The British election as seen from Europe

Peter Schwarz

Today’s general election in the UK has sparked disquiet and concern in Europe’s ruling circles, particularly in Germany. It is regarded as a source of economic instability and a step towards the fracturing of the European Union into its national and regional components.

While leading politicians—not least for fear outside interference could boost anti-EU sentiments—are holding back on their comments, the leading media have published analysis and editorials which also include the views of big business representatives.

Financial Times columnist Wolfgang Münchau, who is well connected in Germany, commented, “The aftermath of the British elections is one of the most pressing issues on the minds of EU policymakers. It ranks some distance behind a breakdown of the Minsk II ceasefire agreement in Ukraine, but some way ahead of a sudden Greek exit from the euro zone.”

Many editorials accuse both the Conservative Prime Minister David Cameron and his Labour challenger Ed Miliband of opportunist adaptation and a lack of leadership.

Münchau finds it astonishing that “given the importance of this Thursday’s elections for Britain’s future in the EU, Europe has played hardly any role in the debate.”

Die Zeit refers to the election campaign as “intra British navel-gazing”. Britain has become “provincial” and “self-absorbed”. Cameron, “in the eyes of the other European countries”, is letting himself “be driven by the Eurosceptics in his own party and the anti-EU UKIP”.

The right-wing Die Welt accuses the prime minister of wanting to “win over nationalist and Euro-critical voters” and that he has become “the prisoner of his own rhetoric.”

Several editorials express concern that the outcome of the election could result in a long period of political and economic instability, which could then spread to the whole of Europe. Since all available forecasts show neither the Tories nor Labour winning a majority, they expect protracted coalition talks, with the end result being a chronically unstable government.

“In this complex situation, a stable new coalition emerging is rather unlikely,” says Spiegel Online, “and that in a country whose economy is still on rather shaky legs. ... Economic and political shock waves could spread from London that will also be felt far beyond the British Isles.”

The news magazine expects that the stock markets will record declines and the value of the pound will fall “if the impression of political instability solidifies on Friday. ... For a country whose business model is based on the constant influx of foreign capital, that would be a very unpleasant situation.”

In addition, the Frankfurter Allgemeine warns that the country’s dependence on capital inflows would have dire consequences in the event of political instability. The current UK account deficit of “around 140 billion euros a year” corresponds to “5.5 percent of economic output—a lonely record among major industrialized countries”, the paper writes.

However, the fears of the effects of a Brexit, a possible withdrawal of Britain from the European Union, run far deeper than concerns over the conjunctural impact of the election. Cameron had already announced two years ago that he would let the people vote on this question in 2017 if he were elected for a second term.

So far, he has spoken in favour of Britain remaining in the EU, but only if it grants significant concessions—which, given the complex relations between the 28 member states, is virtually impossible. Public opinion in Britain appears currently to lean in favour of remaining in the EU, but given the uncertain international situation, it is impossible to predict the result of a referendum in two years.

The Frankfurter Allgemeine believes that the uncertainty of the outcome of a referendum alone would have serious consequences. “Domestic or foreign companies could shelve investment plans or even leave the country faced with the years of stalemate expected.”

A victory for Ed Miliband, who represents a more EU-friendly view, would not in the long run solve the problem in the view of the newspaper. It is to be expected that the Tories in opposition “will be dominated by Eurosceptics” and could win the next elections “with an anti-EU campaign”, it states.

In the Financial Times, Wolfgang Münchau points out that even Labour holds an increasingly Eurosceptic view. In the party’s 83-page election manifesto, the topic of the EU takes up little more than a page, where it claims it will “change the EU in the best interests of Britain” and “protect our national interest”. The EU’s interests are not mentioned at all.

In addition to economic questions, several editorials deal with the political and strategic consequences of a Brexit. They see this as the beginning of the end of the European Union.

According to Spiegel Online, a British decision against the EU would be “a shrill signal”. It states: “For the first time, a country—and especially such a large, important and central one—would voluntarily withdraw from the EU. Other Eurosceptic countries could follow. European integration as a whole would be in question.”

The Frankfurter Allgemeine also warns of the “signal effect” of such a move: “A ‘Brexit’ provides an example that European integration—and thus also the internal market—are not irreversible.”

The newspaper cites financial and policy experts, according to whom a Brexit would be “likely to lead to the dismantling of the United Kingdom”. It warns of a “momentous chain reaction of ‘Brexit’ and ‘Sexit’ [the secession of Scotland].” What is “all the more astonishing,” is that “the important topic of Europe has so far played only a minor role in the British election campaign itself”, the paper concludes.

Die Welt compares the potential consequences of a Brexit with the “financial crisis of 2008-2009.” The “risks for the rest of Europe are enormous, not least for Germany”, which would “lose an important ally”. London had, “just like Chancellor Angela Merkel, always insisted that the EU needs to be competitive as a whole. Without England, the preponderance of the southern states, including France, would be almost overwhelming.”

The French newspaper Le Figaro also wants to prevent a Brexit. It accuses Cameron of “pursuing a chaotic European policy, of taking a failed gamble and of posing hazardous ultimatums”, and of accepting “the risk of a ‘Brexit’ in face of a sceptical electorate”. If he was re-elected, Europeans would have to help him out of this trap, “Since the EU needs British dynamism and its model of success.”

The Irish Times warns of the “enormously damaging” consequences for Ireland: “British withdrawal from the EU would be a huge shock to the whole European project and to its global influence and reputation”. It “would have deep implications for Irish business, agriculture, social policy, financial services, trade and energy.” It would be extremely damaging “to the close relationship built up between Dublin and London. Irish-British relations would revert to a damaging bilateralism based more on power relations than interdependence.” And it would profoundly unsettle Northern Ireland, politically and economically.

Journalist Christoph von Marschall, of public radio broadcaster Deutschlandfunk, paints a picture of an “existential crisis” of the EU. One should no longer treat the European trouble spots separately, he warns. If one takes together the risks of a Greek bankruptcy, a fracture of the sanctions front against Putin, a withdrawal of Britain from the European Union and an election victory of Marine Le Pen in the French presidential election in 2017, it will “suddenly be clear that the EU Europe as we know it will probably soon cease to exist.”

Reading these warnings coming mainly from the conservative, business-oriented media, one would assume that the ruling elites would do everything possible to stop an impending economic disaster and the disintegration of the continent into conflicting parts. One could add surveys of British, European and American business leaders who warn overwhelmingly of the devastating consequences of a Brexit.

Nevertheless, the centrifugal forces and contradictions in Europe are growing. This cannot be explained by the personal failings of politicians like Cameron and Miliband, nor with the growing pressure of right-wing populists like Nigel Farage and Marine Le Pen. More fundamental objective forces are at work.

The global crisis of capitalism, which has deepened since the 2008 financial crisis, is exacerbating national and social tensions everywhere. Europe is no exception. In the short term, an EU breakup might have devastating economic consequences, but in the long term this is outweighed by strategic considerations.

Is the British ruling class really served by remaining in a European Union in which Germany rises seemingly unstoppably to become the dominant economic and political power? Should Paris play second fiddle to Berlin, or orient more closely to Moscow or Washington, with which Germany could come into conflict? Is it really in the interests of Germany to hold together an EU of 28 states, or is it better to retreat to a core Europe and use the freed-up funds to build up the military?

These and similar considerations play a role in the background.

Christopher Clark called his bestseller about the First World War, “The Sleepwalkers”. The title tends to understate the criminal determination with which the protagonists pushed towards war. But it is true in so far as they—like sleepwalkers—were no longer accessible to “rational” arguments. Driven by imperialist and class interests, they marched with open eyes into the catastrophe.

The situation is similar in Europe today. The warnings that the continent is heading for a disaster must be taken seriously. The answer, however, does not lie in defending the European Union. This tool of the most powerful business and financial interests is the driving force behind the social division of the continent and the emergence of national antagonisms. The EU is organizing the attacks on the working class, it is driving forward rearmament at home and abroad, and it serves as a battleground upon which the European powers are struggling for supremacy.

The only way to unite Europe on a progressive basis is through the establishment of the United Socialist States of Europe. The defence of social and democratic rights, the opposition to war and militarism, the fight against the European Union and the unification of the European working class on the basis of an anti-capitalist, socialist programme are inseparable components of this struggle.

Kerry visits Colombo to deepen US ties with Sri Lanka

K. Ratnayake

US Secretary of State John Kerry’s two-day visit to Sri Lanka last weekend was a further step to reset US ties with Colombo as part of military preparations against China.

Relations between the US and Sri Lanka were strained under former President Mahinda Rajapakse, who tilted toward China and tried to balance between Washington and Beijing. A regime-change operation backed by the US resulted in Maithripala Sirisena winning a presidential election in January.

Kerry met with President Sirisena, Prime Minister Ranil Wickremesinghe, Foreign Minister Mangala Samaraweera and Tamil National Alliance (TNA) leaders. He praised Sirisena, Wickremesinghe and Samaraweera for taking “difficult decisions” and announced “an annual partnership dialogue between our two governments” to “deepen our partnership with you.”

Significantly, this was the first visit by one of the highest-ranking US officials to Sri Lanka since 2005, when Secretary of State Colin Powell travelled to the island after the devastating December 2004 Asian tsunami. Powell visited a number of affected countries, using the catastrophe to advance US strategic interests.

Kerry made hypocritical lectures during his visit about human rights, democracy and reconciliation. None of these was his real agenda. His trip was aimed at placing Sri Lanka firmly in line with the Obama administration’s “pivot” to Asia, which is directed at encircling China and subordinating it to US hegemony. Kerry’s visit also sent a wider message that US imperialism is aggressively pursuing its drive against China.

For almost half a decade, Washington backed the Rajapakse government’s war against the separatist Liberation Tigers of Tamil Eelam (LTTE) to the hilt. But it was concerned when China emerged as the principal supplier of military hardware and funds to the cash-strapped government. The Obama administration then cynically raised human rights violations committed during the final months of the war, when tens of thousands of civilians were killed, to press Colombo to distance itself from Beijing. Last year, Washington backed a UN Human Rights Council (UNHRC) resolution, threatening an international war crimes probe.

When Rajapakse called an early presidential election for January 8, State Department officials utilised long-established connections with pro-US United National Party (UNP) leader Wickremesinghe and former President Chandrika Kumaratunga to bring forward Sirisena, one of Rajapakse’s senior ministers, as a candidate to oust Rajapakse. Kerry personally telephoned Rajapakse on election day, advising him to “respect the election outcome.”

Sirisena and his minority government, led by Wickremesinghe, swiftly shifted in favour of the Western powers, particularly Washington and its regional ally, India. It also declared a review of Chinese-funded projects, with the $US1.4 billion Colombo City Port City project still to be approved. The message to China is that relations will continue, but not at the same level as before.

Kerry spelled out Washington’s strategic interests in a lecture at the Kadirgamar Centre in Colombo. He explained that the US had no problem with Rajapakse’s war to crush the LTTE. Speaking in terms that also sought to justify Washington’s ruthless wars around the globe, Kerry said: “It is sometimes necessary to go to war, despite the pain it brings. For all of my country’s disagreements with the previous government in Sri Lanka over how it fought the LTTE, we clearly understood the necessity of ridding this country of a murderous terrorist group.”

Without mentioning Rajapakse’s relations with China, Kerry pointed to Sri Lanka as a geo-strategic asset located near vital trade routes, on which China depends heavily. He declared: “Your country sits at the crossroads of Africa, South Asia and East Asia... The Indian Ocean is the world’s most important commercial highway.”

Kerry noted that 40 percent of all seaborne oil passes through the Strait of Hormuz and half the world’s merchant fleet capacity sails through the Straits of Malacca. He stated: [W]ith its strategic location near deep-water ports in India and Myanmar, Sri Lanka could serve as the fulcrum of a modern and dynamic Indo-Pacific region.”

Kerry asserted that the US was already providing leadership on maritime security in the Indian Ocean in association with “close friends and allies across the region, including India, Australia, Indonesia and Japan.”

The secretary of state said the US and Sri Lanka “are also working together to oppose the use of intimidation or force to assert a territorial or maritime claim by anyone.” He asserted the need to defend “freedom of navigation and over-flight and other lawful uses of the sea and airspace.” Freedom of navigation is a slogan with which the US is fomenting provocations against China, while encouraging Japanese imperialism’s claims in the East China Sea and claims by the Philippines and Vietnam in the South China Sea.

The Pentagon is already boosting relations with the Sri Lankan military. On April 19, US Seventh Fleet commanders invited Samaraweera, State Minister of Defence Ruwan Wijewardena and a delegation to the USS Carl Vinson Carrier Strike Group, where they had discussions and viewed its military might.

Kerry was keen to ensure that the TNA, the main Tamil bourgeois alliance, backed the government. Washington wants to stop any agitation over the repression of the island’s Tamil minority that could deepen the political instability in Sri Lanka, as well as southern India, affecting Washington’s strategic interests.

In his meeting with TNA delegates, Kerry supported “devolving powers”—a formula for power-sharing between the Colombo and the Tamil elites in the island’s north and east. However, he urged the TNA to cooperate with “the new government’s initiative towards an amicable solution,” TNA spokesman Suresh Premachandran said.

A considerable section of the Sri Lankan elite is enthusiastic about the new relations with the US. The Colombo media featured articles on the importance of Kerry’s visit. A Sunday Times editorial stated: “The dialogue [between the US and Sri Lanka] completely broke down. It had to take an election in Sri Lanka to turn the tide—and Secretary Kerry’s visit is, largely, to pay tribute to the voters of Sri Lanka who helped oust the Rajapakse regime, and put back on track US-SL relations.”

Sri Lankan capitalists were dismayed about losing business with the US, the country’s largest single destination of exports, worth about $2.5 billion in 2013. Sirisena’s government hopes to attract more investment, using its close relations with the US, the international finance capital. Speaking alongside Kerry, Foreign Minister Samaraweera declared: “Sri Lanka has been considered a paradise for tourists for many years but our government is now also keen to make Sri Lanka an investor’s paradise.”

Kerry said a US Treasury and Commerce department team would work with the government on economic measures to achieve “greater investment and greater growth.” That means deeper attacks on working-class conditions in the name of economic reform, as well as exposing workers across the region to the danger of war against China.

Alberta: NDP election sweep ends 44 years of Tory rule

Keith Jones

The trade union-backed, ostensibly left-wing New Democratic Party (NDP) was unexpectedly swept to power in Tuesday’s Alberta election, bringing an abrupt end to 44 years of Progressive Conservative rule over Canada’s main oil-producing province.

In the six preceding Alberta elections stretching back to 1993, the NDP had never won more than 4 seats. On Tuesday it won 53, as its share of the popular vote increased more than fourfold from the 2012 election to 40.5 percent.

The NDP swept urban Alberta, including the smaller cities of Red Deer, Lethbridge, and Medicine Hat. It won all 19 seats in the provincial capital, Edmonton, and 14 of Calgary’s 25 seats.

Headquarters to Canada’s major oil companies, Calgary has long been considered the political-ideological center of Canada’s “new right,” which first emerged as the Reform Party in the late 1980s and ultimately became the dominant force in Stephen Harper’s “new” Conservative Party. Harper, who has headed Canada’s national government since 2006, is himself a Calgary MP.

The Progressive Conservatives (PC), led by former Harper cabinet minister and Canadian Imperial Bank of Commerce vice-chairman Jim Prentice, lost 60 seats and have been reduced to the third party in the 87-seat provincial legislature, behind the right-wing populist Wildrose Party—a party that only a few weeks ago appeared to be on its deathbed.

Prentice, in his election night concession speech, announced that he is not only resigning as PC leader. He is renouncing the Calgary seat to which he was just reelected and quitting politics.

Within weeks of Prentice becoming Conservative leader and Alberta Premier last September, the province’s economy was roiled by the plunge in world oil prices.

The government’s response was to introduce a raft of austerity measures aimed at placing the burden of the economic slump on the working class in what is already far and away Canada’s most socially unequal province.

The budget introduced by the government just prior to the election detailed plans to slash public spending by close to 10 percent in real terms over the next three years, eliminated the equivalent of 1,700 full-time health care jobs, introduced a new health care premium, and imposed numerous other hikes in taxes and government fees.

Speaking with the CBC while on the campaign trail last month, Prentice touted his imposition of unpopular policies designed for and by big business as proof of his capacity for leadership. “No one,” said Prentice, “expected that we would lose close to 50,000 permanent jobs in this province in the last three months. Nobody expected we’d see a $7 billion crater open up in our public finances because of the collapse in oil prices.”

Although the New Democrats will on occasion employ vague anti-big business rhetoric, they are no less beholden to big business and staunch defenders of the capitalist profit system than their Tory rivals.

Within hours of the NDP sweeping the polls, Premier-elect Rachel Notley was pledging to work with Prime Minister Harper and offering obsequious reassurances to big business.

Any policy changes, Notley told a Wednesday morning press conference at the Alberta legislature, “will be done collaboratively and in partnership with our key job creators in this province.” The premier-elect said she will be “reaching out” to industry in coming days. “I’m hopeful that over the course of the next two weeks they will come to realize that things are going to be just A-OK over here in Alberta.”

The daughter of a former Alberta NDP leader, Notley has lifelong ties to Canada’s social democrats and the trade union bureaucracy. As she insisted, and all but the most rabid right-wing sections of the corporate media conceded, the NDP is proposing modest changes—the scrapping of the Conservative cuts to health care and education and the new health care premium; a staggered raising of the minimum wage to $15 per hour over the next three years; a 2 percent increase in the provincial corporate tax rate; and higher tax rates for the upper middle class and rich (the top 10 percent).

If implemented, the corporate tax increase will roll the taxation rate back to what it was in 2004; the income tax increase would still leave high-income Albertans paying less than in any province but New Brunswick.

The NDP is committed to reviewing the royalties paid by the province’s oil and natural gas producers. But Notley has pledged that there will be no increases during a period of depressed world energy prices, adding that the review could well leave the royalties unchanged. In a further measure of her readiness to work hand-in-glove with Big Oil, the premier-elect has repeatedly said that the she is modeling her energy policy and relationships with the province’s energy producers after that of longtime Progressive Conservative Premier Peter Lougheed.

Invariably the new government, as have previous NDP regimes in Ontario, BC, and wherever else Canada’s social democrats have gained office, will come into headlong conflict with the working class.

That said, the Alberta elections point to growing political volatility and popular disaffection with the traditional political and economic establishment. This is the product of the recent economic tailspin, but also of years of government austerity, social reaction and ever-widening social inequality.

Buoyed by the development of the tar sands and high oil prices, Alberta’s economy has grown far more rapidly than the rest of Canada’s over the past two decades. The “boom years,” however, were marked by intensifying hardship for wide swathes of the population due to housing shortages, inadequate public infrastructure, and the country’s lowest minimum wage outside the impoverished Atlantic Provinces.

Prentice will now be forever identified with the collapse of the Tories’ Alberta political dynasty. Yet only a few weeks ago he was being touted by the corporate media as a political titan who would in all likelihood lead Alberta’s government for years to come.

Arguably the second or third most powerful minister in Harper’s government till he choose in 2012 to cash in and make millions as a top bank executive, Prentice was coaxed back to Alberta by Calgary’s oil barons last summer to take charge of a PC government that had been tarnished by scandal and to steer it further right.

Topping business’s agenda for Prentice was a renewed push for health care privatization, slashing social spending, and overcoming the political logjam in the building of new pipelines for Alberta oil-sands bitumen.

Recognizing that the political ground was shifting under their feet, the majority of the Wildrose MLAs (Members of the Legislative Assembly), including the party’s leader, Ayn Rand devotee Danielle Smith, crossed the floor in December to join the government and “reunite” the right.

The unions, for their part, were eager to work with Prentice. As the government was sent reeling by the drop in oil prices, the Alberta Federation of Labour and heads of the various public sector unions entered into talks with Prentice. In 2012 the unions had rallied round Prentice’s predecessor, Alison Redford, claiming that she was a “progressive” Tory and that the reelection of her Conservative government was the only way to prevent the Wildrose from coming to office.

Three years on, the unions cited Prentice’s promise to repeal a vicious anti-worker law that Redford had enacted in 2014 that threatens union officials and workers who even speak about the possibility of a walkout in defiance of the province’s draconian antistrike laws with criminal prosecution, as evidence that they could work with the new premier to deal with the budget crisis caused by the oil price drop.

But in the aftermath of the Conservatives’ March 26 budget, the corporate media-created bubble around Prentice and his government burst. Workers were outraged that Prentice, while slashing public services and hiking user fees and regressive taxes for Albertans across the board, insisted that corporate tax rates were untouchable. At the same time, the budget angered small business owners, professionals, and other petty-bourgeois layers by abandoning the 10 percent “flat” income tax that PCs had introduced in the later 1990s and otherwise relying on “revenue-raising” measures, not just social spending cuts, to balance the budget three years hence.

Three more Republican candidates join US presidential race

Patrick Martin

Three more multi-millionaires announced their candidacy for the Republican presidential nomination Monday and Tuesday, bringing the total number of declared candidates to six. As many as a dozen others are openly campaigning, raising money, or participating in forums, without yet formally declaring.

Two weeks ago a forum in New Hampshire, the first primary state, drew a staggering 19 active or potential candidates, who addressed hundreds of Republican Party activists in the course of two days. These included four US senators, four governors, six former governors, one former senator, and a US congressman, as well as three who had never held political office.

The multiplication of Republican candidates is the byproduct of several factors, including the lack of any credible frontrunner—which reflects the general unpopularity of the party’s ultra-right policies—and the factional divisions among ultra-right Tea Party elements, Christian fundamentalists, corporate executives, and the direct representatives of the military-intelligence apparatus.

But one factor is of overriding importance: the flood of money into the two big business parties, particularly in the wake of the 2010 Supreme Court decision in the Citizens United case, which effectively scrapped all limitations on campaign contributions.

As a result, virtually any candidate, no matter how obscure or erratic, can sustain a presidential bid—at least during the year before actual voting begins—providing he or she can find a billionaire backer willing to put up the money. Many of the Republican presidential hopefuls are participating in the hope that a well-received speech or television appearance will allow them to hit that jackpot.

On the Democratic side, the influx of big money seems to have produced the opposite result. The presumptive nominee, former secretary of state Hillary Clinton, has the active or passive support of all the available politically active billionaires, who are less numerous on the Democratic side than on the Republican. As a result, she faces only one declared opponent, Vermont Senator Bernie Sanders, with few significant challengers waiting in the wings.

On the Republican side, it requires a $50 million campaign war chest for 2015 alone—the year before the election—to be taken seriously as a candidate. The influence of big money accounts directly for the early announcements by three US senators, Ted Cruz, Rand Paul and Marco Rubio, because as federal elected officials they can only raise money directly as declared candidates for the presidency. Governors like Scott Walker of Wisconsin and Chris Christie of New Jersey, as well as ex-governors like Jeb Bush of Florida, have no such restrictions, and can raise vast sums of money even before the formal declaration.

None of the three candidates who joined the Republican presidential race this week is likely to win the nomination, but the combined effect of their entry is to push the campaign even further to the right. Each of the three candidates demonstrates, in different ways, that holding false, retrograde, and virtually demented views is no barrier to being treated as a serious presidential candidate—provided you declare your unflagging loyalty to capitalism, religion and the US military.

Retired neurosurgeon Ben Carson declared his candidacy Monday morning at a rally at the Music Hall in downtown Detroit, his birthplace. Carson, who is African-American, had a fabled medical career at Johns Hopkins in Baltimore, during which he never openly engaged in politics. Even now, as a declared presidential candidate, he boasts of never using notes or a prepared text, simply speaking off the cuff.

Carson was promoted among Tea Party Republicans after a televised confrontation with President Obama in 2013 during the National Prayer Breakfast in Washington, in which he denounced the Affordable Care Act and advocated a “flat tax” that would substantially cut taxes for the wealthy and corporations. The Wall Street Journal immediately published an editorial headlined “Ben Carson for President,” and a National Draft Ben Carson for President Committee raised $16 million.

In subsequent months Carson went on to claim that Obamacare was the “worst thing to have happened in this nation since slavery” and to suggest that Obama was a “psychopath” and that Christians faced repression in the United States “very much like Nazi Germany.” He published a 2014 book,One Nation, denouncing the decline of moral values in America and appealing to Christian fundamentalists and anti-gay bigots.

Carson’s opposition to welfare programs and his law-and-order demagogy took a blow from the recent events in Baltimore, the city where he made his name as a surgeon and medical administrator. He has been silent on the police violence that triggered days of unrest, while claiming that rioters saw looting as an economic opportunity.

Multi-millionaire former CEO Carly Fiorina announced her candidacy Monday as well, using video posted on the Internet as well as media interviews. Like Carson, she has never held political office, but she has been active in Republican Party politics since being fired by Hewlett-Packard in 2005. She was the Republican candidate for US Senate in California in 2010, losing to incumbent Democrat Barbara Boxer, and served as an adviser and campaign surrogate for Republican presidential nominee Mitt Romney in 2012.

Fiorina claims that her top qualification is knowing “how the economy actually works” and that her role as a CEO showed she could make “a tough call in a tough time with high stakes.” Her corporate experience does indeed personify the state of the American economy, as she oversaw the cutting of 36,000 jobs at H-P and then received a $21 million golden parachute from the company when she eventually lost the confidence of the board of directors and was ousted, after a merger with rival Compaq failed to boost profits sufficiently.

Fiorina’s campaign appears to be an audition for running mate rather than for the top spot on the Republican ticket, as she has focused largely on strident public attacks on the likely Democratic nominee, Hillary Clinton, the role traditionally played by a vice-presidential nominee. She is acceptable to the military-intelligence apparatus, having served two years as chair of the CIA’s External Advisory Board, from 2007 to 2009.

Like Carson and many of the other Republican hopefuls, Fiorina is prone to bizarre utterances, as when she told Time magazine that liberal environmentalists were responsible for the massive drought now afflicting California.

The third Republican to declare his candidacy this week, former Arkansas Governor Mike Huckabee, ran for president previously in 2008, winning the Iowa caucus thanks to support from Christian fundamentalists and home-schoolers, and also winning seven primaries in the South. He had to halt his campaign after financial support dried up, but was the last rival to concede to the eventual Republican nominee, John McCain.

Since then, Huckabee has become a multimillionaire talk-show host on Fox News, raking in additional income with a radio program and books marketed to the ultra-right audience, and by serving as a pitchman for a dubious series of commercial products, including a quack remedies for diabetes. Like Bill Clinton, he has risen from poor beginnings in Hope, Arkansas—they were both born in the same small town—to living in a mansion, although in Huckabee’s case it is on the Florida Gulf coast rather than in the New York City suburbs.

As a largely flattering profile on Politico.com described him, Huckabee is now “a part of the one percent. There’s the 10,900-square-foot beachfront mansion he built on Florida’s Panhandle, worth more than $3 million. There are regular trips on private jets, often to elite events at which he has given countless paid speeches.”

While likely to have an impact again in the Iowa caucus and Southern primaries, Huckabee faces more competition for the Christian fundamentalist vote than in 2008. He has accordingly sought to outbid rivals like Cruz, former senator Rick Santorum and Louisiana Governor Bobby Jindal, suggesting that Obama was against Christians and Jews but gave his “undying, unfailing support” to the Muslim community. He has also been the most strident Republican opponent of gay marriage and abortion.

This is combined with a right-wing populist attack on New York-based financial interests, denouncing “the real axis of evil in this country—the axis of power that exists between Washington and Wall Street.” He has come close to the language of the AFL-CIO in opposing the Trans-Pacific Partnership trade deal, where he declared that among American CEOs, “We have a lot of globalists and, frankly, corporatists instead of having nationalists.”

This type of right-wing populist demagogy is a political show aimed at confusing workers and lining them up behind the interests of their “own” capitalists on the basis of economic nationalism. It serves the interests of the financial aristocracy and the military-intelligence apparatus, which is preparing for stepped-up military adventures overseas.

Record number of internally displaced people globally in 2014

Niles Williamson

According to a report issued by the Internal Displacement Monitoring Centre (IDMC) on Wednesday, a record 38 million people in 60 countries were displaced by ongoing conflicts from their homes within the borders of their own country through the end of 2014. They comprise the vast majority of the more than 50 million classified as refugees.

The report, “Global Overview 2015,” notes that the number of people internally displaced is equivalent to the combined populations of New York City, London and Beijing. The report marks the third straight year in which the IDMC has tallied a record number of internally displaced people.

The report blames rising wealth inequality for increasing conflict around the globe as marginalized religious, ethnic and tribal minorities seek independence and control over territory. They single out Islamic jihadist groups such as the Islamic State in Iraq and Syria (ISIS), Boko Haram and Al Shabaab whose actions and the response by Western imperialism have caused millions to flee their homes.

11 million people were newly displaced as the result of violent conflict in the course of 2014, with an average of 30,000 people fleeing their homes every day. Iraq, South Sudan, Syria, Democratic Republic of Congo (DRC) and Nigeria account for 60 percent of new displacements.

Iraq showed the greatest new dislocation with 2.2 million people escaping from areas seized by ISIS. The Islamic fundamentalist organization launched an offensive in June last year in which it seized control of large swathes of northwestern Iraq including the major cities of Mosul and Tikrit. The United States responded by launching a new air campaign in Iraq and dispatching thousands of special forces which are assisting the Iraqi military in a counterassault.

A total of at least 3.2 million people are currently internally displaced in Iraq, a legacy of the American invasion and occupation of the country between 2003 and 2011.

In neighboring Syria, where the US and its allies have stoked a civil war against President Bashar al-Assad, at least 1.1 million people were forced out of their homes last year. In total, 35 percent of Syria’s population, approximately 7.6 million people, have been displaced by ongoing fighting in the country’s four-year-old civil war. It is estimated that at least 30 percent of the housing stock registered in the 2014 census has been damaged or destroyed, making return for many impossible.

US imperialism and its allies bear the responsibility for the unprecedented humanitarian catastrophe in Syria as they have flooded the country with weaponry and provided military training to so-called moderate rebel forces, which include Islamist fighters now aligned with ISIS and the Al-Qaeda affiliated Al-Nusra Front.

Meanwhile, fighting in South Sudan’s ongoing civil war displaced at least 1.3 million people last year, 11 percent of the country’s total population. Competing factions of the Sudanese People’s Liberation Army have been fighting for control over the northeastern provinces which contain key oil fields since the end of 2013.

In the DRC at least a million people were displaced by fighting in the country’s eastern provinces. People fled in the aftermath of a series of massacres carried out by the rebel Allied Democratic Forces in the city of Beni that killed several hundred.

Nearly one million people were displaced in Nigeria last year where the Islamic fundamentalist organization Boko Haram has been involved in an insurgency since 2009. Suicide attacks and other assaults by Boko Haram killed more than 10,000 people throughout northern Nigeria in 2014.

Ukraine was the only European country in which a significant number of people were newly displaced by fighting last year. More than 646,000 people were forced from their homes as a result of fighting in eastern Ukraine between government forces backed by the United States and Germany and pro-Russia separatists.

The conflict began after the US and Germany backed a fascist-led coup which ousted pro-Russian President Victor Yanukovych. The new pro-Western regime launched a bloody offensive which sought to suppress pro-Russian separatists in the eastern Donbas region opposed to the new government.

What the report makes clear is that every continent is affected by the growing numbers of people displaced due to ongoing armed conflicts.

There were at least 436,500 newly displaced people in North and South America in 2014, making a cumulative total of 7 million people. In Mexico more than 281,000 people have been displaced by fighting between the drug cartels and gang violence. More than 500,000 people in El Salvador, Guatemala and Honduras are currently displaced as the result of organized crime and gang violence.

Colombia accounted for 90 percent of the Americas’ total displaced population. The 6,044,200 people counted as displaced in Colombia account for 12 percent of the country’s total population. In addition to gang violence, many in Mexico, Colombia and Guatemala have been displaced by illegal and legal logging operations and cultivation of crops such as cocoa, poppies for opium, marijuana and palm oil.

Sub-Saharan Africa accounts for more than 10 million of the world’s internally displaced peoples, and at least 4.5 million people newly displaced in 2014. The insurgency in Somalia headed by the Islamic jihadist group Al Shabaab has contributed to the more than 1 million displaced people in that country. Displaced people in Somalia suffer from the highest rate of severe malnutrition in the impoverished country.

At least 3.8 million people were newly displaced in the Middle East and North Africa in 2014, bringing the total to 11.9 million. In just the last four years alone, 7.8 million people have been forced out of their homes. The number of people forced to flee their homes in Libya, destabilized by a US-NATO air assault in 2011, increased more than six-fold from 2013 to 400,000. The Middle East and North Africa now account for 31 percent of the world’s internally displaced people, up from just 14 percent in 2011.

South Asia accounted for 1.4 million new displacements with a total of 4.1 million displaced by violence. In Pakistan the number of displaced people grew from 746,700 to 1.9 million. The US has carried out years of drone attacks and backs military operations against an Islamic insurgency in the country’s northwestern FATA region. In neighboring Afghanistan, which has been subjected to continuous US military operations since 2001, the number of displaced people grew by more than 170,000 to 805,400.

In Southeast Asia, 95 percent of the 855,000 displaced people are in Burma, Indonesia and the Philippines. While the region saw 134,086 new displacements in 2014, it was the only region that experienced a decline in the overall total, mainly in Burma and the Philippines.

French National Assembly passes draconian electronic surveillance law

Anthony Torres

The French National Assembly overwhelmingly passed the Intelligence Law on Tuesday, retroactively sanctioning mass spying carried out by the intelligence services. The reactionary and antidemocratic law formally sets up the surveillance infrastructure for a police state in France, allowing the government to collect data on the entire population.

All the parties of the political establishment supported the law, which was approved 438-86, with 42 abstentions. It was overwhelmingly backed by both the ruling Socialist Party (PS) and the conservative Union for a Popular Majority (UMP). Some Green and Left Party delegates voted against, secure in the knowledge that the law would pass overwhelmingly.

The Senate is due to begin examining the law on May 20 and is expected to approve it before the Constitutional Council examines it.

Prime Minister Manuel Valls (PS) personally appeared at the National Assembly to defend the bill. Admitting that “it is exceptionally rare for a prime minister to present a bill to the representatives of the nation,” he said that he was doing so “to insist on the law’s importance.”

During parliamentary debate last week, Valls sought to intimidate deputies critical of the bill by saying that they were refusing to “defend the Republic.” All but accusing opponents of the bill of treason, Valls declared that the decision to vote for or against the law would separate “those who have a sense for the state from those who sometimes do not.”

The French ruling class is seizing on the attacks on the anti-Islam Charlie Hebdo magazine in January to rapidly push through far-reaching measures. By voting for the law, the state is sanctioning powers that even supporters of the law admit were illegal, though broadly used. Last month, Le Monde wrote that “this text, which legalizes forty years of illegal practices by the secret services and tries to somewhat control them, was in the works for years.”

Thus, for years, the intelligence services have employed criminal practices to spy on everyone, without criticism from the parliament, which obeys the orders of the police and intelligence services. The law will now function to protect and offer legal cover to these same intelligence officials.

The law obliges Internet Service Providers to provide their clients’ data in real time. Electronic surveillance will be stepped up, with the mass collection of metadata. Cameras and microphones can also be exploited for spying purposes. Communications between two people in France, as well as communications between people in France and abroad, can be recorded.

An automated national judicial file for perpetrators of terrorist violations will conserve these data for 20 years, and 10 years for minors. Prison officials will also have the right to use these techniques legalized by the bill, turning them into an extension of the intelligence services.

The law also legalizes the use of IMSI-Catchers—false cell phone towers that allow authorities to identify and track physical movements of any cell phone user near the device. Previously, the use of such devices was illegal under French law.

The current law breaks with legality by hiding and justifying illegal conduct taking place without the knowledge of the population. This will only encourage the intelligence services, which know that they are protected by the state, to break through the weak limits that the law unconvincingly claims to impose upon them.

In fact, the law gives the secret services virtually unlimited powers. The National Commission of Control for Intelligence Techniques (CNCTR) will be composed of six magistrates of the Council of State and of the Court of Cassation, of three deputies and three senators from the government and the opposition, and one “technical expert.” This body replaces the current National Commission for Control of Security Intercepts (CNCIS).

The CNCTR can give advisory opinions to approve more intrusive spying, but in urgent cases operational chiefs or even agents of the intelligence services can skip the formality of obtaining the CNCTR’s advice, with the authorization of the prime minister.

The CNCTR thus serves as a pseudo-democratic cover for mass surveillance by the secret services.

The vote for the intelligence law took place behind the back of the French people. Besides a few criticisms that substantial powers were being granted to the intelligence services, the vast political implications of the law were neither mentioned nor debated.

One of the few more substantial statements on the law came from UMP deputy Alain Marsaud who, though he supported it, admitted: “This law does not have enough built-in controls. The capacity for intrusion it grants is enormous. Our life will not be the same before and after it passes, because everything we say will be monitored. This law can allow the creation of a political police, the likes of which we have never seen.”

The passage of the intelligence law, which has been openly compared in the press to the USA Patriot Act, is a warning to the working class. The ruling class is breaking with democratic forms of rule. Following the model employed in all the major capitalist countries, France is responding to the growth of social antagonisms through mass spying and a wholesale assault on democratic rights.

The French ruling class is seeking to implement the illegal and unconstitutional methods perfected by the US National Security Agency, as exposed by Edward Snowden. The NSA collects and monitors the communications data of the American people and of billions of other people around the planet, outside of any democratic control.

The immense expansion of the powers of the spying apparatus is part of a general militarization of French society. After the January terrorist attacks on Charlie Hebdo, the state has deployed 10,000 troops inside France itself.

The “war on terror” proclaimed by the Bush administration nearly 15 years ago was used by the American ruling class as the ideological framework for never ending war abroad and the destruction of democratic rights at home. It is now the modus operandi for country after country.

On Wednesday, a day after the vote in France, the Canadian House of Commons voted to approve the Anti-Terror Act, which gives the Canadian Security Intelligence Service and police vast new powers, including the ability to disrupt activity declared to endanger “national security” and engage in preventive arrests and detention without charges.

Naga Peace Process: Gone Off Track

Wasbir Hussain


That New Delhi’s Naga peace policy has flopped has become evident with the Khaplang faction of the National Socialist Council of Nagaland (NSCN-K) calling off the 14-year ceasefire on 27 March and immediately targeting security forces, killing eight soldiers of the Assam Rifles on 3 May. There have been two other recent attacks on the Assam Rifles in Nagaland, with one in the heart of capital Kohima, where an on-duty soldier was shot dead. Earlier, on March 26, four Assam Rifles troopers were injured as armed gunmen attacked the Company Operating Base and outpost in the outskirts of Kohima. The NSCN-K is suspected to have carried out these attacks.

These incidents have broken the rather long lull in Nagaland, Northeast India’s hottest insurgency theatre until the Government of India managed to strike a ceasefire deal with the Isak-Muivah faction of the NSCN (NSCN-IM) in 1997 and began peace talks. Within four years of the truce with the NSCN-IM, New Delhi succeeded in having a similar ceasefire agreement with the rival NSCN-K. But unlike the movement on the peace efforts with the NSCN-IM, the NSCN-K was not invited for formal negotiations, making the Myanmar-headquartered outfit led by SS Khaplang restive.

In fact, New Delhi began watching the NSCN-K rather closely after it signed a ceasefire deal with Naypyidaw in April 2012. Apart from India, which was uneasy with this move, both the NSCN-IM and the NSCN (Khole-Kitovi) opposed this truce with Myanmar. They felt the NSCN-K cannot behave or consider itself as a group that has relevance in both India and Myanmar.

What eventually might have firmed Khaplang’s resolve to call off the truce with New Delhi could be the actions of two of its senior leaders who have been accused of compromising the NSCN-K’s and the Naga cause’s stand. While Khaplang wanted to abrogate the truce, the two leaders, Wangtin Konyak and T Tithak, wanted the ceasefire to be extended beyond 28 April – the day the term was to end. The picture is still hazy, but the haste with which Wangtin Konyak and T Tithak, were expelled from the NSCN-K, and the duo formed a new rebel group, the NSCN-R (Reformation), indicates that they had already arrived at some sort of an understanding with the Government of India.

New Delhi appeared working to a plan because it did nothing to either save the truce or prevent a split in the NSCN-K. Take a look at the swift turn of events: on 17 April, the new-born NSCN-R signed an initial one year ceasefire agreement with New Delhi. The latter followed this up by cancelling the ceasefire agreement that it had with the NSCN-K, making the ground clear for a direct confrontation with the now belligerent insurgent faction. The whole thing looked like part of a plan to sideline the NSCN-K and paint it as an outfit with no relevance to Nagas in India.

Recently, there are have been several other significant developments that indicate that New Delhi is treading a slippery path. First, although the truce with the NSCN-R, like that with the NSCN-IM, is confined to the state of Nagaland, leaders of the new faction claimed that the government ‘verbally assured’ them that the ceasefire is being extended up to Arunachal Pradesh. These leaders have also claimed that New Delhi has agreed to let the NSCN-R set up a camp in Arunachal Pradesh.

If true, this will have serious ramifications because the NSCN factions are having a free run in several parts of Arunachal Pradesh. Besides, the route the rebels take to Myanmar is via Arunachal Pradesh and any extension of the truce to Arunachal Pradesh will prevent the army and other security forces to engage with these rebels. Moreover, in a jungle warfare scenario, it is next to impossible to ascertain which group or faction a rebel contingent might belong to unless there is a liaison with the security forces.

In the wake of the NSCN-R leaders’ claims, the Centre must clarify the exact facts. If the ceasefire with the NSCN-R is extended beyond Nagaland, the same must apply to the NSCN-IM as well, with whom New Delhi is engaged in peace talks without a breakthrough for the past 18 years. There cannot be different yardsticks for different factions of a same militant group, but unfortunately that is happening and derailing peace processes.

Despite eighteen years of dialogue with the NSCN-IM, desired results have not been achieved. Both New Delhi and the NSCN-IM leadership are either ambiguous or have kept the people in the dark about the progress or otherwise of these deliberations. Additionally, while grappling with the NSCN-IM, New Delhi has not bothered to engage with other Naga rebel groups and factions, particularly the NSCN-K. This gave an impression that New Delhi regarded the NSCN-IM as the sole or principal rebel group representing the Nagas. However, the NSCN-K too has considerable influence in several Naga areas, particularly those bordering Myanmar. If New Delhi has decided to ignore the NSCN-K because it had entered into a ceasefire agreement with the Naypyidaw, then it would only expose the Government’s lack of foresight.

These are certainly not welcome developments insofar as the Naga insurgent politics is concerned as it will make things more difficult for New Delhi in its bid to resolve the Naga issue. 

The questions for New Delhi are: after not formally speaking with the NSCN-K all these years, would you start formal talks with the brand new NSCN-R now? If not, is this the Centre’s old and unproductive strategy of postponing peace yet again? Is the NSCN-R, unlike the NSCN-K, willing to accept the NSCN-IM as the big brother and accept a possible agreement with them? Have you encouraged the formation of the NSCN-R to side-line the NSCN-K? 

If the recent attacks are any indication, the NSCN-K will try to keep demonstrating its strike potential in the coming days with security forces being the main target. The group wants to include parts of Myanmar’s Sagaing Division, where it is based, in its scheme of a united. With an estimated at 1500 fighters, its cadres are mostly based in Sagaing’s northern Lahe and Nanyun townships and thrive on funds collected via kidnapping, extortion and other anti-social activities. 

At the end of the day, the Naga peace process shows clear signs of having gone off track.

The Rich Get Richer

MIKE WHITNEY

Why are stocks still flying-high when the smart money has fled overseas and the US economy has ground to a halt?

According to Marketwatch:

“For the eighth week in a row, long-term mutual funds saw more money flowing out of U.S. stocks and into international stocks, according to the Investment Company Institute……For the week ended April 22, U.S. stocks saw $3.4 billion in net outflows from long-term mutual funds…For the year to date, net outflows for U.S. stocks are $13.79 billion, while inflows for international stocks are $41.12 billion.

Those figures, however, don’t count exchange-traded funds. In April alone, mutual funds and ETFs that focus on international stocks saw $31.8 billion in net inflows, while U.S.-focused funds and ETFs shed $15.4 billion, according to TrimTabs Investment Research.” (“Why U.S. stocks are near highs even as fund investors flee“, Marketwatch)

So if retail investors are moving their cash to Europe and Japan (to take advantage of QE), and the US economy is dead-in-the-water, (First Quarter GDP checked in at an abysmal 0.1 percent) then why are stocks still just two percent off their peak?

Answer: Stock buybacks.

The Fed’s uber-accommodative monetary policy has created an environment in which corporate bosses can borrow boatloads of money at historic low rates in the bond market which they then use to purchase their own company’s shares.  When a company reduces the number of outstanding shares on the market, stock prices move higher which provides lavish rewards for both management and shareholders.  Of course, goosing prices adds nothing to the company’s overall productivity or growth prospects, in fact, it undermines future earnings by adding more red ink to the balance sheet. But these “negatives” are never factored into the decision-making which focuses exclusively on short-term profits. Now get a load of this from Morgan Stanley via Zero Hedge:

 “In 2014, the constituents of the S&P 500 on a net basis bought back ~$430Bn worth of common stock and spent a further ~$375Bn on dividend payouts. The total capital returned to shareholders was only slightly less than the annual earnings reported. On the fixed income front, the investment grade corporate bond market saw a record $577Bn of net issuance in 2014. While the equity and bond universes don’t overlap 100%, we think these numbers convey a simple yet important story. US corporations have essentially been issuing record levels of debt and using a significant chunk of their earnings and cash reserves to buy back record levels of common stock.”  (“Buyback Bonanza, Margin Madness Behind US Equity Rally”, Zero Hedge)

So corporations are borrowing hundreds of billions of dollars from investors through the bond market. They’re using this cheap capital to repurchase shares in order to boost skyrocketing executive compensation and to line the pockets of their shareholders. At the same time, they are weakening the capital structure of the company by loading on more debt.  (It’s worth noting that “highly rated U.S. nonfinancial companies” are now more leveraged than they were in 2007 just before the crash.)

This madcap buyback binge has gotten so crazy, that buybacks actually exceeded profits in two quarters in 2014. Here’s the story from Bloomberg:

“Companies in the Standard & Poor’s 500 Index really love their shareholders….Money returned to stock owners exceeded profits in the first quarter and may again in the third. The proportion of cash flow used for repurchases has almost doubled over the last decade while it’s slipped for capital investments, according to Jonathan Glionna, head of U.S. equity strategy research at Barclays Plc.

Buybacks have helped fuel one of the strongest rallies of the past 50 years as stocks with the most repurchases gained more than 300 percent since March 2009.” (Bloomberg)

But maybe we’re being too pessimistic here. Maybe stocks would have risen anyway due to record high earnings and improvements in the economy. That’s possible, isn’t it?

Nope. Not according to Morgan Stanley at least. Check it out:

“Since 2012, more than 50% of EPS growth in the S&P 500 has been driven by buybacks and growth ex-buybacks has been a mere 3.3% annualized. (EPS: Earnings Per Share)

“More than 50% “!  There’s your market summary in one damning sentence. No buybacks means no 5-year stock market rally. Period.  If it wasn’t for financial engineering and the Fed’s easy money, stocks would be in the same general location as the real economy, circling the plughole, that is.

What’s so frustrating about the present phenom is that the Fed knows exactly what’s going on, but just looks the other way.  So while the stock bubble gets bigger and bigger,  CAPEX –which is investment in future productivity and growth– continues to deteriorate, GDP drops to zero, and demand gets progressively weaker. Shouldn’t that warrant a rethinking of the policy?

Heck, no. The Fed is determined to stick with the same lame policy until hell freezes over. Whether it works or not is entirely irrelevant.

Now take a look at this eye-popper from Wolf Street:  “GE, in order to paper over a net loss of $13.6 billion and declining revenues in the first quarter, said on April 10 that it would buy back $50 billion of its own shares.” (Wolf Street)

I can’t tell you how many times I’ve read similar stories in the last couple years.  The company’s revenues are shrinking, they’re losing money hand over fist, and what do they do?

They announce they’re going to buy back $50 billion of their own shares.

What a joke. And it doesn’t stop there. The Fed’s policies have also ignited a flurry of activity in margin borrowing. This is from CNBC:

“NYSE margin debt rose to an all-time high in March, according to recently released data from the stock exchange….NYSE margin debt sat at $476.4 billion, up from $464.9 billion at the end of February..(Note: That’s $95 billion more than 2007 at the peak of the bubble.)

Margin debt is created when investors borrow money in order to buy stocks. If an investor buys $100 worth of stocks with $50 in capital, that individual has $50 of margin debt outstanding. Since margin debt provides leverage, it amplifies gains, but also increases the risk to an investor.” (“What record-high margin debt means for stocks”, CNBC)

More borrowing, more risk taking, more financial instability. And it’s all the Fed’s doing. If rates were neutral, then prices would normalize and CEOs would not be engaged in this reckless game of Russian roulette. Instead, it’s caution to the wind; just keep piling on the debt until the whole market comes crashing down in a heap like it did six years ago. And that’s the trajectory we’re on today, in fact,  according to TrimTabs Investment Research, February saw buybacks in the amount of $104 billion, ” the largest monthly figure since these flows were first tracked 20 years ago. ”

So things are getting worse not better. Bottom line: The Fed has led the country to the cliff-edge once again where the slightest uptick in interest rates is going to send the economy into freefall.

But why? Why does the Fed keep steering the country from one financial catastrophe to the next?

That’s a question that economists Atif Mian and Amir Sufi answer persuasively with one small chart. Check it out:

“Here is the distribution of financial asset holdings across the wealth distribution. This is from the 2010 Survey of Consumer Finances:

The top 20% of the wealth distribution holds over 85% of the financial assets in the economy. So it is clear that the direct income from capital goes to the wealthiest American households.” (Capital Ownership and Inequality, House of Debt)

Why does the Fed create one bubble after the other?

Now you know.

Universities, Inc.

Ben Agger

We use shorthand for evaluating faculty: “She is productive.” We don’t necessarily have in mind a steel worker toiling in Andrew Carnegie’s factories but, given one’s orientation, perhaps a Hero of Socialist Labor. Factory work may be too grubby a metaphor for genteel academics. The antonym is worse: Loser, slacker, non-publisher. Generational politics are in play as young faculty who publish have seized power from an older generation born before the baby boom. We boomers decamped the New Left after the sixties, entering academic life in order to make a difference, which we did in part by publishing.

Russell Jacoby’s lament for the demise of independent intellectuals such as Susan Sontag and Lewis Mumford always resonated. We ex-New Leftists imagine ourselves to be public intellectuals who also held down university jobs, defying his observation that academia amounts to vita padding. C. Wright Mills, Todd Gitlin, Howard Zinn and Hannah Arendt are among those who pay the bills via tenure but write large books that treat of important societal issues. It took time to become untangled from the obscurantist examples of Frankfurt School role models in order to find a pitch at which we could be heard by undergraduate students and even by Barnes & Noble trade readers. Although borrowing from Habermas the ideal of the public sphere as a talkative democracy, I worry that a digital public sphere blurs the boundary between public and private. Self-revelation goes public via social media as people overshare.

Since the sixties and Sputnik, the public research university has been profoundly transformed as states have massively disinvested in public higher education. Universities are barely state assisted and not state supported, transforming the job of college president into fund raiser. Simply making the academic payroll preoccupies senior academic administrators who patch together paltry state budgets with grant dollars and gifts from football-loving donors. Universities must hire rain makers, especially in STEM disciplines, in order to keep the lights on in the offices of faculty like me who purvey critical theory and cultural studies. Without “productive” electrical engineers and biologists, with large start-up packages used to leverage funded research, the 21^st public research university couldn’t stay open. Paul Campos, in a controversial April 4, 2015 New York Times essay, contests the notion that universities receive less funding from the state, arguing that higher tuition can be blamed on the hiring and handsome compensation of additional administrators.

During this disinvestment, academic administrators morphed into CEOs responsible for budget. Their notion of “productivity” is different than ours. They seek faculty who could augment the university budget, through grants, and who conduct “applied” research that fit the agenda of Eisenhower’s military-industrial complex, which becomes the military-industrial-educational complex. Two consequences of the emergence of an administrative professional-managerial class are the decline of faculty governance and the establishment of command-and-control measures designed to keep faculty working hard. “Workload,” and its measurement, is suddenly in the air as neoconservative politicians and CEO-like academic administrators redouble their commitments to get a day’s work for a day’s pay from otherwise
unaccountable tenured faculty. Predictably, in this environment, tenure itself has come under attack, and many universities now subject tenured faculty to post-tenure review. No matter that tenure protects academic freedom, as it has since McCarthyism.

And so we who use shorthand, such as the term productivity, need to rethink the implications of our discourse. Productive used to mean she-who-publishes. Now, it means she-who-gets-grants and does applied work. We have leapt from the need to make a payroll during an era of diminished state support of higher education to a general utilitarianism and vocationalism that threaten to change academic life irrevocably.

For their part, junior faculty are encouraged to view themselves as civil servants with a well-defined career ladder. Understandably, they obsess over how “much” it takes to get tenure. These are post-boomers who didn’t cut their teeth on the civil-rights movement or anti-war protest and who don’t necessarily share our conception of the university as a site of social justice and an opening to a public sphere in which intellectual debate matters. They accept new norms of productivity, and they negotiate for handsome “start-up” funds with which to jump start their own careers. Start up, in my prehistoric era, was a used IBM typewriter. One has the sense that many post-boomer faculty could as well be running restaurants, flipping houses, or occupying a corporate cubicle. The politically engaged public intellectual of the sixties has given way to the academic who tweets.

Eventually, young faculty age, as we have. Academic careers have seasons, and rates of productivity vary. It is tempting to view people over 50 or 55 who publish heavily as compulsive. But faculty-accountability measures, which were borne of Frederick Taylor’s time-and-motion studies in early-20^th century capitalism, standardize “output,” whereas the life of the mind cannot be reduced to a business or tracked on a production schedule. People may have gaps in their vita as they explore new fields and read more deeply into their current fields. The point of tenure is to give people time to think and re-think as well as to avoid political censorship.

College presidents, who must beg and borrow at every turn, need to pose the argument, to legislators, tax payers and tuition payers, that human capital produces capital, that academic credentialing adds value, albeit often hidden value. This is rhetorical and political work. People of my style call this “valorization,” tracing value creation to its often-hidden roots in domestic labor, children’s labor and—here—college teaching. In plain language, 21^st century laptop capitalism requires universities to teach skills and values. Whether all this can be outsourced to online credit-hour providers is debatable. Many contingent college professors merely read the textbook faster than students, but don’t contribute their own research to the literatures they expound. Adjuncts form an industrial reserve army at a time when tenure-track employment is disappearing, especially in non-grantable fields. Post-tenure review is matched by the disappearance of tenure-track employment. Clearly, tenure thwarts administrative flexibility.

This is not to deny that some tenured and tenure-track faculty, given the overwhelming emphasis on research output, don’t care enough about students, nor are rewarded for caring. My premise is that students are best taught by caring faculty who are intellectual leaders in their fields. My wife and I have college-age children.

We must be careful not to get swallowed whole by our own discourse as we convince capital that universities produce human capital. As universities are forced to become business-like, we should be wary about adopting a business model of all things. We need gadflies, poets, and activists, too. We want a university—and society– in which people question the meaning of “productivity.” For academic life to become a career ladder adds momentum to the tsunami of anti-intellectualism so abundant in our media culture and political discourse.