Is There Such A Thing As An Austerity Riot That Isn't "Political"... Anywhere?

While Matt Taibbi, on this side of the Atlantic, asks the question we all know the answer to-- Is the SEC covering up Wall Street crimes?-- and an increasingly uncomfortable English public on the other side of the Atlantic wants to understand what happened to the independence of their judiciary, Naomi Klein bridges the vast expanse of ocean by explaining just how "political" Austerity Riots are. Let's start with the massive looting in post-invasion Baghdad.

Back then the people on cable news thought looting was highly political. They said this is what happens when a regime has no legitimacy in the eyes of the people. After watching for so long as Saddam and his sons helped themselves to whatever and whomever they wanted, many regular Iraqis felt they had earned the right to take a few things for themselves. But London isn’t Baghdad, and British Prime Minister David Cameron is hardly Saddam, so surely there is nothing to learn there.



How about a democratic example then? Argentina, circa 2001. The economy was in freefall and thousands of people living in rough neighborhoods (which had been thriving manufacturing zones before the neoliberal era) stormed foreign-owned superstores. They came out pushing shopping carts overflowing with the goods they could no longer afford-- clothes, electronics, meat. The government called a “state of siege” to restore order; the people didn’t like that and overthrew the government.



Argentina’s mass looting was called El Saqueo-- the sacking. That was politically significant because it was the very same word used to describe what that country’s elites had done by selling off the country’s national assets in flagrantly corrupt privatization deals, hiding their money offshore, then passing on the bill to the people with a brutal austerity package. Argentines understood that the saqueo of the shopping centers would not have happened without the bigger saqueo of the country, and that the real gangsters were the ones in charge.



But England is not Latin America, and its riots are not political, or so we keep hearing. They are just about lawless kids taking advantage of a situation to take what isn’t theirs. And British society, Cameron tells us, abhors that kind of behavior.



This is said in all seriousness. As if the massive bank bailouts never happened, followed by the defiant record bonuses. Followed by the emergency G-8 and G-20 meetings, when the leaders decided, collectively, not to do anything to punish the bankers for any of this, nor to do anything serious to prevent a similar crisis from happening again. Instead they would all go home to their respective countries and force sacrifices on the most vulnerable. They would do this by firing public sector workers, scapegoating teachers, closing libraries, upping tuitions, rolling back union contracts, creating rush privatizations of public assets and decreasing pensions-- mix the cocktail for where you live. And who is on television lecturing about the need to give up these “entitlements”? The bankers and hedge-fund managers, of course.



This is the global Saqueo, a time of great taking. Fueled by a pathological sense of entitlement, this looting has all been done with the lights left on, as if there was nothing at all to hide. There are some nagging fears, however. In early July, the Wall Street Journal, citing a new poll, reported that 94 percent of millionaires were afraid of "violence in the streets.” This, it turns out, was a reasonable fear.



Of course London’s riots weren’t a political protest. But the people committing nighttime robbery sure as hell know that their elites have been committing daytime robbery. Saqueos are contagious.



The Tories are right when they say the rioting is not about the cuts. But it has a great deal to do with what those cuts represent: being cut off. Locked away in a ballooning underclass with the few escape routes previously offered-- a union job, a good affordable education-- being rapidly sealed off. The cuts are a message. They are saying to whole sectors of society: you are stuck where you are, much like the migrants and refugees we turn away at our increasingly fortressed borders.



David Cameron’s response to the riots is to make this locking-out literal: evictions from public housing, threats to cut off communication tools and outrageous jail terms (five months to a woman for receiving a stolen pair of shorts). The message is once again being sent: disappear, and do it quietly.



At last year’s G-20 “austerity summit” in Toronto, the protests turned into riots and multiple cop cars burned. It was nothing by London 2011 standards, but it was still shocking to us Canadians. The big controversy then was that the government had spent $675 million on summit “security” (yet they still couldn’t seem to put out those fires). At the time, many of us pointed out that the pricey new arsenal that the police had acquired-- water cannons, sound cannons, tear gas and rubber bullets-- wasn’t just meant for the protesters in the streets. Its long-term use would be to discipline the poor, who in the new era of austerity would have dangerously little to lose.



This is what David Cameron got wrong: you can't cut police budgets at the same time as you cut everything else. Because when you rob people of what little they have, in order to protect the interests of those who have more than anyone deserves, you should expect resistance-- whether organized protests or spontaneous looting.



And that’s not politics. It’s physics.

Extra credit if you put together Taibbi's hypothesis with Naomi's:

For the past two decades, according to a whistle-blower at the SEC who recently came forward to Congress, the agency has been systematically destroying records of its preliminary investigations once they are closed. By whitewashing the files of some of the nation's worst financial criminals, the SEC has kept an entire generation of federal investigators in the dark about past inquiries into insider trading, fraud and market manipulation against companies like Goldman Sachs, Deutsche Bank and AIG. With a few strokes of the keyboard, the evidence gathered during thousands of investigations-- "18,000 ... including Madoff," as one high-ranking SEC official put it during a panicked meeting about the destruction-- has apparently disappeared forever into the wormhole of history.



...Many of the destroyed files involved companies and individuals who would later play prominent roles in the economic meltdown of 2008. Two MUIs involving con artist Bernie Madoff vanished. So did a 2002 inquiry into financial fraud at Lehman Brothers, as well as a 2005 case of insider trading at the same soon-to-be-bankrupt bank. A 2009 preliminary investigation of insider trading by Goldman Sachs was deleted, along with records for at least three cases involving the infamous hedge fund SAC Capital.



Even Chuck Grassley (R-IA) seems to have noticed that "it looks as if the SEC might have sanctioned some level of case-related document destruction... "It doesn't make sense that an agency responsible for investigations would want to get rid of potential evidence. If these charges are true, the agency needs to explain why it destroyed documents, how many documents it destroyed over what time frame and to what extent its actions were consistent with the law."



No rioters or looters will have this in mind when they're rioting and looting, but no understanding of the cause will be complete without it. And Joel Kotkin over at Forbes seems as pessimistic as I am about anything ameliorating the roots causes of what looks like will be some pretty bad upheavals worldwide.

The riots that hit London and other English cities last week have the potential to spread beyond the British Isles. Class rage isn’t unique to England; in fact, it represents part of a growing global class chasm that threatens to undermine capitalism itself.



The hardening of class divisions has been building for a generation, first in the West but increasingly in fast-developing countries such as China. The growing chasm between the classes has its roots in globalization, which has taken jobs from blue-collar and now even white-collar employees; technology, which has allowed the fleetest and richest companies and individuals to shift operations at rapid speed to any locale; and the secularization of society, which has undermined the traditional values about work and family that have underpinned grassroots capitalism from its very origins.



All these factors can be seen in the British riots. Race and police relations played a role, but the rioters included far more than minorities or gangsters. As British historian James Heartfield has suggested, the rioters reflected a broader breakdown in “the British social system,” particularly in “the system of work and reward.”



In the earlier decades of the 20th century working class youths could look forward to jobs in Britain’s vibrant industrial economy and, later, in the growing public sector largely financed by both the earnings of the City of London and credit. Today the industrial sector has shrunk beyond recognition. The global financial crisis has undermined credit and the government’s ability to pay for the welfare state.



With meaningful and worthwhile work harder to come by-- particularly in the private sector-- the prospects for success among Britain working classes have been reduced to largely fantastical careers in entertainment, sport or all too often crime. Meanwhile, Prime Minister David Cameron’s supporters in the City of London may have benefited from financial bailouts arranged by the Bank of England, but opportunities for even modest social uplift for most other people have faded.



The great British notion of idea of working hard and succeeding through sheer pluck-- an idea also embedded in the U.K.’s former colonies, such as the U.S.-- has been largely devalued. Dick Hobbs, a scholar at the London School of Economics, says this demoralization has particularly affected white Londoners. Many immigrants have thrived doing engineering and construction work as well as in trades providing service to the capital’s affluent elites.



A native of east London himself, Hobbs maintains that the industrial ethos, despite its failings, had great advantages. It centered first on production and rewarded both the accumulation of skills. In contrast, by some estimates, the pub and club industry has been post-industrial London’s largest source of private-sector employment growth, a phenomena even more marked in less prosperous regions. “There are parts of London where the pubs are the only economy,” he notes.



What’s the lesson to be drawn? The ideologues don’t seem to have the answers. A crackdown on criminals-- the favored response of the British right-- is necessary but does not address the fundamental problems of joblessness and devalued work. Similarly the left’s favorite panacea, a revival of the welfare state, fails to address the central problem of shrinking opportunities for social advancement. There are now at least 1 million unemployed young people in the U.K., more than at any time in a generation, while child poverty in inner London, even during the regime of former Mayor “red Ken” Livingstone last decade, stood at 50% and may well be worse now.



Hobbs claims that the current “pub and club,” with its “violent potential and instrumental physicality,” simply celebrates consumption often to the point of excess. Perhaps it’s no surprise that looting drove the unrest.



This fundamental class issue is not only present in Britain. There have been numerous outbreaks of street violence across Europe, including in France and Greece. One can expect more in countries like Italy, Spain and Portugal, which will now have to impose the same sort of austerity measures applied by the Cameron government in London.



And how about the United States? Many of the same forces are at play here. Teen unemployment currently exceeds 20%; in the nation’s capital it stands at over 50%. Particularly vulnerable are expensive cities such as Los Angeles and New York, which have become increasingly bifurcated between rich and poor. Cutbacks in social programs, however necessary, could make things worse, both for the middle class minorities who run such efforts as well as their poor charges.



A possible harbinger of this dislocation, observes author Walter Russell Mead, may be the recent rise of random criminality, often racially tinged, taking place in American cities such as Chicago, Milwaukee and Philadelphia.



Still, with over 14 million unemployed nationwide, prospects are not necessarily great for white working- and middle-class Americans. This pain is broadly felt, particularly by younger workers. According to a Pew Research survey, almost 2 in 5 Americans aged 18 to 19 are unemployed or out the workforce, the highest percentage in three decades.



Diminished prospects-- what many pundits praise as the “new normal”-- now confront a vast proportion of the population. One indication: The expectation of earning more money next year has fallen to the lowest level in 25 years. Wages have been falling not only for non-college graduates but for those with four-year degree as well. Over 43% of non-college-educated whites complain they are downwardly mobile.



Given this, it’s hard to see how class resentment in this country can do anything but grow in the years. Federal Reserve Chairman Ben Bernanke claimed as early as 2007 that he was worried about growing inequality in this country, but his Wall Street and corporate-friendly policies have failed to improve the grassroots economy.



The prospects for a widening class conflict are clear even in China, where social inequality is now among the world’s worse . Not surprisingly, one survey conducted the Zhejiang Academy of Social Sciences found that 96% of respondents “resent the rich.” While Tea Partiers and leftists in the U.S. decry the colluding capitalism of the Bush-Obama-Bernanke regime, Chinese working and middle classes confront a hegemonic ruling class consisting of public officials and wealthy capitalists. That this takes place under the aegis of a supposedly “Marxist-Leninist regime” is both ironic and obscene.



This expanding class war creates more intense political conflicts. On the right the Tea Party-- as well as rising grassroots European protest parties in such unlikely locales as Finland, Sweden and the Netherlands-- grows in large part out of the conviction that the power structure, corporate and government, work together to screw the broad middle class. Left-wing militancy also has a class twist, with progressives increasingly alienated by the gentry politics of the Obama Administration.



Many conservatives here, as well as abroad, reject the huge role of class. To them, wealth and poverty still reflect levels of virtue-- and societal barriers to upward mobility, just a mild inhibitor. But modern society cannot run according to the individualist credo of Ayn Rand; economic systems, to be credible and socially sustainable, must deliver results to the vast majority of citizens. If capitalism cannot do that expect more outbreaks of violence and greater levels of political alienation — not only in Britain but across most of the world’s leading countries, including the U.S.

Scary to think of the mediocre individuals offering themselves up for leadership at this time-- Obama and Romney-- or the much less than mediocre-- a Michele Bachmann or Rick Perry. Why not the very best for a change, someone with real vision and real political courage... a Bernie Sanders?

Austerity: Class War Against Working People, An International Plague

Unless you think you'll be winning a lot of lotteries in the future, you're never going to be as rich as Warren Buffett. A significant number of Americans-- rational people in other countries don't think this way-- hold out hope that they will be the exception and that they want to be certain that tax rates on billionaires are low... just in case. Meanwhile, they could be making $40-50,000 a year and paying a higher effective tax rate than the billionaires they're protecting by voting for the billionaire protection racket known as the Republican Party. In yesterday's New York Times Buffett himself begged Americans-- and their representatives in Congress-- to stop coddling the super-rich. (You can watch Buffett discussing his editorial with Charlie Rose Monday night.)

Our leaders have asked for “shared sacrifice.” But when they did the asking, they spared me. I checked with my mega-rich friends to learn what pain they were expecting. They, too, were left untouched.



While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks. Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as “carried interest,” thereby getting a bargain 15 percent tax rate. Others own stock index futures for 10 minutes and have 60 percent of their gain taxed at 15 percent, as if they’d been long-term investors.



These and other blessings are showered upon us by legislators in Washington who feel compelled to protect us, much as if we were spotted owls or some other endangered species. It’s nice to have friends in high places.



Last year my federal tax bill-- the income tax I paid, as well as payroll taxes paid by me and on my behalf-- was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income-- and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.



If you make money with money, as some of my super-rich friends do, your percentage may be a bit lower than mine. But if you earn money from a job, your percentage will surely exceed mine-- most likely by a lot.



...Back in the 1980s and 1990s, tax rates for the rich were far higher, and my percentage rate was in the middle of the pack. According to a theory I sometimes hear, I should have thrown a fit and refused to invest because of the elevated tax rates on capital gains and dividends.



I didn’t refuse, nor did others. I have worked with investors for 60 years and I have yet to see anyone-- not even when capital gains rates were 39.9 percent in 1976-77-- shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off. And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what’s happened since then: lower tax rates and far lower job creation.



Since 1992, the I.R.S. has compiled data from the returns of the 400 Americans reporting the largest income. In 1992, the top 400 had aggregate taxable income of $16.9 billion and paid federal taxes of 29.2 percent on that sum. In 2008, the aggregate income of the highest 400 had soared to $90.9 billion-- a staggering $227.4 million on average-- but the rate paid had fallen to 21.5 percent.



The taxes I refer to here include only federal income tax, but you can be sure that any payroll tax for the 400 was inconsequential compared to income. In fact, 88 of the 400 in 2008 reported no wages at all, though every one of them reported capital gains. Some of my brethren may shun work but they all like to invest. (I can relate to that.)



I know well many of the mega-rich and, by and large, they are very decent people. They love America and appreciate the opportunity this country has given them. Many have joined the Giving Pledge, promising to give most of their wealth to philanthropy. Most wouldn’t mind being told to pay more in taxes as well, particularly when so many of their fellow citizens are truly suffering.



Twelve members of Congress will soon take on the crucial job of rearranging our country’s finances. They’ve been instructed to devise a plan that reduces the 10-year deficit by at least $1.5 trillion. It’s vital, however, that they achieve far more than that. Americans are rapidly losing faith in the ability of Congress to deal with our country’s fiscal problems. Only action that is immediate, real and very substantial will prevent that doubt from morphing into hopelessness. That feeling can create its own reality.



Job one for the 12 is to pare down some future promises that even a rich America can’t fulfill. Big money must be saved here. The 12 should then turn to the issue of revenues. I would leave rates for 99.7 percent of taxpayers unchanged and continue the current 2-percentage-point reduction in the employee contribution to the payroll tax. This cut helps the poor and the middle class, who need every break they can get.



But for those making more than $1 million-- there were 236,883 such households in 2009-- I would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains. And for those who make $10 million or more-- there were 8,274 in 2009-- I would suggest an additional increase in rate.



My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice.

We've been watching with alarm what the Austerity approach has done to social cohesion in Greece and England. I expect it will be even worse in France and Italy, which the international banksters are forcing in that direction. Italy's largest labor union threatened a general strike yesterday, after Berlusconi hastily pushed through an Austerity plan demanded by World Plutocracy.

Critics say the package-- a mix of spending cuts, job cuts and tax increases, including a "solidarity tax" for high-earners-- will strangle Italy’s stagnant economy, which is now expected to grow by only about one per cent this year.



Other critics, including nine members of Berlusconi’s own coalition, say it unfairly targets the middle class and fails to tackle Italy’s massive tax evasion problem.



Susanna Camusso, leader of the CGIL labour union, criticized measures aimed at liberalizing Italy’s labour market and targeting its pension system, saying a strike is the only way to "change the inequity of this package." She told the La Repubblica newspaper that union officials will meet Aug. 23 to set a strike date and invited other unions to join.

I don't trust Labor's Ed Miliband to get it any more right in England than Obama has here in the U.S., but yesterday Miliband launched a flashy (for him) attack on Cameron's reactionary approach to the riots, calling it "shallow and simplistic." Take that, fascist dog!

Reiterating his call for a national inquiry into the causes of the violence, he said the country had a "deep need" to explain and understand what had happened, but that Cameron had responded with "gimmickry."



The Labour leader said nothing could excuse or justify the actions of the rioters and looters but that, unless the causes were understood properly, the violence could be repeated.



...Miliband said writing the riots off as "pure criminality" or simply blaming parents would not get to the root of the problem. In a direct attack on Cameron, he characterised the government's response as "kneejerk gimmicks," citing talk of water cannon, "supercops" and the "harassment" of gangs.



"A prime minister who used to say 'hug a hoodie' now says the answer is to reform our health and safety laws," he said.



"A crisis like this tells us something about our political leaders. Day by day, the prime minister has revealed himself to be reaching for shallow and superficial answers."



Miliband said individuals were responsible for their actions, questioning why some parents were failing to teach their children right from wrong, but added that everyone had a responsibility for the society we live in.



He also questioned whether an economy that dictates that some parents have to work up to 70-hour weeks, meaning they are largely absent from their children's lives, might have a role in family breakdown.



But he added: "Children's ideas of right and wrong don't just come from their parents. And we can't honestly say the greed, selfishness and gross irresponsibility that shocked us all so deeply is confined to the looters, or even to their parents.



"It's not the first time we've seen this kind of me first, take what you can culture. The bankers who took millions while destroying people's savings-- greedy, selfish and immoral. The MPs who fiddled their expenses-- greedy, selfish and immoral. The people who hacked phones to get stories to make money for themselves-- greedy, selfish and immoral.



"People who talk about the sick behaviour of those without power should talk equally about the sick behaviour of those with power.



"Let's not pretend that the crisis of values in our society is confined to a minority only at the bottom when we see the morality of millions of hardworking, decent people under siege from the top as well."



He said the last Labour government, as well as the coalition, had failed to address the issues of inequality in society, arguing that there is a culture of aspiration for success that is out of the reach of people at the bottom, creating frustration.

Would The CIA Harm Us... American Civilians? Operation Midnight Climax

A few days ago I let loose with a provocative and kind of random tweet based on something I was reading about the post World War II American national security state in Glen Yeadon's book Nazi Hydra In America. I sometimes forget not everyone has read that book. So this little tweet dialogue ensued:





Operation Midnight Climax was part of a CIA mind-control research program after the U.S. started importing hundreds of Nazi "scientists who had been experimenting on human beings in concentration camps. According to Wikipedia, this project "consisted of a web of CIA-run safehouses in San Francisco, Marin, and New York. It was established in order to study the effects of LSD on unconsenting individuals. Prostitutes on the CIA payroll were instructed to lure clients back to the safehouses, where they were surreptitiously plied with a wide range of substances, including LSD, and monitored behind one-way glass. Several significant operational techniques were developed in this theater, including extensive research into sexual blackmail, surveillance technology, and the possible use of mind-altering drugs in field operations.



... News of the story began to leak following a landmark story by New York Times reporter Seymour Hersh on illegal CIA domestic surveillance. This report triggered Senate Subcommittee hearings which investigated MKULTRA, and brought Operation Midnight Climax to light.



I found an old report from 1977 in Time, slightly minimizing the magnitude of what the U.S. government was doing. Let's take a look at some of what Yeadon had to say that inspired my little tweet:

Just as the immigration of Nazis and war criminals into the US involved the use of several projects of which Paperclip is the most widely known such is the case of MK-Ultra. There were 149 sub projects under MK-Ultra. The use of drugs for truth serum and for mind control were conducted under a bewildering list of Project or Operations.



...Army documents suggest there is a contingency plan to use BZ [aka, Buzz or Quinuclidinyl benzilate] as a domestic civilian riot control method. STP, PCP and hundreds of other drugs were tested for use in mind control and as incapacitating agents.



Most research involved LSD. The Army tested LSD on approximately 1,500 military personnel in the mid-1960s. Soldiers were not the only guinea pigs used by the CIA. The list of expendables: war prisoners, prostitutes, sexual psychopaths, prison inmates, certain war objectors, mentally retarded people, the elderly, terminally ill patients, schizophrenics, drug addicts, foreigners, and, of course, any other man, woman or child who fit the need.



...Besides being illegal, such testing [Operation Midnight Climax] without subjects' informed consent is a violation of the Nuremberg code, a set of ethical principles regarding experiments with human subjects and other medical research, which guided the Nuremberg Tribunal.

No idea if the Brits recently used-- or even have-- any of these mind control drugs. No doubt a pissed off right-wing prime minister-- who had to interrupt his Tuscan vacation and hurry home-- wouldn't hesitate for a moment to use them. And now he isn't hesitating to kick arrested suspects' families out of their homes. His coalition partners, the Liberal-Democrats are starting to get a little nervous that they're hooked up with an increasingly dangerous sociopath and that their party could well be headed for extinction. The party's business secretary, looking to the underlying causes of the anti-Austerity riots that shook Britain last week, wants to impose a wealth, or mansion, tax, in the form of a capital gains tax, on properties valued at over £1 million. Their Conservative partners, like the Republicans here, will never go for it. In fact they are committed to lowering taxes on the rich which ramping up the Austerity regime that is convulsing the country. Does this sound familiar?

Speaking on BBC Radio 4, [Chancellor of the Exchequer George] Osborne said there was "not much point" in having a tax that raised scant funds but that served to drive businesses out of Britain.



Osborne said: "I've said with the 50p rate I don't see that as a lasting tax rate for Britain because it's very uncompetitive internationally, and people frankly can move. What is it actually raising? It's only been in operation for a year, this tax, put in place by the last government."

Another Lib-Dem MP, Simon Hughes, who represents a district in South London, Old Southwark, hit hard by rioting last week, penned a column for The Guardian Sunday, Profits must no longer go to the few at the top. It probably wasn't very well-received by anyone at or near the top, particularly not David Cameron. Hughes called for "a fundamental shift in the politics of the last 30 Conservative and Labour years which have sacrificed people's jobs and security in the name of efficiency, and then seen the profits go only to the few at the top."

We must now focus on the redistribution of wealth. But this will not succeed by means of greater hand-outs. Financial benefits must seek to engage people positively. The redistribution of hope and opportunity means the redistribution as well as the creation of work. Co-operative and mutual businesses and social enterprise should be prioritised. The private sector, like the public sector, should not be allowed to get away with obscene pay ratios and bonuses. All employers should be required to consider how they can increase employment and training, by themselves or with others.



Where communities are unable to provide work the government must be prepared to intervene.



A responsible economy is necessary for a responsible society. Building local, regional and national economies which provide the opportunity for all to participate in for fair reward will build much stronger communities. This will counter the appeal of the gangs and the get-rich-quick merchants. Other people and activity must now capture the energies and abilities of a generation that has greater potential than any we have had before.

The Austerity the Republicans are demanding-- and to which Obama seems to be giving in to without any fight at all-- is what's infecting Britain and Greece and dozens of other countries on the verge of explosions. I just don't want to see anyone get hurt with all those experimental drugs.

"Screw optimism and screw 'sanity'" (Ian Welsh)

I found this painting, "Optimism," by John Slaby, illustrating an October 2007 blogpost by John Fenzel called "Your Brain on Optimism. . . "





"I do know that when I want to have good time at a party, or I need a good salesman, I look for different abilities than I do in good analysts and good leaders. That the person who runs my nuclear plants should not be Mr. Fucking Sunshine, 'it’ll all work out for the best!'"

-- Ian Welsh, in the blogpost

"Screw Optimism and screw 'sanity'”

by Ken



Let me say first that I'm not sure I"m prepared to accept the characterization of George W. Bush as "eminently sane" -- unless, of course, he attempts an insanity defense when he's called to account for his much-worse-than-waste of a life. (By the legal definition, he's certainly sane.) And if there's an implication here that, as has often been suggested, George W. Bush would be fun to have a beer with, I think the idea is preposterous -- again unless the only purpose in having that beer is to get quickly sloshed enough that you don't care about the absence from his mind of perception, curiosity, sensitivity, and imagination.



That said, I can certainly imagine there are people who might well make convivial drinking pals who would nevertheless be as disastrous as Ian argues in any position of leadership that requires a realistic perception of problems and dangers.



Of course I haven't explained yet what the hell we're talking about. Here's Ian:

I recently stumbled across a book on the link between leadership and what we call madness. From the Amazon review:

Take realism, for instance: study after study has shown that those suffering depression are better than “normal” people at assessing current threats and predicting future outcomes. Looking at Lincoln and Churchill among others, Ghaemi shows how depressive realism helped these men tackle challenges both personal and national. Or consider creativity, a quality psychiatrists have studied extensively in relation to bipolar disorder. A First-Rate Madness shows how mania inspired General Sherman and Ted Turner to design and execute their most creative-and successful-strategies.



Ghaemi’s thesis is both robust and expansive; he even explains why eminently sane men like Neville Chamberlain and George W. Bush made such poor leaders. Though sane people are better shepherds in good times, sanity can be a severe liability in moments of crisis. A lifetime without the cyclical torment of mood disorders, Ghaemi explains, can leave one ill equipped to endure dire straits. He also clarifies which kinds of insanity -- like psychosis -- make for despotism and ineptitude, sometimes on a grand scale.

"Ordinary people, what we call 'sane' in our society," Ian says,

are really shitty analysts. Really, really shitty analysts. Their bias to the upside is tiresome, predictable and makes them wrong, over and over and over again. They don’t know what real threats are, they constantly are confused about what is really dangerous. They think stranger pedophiles are a big danger to their kids, while it’s their family members or their own driving. They think terrorism is dangerous, when almost no one dies from it, as opposed to crossing the street or eating too many Big Macs. They fear “Osama” when the men who are most likely to cause their death or impoverishment have names like Bush, Paulson, Geithner, Obama and so on.

Ian understands why people gravitate to optimism and optimists, which he says is fine --

as long as optimists aren’t your leaders or analysts, and don’t run your nuclear power plants, or plan your economies, or make any decisions about anything which if it goes wrong can go catastrophically wrong. Optimists are happier, they live longer, they’re healthier, they “get up and go”, blah, blah, blah. Optimism is good for optimists and hey, they’re generally more pleasant to be around, too. There are time periods when they’re even right a lot (say during the 50s). But basically, they’re blind. One imagines conversations between cows. “Hey, they feed us every day, we get free health care, no real responsibility! The dog makes sure the wolves don’t bother us. This is great! I do wonder what happened to Thelma and Fred, when they took them away in that truck? But I’m sure it wasn’t anything bad, and if it was they must have deserved it, and anyway, that’d never happen to me, because I’m a good cow and this is the best herd in the whole world!”



And you can tell people what will happen, in advance, and be right, over and over and over again. And what that will do is get you marginalized. “Oh, he’s so negative! Such a downer. He should make us feel good about ourselves and our future, and if he doesn’t, we won’t listen. Let’s watch some TV!” The stuff that makes you a good everyday person, a pal at the pub, the best husband or wife, boyfriend or girlfriend, mother or father, does not make you a good analyst or a good leader. Choosing other sheep to lead you, to guide you, gets you what you’re getting right now, good and hard.

"Likewise," Ian says, "I am beyond tired of the excessive stigmatization of anger and hatred."

It is appropriate to hate some people. If you don’t hate a man who has killed tens to hundreds of thousands of people (you don’t know because he refused to count) for a war based on lies, while gutting your civil rights, you are either a saint or your values are so fucked up I don’t even know what to say. You hate some people (yes, you do, don’t deny it), why don’t you hate the people who are actually doing evil on an industrial scale and who directly threaten your prosperity and your good life? And why, exactly, aren’t you angry? Again, don’t tell me you don’t get angry (unless you’re a saint), so why aren’t you angry at the people who are destroying your future and the future of your children?



Oh, right, because most people suck at threat analysis. They don’t even know what or who is really dangerous. They don’t /want/ to believe that people who look like they’d be great to have a beer with, or Uncle Fred, or driving their beloved automobile, or the food that they eat, is what’s actually going to kill them, make them sick, or hurt the kid they profess is just the most special and important person in their life, except when it comes to making sure the kid will have a world worth living in.



So folks. Hate can be awful, it can lead to awful crimes. But you’re going to hate someone, so learn who to hate. Anger can be terrible, few people know that better than I do, as my father’s temper was the terror of my youth, but you’re going to be angry, know when and with who to get angry with, and stop displacing your anger.



And screw hope. Screw optimism. Really, seriously. Hope is like pride, you should have exactly as much hope as the circumstances dictate, and no more.



But you can’t live that way. I know. You need your hope. You need to believe.



Ok. That’s fine. I understand. Variety is good.



But don’t insist that everyone else be like you. And understand your own weaknesses. Know what you suck at. Find the people who don’t suck at those things, figure out which ones to trust (that’s a whole other essay) and listen to them. No one is good at everything (I sure as hell am not), but a wise person knows what they are bad at.



Who is mad? The pessimist, the depressive, who accurately understands the world around him, or the hope filled optimists who are blind to real threats, can’t predict the future worth a damn and who select their leaders based on “wouldn’t it be great to have a beer with him?”



I don’t know, and I don’t even really care. But I do know that when I want to have good time at a party, or I need a good salesman, I look for different abilities than I do in good analysts and good leaders. That the person who runs my nuclear plants should not be Mr. Fucking Sunshine, “it’ll all work out for the best!”



Just, no.

Ian concludes with an admonition to "stop drugging your kids en masse. Ok? Just stop," referring back to comments on the habit of dealing with childish "differences" by drugging them away, which I've omitted above, along with a good deal of other material for which you really should read the full post.



But the basic point seems to me a dreadfully important one.





BY THE WAY, IAN'S BEEN OFFERING SENSATIONAL

COMMENT ON THE SITUATION IN THE U.K.



There've been terrific pieces yesterday and today, which I'm hoping we'll have a chance to come back to, called "Innocents were already being hurt in Britain" and "The monopoly of violence and simple solutions to supposedly insoluble problems." But scroll through the blog itself (ianwelsh.net) for his earlier comments.



Not surprisingly, Ian takes a noticeably different tack from the Cameron-clone American right-wing commentators, who think they've said something when they declare that what's happening is criminality "pure and simple," which needs to be dealt with by pure-and-simple crime-busting.

#

Super Congress To The Rescue (But Not Ours)

I never liked the idea of this SuperCongress or congressional SuperCommittee to sit down and decide our fate as a nation from the first time it was proposed as part of a "compromise," a compromise that could only lead us to another advance for the Conservative Consensus imposition of an Austerity Regime on the United States. It certainly was never meant to lead to what Americans would like to see happen. Corrupt wingnut Jeb Hensarling's kind of serious bipartisan work (above) shows what the GOP has in mind. Boehner picked him and two other right-wing Austerity fanatics-- and Miss McConnell picked 3 as well.



It was obvious from the beginning that all we needed was for Reid or Pelosi to give us just one so-called "serious compromiser"-- along the lines of Democrats playing softball and Republicans playing hardball-- and the game would be over before it started. Reid gave us three-- Kerry, Murray and Baucus, all seriously conflicted Establishment types. I heard EJ Dionne on MSNBC this week advocating that Pelosi pick "a real liberal" (he mentioned Schakowsky who abandoned the public option at the drop of a hankie and said she would have voted FOR the Satan Sandwich if her vote had been needed) and a serious moderate (Hoyer). I wonder why no one Inside-the-Beltway can figure out that if there are 12 members of the SuperCongress, and the 6 Republicans are all hard-line, anti-compromise fanatics, even one Democratic schnook is too many.





Admittedly Reid didn't have much to choose from, given the kind of human waste that populates the U.S. Senate, but he would have sent a very different message if he had chosen a trio with records of standing up for the legitimate aspirations of working families, Bernie Sanders, Tom Harkin and Jeff Merkley, for example. I guess we can be happy he didn't give us McCaskill, a Nelson or Manchin but, in effect, he certainly could have because, other than the theatrics, it's the EXACT same thing-- the transpartisan Conservative Consensus again.



At this point it really makes no difference who Pelosi puts on the SuperCongress. The die is cast with intransigent anti-family sociopaths like Kyl, Toomey, and Portman, who oversaw a doubling of deficits while at Bush's OMB, from the Senate Republicans and, Hensarling, Camp, and Upton courtesy of Boehner. All six, of course, swore their ultimate fidelity to Grover Norquist and his anti-tax/drown the government in a bathtub pledge.



So just at a time when the rest of the world is starting to realize that Austerity is the WRONG answer-- while Wall Street and the international "let them eat cake" plutocracy doubles down on it-- the U.S. is rushing headlong into an agenda that will destroy what's ever left of our country's social cohesion. You can only push people so far-- and only steal so many elections-- before they react... in a way that gets out of hand and uncontrollable.

In the eyes of the financial markets, Britain was supposed to be a model of successful, sustainable austerity and a safe haven in which the world's rich could buy houses and stash their savings.



The riots that turned London and some other English cities upside down this week have undermined that model, raising questions about the sustainability of spending cuts and a widening gap between rich and poor.



From many of the dealing rooms and offices in the skyscrapers of Canary Wharf, traders, wealth managers and analysts could see billowing smoke in several directions this week as rioters torched buildings and looted shops.



Order was restored in the capital at least on Tuesday night with a massive show of force by police, but they too face the drastic spending cuts that will affect everything from the military to social benefits and inner-city services.



Britain's coalition government says it remains committed both to cutting a record budget deficit and staying in power until elections due by 2015.



Investors have always had mixed feelings about austerity. They want the British government to tackle the huge deficit to slow its accumulation of debt. But they also fear that cuts will push the economy back into recession, hitting corporate earnings and tax income while raising social spending costs and actually pushing the country deeper into debt.



Nevertheless, they had generally compared British determination to cut the deficit favorably with the indecision or infighting paralyzing much policy-making in the euro zone and United States. Now, they are not so sure.



"If you'd asked me at the weekend, I would have said that with the problems of the euro zone and U.S., (Britain's) sterling (currency) might be poised to become an appealing safe haven," said Simon Derrick, head of foreign exchange at the London branch of Bank of New York Mellon.



As he spoke, from his dealing room Derrick could still see smoke on the horizon from a distant burning warehouse. "This has certainly shaken that... it's probably still too soon to say what it means for policy, but it certainly makes austerity look more difficult."



The short-term market impact looks to have been limited. Derrick said U.S. media coverage of the London riots prompted a modest sell-off in the pound late on Tuesday, but markets have largely shrugged off the violence.



...Some countries such as Latvia and Ireland have pushed through massive cuts with relatively little unrest but not everyone can pull off the same trick. The British riots could point to similar risks in other European and U.S. cities as cuts start to bite.



...Speaking to Reuters late on Tuesday, looters and other local people in east London pointed to the wealth gap as the underlying cause, also blaming what they saw as police prejudice and a host of recent scandals.



Spending cuts were now hitting the poorest hardest, they said, and after tales of politicians claiming excessive expenses, alleged police corruption and bankers getting rich it was their turn to take what they wanted.



..."Across Europe, we've already seen some incidence of civil unrest," she said, saying it would almost inevitably impact policy. "There's definitely a likelihood that similar scenes might erupt when austerity cuts really start to be felt."

UPDATE: PELOSI ADDS... NOTHING MUCH



She named 3 loyal leadership lieutenants. Xavier Becerra is the best of the three. Clyburn's OK for a garden variety Democrat and Van Hollen isn't completely horrible. Becerra even voted against the Satan Sandwich.

Could Anti-Austerity Fever Spread To America?

Nearly 60% of Americans have an unfavorable opinion of the Republican Party, even worse than when they were at the height of impeachment fever-- and even worse than the 51% of people with an unfavorable view of the Tea Party movement. The GOP's 59% unfavorable ranking, is the highest since the CNN/Gallup Poll started asking the question in 1992.



Also interesting in this poll is that only 41% of Americans think their own congressmember deserves to be reelected. Only 25% think "most Members of Congress" should be reelected-- higher than usual but not really new news-- but it is significant that ire towards Congress is focussing on voters' own representative. Many people do not understand the details of the SatanSandwich but they understand that their congressmember voted against their interests and against the country's interests. This lack of support for their own Representative is the lowest since polling began-- by far. And it shows considerably more antipathy towards Republicans than towards Democrats. 58% (57% of registered voters) of Americans think congressional Democrats do not deserve reelection and 64% (65% of registered voters) think congressional Republicans do not deserve reelection. It could be a lot worse if our political elites continue down the same death-march path they're headed.



Yesterday we saw anti-Austerity riots break out all over Chile and, despite a violent and massive crackdown, continue to spread to every corner of England. Yes, the U.K. riots ARE anti-Austerity riots, not, as the Conservative Establishment would have you believe, "gang violence." Watch a highly biased BBC anchor have a journalistic meltdown (Monday) when she was interviewing someone who didn't fit in with her Conservative Consensus mindset:







Much easier to just repeat David Cameron's assertion that the protesters are nothing but mindless gang thugs and hooligans. There is another way of looking at it though, one that takes us back to the verge of the 1848 revolutions that swept Europe:

Many residents of the diverse borough of Hackney said it was this ever widening and very visible gap between the rich and poor that has exacerbated tension in recent years, especially as government cuts to welfare payments have started to bite.



Britain, one of the world's major economies, has a bigger gap between rich and poor than more than three-quarters of other Organisation for Economic Cooperation and Development (OECD) countries, according to a 2008 report. Charities in Britain say that inequality is most keenly felt in London.



"It's us versus them, the police, the system," said an unemployed man of Kurdish origin in his early 20s, sitting at the entrance to a Hackney housing estate with four Afro-Caribbean friends who nodded in agreement.



"They call it looting and criminality. It's not that. There's a real hatred against the system," he added, listing what he saw as the police prejudice, discrimination and lack of opportunity that led him and his friends to loot shops, torch bins and hurl missiles at police Monday.



"There's two worlds in this borough. More and more middle classes are coming and we're being pushed out. The shops are pricing stuff like it's the West End, we can't afford the rents. We're the outcasts, we're not wanted any more.



"There's nothing for us."



Those who were out on the streets Monday night, and those who had gathered amid the debris Tuesday morning, said there was no interaction between the two distinct communities, even though they live practically on top of each other.



The rioting in Hackney was the third night of violence across the capital, sparked by the fatal shooting by police of a man in another poor borough.



"Youths are frustrated, they want all the nice clothes. They ain't got no money, they don't have jobs," a 41-year-old youth worker told Reuters, stood outside the Pembury estate, the scene of much of the trouble Monday night and home to mostly young black people.



"To live, to have money in their pocket, they have to thieve, they have to rob.



"The people that run this country, they got money, they are rich, they got nice houses. They don't care about poor people."



"SCREWING THE SYSTEM"



The statistics confirm the problem.



In 2007 Hackney was ranked the second most deprived local authority in England, behind Liverpool. More than 10 percent are unemployed. Some 11,000 people rely on state benefits to live, meaning some 24 people are competing for every available job.



According to the council, Hackney is ranked sixth out of the 32 London boroughs in terms of crime.



At the same time, small one-bedroom flats regularly cost some 300,000 pounds. On a nearby street, smart cafes are full of young families attracted to the parks and transport links to the nearby financial district. Pricey organic food shops stand next to 'pound shops'-- where all the items cost one pound.



Professor Mike Hardy of the Institute of Community Cohesion said it was not just the division between rich and poor that caused the problem, but the fact they lived so closely together.



"There is a much greater visibility of the difference," he told Reuters. "In London, the current troubles are almost focussed entirely not on a cause or a protest, but on greed and personal want. 'I haven't got something and I can take it'."



Britain's coalition government has made deep spending cuts since coming into power last year to tackle a big budget deficit. The poor say they have been hit hardest, with people in Hackney pointing to the closure of many services.



"The only way we can get out of this is education, and we're not entitled to it, because of the cuts. Even for bricklaying you need a qualification and a waiting list for a course. I signed up in November, and still haven't heard back," the Kurdish man said.



The government has also raised university tuition fees since coming into power, putting a higher education further out of the reach of youths from places like Hackney.



"They're screwing the system so only white middle-class kids can get an education," said another man, who declined to be named. He said politicians were the real criminals, and pointed to a 2009 expenses scandal in which several lawmakers were revealed to have cheated the taxpayer out of thousands of pounds.



"The politicians say that we loot and rob. They are the original gangsters. They talk about copycat crimes. They're the ones that's looting, they're the originals," he said.



One of the Kurdish man's friends pointed to alleged payments made to the police by journalists, claims currently under investigation as part of a wider phone-hacking scandal centred on the now defunct News of the World newspaper, part of Rupert Murdoch's News Corp media conglomerate.



"Everyone's heard about the police taking bribes, the members of parliament stealing thousands with their expenses. They set the example. It's time to loot," the youth said.

Could that happen here?





UPDATE: THE GREAT SPLINTERING



Umair Haque, who studied neuroscience at McGill, is a London-based columnist to the Harvard Business Review, Director of the Havas Media Lab and author of The New Capitalist Manifesto: Building a Disruptively Better Business. His specialty as a consultant and as a writer is capitalism, particularly venture capitalism and start-ups. His column yesterday is worth reading in its entirety. Excerpts below:

London's become a city where many young people feel they're finished before they start. Global economic imbalances (think, crudely, a country with a perpetual trade deficit) ultimately mean that there aren't enough jobs to go around-- and entrepreneurship is about as British as fish and chips are American. Being lucky enough to land a job that propels you into the ranks of the upwardly mobile-- or at least, that keeps you from the ranks of downwardly mobile-- depends, in my experience, not just on having gone to a handful of top schools (Oxford, Cambridge, LSE), but on having the right accent, postcode, and background. And while Americans might say that's unique to Britain, I wonder if in most advanced economies, similar dynamics aren't at work. Top employers, for example, don't exactly recruit heavily from The University of Nowhere. Internships are heavily tilted towards the already-privileged. In fact, the problems of youth unemployment, underemployment, marginalization, and inequality are so pervasive globally, more and more economists are beginning to point to a lost generation.



Another storm cloud looming over the dreary isle is, of course, the grim specter of austerity. Of all advanced economies, the UK proudly passed perhaps the world's most severe shock and awe austerity package-- dramatic cuts across the board-- to the shock and disbelief of many economists, who predicted that it would throw thousands out of work and cripple demand in the middle of an already precarious economic situation at precisely the time the economy needed it least. The result has been predictable: even for a world beset by reluctant recoveries, the UK's "recovery" has been notably the poorest. Hence, an economy where too many are out of breath, struggling even to tread water. The evidence suggests austerity leads to social instability and violence: uh-oh. [...]



Our institutions are failing-- they're failing us; failing the challenge of igniting real, lasting human prosperity. If institutions are just instruments to fulfill social contracts, then ours are shattering because the social contracts at their hearts have fractured.



I call it a Great Splintering-- not purely an economic phenomenon, as in "Great Contraction," but a social one: an era when social contracts are being torn up, abrogated, betrayed, abandoned, by accident, by design, by "regulatory capture," or simply by polities too gridlocked to progress. Broken social contracts aren't just tidy abstractions, empty of visibly real consequences, disconnected from the noise and clamor of our messy human lives. As they break, yesterday's ways of living, working, and playing rupture; yesterday's organizations, from corporations to banks to nations, creak and crack.

Austerity Regime Leads To Breakdown In Social Cohesion

Didn't David Cameron looked pissed off having been dragged back to gritty, sweltering, seething, burning London from his lovely £10,000/week 18th Century Tuscan holiday villa near Montevarchi! His answer to the rioters who have spread from Tottenham to almost every corner of London and up to Birmingham and Liverpool is one dimensional: he's going to go all Bashar al-Assad on them. Tonight the police on the streets of London will increase from 6,000 to 16,000.



As he said he's recalling Parliament-- no doubt to force Labour to embrace his harsh plans for repression-- he muttered something about rebuilding the burning communities... but nothing about the roots causes of the three days of rioting. It surely went beyond one instance of police brutality in the extra-judicial murder of community activist Mark Duggan. That was a spark in Tottenham-- a spark that set off hours of peaceful-- if unreported-- protest. But the conflagration that followed, there and beyond, has much more to do with a breakdown of social cohesion in the U.K. There's a hopelessness brought on by Cameron's enthusiastic buy-in to world capital's insistence on an Austerity Regime. Cameron was the first major embraceor of the concept, a concept that the GOP feels will serve their nefarious purposes here in the U.S. as well, regardless of how disastrously it has failed-- in every way-- in the U.K.



From the closure of youth clubs and youth projects to staggering unemployment and cutbacks in life-or-death public services, the poor in England see themselves as victims of the banksters and the political hacks, like Cameron, who the banksters control. Who remembers Janis Joplin singing "If you ain't got nothin', you ain't got nothin' to lose" (Bobby McGee by Kris Kristofferson)? Probably next to no one who's taken to the streets in London in the last few nights. I'm guess they just have the sentiments expressed in the song coursing through their body as a human emotion.



By dragging the country, a very different country now, back towards reactionary Thatcherism, Cameron has opened up dangerous social and economic faultlines that bode ill for a country he is ill-prepared to govern. The Tories insist England has entered "an age of economic austerity, rising individualism, and a reduction in the Christian ethic of ‘love thy neighbour'." For all Governor Perry's pious and inappropriate invocations last weekend as he was about to toss his hat into the Republican presidential nomination ring, this is precisely what we can expect to see coming our way. Republicans-- who, after all, have more guns than England could ever imagine, welcome it even more gladly than they welcomed the S&P downgrade and yesterday's stock market meltdown. Push-back in this country is taking a peaceful approach so far-- tonight in Wisconsin, yesterday outside the offices of right-wing Congresswoman Nan Hayworth (R-NY).

[Elaine] Epstein said she showed up at an afternoon rally Monday outside Rep. Nan Hayworth's office here to protest the congresswoman's support for a Republican budget proposal she says puts Medicare in jeopardy.



"People under 55, she just threw them under the bus," Epstein, a retiree from Somers, said. "She didn't say that, but I'm reading between the lines. I'm afraid for my children and grandchildren."



"I'm really concerned that Nan Hayworth and her Republican colleagues believe we should be balancing the budget on the backs of the people who can least afford it," said Mel Tanzman of Mohegan Lake.



Chanting "Jobs, Not Cuts," protesters targeted the budget proposed by Rep. Paul Ryan, R-Wisc.



"We want them held accountable for what they voted for, which in the case of Nan Hayworth is she wanted to make Medicare into a voucher system," said Joe Mayhew, a member of the Working Families Party and political and legislative coordinator for the Communication Workers of America Local 1103. "That's the Republican plan."

After 8 years of Bush's bumbling incompetence, it looked like experience was no longer required for the presidency. So now we're stuck with a weak, inexperienced, untested, vacillating leader here in America, likely to have to face challenges far above anything he's prepared for-- and with nowhere to turn to except, like Cameron, the smiling, salivating forces of repression.