To The Emergency Exits In A Disorderly Fashion

I'm not sure if you've noticed but the world is going to hell in a handbasket. We've already had Iceland go tits up, followed by its government after a few weeks of rioting and protests. And it looks like they won't be the last. Next on the list is jolly old Britain - affectionately called "Reykjavik-on-Thames":

"The question in Britain is no longer when the economy will enter a recession, but when it will enter a depression, with many bracing for a slump that could rival the 1930s in severity. GDP fell 1.5 percent in the fourth quarter of 2008, and the European Union estimates it will contract another 2.8 percent in 2009. Unemployment is projected to balloon to more than 8 percent by year's end, and an estimated 23 percent of adult Britons currently consider their debt level 'unmanageable.'"

Also up for nomination as "Country Most Likely To Go Up In Flames" are Latvia and Greece - both scenes of recent rioting - the Ukraine (which is having gas pains, thanks to the Russians), and Nicaragua - have they ever really recovered from the US' illegal war against the Sandanistas. No wonder current president - and former Sandanista leader - Daniel Ortega has said that the financial meltdown is a sign that "God is punishing the United States". Not an unreasonable suggestion but I think it more accurate to say that greedy, asshole capitalists are the real source of America's (and our) problems.
The US Army would like to add to that list Mexico, which has been engaged in an increasingly violent and destabilizing war against "narco-gangsters." The Mexicans ought to hope that they don't get the same medicine as the Pakistanis, who are also on the "nearing collapse" list of the US Army. Their prescription involves repeated military incursions by the US military and CIA, firing missiles at local leaders who the US doesn't like.
Even Israel, which the Christian Fundamentalists would have you believe is watched over by God himself as his plan for the Second Coming unfolds, has just taken a kicking at the World Economic Forum in Davos. In case you don't know, the WEF is a big capitalist jaw wag where they politely discuss how they will carve up the planet. Well, this year the Prime Minister of Turkey, Israel's closest ally, told Israeli president Shimon Peres "When it comes to killing, you know well how to kill” before storming out of a panel discussion of the Gaza crisis.
But the greatest pleasure must be the massive general strike that swept over France today. It was something of a love letter to that country's president, Nikolas Sarkozy. As I understand it the first sentence went as follows: "Dear Sarko: Get your fucking act together and do something about the collapse of capitalism. Asshole." Of course, it sounds much more romantic in French. Anyway, 70% of the population supported the general strike and something like 300,000 demonstrated in Paris so that they could blow Sarkozy a kiss live and in person.
Meanwhile, here in exciting Canada, our government managed the biggest horseshit recession budget ever - look for the neo-liberal measures to have zero impact on the recession. Not to worry about any more crises or opposition coalitions - head Opposition Knob, Michael "I love torture as long as it doesn't hurt too much" Ignatieff, has told Harper he can do what he wants as long as he sends him a memo every so often telling him what he is doing. For a guy who thinks torture's OK as a policy tool, he sure is a wimp. Well, I guess that's what you get when the most defining feature of Canadian culture, besides hockey and constitutional crises, is just how darn polite we are. Seriously people, are we really gonna let France show us up while Harper can't work up a fart to save us from our imminent doom?

The Globe & Mail's Phoney Gaza "Exposé"

You couldn't be in any doubt that the Globe and Mail were supporters of Israel, certainly not after their plaudits for Canada's lonely vote in the UN Human Rights Council against condemning Israel's "grave violations" in Gaza. Of course they even managed to justify Israel's bombing of civilians and civilian buildings with the thoroughly discredited claim that Hamas uses fellow Palestinians as human shields (not noting the irony that the Israel Defense Forces regularly use human shields,including children - despite a ruling by their own supreme court. See photos.)

The Globe's coverage also managed to miss the story that the studiously neutral International

Committee of the Red Cross condemned Israel for letting children starve next to the bodies of their dead mothers after refusing to allow ambulances to reach the wounded. Nor could I find on their website any account of the internationally covered story of Israeli soldiers shooting children carrying a white flag as a family fled - under orders from the IDF.

The Globe did manage to uncover a much more significant and important "scandal" from the war in Gaza, however. Remember how the IDF bombed that school and killed 43 civilians, many of them children? Well, it didn't happen. That's right, as the Globe says the report "doesn't stand up to scrutiny". Sure, 43 civilians were killed, many of them children. But the bombs landed outside the property line of the school. It just so happened that the civilians, fleeing under orders of the IDF, were standing outside of the school's walls, probably because they were crammed into a small school in their hundreds. So, while Israel lied about there being a sniper's nest, a mortar launching site, no casualties, and that the building was booby-trapped, the real story here is that the shells actually landed right outside the school. Besides demonstrating how utterly, utterly craven are the journalists and editors of the Globe and Mail they also raise questions about their own journalistic abilities. Every article about the school bombing that I could find, names the school al Fakhura - somehow the Globe came up with the name "Ibn Rushd Preparatory School for Boys". One wonders if the reporter was in the wrong place entirely.

Afghanistan: Anti-War President Ramps Up War

If the multiple missile strikes inside Pakistani territory didn't make the point, this article in the New York Times puts an exclamation point on it. Obama means war.

"Mr. Obama is preparing to increase the number of American troops in Afghanistan over the next two years, perhaps to more than 60,000 from about 34,000 now."

Of course, anybody who's been listening knew that Obama's strategy was always about increasing the troop commitment in Afghanistan, but the sheer hawkishness of his strategy hasn't really been so apparent. The article in the Times makes it so - no longer is there going to be the fig leaf of "development" that used to happen through the Provincial Reconstruction Teams, albeit in a half-assed, uncoordinated way that prioritized military objectives. Now, the US has "a new American approach to Afghanistan that will put more emphasis on waging war than on development." Anybody thinking of getting married in Afghanistan must be worried, since US war-making seems to include bombing a lot of wedding parties.

However, endless pain and misery for the locals aside, someone ought to tell Obama what happened to every other empire that has tried to subdue Afghanistan. It isn't for nought that Afghanistan is called the graveyard of empires. And now it looks as though, in a move eerily similar to escalation in Vietnam, the Americans are taking things out of the hands of their local puppet, who is having his video-call privileges with the President of the United States taken away. The Americans will focus on regional strongmen and brute military force to defeat the resurgent Taliban.

Where have we heard this song before?

Without a full scale invasion of Pakistan, the US and sycophantic allies like Canada, will never defeat the Afghan insurgents. But such an invasion would turn Pakistan into one more failed state as the already extensive internal rot of the Pakistani state apparatus collapses under the external and internal pressures. From battling a low tech, mostly localized insurgency within a tiny undeveloped country, the US risks opening up a front against a country with a population of 172 million and an ample supply of nuclear weapons. Yet, as dumb as this sounds, it is the Obama plan for fighting terrorism. He has just made Afghanistan his war and he risks being destroyed by it, just like Bush was destroyed by Iraq.

60 Minutes Goes Pro-Palestinian!

This is a remarkable piece of journalism in the United States of America - to show the racism and colonialism of the Israeli Occupation is almost unheard of in the mainstream media. It is definitely worth watching - I know I learned something from it. Could this be a sign that something is shifting in America viz. Israel?


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Undigested Thoughts On The Present Economic Collapse

I haven't had a chance to sort through all the elements of what I've been reading regarding present economic conditions but I wanted to get down some preliminary thoughts. It's clear that things are bad. Very bad. The UK may well be driving down the fast lane on the road to Iceland. That is, it may be approaching a situation where its insolvent banking sector is too big to allow it to fail and yet it is too big to save - ie. the government can't afford it because no one will lend them the money. Or, if they go to the IMF, the IMF may well not have sufficient money. If that were to happen, look for disaster to unfold - a collapsing currency, a government forced (according to the rules of the game) to impose austerity measures against its population, and other such notable treats, as outlined by Nouriel Roubini:

"At best, the UK faces an economic and financial crisis that will be as bad as the US one: a severe and protracted recession that could last two years with very weak growth recovery once it is over; a near insolvent financial system, most of which will be formally or informally nationalized; a large fiscal costs of budget deficits surging because of the recession and the bailout of financial institutions; a weakening currency that may risk a hard landing if the crisis is not properly managed. "

It used to be that Roubini would outline the details of what the worst case scenario was but he doesn't any more. Could it be that even "Dr. Doom" is afraid of what might happen?

But lest you think it's only Britain, we shouldn't forget America's spiralling economy. The latest figures out regarding housing starts indicate the biggest collapse since records were kept, back in 1959. Just look at the graph, it's got a drop so sharp even one of those pot-smoking rock climber hippies would shit their pants. And it doesn't look much like its bottoming out.

It could be worse, of course, you could own an import/export business in Japan. The same report(pdf) that highlighted the collapse in US housing starts also points to the collapse in Japan's imports and exports - particularly exports. 

"December imports contracted by 21.5% on the year and were up by 7.9% for 2008 as a whole, but exports fared much worse, posting respective changes of -35.0% and -3.4%. This dragged the annual trade balance down to $20.4 billion, a level not seen since 1983 and a far cry from the 2007 tally of $92.1 billion."

In the face of this kind of global collapse in demand, alongside the spreading implosion of the international financial system, it is unclear what fiscal stimulus packages, such as the one planned by our very own Tories and the stratospheric one being mooted by Obama, will actually do to save the economy.

Obama and the Tories are both trying the same halfway house measures between Keynesianism and neo-liberalism, a combination of infrastructure spending and tax cuts, as a means to try and maintain consensus within different wings of the ruling class. And while the Keynesian side of the equation is still timid, with the Tories, for instance, insisting on forms of spending that aren't permanent programs, such as healthcare or daycare. The neo-liberals, like failed presidential candidate Senator John McCain want "to make tax cuts permanent, and we need to make a commitment that there’ll be no new taxes.”

Of course this is ideology written by idiots, not true bourgeois class consciousness. After all, if they want to save their consumer driven economy, they need to get the vast majority of the population to consume. The trouble is, it is those people who are most fearful right now, facing job losses, the loss of their pensions - often tied up in investment plans that have nose-dived in value, and suffering from a debt hangover the could drop a moose. If you handout tax breaks, like Bush did in spring 2008, it has no effect on growth because the cash is applied directly towards paying down debt. Money invested in infrastructure at least buys goods - even though the companies and individuals who will be paid for those goods and their construction will also probably sink a hefty sum of their wages and profits into lowering their debt load.

And there is the rub of the problem, taking us back to Mr. Roubini. Does the US or any combination of governments acting individually have the political will or, frankly, the credit rating, to "deleverage" their nation sufficient that the debt blockage to further growth can be removed? It's not at all clear that the US can even achieve this domestically. Just look at the insatiable appetite of the banking sector scrambling for more cash, on top of the $700 billion it sucked back quicker than a light beer in a heat wave. And the banks are merely one expression of a problem worth trillions upon trillions.

And the problem is international - so if the US fixes their problem, it won't solve China's, or Iceland's or Britain's, etc. 

That's why there is no agreement on Obama's plan. Even Liberals are suggesting that it won't work, that it's not enough. And certainly, if the system continues to unwind the way that it has over the past year and a half, with housing starts in freefall, employment dropping quicker than the 1980-82 recession and the banking sector doing a fine imitation of musical chairs on the Titanic, then a program of new investment that will be smaller than the present banking bailout package, will have negligible effect. As an article in The New Republic noted, it was the massive and unprecedented spending of World War Two that ended the Great Depression.

"Most economists agree that what finally pulled the U.S. out of the Great Depression was military spending for World War II... in 1936, unemployment was still at 16.9 percent; by 1942, after two years of war spending, it was 4.7 percent, strongly indicating that it was war spending that did it. I am not suggesting that the United States start a world war in order to solve the world's economic problem. But I am suggesting a strategy that could be called the fiscal equivalent of war."

However, I would suggest, it was more than just the spending. It was also the destruction that was key. Then, like now, there was the capacity to create too many goods. It has been sustained up till now with the massive accumulation of debt. But that strategy has come to an end. Capital must be destroyed on a vast scale to re-open the vistas for further accumulation. America must reconquer her markets - and thus there are noises from the new Treasury Secretary about China's currency manipulation to sell its products to US consumers. The next step will be trade barriers. China's factories will close, creating the space for factories to open in America.

And this creative destruction will also have the effect of lowering the price of capital (and other inputs) relative to labour. Labour is the source of all profit - which isn't a natural phenomenon but merely a social creation requiring some common source of comparison, in this case labour. When the amount of investment in capital rises in relation to labour, profits tend to fall (though there are a whole number of means to countervail this, including rises in technological efficiency leading to a fall in the price of capital goods, etc). When the investment in labour rises viz the investment in capital goods, profits can also rise.
I'll stop myself here before I get too deep into a subject I can only half defend. Suffice it to say, even on the basis of the need to destroy other capital to conquer new markets or reconquer old ones - the ultimate expression of which is war - the present system is utterly mad and getting crazier every day. Surely we can come up with a better way to run the world than this.

Obama to Pakistan: "Meet The New Boss"

In the first days of Obama's presidency he has done some laudable things - his movement towards closing Guantanamo, his restoration of family planning funding to international aid groups that provide abortions, abortion referrals and abortion counseling. These are strong signals that this administration will break from the hard social conservatism of the Bush years.

But it is a very worrying sign that the other signal that has been sent out arrived on the tips of five hellfire missiles in the Pakistan Frontier Provinces. The result was more than 20 people dead, including numerous civilians. There is even dispute that the tribal leader targeted by the US - and probably killed along with several family members - was even connected with the Pakistan-based Taliban. Likely, the US attack will further destabilize the Pakistani government, certainly undermining it in the tribal areas near the Afghan border. The Pakistani parliament passed a resolution that such attacks were assaults on the sovereignty of the country.

What's especially worrying about this is that Obama stated on more than one occasion during the election campaign and the primaries that he supports unilateral action by the US military in Pakistan. Besides being illegal, it threatens the whole region, including the continued existence of Pakistan, a nuclear-armed power, as a coherent country. Of course what is really needed is for the US, Canada and NATO to get out of the region entirely. The money presently being spent to keep tens of thousands of troops in Afghanistan, to bomb Afghan and Pakistani villages, and to prop up the corrupt Karzai regime and his coterie of drug pushing warlords and human rights abusers should instead be spent on real, locally controlled development aid. That would be the way to "win hearts and minds". It would open the space for greater democracy and send a message to the world that the US and its allies are really about justice and democracy - rather than imperialism, gas pipelines and bombing weddings.

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A "Fiscally Socialist Ideological Change Of Heart"

Ok, ok, wait a minute. WAIT A MINUTE! Now, let me get this straight. Stephen Harper, Canada's Conservative Prime Minister, the dude who used to head the crazy, neo-liberal, neo-conservative National Citizen's Coalition, is about to bring in the biggest federal budget deficit since, well, since Brian Mulroney.

Whoa. Isn't this the same guy who was saying during the election campaign that "we're not going into recession"? And didn't he also say his government would "not be running a deficit"? 

Of course, none of this indicates that Harper is dumb as a post or a liar. Nothing of the sort. It simply is a reflection of the fact that, according to Stephen, nobody knew Canada would be in a recession way back there in October. Nobody predicted it. Nobody. 

Oops, well, maybe a few people, according to this article from October 7: "Some of Canada's top economists predicted we're heading for a recession deeper and longer than anticipated, suggesting the economy may be hobbled till almost 2010."

Far be it from me to suggest that Steve was engaging in a little electioneering back in October and now, with the Liberals threatening to bring down the government, he's decided that he better look like he's doing something. However, that is the view of the right wing National Post, which wrote that "the budget and subsequent stimulus plans are a means of survival for the Conservative party, and not a fiscally socialist ideological change of heart from Stephen Harper." Whew, I was worried for a minute that the Conservatives had principles. Glad to hear that it's just about saving their fat paycheque.

Now, I leave you with a little medley of Stephen Harper's changing tune...

Bailout Cash Used To Pay Banker Bonuses

Found this little item on Clutterstock. Apparently the fat cat bankers at Bank of America, who were bleating that they needed an extra $20 billion - that's $20,000,000,000 - to help cover the costs of their takeover of Merrill Lynch, gave it to themselves as bonuses.

I've decided that the bankers really do show the way, so I've decided to put in a bid on a bank - something small, maybe a credit union. I don't want to be greedy. Then once I own that I'll ask the government to give me the money to cover the cost of my purchase - sure I'll even offer the government some dividend paying shares (in case my bank ever makes a profit that I can't hide). Luckily, the government of Canada, like that in the US, is a strong believer in the free market, so they won't want any voting shares to determine how I actually spend the money. Then I'll take the money meant to cover my purchases and I'll pay myself a big fat bonus for being so clever. Say, $50 million. 

And the great thing about this plan is that you can keep going back for more - this is the second installment that Bank of America received. It's like it says on the back of your shampoo bottle: lather, rinse, repeat. Anybody else in?

"They Created A Desert & Called It Peace"