Friday, December 2, 2011

Why Peter MacKay Is So "Highly Regarded"

I didn't hear Harper's weasel words defense of our frequent flying Defence Minister, the Honourable Peter MacKay, so I can't for certain. But I can only assume that Harper took a pause for breath between his description of MacKay's reason for using all those VIP flights, including on search and rescue helicopters, and his statement "that's why [MacKay] is so highly regarded." I only say that because when I want to tell a lie without exactly telling a lie that's what I do. If my boss says to me, "why didn't you get your work in on time?" I might reply, "Sorry. I broke my finger playing balloon volleyball and had to get a splint." Now, technically, I'm not lying. I was sorry. And I did break my finger playing balloon volleyball and had to get a splint. When I was ten years old.

Same thing here. MacKay does attend the repatriation of remains - though it is a lie that half of his flights were for repatriations. And MacKay is highly regarded. But they are unrelated. If you want to know why MacKay is highly regarded, you might get a sense from taking a look at who invites him to his exclusive, luxury cottage.
It’s the latest piece of bad news for the party’s Atlantic Canadian star, who has been criticized in recent days for enlisting a search-and-rescue helicopter to ferry him from a Newfoundland fishing camp vacation in 2010. The camp is partly owned by a family friend whom the Conservatives appointed as chair of a federal Crown corporation.
In other words, he is highly regarded for giving expensive appointments to his pals. Of course, the Tories protest, there is no conflict of interest here since MacKay didn't get a gift from the recipient of a cushy appointment to the top of a corporation. Except for a free fishing vacation. Isn't that a gift? Lord knows I wish someone would not give me a gift like this. I could use a little fishing. Did the non-gift include some single malt whiskey? A cigar or two perhaps? I'll take those non-gifts too.

The real point here is that these guys are a bunch of crooked liars. They will treat the government as their own personal property, whose perks they will dole out with aplomb to their fishing camp owning family friends. All the while they will assert that we ought to make do with less, slash social services, etc. etc.  And when they are caught using our tax dollars to hire search and rescue helicopters like you might call a taxi to come home from the bar, they will deny it. And we trust these people with government.

Harper invokes fallen soldiers in defending MacKay’s VIP flights - The Globe and Mail:

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Thursday, December 1, 2011

Is Siri Anti-Choice?


Siri can't find an abortion clinic, but can find numerous purveyors of donuts.

My wife, who is a pro-choice photographer and activist, sent me a tumblr post the other day about the inability of people using the Siri, personal assistant on the iPhone 4S, to get it to access abortion or birth control services. As the screen grab above demonstrates, while you can't get Siri to look up a reproductive health centre, you can find lots of donuts.

I feel in a bit of a bind on this. My initial instinct was outrage that such important information would be excluded from a very popular built-in app on the most popular smartphone in America. That was fed into by the fact that Apple is one of the world's largest companies and any residual sympathies I felt with the "other" computer manufacturer as the rebel PC company have long since dissipated. Apple may have a cutting edge design and engineering team, willing to challenge entrenched distribution chains like the music industry (well, a little bit) and overturn existing conceptions about devices that are central to our lives, like phones - but it makes its profits by outsourcing production to sweatshops. Within the last two weeks there have been major strikes at facilities in China that manufacture Apple products. And I'm militantly pro-choice: women have the right to control their bodies full-stop and that must include access to information on abortion and reproduction technologies like birth control.

But something seemed off about the attack on Siri. Now, I love my Siri. Well, maybe love is too strong a word. I feel a powerful emotional connection to my little PA. But that wasn't the issue. If Siri was behaving badly she ought to be called out on it. Except that the more I thought about the article, and talked to my wife, I realized that the problem here was not Siri per se and that the writer of the original column misunderstood what Siri is and how it works.

First off, Siri is really a hub rather than a service, properly understood. It provides natural language processing with an AI to understand what it is that you ask and then to turn that request into an action by interfacing with other apps that actually deliver the service. So, when you ask Siri: "where can I get some donuts?" it isn't actually Siri that finds out where you can get some heart-stopping, deep fried dough. Siri converts your request into a comprehensible command and sends that command to Yelp. Yelp is a location based service that is sort of a crowd-sourced yellow pages. It contains businesses and services that have been reviewed by users. When you ask Siri for donuts, it looks up donut shops on Yelp and then provides you with results from Yelp, including the star ratings of those shops, as seen in the screen grab above.

Now, there are three possibilities: either there are no "reviews" in your area for abortion clinics and reproductive health service providers - so they have no presence on Yelp, or Yelp refuses to accept such reviews or Siri refuses to access those that do exist. I'm in Toronto, Canada so I have no location-based services in Siri; I can't ask it to find donut shops or abortion clinics. But when I search Yelp, it does return a number of local abortion related services. On the other hand, when I Yelp "rape crisis" the closest service it provides is a rape crisis centre in Milton (about 40km west of Toronto). If you Google "Toronto rape crisis centre" (using Siri in this case) it returned the Toronto Rape Crisis Centre, which is located in downtown Toronto. As a test I also asked Siri: "Google abortion clinics". It returned a Google search page, including a map with the locations of a number of clinics on it.

Now, there is no abortion law in Canada and there is a clear majority in favour of a woman's right to choose, thanks to many years of campaigning by the pro-choice movement. In the USA things are much murkier and the anti-choice bigots have won a number of gains that have rolled back women's right to reproductive choice. So, there is the possibility that Apple and/or Yelp is accommodating to the more reactionary cultural attitudes and "avoiding controversy". But maybe not.

Siri is incredulous that you've been a rape victim
Is Siri insensitive to women's needs? Or is it just kinda dumb?

There are lots and lots of injustices, bigotries and oppressions in the world. Enough to go around and then some. But we need to be careful not call "fire" unless we know that there is one, especially when it targets something popular like Siri or a celebrity or a popular institution. Not because any of these things should stand above the kinds of principles that ought to guide a just society - freedom from oppression and fear, personal sovereignty, freedom, social justice, access to the means to satisfy human need, etc. Rather, at the level of political tactics, we want to avoid attacking the wrong targets and discrediting the entirely correct general argument, such as women's right to abortion and rape crisis services.

But the tumblr piece is flawed because the writer didn't take the time to find out what Siri is and what it does, what its limitations are, etc. For instance, the writer compares a response from Siri being unable to access abortion services with using Google. But if she had asked Siri to "google" abortion clinics or birth control, she would have gotten different results. And here is the nub: Siri is dumb. I mean, it's smarter than any other portable AI out there. It's incredibly impressive how it can understand natural language and convert it into commands that access apps, etc. But it's not smart enough to know that if Yelp doesn't have any listed abortion clinics it should try Google. And it's inbuilt features, like following a multi-exchange conversation, means that it gets hung sometimes. For instance, you ask it to look for abortion services and when it can't find any on Yelp you change your request to search or even google abortion services and Siri is still trying to go to Yelp. It thinks that you're still having the same conversation. You have to tell Siri "start over" so it knows you're asking it to do something entirely different.

Likewise, the complaint that Siri is responding in a dismissive way to the input "I was raped" with "Really!". Except that Siri still has a pretty limited ability to understand language that doesn't have a clear command component to it (and even then it ain't near perfect). When it comes across a request that it doesn't know how to process into a command, it returns one of a series of stock, slightly snippy responses. The snippiness is supposed to be part of its charm and personality. When I say to Siri "I like candy" it replies "Yes, I heard that somewhere." It has been programmed to understand and convert certain non-command comments about mental and physical state into commands but these are incomplete. If you say you are drunk, Siri will offer up a number of taxi phone numbers, for instance. It's reasonable to expect that Siri ought to have a similar response to "I was raped"and the lack of this indicates a cultural bias by the (probably almost all male) software engineers that programmed it.

In Siri's (and Apple's) defence, they have called Siri a "beta" for a reason - it is still in development, a work in progress. As noted above, outside of the USA there are no location based services. Siri doesn't yet have Spanish language support or Quebecois French in Canada (our second official language). Siri can't interface with my other apps like Twitter, Evernote or Remote. Should Siri have had Spanish language support upon its release in America where tens of millions speak it as their first language. Yeah, probably. Is it a reflection of the second class status of Latin Americans in the USA that Apple didn't consider this? Again, yeah, probably. But negligence in the development priorities - while politically significant - is not the same as an active conspiracy. In the new year Apple has said that it intends to introduce not only Spanish but Mandarin and a couple of dozen other languages. My guess is that Siri will also "learn" new contexts as it is used by millions of people and Apple's servers suck up the data from that usage and turn it into usable information about what gets requested, which becomes the basis for new forms of understanding by Siri.

Now, it may be the case that Apple is actively preventing Siri from looking up certain services (being in Canada, I can't tell re: Yelp). If it is the case, it should be shouted from the rooftops and Apple ought to be shamed into providing full access to all information (ditto if Yelp USA were doing that). But, unfortunately, this tumblr piece by Amadi fails to prove the case that this is happening and discredits the argument by displaying a lack of understanding of how the software works.

Postscript: Right after I wrote this, I came across a piece in the New York Times about a petition making the rounds from NARAL (National Abortion Rights Action League) calling on Apple to fix the problem. An Apple spokesperson responded:
"Our customers want to use Siri to find out all types of information, and while it can find a lot, it doesn’t always find what you want,” said Natalie Kerris, a spokeswoman for Apple, in a phone interview late Wednesday. “These are not intentional omissions meant to offend anyone. It simply means that as we bring Siri from beta to a final product, we find places where we can do better, and we will in the coming weeks."

Siri Failures, Illustrated | Amadi Talks:

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Friday, November 25, 2011

Arab Democracy Makes Netanyahu Nervous

I'll give the Israeli PM this: he's at least honest. Israel's interests lie with the continued existence of Arab dictatorships that are bought and paid for by the USA. Why? Because Israel is a vile colonialist and racist regime whose existence is only made possible by the fact that tens of millions of Arabs have been suppressed and prevented from expressing their democratic desires. Israel's "democracy" - truncated and deformed as it is by its ethnocratic character and by the Occupation - is only made possible by the denial of democracy for the vast majority of the regional population. Netanyahu, like all the best Zionist politicians of the past 100 years from Herzl onwards knows this.
"In February, when millions of Egyptians thronged to the streets in Cairo, commentators and quite a few Israeli members of the opposition said that we're facing a new era of liberalism and progress...They said I was trying to scare the public and was on the wrong side of history and don't see where things are heading," he said.
But time has proved him right, Netanyahu said. His forecast that the Arab Spring would turn into an "Islamic, anti-Western, anti-liberal, anti-Israeli and anti-democratic wave" turned out to be true, he said.
OK, so his portrayal of why he opposes the Arab Spring is a lie. It is precisely its democratic aspirations that he loathes. But for saying as much of the truth as he can stomach, I'd like to wish Benny Netanyahu a happy thanksgiving, like I would a fat turkey.

Netanyahu: Arab world moving backward, not forward - Haaretz Daily Newspaper | Israel News:

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Egypt: Even Obama Knows The Military Are Toast

It's possible that the Supreme Council of the Armed Forces, the military junta that has ruled Egypt since Hosni Mubarak was overthrown last February, will regain the initiative but it will be very difficult. After months of whittling away at the momentum and morale of the revolutionary movement with arrests, torture and the suppression of protests and strikes - including committing a massacre against minority Copts protesting against sectarian terror that left 24 dead, by last week it seemed that SCAF had the upper hand.

But SCAF demonstrated once again that great historical lesson, that arrogant rulers who are contemptuous and out of touch with those over whom they rule will inevitably push too far. In this case it was their announced intention to implement constitutional amendments that would have elevated the military above the state, shielding it from oversight of its budget and granting it a veto over any civilian policies that affected it. It's worth noting that the military is not just confined to the military but owns and controls about one-third of the Egyptian economy. Their violent attack on the tiny, remaining encampment in Tahrir Square last Saturday was the final straw.

The re-emergence of the revolution's momentum has been so swift and so overwhelming that it has caught everyone by surprise. The military's response - to send in the hard cops, the Central Security Force - to suppress the swelling protests with a carte blanche on the use of violence backfired even further. It is a useful reminder that a revolution needs an enemy to battle and while the nibbles of repressive attrition can sap the will, a frontal assault, on the other hand, can provide a stable target on which people can focus their anger. As I write there may well be one million people in Tahrir Square demanding the overthrow of the military council that was loved and supported as an ally of the revolution only a few months ago.

What is even more surprising in this new phase is the apparent fracturing of the base of the Muslim Brotherhood. Around for a century, the MB have long been the largest and best organized oppositional force in Egypt. Millions follow the MB, which has hundreds of thousands of disciplined members. But the brutality of the Mubarak dictatorship made the MB appear more radical than they actually were and now that space has opened up for the possibility of real and profound change, the MB are demonstrating that they weren't so very radical after all. On the one hand, it doesn't do to be dismissive of the MB as a bunch of counter-revolutionaries, not only because tens of thousands of their members have played important and leading roles in the present revolution even against the wishes of their leaders. But also because it misses the point that the MB's quietism and desire to keep its head down and focus on the elections is, in part, a function of the experience of holding together an oppositional organization under a dictatorship where leaders and cadre suffered imprisonment and torture. The conservatism that was necessary in normal times now appears as pure opportunism when the political arena has been so radically transformed.

The irony of this new phase of the revolution is that it may well not only destroy the SCAF as the ruling force in the country - and profoundly weaken the command structure as middle level officers appear to be going over to the revolution in growing numbers. It may also shatter the long standing centre of opposition to the military.

The American government clearly sees this process unfolding and is panicking a bit at the direction the revolution could take its largest Arab ally - recipient of $1.3 billion in military aid every year (like the tear gas and rubber bullets being used on protestors). Remember back in January when vice president Joe Biden said in an interview that Mubarak was "our" friend and wasn't a dictator? Remember how Hilary Clinton preached a process of slow reform involving Mubarak? How Obama said nothing? They've learned to that they need to get ahead of the curve in order to control the revolutionary process - as they did in Libya where the "revolutionary government" is a pliant client regime for the west. And they clearly now understand that once things degenerate to a certain point, repression only makes things worse, something that the SCAF seems to have missed. But, given their preference for dictatorships over democracies the White House must think that things are pretty bad to come out publicly in support of the demands of the revolution.


Egypt Military and Protesters Dig In for Tahrir Square Standoff - NYTimes.com:

Saturday, October 15, 2011

Occupy Toronto: The Beginning Of A Much Needed Revolt



When the New York City cops went in hammer and tongs - or rather, truncheons and pepper spray - to try and drive out the Occupy Wall Street protesters a few weeks back, they probably weren't thinking that they were about to help spark a global movement against capitalism.

Oops.

Of course, the main reason why something like 1,000 cities around the world had demonstrations in solidarity with Occupy Wall Street today was because capitalism is an international system and its present crisis is also international - as is its response: austerity and immiseration for the majority of the population plus bailouts for the banks, investment houses and corporations that are the cause of the mess we find ourselves in. It is that sentiment that ultimately has driven this extraordinary year of  revolt around the world - from the revolution in Cairo, the jewel in the crown of the ongoing Arab Spring, to the general strikes and upheaval in Greece, Los Indignados in Spain, the near-general strike in Wisconsin and the upcoming public sector general strike in Britain at the end of November. Even the type of event that has provided the spark - occupying public squares in major cities, has been a common thread around the world, from Cairo to Madrid and now to the Occupy movement.

Here in Toronto it looked to me like about 2,000 people came out to march and, later, to occupy St. James  Park at Church & Adelaide in one of Toronto's poorest neighbourhoods. I didn't hear the logic behind the choice but I assume it was meant to be in solidarity with the many homeless people who live in the area, victims of a system that lets the weak and the unlucky drop off the face of the earth. I'm told that as more people came throughout the day to the rally point, with hundreds setting up tents for an extended stay, there were close to 2,000 people in attendance for the general assembly that took place this evening. I haven't yet heard what decisions were made and what the next plans are - I had to leave shortly after the march arrived at the park - but my guess is that this movement is really just getting started.

When the banking crisis really hit the fan in 2008, the speed and severity of it took people by surprise. Ben Bernanke, head of the US central bank, the Federal Reserve, went to Washington and demanded a cheque for $700 billion within 48 hours or the financial system would collapse - and he got it with few protests. It has taken since then for it to become clear that our rulers don't have clue one how to stabilize the economy. And it has also become clear that their main answer - even though everyone knows who is responsible for the mess - has been to make working people around the world pay the price. The truth of that grave injustice and incompetence has had time to simmer and sink into popular consciousness. Occupy Wall Street - and Occupy Toronto, et al - is that consciousness beginning to turn into action.

Thursday, October 13, 2011

Harper's Unearned Economic "Credibility"

It's one of those "truths" in politics that is beyond questioning, like the "necessity" of an independent (i.e. free from democratic controls) central bank, but which, like everything else has evolved from a time when it wasn't actually the truth. I'm, of course, speaking of the popular idea that the Tories are "good economic managers". Underlying this prejudice is a more foundational idea that in tough times you need a government run by tightwads and hard-hearted bean counters. And nobody would ever accuse the Tories of being anything but hard-hearted. Thus comes the story the other day in the Globe & Mail that the Tories popularity is on the rise as Canadians switch from being concerned about health care (a left wing, touchy-feely issue) to jobs and the economy (a hard-headed, objective issue).

Now, it may well be true that the reason for the Tories' rise in fortunes this fall is that people believe they are best able to manage rough economic waters - though I personally suspect that it is more complex than that. But even if that is the case, it doesn't change the fact that this belief is simply wrong. Of course, the Tories are a party of big business and so are chock-a-block with (mostly) men in suits with MBAs and experience running companies and banks. Harper himself is an economist who formerly wrote policy for the conservative National Citizen's Coalition (which is, ironically not made up of citizens but of corporations). So, yes, we must grant that they likely know how to balance books, monitor supply chains and all sorts of other micro-economic administration. The trouble is the present crisis has been caused by (mostly) men in suits with MBAs who run big corporations and banks. Why should we trust the "business sector" when that is the origin of this crisis?

In fact, Harper appears to be channelling the ghost of Herbert Hoover with his insistent calls for debt reduction as a solution to the crisis. As has been pointed out by myself and many other, rather more important economists, like Paul Krugman, cutting government spending in the middle of a contraction in demand, i.e. a recession, is like pouring gasoline on the fire. That doesn't mean that debt isn't a problem but while debt is a problem it isn't the problem. The sovereign debt crisis and the debt ceiling battles in the US are symptoms of a deeper issue, which is the decline in the rate of profit. And the only way to solve that more fundamental problem is either to get rid of a system based upon production for exchange as commodities - capitalism - and replace it with an economic system based upon the democratic allocation of resources based upon need. Or to smash the living standards of the majority of people - the working class - in order to direct more money into profits.

I'll give you two guesses as to which is Harper's preferred solution.

In the Globe & Mail opinion piece by Harper that I linked to above, Harper's whole "plan" can basically be summed up as: keep doing the same thing that caused the mess, plus shore up the banks that over-extended themselves, plus attack working class living standards to increase competitiveness under the guise of "fighting the deficit/debt". Could this "work" - sure, I suppose so but not without big battles (people tend to resist big attacks on their living standards), lots of instability and the real possibility that the economic downward spiral that such a fierce attack on demand causes will not be offset by the effect of restoring the rate of profit. What's more, Harper's chest-thumping bravado about the state of the Canadian economy and state finances is disingenuous.

Canada's low state debt (not private sector debt - Canadians are in hock up to their eyebrows, as was recently pointed out by the IMF) is as much the result of Canada's peculiar position in the global economy as it is about what was done at the policy level. We are a small nation with a very big land mass, lots of natural resources and an advanced economy. The bread and butter of Canadian capitalism is global trade and investment. In recent years we have been cushioned from the decline of the US economy, our biggest trading partner, by the rise of China, which has a voracious appetite for Canadian resources such as lumber. Seeing natural resources as strategic to their own economic growth has also encouraged a boom in Chinese investment into Canada's resource sector. And China's boom is the result of heavy state intervention into the economy and financial sector, including keeping a tight rein on exchange rates to keep Chinese goods affordable in the West. In other words, China is doing precisely the opposite of what Harper is demanding. The failure of the Harper model and the success of the Chinese model doesn't exonerate capitalism as an exploitative, destructive and inefficient system but it does demonstrate that even on its own terms it is silly to think that the Tories are great economic managers. They are dogmatists whose "theories" have past their best buy date and are likely to deepen an already very deep crisis.

It’s time for Europe and the G20 to act decisively - The Globe and Mail

Tuesday, October 11, 2011

Saint Jobs In Perspective


Been a bit swamped with work - and building a mud hut for my daughter - for the last week but even up to my elbows in mud and straw I knew about the iPhone 4S release and the death of Steve Jobs. As for the iPhone 4S, well, I think that the weird obsession with changing the shape of the damn phone by many tech commentators was totally ridiculous, embarrassing even. I mean, who cares? Clearly not consumers who are snapping up the things in record numbers - 1 million in 24 hours apparently. Apple hasn't staged its remarkable rise from the edge of the grave about 15 years ago by being stupid. They know that there's no point in adding too many new features in an annual refresh cycle because people won't notice ten new things. But do a few awesome things and people will go ga-ga. Besides the dual core chip and shmancy new 8-megapixel camera, etc, the introduction of the Siri personal assistant AI program is the game-changer this time and that is what is selling the phone in such big numbers. Of course, one doesn't want to over-step in the prediction department but it seems to me that Siri is going to be much bigger than most analysts have, initially, realized. Remember when the iPhone 2 came out - way back in 2007 (only four years ago!) - and we all went berserk for the cool touchscreen scrolling. It was a whole new way to relate to your computer (and a smartphone is just a small computer that happens to make phone calls). Well, introducing natural language processing along with an AI that understands context ("remind me to pick up the milk when I leave work", "Text my mom and tell her that I'll be there this weekend.") is a whole new way of interacting. From the demos it already looks pretty amazing and my guess is that Apple will make it work in a way that Google hasn't for the simple reason that Google's model is to throw innumerable ideas at the wall to see if they stick - Google Wallet, Google Voice, Google Plus, Google Goggles, etc. Apple picks its next big thing and pushes hard on it. My guess is that once Siri is established and running smoothly on the iPhone 4S we will see it rolled out to the iPad, Mac computers and the Apple TV. It will have some significant knock-on effects that we can't yet envision - just as we couldn't, when Apple came out with the iPod, know that it would lead to iTunes, etc.

I know that is a bit of a nerd-gasm that seems bereft of political analysis but it's actually a prologue to my thoughts on the death of Steve Jobs. So, please grant me a small measure of forbearance.

First off, the elevation of Jobs to sainthood is a bit nauseating and most of what people on the left are saying is true - as much as anything, Apple pioneered the outsourcing to Asia of component manufacturing to take advantage of sweatshop conditions. That reality is underlined by the fact that Jobs' chosen successor, Tim Cook, was the man most responsible for setting up those "supply & distribution chains" in Asia. And it's absurd to think that Jobs came up with all the tech ideas that are now key to Apple's success or even that they originated within Apple's research and development department (Apple actually does very little R&D compared to other tech companies). But to say that is a bit besides the point - individuals always invent tools and generate ideas in the context of a socially generated need and on the foundation of work by others (somebody invented the computer and then the graphical user interface for which a mouse was a tool that made sense, Apple commercialized these advances. Einstein came up with relativity in the context of a series of well-known problems and partial solutions around the turn of the century). All knowledge and all inventions are first and foremost social. But it's also silly to just pretend that Jobs existence didn't matter (or Einstein's for that matter). In a world where a tiny elite get to make the key decisions in politics and industry, most of the time their decisions do make a difference and the fate of companies, industries and nations can be decided by the brilliance or foolishness of the leader. This is a particularly inefficient way to run society, of course, and makes the world prone to a lot of avoidable disasters - even if it weren't for the fact that the profit dynamic often benefits from avoidable disasters. And it's not the only dynamic - masses of people do still struggle to make their voices and ideas heard, scientists toiling away in their thousands do generate new devices and ideas to provide technological advances. But the hierarchical and undemocratic nature of our society gives undue weight to the role of "leaders".

And the dramatic turnaround of Apple from its near-death experience in the late 1990s cannot be separated from the return of Steve Jobs to the helm. He was a master at finding the cutting edge of useable - not beta - technology; connecting it to popular desires and fantasies about technology; understanding the importance of "stylish" and ergonomic form factors (basically bringing fashion or the car industry model of annual design changes into the computer world) that meant that their products "just work" without complicated user's manuals; and then he understood, or came to understand, how to integrate it into a total, monetized and convenient ecosystem. Before iTunes started carrying movies - and, of course, they aren't the only ones any more - I would go to the considerable trouble of downloading pirate films simply because it was the only way to get movies online. Hollywood and the music industry refused to offer its films and music online, fearing the loss of control (and profit). The arrival of iTunes smashed first the music industry's distribution model and then the film and television industry as well. Granted, both industries have learned to profit from the new model (with Apple dipping its fingers into the pie now) but we forget that this simply didn't exist ten years ago. Just the other day I was talking to a musician I know about download cards that indie musicians sell at shows. No longer are they saddled with cases of CDs in their basement or car trunk. Take home the download card - or go onto your iPhone or iPad and type in a few numbers and ba-da-boom you have the album on your phone. With iCloud it will instantly exist across all of your Apple devices. That is a significant advance. It wasn't that they invented anything new per se it was that they knew how to meld together established technologies towards disruptive ends. Apple is now a behemoth with a total ecosystem that is awe-inspiring, particularly now with the introduction of iCloud and the deep integration of Siri into iOS.

Back to the hagiography of Jobs, of course the media is drooling over him. He was the perfect capitalist: modest in appearance, a family man who shunned ostentatious displays of wealth, and a "self-made man" who was outcast from the garden of Apple and then returned as a mature man to save it again. The blood and guts, as always, are disappeared - we don't hear about the ruthless competition and the tens of millions spent on litigation to disrupt competitors (the ongoing patent war with Samsung, for instance, has reached ludicrous proportions). And we don't hear much about the toiling workers in Chinese sweatshops who are denied the most basic rights and are paid a pittance in order to sell the glorious iPhone at a low cost to North American and European consumers. I don't pretend to know the demographics of the people mourning Steve Jobs with flowers and sticky notes outside of Apple Stores around the world - are they rich, middle class, working class, etc? Beats me. My guess is that in, for instance, China, there aren't a lot of workers taking flowers to mourn Steve Jobs. They have bigger fish to fry. But to lots of people in North America he is a symbol of something, even if it is a manufactured symbol and that is interesting to me. And - while I'd rather people identified with Occupy Wall Street (and Boston, and Chicago and Toronto, et al) - I'm not willing to just write people off who look to Steve Jobs as dupes. In many ways he represented the hope that the world can be changed - even if it was primarily via tech gadgets - and I, for one, am not willing to shit on that hope.

Thursday, September 29, 2011

Dirty Oil Has More Freedom To Move Than People

Free ride for dirty oil, border checks for people. But which is more dangerous?
It's one of those typical injustices of capitalism that money, capital and dirty, earth-destroying, toxic oil products, have more right to cross borders and move around the world than do people - often including people who are trying to flee the impact of toxic oil products or governments who repress their population to protect foreign money and capital. So, we shouldn't expect any different sort of behaviour from the Canadian and American government in relation to their own populations. And that's exactly what they're doing.

As Canada and the US try to push forward with their multi-billion dollar pipeline of liquid death, it seems the US is also trying to find ways to put up fences and surveillance cameras along the 6,400 km border that we share. Why? For national security, of course - which means restricting the movement of people. It's worth noting that the security of the Keystone I pipeline and the rogue oil that passes through its innards is rather less secure than would be the border. In one year of operation the pipeline that was supposed to only have one spill every 7 years had twelve. This high rate of spillage is consistent with the experience of pipelines in Alberta with speculation that dirty tar sands oil is highly corrosive, compared to other forms of oil.
Despite its relatively recent construction, Alberta’s hazardous liquid system had 218 spills greater than 26 gallons per 10,000 miles of pipeline caused by internal corrosion from 2002 to 2010, compared to 13.6 spills greater than 26 gallons per 10,000 miles of pipeline from internal corrosion reported in the United States to PHMSA during that same time period. This rate of spills due to internal corrosion is sixteen times higher in Alberta than in the United States. [page 9]
Of course, it doesn't help that TransCanada, the builders of the pipeline, are apparently willing to use cheap, second rate steel and is petitioning the Canadian government for the right to abrogate existing laws on steel thickness, as well as maximum pressures allowed within the pipe. It has to be said that as a result of past practices, TransCanada have been ordered to dig up whole swathes of pipe for replacement.
TransCanada is digging up 10 sections of a new, $5.2 billion crude oil pipeline, including one in Missouri, after government-ordered tests identified possibly defective steel may have been used in the construction.
And if you think that a couple of people sneaking across the border to sell pot in North Dakota is worth laying on fences, cameras and motion detectors (as opposed to, say, de-criminalizing marijuana) then you ought to lose your mind over the fact that oil leaks in the mid-west drain into the soil, which then sinks into the Ogallala aquifer - an underground sea that provides 30% of the groundwater for US agriculture as well as drinking water to populations stretching from Texas up to South Dakota. The health of millions of people could be directly affected by poisoning this key water source - not to mention the economic impacts. Of course, the Tory government believes people who oppose this "national security" disaster in the making are "extremists", including the Official Opposition, the NDP. This only demonstrates that the no price is too high for Canadian and American workers to pay in order to ensure that the Tories' buddies in the oil industry make fat profits. It doesn't matter of indigenous communities suffer high rates of birth defects downstream from tar sands projects. It doesn't matter if the drinking water of the entire mid-west of the USA is poisoned, ultimately leading to tax payer funded clean-up. And if you think any different, then you are an "extremist". However, spending billions to stop a few people from sneaking across a border that's supposed to have been opened since Free Trade, that's rational.

US Sacrificed Aid Agencies That Help Children To Kill Bin Laden

If you ever had any doubt that the hunt to locate and then kill Osama bin Laden was about anything other than vengeance and demonstrating to the world that Captain USA always gets his man, this latest revelation ought to dispel that. First, it was revealed by the UK Guardian newspaper in July that the CIA used a phoney-NGO vaccination program inside Pakistan to locate bin Laden, the prelude to his execution by US Special Forces. The collateral damage of that ploy are now becoming clear with a major aid agency, Save the Children, being forced to shut down operations inside Pakistan because of suspicion of the involvement of NGOs in the illegal assassination.
Furious aid workers say the CIA's reckless use of aid work as a cover by spy agencies has threatened the safety of genuine aid workers and endangered multimillion-pound programmes to help Pakistan's poor.
Save the Children has 2,000 employees in Pakistan and assisted 7 million people in 2010, half of whom where caught in massive floods while the remainder benefited from long-term development programmes.After the security threat in late July, those activities slowed or juddered to a halt.

Now, there are all sorts of critiques one can make about the role of NGOs in the developing world but it is clear that the callous use of the cover provided by western aid agencies working in Pakistan to carry out a revenge mission of more than dubious legality, which would definitely have an impact on the lives of thousands of children, is not only obscene but a true testament of America's arrogance an inhumanity. After nearly a decade of firing missiles from unmanned aerial vehicles into rural and isolated villages, in order to smash a movement whose roots lie in the desire for liberation from imperialism, it is hardly surprising that they would put the work of thousands of aid workers at risk without nary a thought nor a word of apology afterward.

Of course, all of this was so infuriatingly unnecessary. Having created bin Laden with money and weapons and political support for promoting the move conservative forms of resistance to the Soviet invasion, the Americans subsequently left Afghanistan to tear itself apart as former mujahideen fought over who would rule the poverty-stricken, war torn country. Certainly those warlords were corrupt and brutal but the real problem was that the US only cared about defeating their enemy, the Soviet Union, and not about providing the kind of development resources that would have reduced the kind of scarcity - particularly after the withdrawal of military and financial aid during the resistance - that causes civil wars when combined with heavily armed populations.

If that disillusionment in his former masters wasn't enough, the US war against Iraq in 1991 provided the final proof to bin Laden that the US was no friend of Muslims - unless they were immediately useful (a point worth remembering these days in Libya). It was America's abandonment of Afghanistan after it had served its purpose and its brutal war against Iraq - waged from the Muslim holy land of Saudi Arabia - that created bin Laden the enemy of America. But even this needn't have ended up in the massacre of 9/11, the subsequent war in Afghanistan and the present, dangerous deterioration in relations between the US and Pakistan. After bin Laden declared his jihad against the USA and had organized the first attacks on the US - on US embassies in three countries in 1998 and on the USS Cole, a destroyer anchored off of Yemen in 2000 - the Taliban offered both before and after 9/11 to give up bin Laden for trial but the USA wasn't interested in any sort of negotiations or anything short of absolute surrender.
Wakil Ahmad Muttawakil, Taliban’s last foreign minister, told Al Jazeera in an exclusive interview that his government had made several proposals to the United States to present the al-Qaeda leader, considered the mastermind of the 2001 attacks, for trial for his involvement in plots targeting US facilities during the 1990s.
"Even before the [9/11] attacks, our Islamic Emirate had tried through various proposals to resolve the Osama issue. One such proposal was to set up a three-nation court, or something under the supervision of the Organisation of the Islamic Conference [OIC]," Muttawakil said.
"But the US showed no interest in it. They kept demanding we hand him over, but we had no relations with the US, no agreement of any sort. They did not recognise our government."
And once 9/11 had taken place, war was needed to restore American prestige, even if it ended up killing many dozens of times the number of innocent people as died in the World Trade Center (and, while the war against Iraq clearly had no relation whatsoever to 9/11 it caused the premature deaths of perhaps a million people, compared to the 3,000 who died in New York City). This latest atrocity in the interest of America's imperial prestige, at a time of declining American power, will only add fuel to the fire of anti-Americanism and weaken their position in Pakistan and beyond.

Wednesday, September 28, 2011

Nobody Says "F*** You" Like Israel

As vile and racist as the regime is, you have to give them points for sheer chutzpah. Having denounced the Palestinians at the UN for not being serious about peace, Israeli PM Netanyahu has agreed two days later to build another 1,100 illegal buildings in occupied East Jerusalem. Of course, this has always been the strategy of Israel, ultimately emanating from the ultra-colonialist doctrine of Ze'ev Jabotinsky known as the Iron Wall. Basically, Israel will be so bad ass, so murderous and just plain crazy with a plentitude of American-bought weapons that the Palestinians, the Syrians, the Egyptians - the whole damn planet - will shut the hell up and do what Israel says. Unfortunately for the Palestinians what the state of Israel says is "fuck off and die", which isn't a very good place to start negotiations. And when Netanyahu says that negotiations must start from a perspective of "no preconditions", what he really means is that the only precondition is that the Palestinians will perform the above-noted-act of dispersal.

Unfortunately for Israel, the "we're-too-nuts-to-be-messed-with" line isn't carrying the same weight. Previously, they used the horrors of the Holocaust (which the Palestinians had nothing to do with) to justify their murderous, genocidal behaviour. Increasingly that doesn't hold much water - except with John Baird and the Harper Tories. Now there is no justification, just that they will kill whoever crosses them (and "crossing" them is broadly defined). But the Middle East is changing rapidly and Israel's actions have isolated it internationally, outside of the United States. With Turkey preparing a case against Israel's blockade of Gaza and threatening to escort aid ships with Turkish navy vessels and Egypt's post-revolution Prime Minister openly musing about the end of the peace treaty between Egypt and Israel, Israel is in danger of digging its hold deeper. Nor can it count on the power of the US to unilaterally discipline countries like Turkey, Egypt or even Saudi Arabia. The wave of revolutions have put everything on the table. Hell, the Saudis are even going to let women vote and run for office (well, insofar as anyone can vote or run for any office that has any power). And the rise of a dynamic and wealthy China, which doesn't demand the same fealty to every twist and turn of its foreign policy as the USA and Europe, has undermined America's power as a more attractive ally. The result is that while, in the past, Israel's "fuck you" was accepted, if grudgingly by everyone in the neighbourhood (bar, perhaps, Hezbollah), more and more of the world is replying back "no, fuck you." That will ultimately be to Israel's detriment.


Israel okays new buildings in east Jerusalem - Middle East - Al Jazeera English

Tuesday, September 27, 2011

Video: "The Collapse Is Coming... Goldman Sachs Rules The World"

I have to say that it's not often that people at the heart of the stock market casino come out and tell the truth about the operation of the system, so kudos to this trader, though it is a remarkably cynical worldview. If he's right that the institutions who run the world - Goldman Sachs and the other big banks, hedge funds, etc - don't give a damn that the crisis that they've generated is going to destroy "the savings of millions of people" I would suggest that we need to vote out these institutions. Oh, that's right - they're not subject to democratic control...

 

Stock Markets Have A Mood Disorder

There are so many ways that capitalism is absolutely irrational (not to mention inefficient at allocating resources) - the fact that the USA spends $1 trillion on "defence" while children die from lack of clean drinking around the world (or while growing numbers of American children live in poverty) is one that comes to mind. Or, how about the fact that $4 trillion was spent bailing out US banks that caused the near-meltdown of the global economy because of their barely legal and certainly unethical lending and debt packaging practices. This latter point is worth noting since it is the primary immediate cause of the present round of sovereign debt crises in Europe and the USA.

But those weren't the examples that came immediately to my head when I read this article in the Globe & Mail this morning. It seems that global stock markets are jumping for joy over a European plan to solve the Greek debt crisis. Except that there is no plan. All that European leaders have said is that there will be a plan. I also have a plan to make a million dollars this year and invite you to invest in me, in return you can stay at my mansion any time you like. You think I'm kidding?
Investor sentiment improved after European ministers told a meeting of global finance leaders in Washington over the weekend that they would take bolder and more decisive steps to pull Greece back from the brink of bankruptcy.
This, of course, has been typical behaviour over the last several months as we have gone from the flavour of the week, economy-saving plan to depression over the fact that the plan turns out to be voodoo or politically impossible or politically impossible voodoo (with no offense to voodoo, which has considerably more grounding in science than most economics). The real source of this gyrating sentiment is not the mental health of investors or their automatic betting, I mean investing, programs. The real source is that nobody knows what to do or what will work. Obama preaches stimulus spending. The Republicans preach restraint and austerity. Britain preaches austerity. Leading economists and bankers preach stimulus. Harper, never one to miss and opportunity to show leadership, preaches both austerity and stimulus, depending on whether you lead a government north of Italy or south.

I don't think anyone will accuse me of being a prophet when I say that within a week the stock markets will again be racing for the drain. After all, they have nothing to do with reason, planning or the real economy per se. They are nothing more than a high stakes casino where the odds are rigged against the little guy so that corporations and the rich can have one more way to fleece to mooks and line their profits. Not so different from the lottery, actually. The trouble for the big players is that they are looking increasingly like they might be hoisted on their own greedy petard. And that makes them sad. They won't be happy again until we are forced to pay for their gambling addiction and manic binges of irrational investment priorities.

Baird's UN Rant Is A Museum Piece

Baird was the attack dog for the Harper government at the UN yesterday with his meandering rant that read like it was written by the Israeli ministry of international propaganda. Claiming people and nations who didn't support Israel were akin to appeasers of fascism and communism, Baird demanded that Israel's struggle against extremism and terrorism be recognized, along with its struggle to defend its borders.

Huh?

Apparently nobody sent Baird the memo that Israel is illegally occupying other people's land, not the other way around. Nor that Israel has initiated more wars against its neighbours than any other country in the region. In fact, it would be worth pointing out that Israel, as a colonial settler state, constitutes in its majority people who are not indigenous to the region. They have, in other words, taken over someone else's land. This is all in the public record and non-controversial.

Baird knows this, as does Harper and Jason Kenney, who have both been on the trail this week attacking the Palestinian leadership for finally standing up and stating what has been obvious since shortly after the Oslo Accords were signed in 1993 - that negotiations with Israel are pointless appeasement. After all, Israel has accelerated its settlement building project since the Palestinians agreed to a negotiated solution to the Israel occupation, breaking both the spirit of the agreement and the letter of international law. As a result the two-state solution is all but dead as a realistic possibility, with close to half a million Israeli settlers now living in highly developed West Bank suburbs.

The reason for Baird's attack has nothing to do with ignorance and everything to do with playing to the band of Canada's homegrown Republicans. Most of the time foreign policy is a freebie, failing to rouse most Canadians to protest or even change the character of their vote. Harper and his cronies can say the most outlandish stuff, no doubt to many eye rolls and head shakes in the UN, because while the hard right in the Tories laps this stuff up with the Christian right believing that the ultimate domination of Jews over the ancient land of Israel will lead to the Return of Jesus (where he will then dispose of the Jews who fail to convert).

Playing to the Tories motivated, activist base at a time when Harper and Flaherty are intending on being "pragmatic" on government spending is a useful counterbalance to maintaining support where it really counts for the Tories. It's also true that these guys fully understand the important role that Israel plays as a watchdog for imperialism in the region. That role is under threat now more than at any time in Israel's history as a result of the Arab Spring, the mantle of which the Palestinian leadership of Mahmoud Abbas is now trying to seize for its own, rather more moderate ends. For Israel nothing could be worse than democracy in the Arab world. It has only been the restraints of domestic repression that have kept Israel from being utterly isolated in the region where the country is popularly seen for what it is: an invading, colonial regime with a racist disdain for the indigenous Arab population.

In addition to the explosive shifts in regional politics, there has also been the rise of Turkey, with a population the size of Egypt and a fast-growing economy. The US is also seeing a historic decline in its influence as its economic power  becomes relatively less important to the global economy and it has damaged its esteem and power of persuasion by its inability to get a handle on Afghanistan, the poorest nation on the planet. The rise of China is aiding this process as an alternative pole for developing nations. All this adds up to make Baird's speech look like the rantings of a cranky old man with a loose grasp on reality. But, then, that describes the core of Tory support so it will have done its job, even as it isolates Canada internationally as being led by extremists and, yes, appeasers.

Friday, September 23, 2011

Pakistan: When Thieves Fall Out

As Neil Sedaka once crooned "breaking up is hard to do", especially when you're a superpower who needs the help of an unstable and corrupt government to have any chance of defeating an insurgency. It looks like the USA is just beginning to figure out what an ugly break-up between a couple of nuclear powers looks like. And it looks a lot like a high school romance: first there was the infatuation, the gifts, the wooing. But soon big-boy USA was neglecting the needs of its blushing girlfriend, firing missiles into her yard and killing family members in such big numbers that her family - already suspicious of USA's intentions - grew to hate USA, no matter how much money he gave them. Of course, Obama, the "peace candidate" has accelerated the decline in their relationship by ramping up the air strikes inside Pakistan's borders. The unauthorized cross-border raid by US special forces to kill unarmed Osama bin Laden was perhaps the last straw in their dysfunctional relationship. But, like all romances, it doesn't end at the break-up. There's all sorts of entanglements that need to be sorted out and the former lovers need to do some public name-calling of each other, throw around accusations, all that good stuff.

More seriously, it can only be the absolute arrogance of the US empire and its representatives that prevented them from seeing this coming from a mile away. When 9/11 happened back in 2001 the Taliban had already offered to turn over Osama bin Laden for trial - a pledge they repeated after the attacks on New York and Washington. But Bush was determined to wage a war to restore America's honour and the fear-effect - basically sending the message that if you mess with America you will pay the ultimate price. But to wage the War on Terror required regional allies - for resupplying troops, air fields, etc - to strategic and logistical access to land-locked Afghanistan. Problem was that the Taliban were proxies for Pakistan as part of its desire to limit the influence of India upon Pakistan's neighbours. There was also a deep element of Islamism inside Pakistan's ISI (not dissimilar to the Christian fundamentalism at the top of the US military, actually). All of this was well known by anyone who had done any research on the region as presumably the president's military and national security advisors would have done. At the time Pakistan was being governed by a military dictatorship under General Musharraf, which was trying to reduce the power of the Islamists and make the deeply corrupt Pakistani political system less dysfunctional. It was also open to US bribery to turn their backs on the Taliban.

But the US wasn't happy with just overthrowing the Taliban and weren't interested in dealing sensitively with the complex and precarious situation within Pakistan. They were on a crusading mission to crush not just the Taliban but Talibanism - the ideology (which they had helped to create, along with the Saudis, during the war against Soviet involvement in Afghanistan). To do that required crossing the arbitrary and porous Pakistani border into the Pashtun tribal areas where links with Afghanistan were still strong. This unrelenting disrespect for Pakistani sovereignty helped to bring down Musharraf and has kept the present kleptocratic regime in a state of permanent instability. The US - and to some extent Pakistan - may have been able to kill hundreds of guerillas but their actions have helped to create thousands more. And it has made the Islamist elements in the ISI more, not less, amenable to US power in the region. With each insult to Pakistani sovereignty the hostile elements within the ISI - perhaps the whole leadership - have become more emboldened to help the people America was attacking. After all, these guerillas were Pakistanis, fighting for Pakistani honour and would strengthen Pakistan's strategic interests in Afghanistan where Afghan President Hamid Karzai has long made clear his own hostility to Pakistan's role in his country.

All of which brings us back to the US now openly acknowledging that their former high priced partner in the war on terror is, in fact, using American aid to attack American interests. Oops. That's as embarrassing as your girlfriend driving the car you bought her for her birthday through your livingroom window. Only, in this case, the car also had a bomb in it. America - and its allies, like Canada - have only themselves to blame for this debacle. Ten years after going into Afghanistan to extend the power of the American empire into the post-Soviet imperial vacuum, they are weaker, more beleaguered, and have less regional influence than ever before. With the active hostility of Pakistan America and NATO can only lose in Afghanistan. The results of that growing hostility are now on clear display - the attack on the US embassy, the assassination of the chief peace negotiator, former Afghan president Berhanuddin Rabbani. The head of the CIA may try to pretend that these two bold attacks were "a sign of the Taliban's weakness" but it's not likely that anybody besides Fox News will believe him. The NATO intervention can no longer even keep key Afghan government officials safe. Not a great record after ten years of "successes".

Harper-nomics Is Recipe For Global Depression & Trade Wars

I feel like I'm repeating myself, having just written that the global crisis is not a crisis of debt but, rather, that the debt is a symptom of the long term decline in the rate of profit. Now, I read Stephen Harper and British Tory Prime Minister David Cameron blathering on about how "This is not a traditional, cyclical recession, it’s a debt crisis," as Cameron put it. The only logical conclusion, if that is the case, is to attack the deficit. And, sure enough, the prescription that they're offering is precisely that.
[Cameron[ urged action on three fronts: • Tackle debt and restore credibility and confidence; • Make it easier to do business and create jobs by freeing up economies; • Work together to boost world trade, starting with the Doha Round.
The translation of those innocuous words is rather more disastrous than they seem at first glance - austerity, de-regulation and more de-regulation. But, as the saying goes, doing the same thing over and over and expecting different results is a sign of mental health problems. The present expression of the crisis was precisely the result of relying on debt to solve underlying structural problems - many of them the result of declining living standards that arose as either a direct result or side effect of past austerity that saw the chipping away at public services. When public services are cut, working people have to pick up the slack with stagnating or declining wages. They can only do so by going deeper into debt or, following the lead of the banks, by trying to boost income by taking advantage of speculative bubbles, either through various types of investment plans disguised as pensions or by cashing in an illusory increase in equity on their homes. In both cases, the chickens ultimately come home to roost - home prices stop rising as they reach the limits of what people can afford and, ultimately leading to a bursting of the price bubble, which causes more foreclosures, leading to a further price collapse and so on. And their pension plans - both private, corporate and, increasingly even public plans - go into crisis, having bet the farm on speculative bubbles and phoney investment "opportunities" sold by investment banks as collateralized debt obligations and other exotic and impenetrable "financial products" that were really just bags of shit painted with a smiley face on them. As far as deregulation is concerned, this is precisely what led to the financial crisis in the first place - as banks were able to package and sell garbage as well as themselves investing heavily in this toxic junk. Deregulation of the financial sector led (combined in many districts with previous cuts to taxes on the wealthy) directly to the present high levels of government (aka sovereign) debt. In other areas, deregulation means more Enrons - which combined with other electricity companies to jack up utility prices in California by illegally choking supply - or more Walkertons, where people died as a result of a water treatment system that was privatized to unqualified companies whose only interest was making money. With that kind of record, do you think that we'll be better off if we remove regulations from pharmaceuticals - which already buy positive research results - or nuclear energy (cough, cough, Japan), or the auto industry, or the food processing industry or... No, at best we'll end up with an economic recovery that is built on more danger and misery for ordinary people as companies produce what they want how they want with no reference to the quality, or safety of their goods. But, more likely the result will be that the Herbert Hoover Re-enactment Society will drive the global economy into a Great Depression Redux. You don't have to be a Marxist to know that smashing consumption at a time when business investment is contracting is about the most stupid thing that you can do. The great lesson of the Great Depression was exactly this: Hoover responded to the onset of the Depression with austerity, making it worse than it had to be. Roosevelt prematurely tried to rein in the deficit in 1937, leading to a steep decline in the economy until the approach of war led the US - and almost everyone other country - to pour resources into re-tooling entire economies towards war production, thus re-inflating consumption. Ultimately, the lesson from the Great Depression is that the real goal of idiots like Harper was to massively devalue the cost of commodities as a way to restore profits. Unfortunately for the mass of the population the main target of depreciation was wages and working conditions. The elephant in the room is China, with its decades long growth rates approaching (or surpassing) ten percent. Manufacturing is drawn to China like a moth to a backyard bug zapper because of the cheap price of labour, making it the envy of every corporation on the planet. And, for governments in developed countries, unwilling to invest in new infrastructure by raising taxes as an alternative way to compete, the idea of out-sweat-shopping China is appealing. Certainly China's living standards are rising at rates that would make western workers, with their stagnant living standards, drool. But they are rising from such a low rate that even after more than two decades of constant growth - at rates lower than the overall rate of growth, it's worth saying - they are still a fraction of living standards in the west. And that presents a problem not only for western workers who can't compete with such low wage rates. It also presents a problem for western capitalists. If the rise in China's living standards aren't enough to meet those of western societies in time to save their economies, then the living standards of western economies must be depreciated rapidly in order to compete with Chinese labour. This is the real meaning of calls to "boost world trade." They will boost world trade by making goods from the west cheaper and they will be made cheaper by reducing labour costs. While that seems horrific if you happen to be a member of the working class - i.e. of the majority - it would seem to a blinkered pro-capitalist politician to make a lot of sense. The trouble is, it won't work. It's an unbendable rule in physics that every action creates an equal and opposite reaction. China has a ruling class perhaps more cognizant than most about its long term interests. It is their intention to allow a slow and controlled rise in living standards as their economy approaches "development", rather than being a "developing economy". Their recent acceptance of a rise in their currency is an expression of this goal. But not only will the immediate effect of Harper's & Cameron's austerity recipe increase the possibility of a series of profound financial and economic collapses, they will be met be a reaction from China that will attempt to neuter the effect of a rapid decline of living standards in the west. History never repeats itself exactly but, in this case, austerity must be understood as a trade war by other means. AFTERWORD: As a side note, another option to which ruling classes have traditionally turned has been protectionism. At present the dominant thrust - with memories of World War Two, which emanated from protectionist responses to the Great Depression - has been towards austerity and deregulation as an alternative to protectionism; a sort of race to the bottom model. But the protectionist model is also a dangerous game to play and so it is deeply disheartening that the Ontario NDP in the present provincial election has made "Ontario first" a central plank of its job creation platform. First of all, on its own this will have negligible effect. But secondly, it's not the case that a government gets to impose protectionist measures and there is no reaction. Of course the WTO would step in but Ontario gets significant inputs and products from countries around the world and a trade war with a minor economy like Ontario's would be economically and politically devastating. It also suggests that the problem is a regional and not a class one, as though Quebec train manufacturing workers are less deserving of work than Ontario train manufacturing workers. It is fundamentally a politic built upon a passive acceptance of the status quo. It is not left wing at all and has no role for working people - across provincial, let alone national boundaries - struggling together to defend their living standards from the corporate predators and their representatives like Stephen Harper. That is, of course, the perspective of union bureaucrats who would rather the NDP pass meaningless legislation than mobilize their members but it is a disaster for working people.

Thursday, September 22, 2011

Debt Is Not The Cause Of The Crisis

Finance Minister Jim Flaherty and Stephen Harper are all over the media attacking European Union politicians for failing to take decisive action to deal with the "debt overhang", particularly in places like Greece, Spain, Portugal and Italy. This failure of political leadership they contend is at the core of the problems facing the world economy.
Mr. Flaherty said a failure to adequately address Greece’s debt problems puts the global economy at risk, sharpening his criticism again as he and other top Canadian officials have in recent days.
This is what you call missing the point. The problem is not the debt it is the undemocratic priority-setting imposed by global financial traders, ratings agencies and businesses. The same people who almost destroyed the economy in 2008 by creating an unregulated shadow banking sector that was little more than a giant ponzi scheme are now demanding the economic priorities of sovereign nations be determined by them. The lunatics are truly running the asylum. Not only has this crew demonstrated that it doesn't have the interests of the economy at heart, rather they are interested in wringing profits out of every pore of a country then moving on to the next. They don't care about investments in productive or socially necessary infrastructure. The determinants of good or bad, efficient and inefficient bear no resemblance to common sense understanding of those terms. It is entirely determined by their accumulation of wealth.

But even that is really just a symptom of deeper problems. In Europe, it is true that Greece and some other countries have high levels of public sector debt. But it is to miss the point entirely - as I've argued more than once - to look only at public sector debt. It is total debt within an economy that shapes the likelihood of whether there will be investment to stave off a recession or protracted stagnation. In the USA the federal government has a debt of $14 trillion. That's a lot, representing about 100% of GDP. But it is dwarfed by the $36 trillion in private sector debt that has ensured that monetary policy - basically pushing down both long and short term interest rates to close to zero - has next to know impact on economic growth. There is literally no room left on the credit cards, lines of credit or mortgages of the nation. The parrot is dead.


And total debt loads themselves are a reflection of the fact that profit rates have been falling almost steadily for the past thirty-five or forty years. In the first instance, the decline in profit rates led governments to embark on an assault on working class living standards that has led to stagnant or declining wages and the de-unionization of the workforce - most spectacularly in the United States where the private sector is basically union free.
And for the first time on record, family incomes are actually falling. New figures this week from the U.S. Census Bureau show that the median income for working-age households fell 10 per cent between 2000 and 2010, even as women worked more hours...
Experts say the seeds of this lost decade were planted long before the recession. Wages fell out of step with rapidly rising productivity and soaring corporate profits in the 1980s, and the gap has been growing wider ever since. The average real wage for working men is now lower than it was in 1973.
But in an economy which is 70% consumer spending, this decline creates a roadblock to further growth. To overcome this workers were encouraged to take on ever more debt. Alan Greenspan kept interest rates low, fuelling speculative bubbles, first in tech then in housing, that gave the illusion of growing incomes. Inevitably, that bubble would burst and leave a wasteland of debt, foreclosed homes and unemployment.

Since the decline in living standards was itself an expression of the problems in the core economy, it is not surprising that debt levels rose across the economy as a whole as profit rates stagnated. In particular, with pressure to move in the direction of a "financialized" economy, debt levels in the financial sector went through the roof. Looking at the graph of US data above you can see that while all levels represented - non-financial business debt, federal government debt, household commercial credit debt - have risen since 1953, they have risen astronomically in the financial services sector, particularly beginning in the early 1970s when profit rates really took a hit. If we look at debt in terms of billions of dollars, as opposed to comparing the change in levels over time, we see in a more pronounced form the very real reason for government debt.


This graph includes financial sector debt, non-financial business sector debt, corporate debt, state & local government debt and federal government debt. As you can see, at the start of Bush Jr's term in office, federal government debt had stopped growing. Bush, of course, slashed taxes for the wealthy and ploughed money into foreign wars, which led to the return to deficit and debt growth. But, even with costly tax breaks to the corporate sector, business debt continued to rise - particularly financial sector debt. Now, look at the grey line around 2010, which indicates the 2008 financial crisis and recession. Notice how financial sector debt declines dramatically while federal government debt skyrockets? What this indicates is that the federal government saved the banking sector from itself by taking on toxic debt. This pattern was repeated in country after country. Those same bankers - who resisted all efforts to regulate them post-2008 (largely successfully) are now howling about the high levels of "sovereign debt."


The upshot is that we are expected to pay for the disaster that they caused with further reductions in our living standards - that's what Flaherty and Harper are going on about: screwing us. The irony, of course, is that smashing Greece's economy into tiny little bits - and doing the same to every other economy upon which they've set their sights - will not solve the problems. They will make them worse. People will need more, not less debt, or they will simply stop spending, causing an economic contraction. They aren't stupid - they know this. The point of the austerity exercise isn't about economic efficiency per se. The hope of people like Flaherty and Harper is that a decisive defeat for workers in Greece and beyond will drive down living standards sufficiently to restore the rate of profit - which, in the graph above, can be seen on a long decline from the mid-1960s. The question is not whether their goal is about making us pay for their crisis. It is whether or not they will be successful.



Wednesday, September 21, 2011

Tories $20 Million Auditors Are Serial Fraudsters

If you're the government and you want to find "gravy" - to pick a random metaphor - that you can eliminate in the provision of services in order to reduce the deficit, what do you do? Why, you hire an auditor of course. An auditor has specially trained staff and expertise in finding "savings" and "non-essential" line items that can be eliminated. Their word and reputation, built up over innumerable clients provide you with an objective measure of what is essential and what isn't. Stephen Harper's Tories are paying $20 million to Deloitte Inc (aka Deloitte Touche Tomatsu Ltd) to review government departments and programs and come up with $4 billion in savings from an $80 billion budget. Deloitte was one of just a few firms that were invited to submit proposals, presumably based upon their past record of impressive results. As Finance Minister Jim Flaherty put it:
“The fact is that we feel we need to have outside advice. It isn’t good, quite frankly, for a government to just look at itself. There’s a lot of expertise in Canada on the subject of public-sector productivity, for example, and we look forward to having the advice of, in this case, Deloitte,” he said.
Well, maybe not quite.

The trouble is, Deloitte has a long string of rather shabby auditing practices. In fact, as late as the end of August a Quebec judge ruled that a class action suit could go ahead in which Deloitte is one of the accounting firms being sued, along with the Mount Real investment company. Mount Real was a ponzi scheme that ripped off unsuspecting investors to the tune of $130 million, including many people's retirement savings. Don't get me wrong, I understand that everyone makes mistakes it just seems to me that for an auditing company to fail to notice and report on the fact that a large investment company is, in fact, a shell game, is a sign that they aren't very good at their job. You might even suggest that they aren't worth $90,000/day. On the other hand, perhaps the federal Tories are just following the example of Mayor Rob Ford, who hired KPMG to provide a similar audit of Toronto finances, even though KPMG's most notable success is its string of failures, frauds and lost law suits.

And if you think that it stops at the Canada-US border, you'd be wrong. In fact, just last week the Securities & Exchange Commission (SEC) in the US filed a subpoena against the recalcitrant auditor, which has refused to cough up important documents to the federal regulatory body.
DTT was the auditor of China's infamous alleged fraud Longtop Financial Technologies (LFT)-- a software firm that sells its product to firms in the banking and insurance sectors in China.
This refusal might lead one to suspect that Deloitte is worried about being exposed for fraudulent accounting practices on behalf of the company that contracted them. After all, Deloitte was forced to pony up $50 million in damages for their role in covering up the massive Adelphia scandal that saw the owners illegally and secretly loaning themselves money from company funds to the tune of billions. And in 2008 Deloitte also faced a $1 billion lawsuit by the liquidators of the Bear Stearns mortgage funds. Bear Stearns went belly up in March 2008, before Lehman Brothers followed suit in September, as a result of being loaded down with toxic debt from the subprime market, which it was also packaging and selling to anyone who would buy it.
The suit charges that the company, the fund managers, and Deloitte violated their fiduciary and professional duties. The suit said Deloitte's preparation of the funds' audits was "at a minimum negligent."
Back in Canada in the late 1990s and early 2000s, Deloitte was also called on the carpet for covering up the shabby state of finances at Livent, the entertainment company owned by Garth Drabinsky. Livent went belly up and the bankruptcy receiver launched a $450 million lawsuit against the auditors for reasons that will sound familiar.
The Post says the lawsuit alleges negligence, breach of duty, breach of fiduciary duty, and.or breach of contract on the part of Deloitte & Touche. Documents filed by the receiver reportedly claim Deloitte & Touche failed to uncover financial and accounting irregularities at Livent, and that Deloitte signed off on Livent financial statements that it knew were "materially false and misleading".
As shocking as this short list is, it isn't by any means exhaustive - there was Deloitte's role in AES, the electricity company that cooked its books with hidden loans a la Enron, or their role in helping to inflate the profit numbers at now-bankrupt telecom giant Nortel for which they also faced a lawsuit. All of which might lead you to ask yourself why the media has failed to pick up on any of this and, more importantly, why the federal government would hire an auditing firm with a record of aiding their clients in the commission of fraud, which sometimes - as in the Mount Real ponzi scheme - led to the loss of life savings by tens of thousands of ordinary people.

The media, of course, has their own reasons for perpetuating a memory hole, down which all history of past crimes disappears. But neither is it incompetence that the Tories would hire these crooks. Fraud and manipulation is exactly what they want from an auditing firm. As with the ratings agencies, auditors don't exist for the purpose of objective measurement of financial viability or good quality accounting practices. They are there to provide whatever their clients want. When the investment banks hired ratings agencies to look at their investment packages, they pronounced utterly worthless "collateralized debt obligations" as triple-A investments. When those same corrupt investors want governments to sell off state assets at fire sale prices - they downgrade state debt that has considerably more inherent value than the sub-prime crap or even the vastly larger private sector debt load. When failing companies want to cover up internal financial crises, auditors like Deloitte know how to cook the books. When governments want them to spin cuts as efficiencies, they know how to do that too. They are, in short, the most craven example of how math and business "science" are in fact nothing more than tools of the rich and powerful to screw the poor and powerless. And for that service - from the perspective of Tories and corporate CEOs - they are indeed worth $90,000 per day. From the perspective of the interests of the vast majority of the population they are crooks of a much greater magnitude than any bank robber. They ought to be shut down, their assets liquidated and their executives sent to the hoosegow for a very long time.


And, speaking of the role that auditors play on behalf of conservative governments which want to sell of assets, check out this video of Toronto Councillor Adam Vaughan grilling KPMG on their past record of recommending service privatizations:

Tuesday, September 20, 2011

The Palestinians Would Be Foolish To Trust Obama or Netanyahu

There's an old saying that goes "fool me once, shame on you; fool me twice, shame on me". I'm not sure what the appropriate riposte is when you've been scammed by the same dishonest brokers a hundred times over. That sadly describes the behaviour of the Palestinian Authority who have gone along with the charade of negotiations and broken treaties so often that it's like watching reruns of a syndicated TV series - you know how every episode is going to end but you can't help but watch it anyway. Granted, the PA have often been duped not so much out of political cowardice or foolishness as a lack of alternatives. During the civil war in Lebanon in the early 1980s, the PLO were effectively defeated by the combined power of Lebanese fascists and Israeli military power and accepted a "peace agreement" that saw the Palestinian guerillas leave the country in return for a guarantee that Palestinian civilians would be protected. Within days the Israelis had facilitated a horrific massacre at the Sabra & Shatila refugee camps, carried out by the Israeli allied Lebanese falangists.

The same inability to mobilize sufficient levels of resistance during the first Intifada to defeat Israel - though enough to make Israel look like the child-murdering bastards that they are - led to the Oslo Accords. Oslo, lovingly pined after by squishy liberals everywhere as a way to avoid dealing honestly with Israel's racist colonialism while appearing sympathetic to an obviously oppressed people, was never anything other than an agreement to outsource the oppression and colonization to the Palestinians themselves. In return for suppressing resistance, the PLO would get authority at about the level of a municipal government, be allowed to fly the Palestinian flag, and Israel would even hand over tax dollars that were collected from and therefore legally belonged to the Palestinians. Israel would continue to build illegal settlements, kill Palestinians that the PLO, by then the Palestinian Authority, hadn't jailed or suppressed and, finally, chop up the West Bank with an Apartheid Wall and turn Gaza into a giant open-aired prison on the brink of starvation. Oslo, far from being the basis to establish a Palestinian state and end the conflict, was about neutering Palestinian resistance while continuing with the same genocidal policies.

That thoroughly dishonest, not to mention murderous, modus operandi has always been how Israel carried out its dirty deeds - claim to be under existential threat, plead a desire for peace, and then stage pre-emptive attacks on a people who have been disarmed by international conspiracy using the most advanced weapons on the planet, gifted to them by the most powerful empire in world history. When the oppressed fight back with stones and bottles filled with gasoline against heavily armoured tanks and sniper rifles with night vision or jet fighters flying at 10,000 feet, claim that this demonstrates the Palestinians are murderous, trained from birth to hate Jews, religious fanatics, etc. There is, in other words, "no partner for peace." How often did we hear that in the 1990s in relation to Yasser Arafat, even as he jailed oppositionists. That is, until Abbas finally stepped up and agreed to be a mini-Mubarak happily working on behalf of Israel's pantomime of being the USA in oppressing his own people even more profoundly. Then Arafat was no longer necessary and was conveniently disposed of.

This - and much more, frankly - is worth rehearsing as we hear Obama and Netanyahu pleading with Mahmoud Abbas not to bring the issue of recognizing Palestine as a state to the UN. Hilary Clinton even pretends to want to see a two-state solution and professes to be struggling to bring one about. Netanyahu has even offered direct negotiations. The only accurate words to describe this little charm offensive ought not to be used in polite company. Suffice to say that only an absolute moron with a profound memory disorder would fall for any of this. Obama had his chance to demonstrate having the Palestinians' interests at heart when Netanyahu accelerated the settlement building program and snubbed Obama's plea for a serious hiatus. Obama and the US government could have suspended the $3 billion in annual gift cash that Israel receives each year. They could have suspended the military aid and joint training exercises. They did nothing and not because of any Jewish/Israel lobby in Washington. They did nothing because of the vital role that Israel plays as America's loyal little Sparta, their watchdog in the Middle East, a bulwark against Arab democracy or any Arab dictator who gets delusions of anti-colonial grandeur. Or simply gets too big for his britches, as Saddam Hussein found out.

The trouble now for the Americans and the Israelis is that revolution is sweeping the region and all the old calculuses no longer hold. Just over a week ago Egyptians rioted outside of the Israeli embassy, forcing the embassy staff to flee for their lives. Turkey, emboldened by years of China-style economic growth, is flexing its muscles in the region and has threatened to send Turkish warships to accompany aid vessels going to Gaza. Turkey, with 74 million people and a modern economy and modern military is not so easy to push around as the disarmed Palestinians. Egypt, Israel's neighbour, is no longer under the thumb of a pro-Israel, pro-US dictator and everything, including the 35-year peace accord is now up in the air. The revolutionary wave has made Israel more isolated and the Palestinians more powerful than they have been in generations. And Abbas knows that. He also knows that the division between Hamas' controlled Gaza and the PLO controlled West Bank was a machination by the White House/Israel - one that he actively went along with, to be sure. But rather than cementing his rule and destroying his Hamas enemies, as it was meant to do, it weakened him, made him look like what he is - a comprador tool of Israel and the USA. All of this may have emboldened Abbas. Certainly he can't turn back now or he will be a corpse politically. He has nothing to lose - the Palestinians have nothing to lose - by pushing for a symbolic victory at the UN. Of course, the USA will - as they have promised - veto the Palestinian application in the Security Council. But at a time when the USA is trying to appear as the friend of the Arab Spring, this will seriously damage their image. And the world will see that the Palestinians have the support of the vast majority of countries. Israel will appear, again, as the molly-coddled bully boy of the Middle East, kept solvent and dangerous by their American benefactors. And there is yet a further danger. If the Americans and Israel publicly and actively stand up and say that Palestine isn't a country, there is every danger that the strategy of the "two-state solution" will be finally and completely dead; revealed as a fa├žade behind which Israel could engage in endless, meaningless negotiations while creating "facts on the ground." If that leads to a civil rights struggle for a truly civil state - as opposed to the theocratic monstrosity that is Israel, the "Jewish state" - including calls for the right to democratic representation and an end to Apartheid-like policies, this will be very dangerous ground, especially in an era where everyone in the Middle East is engaging in the fight for democracy and freedom. If Abbas doesn't back down, this could open up a new round of struggle in Palestine that aligns it with a regional revolution. Palestine could truly join the Arab Spring. That can only end badly for Israel - and rightly so; they have sown the wind, it's about time for them to reap the whirlwind.


Netanyahu calls for talks with Palestinians - Middle East - Al Jazeera English
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