Tuesday, September 30, 2008

The Long Con posted by Richard Seymour

Aram Roston's recently published biography of Ahmed Chalabi, The Man Who Pushed America to War, tells a strange tale about one aspect of the 'other war' against Iraq, the one that was pursued relentlessly throughout the 1990s in the form of sanctions, regular bombardment and covert action. In part, it is a character portrait of a crooked upper class Iraqi who, following what the Jordanian authorities consider a massive global heist by the Chalabi family which funnelled millions of dollars to secret accounts in the Cayman Islands, is able to reinvent himself as an authority on the newly troublesome Iraqi dictatorship and eventually as the best possible replacement for it. Chalabi emerges as a man with an immense capacity to make others believe in him, even when he is manifestly on the take and manipulating all to his own advantage. It is also a story of Washington's attempt to manage a 'safe' overthrow of the Iraqi government. Drawing on testimony from Chalabi's associates, friends and co-conspirators, it is meticulous in detailing dates, times and places, and richly descriptive. As for the man himself, some consistent themes emerge. For a start, he was always politically engaged, especially from his time as a bright young thing studying mathematics in MIT, where he was a sophomore during the bloody Ba'athist coup in 1963. Secondly, he has always been absolutely stinking rich. This is the reason why the Chalabi family considered the overthrow of the pro-British monarch by the Free Officers in 1958 such a grave crisis that they fled their Baghdad mansion in a convoy of American sedans and fled to the cramped home of an ally in their traditional base in Khadimiya, a largely Shi'ite area then as now. The fact is that Iraq was, under British tutelage, cultivating an extremely opulent ruling class while slums expanded and infant mortality soared. So, the Free Officer coup contained revolutionary elements that could easily lead to a rich family being expropriated and slaughtered. Chalabi would go on to recall the pre-revolutionary utopia - a time of elections, a relatively free press, cross-sectarian solidarity in his father's boardroom, expanding public schools... He declared: "This is how we were, this is how we will be again!" Later: "The bastards set us back 700 years!" And indeed, the revolt had destroyed the Chalabi family's status in Iraq. Thirdly, and relatedly, though Chalabi didn't appear to be particularly concerned about democracy, and displayed an innate distrust of mass politics, his loathing of the Ba'ath Party appears to have been lifelong. Undoubtedly, he saw its accession to power as a continuation and radicalisation of the revolt that had overthrown the old colonial caste. And it was therefore very probably the 'popular' element of Baathist doctrine that he despised: "left-fascists" was the jarring phrase he used to characterise them in 1963.

At any rate, whatever the problems faced by Chalabi's family in the immediate aftermath of the revolution, it restored its position outside Iraq - in Jordan, Lebanon, and England - and retained its wealth. It ran the Middle East Banking Corporation (MEBCO) with interests both in the UK and across the Arab world. And young Chalabi was carted around in a limousine, both at MIT (where he claims, apparently falsely, to have been responsible for creating a revolutionary new type of unbreakable code) and at the American University of Beirut, where he began to work as an assistant professor in 1971. Though apparently a gifted mathematician, his real passion was to utilise his immense resources and connections to help overthrow the Iraqi regime. To that end, he was smuggling guns to Mustafa Barzani's Kurdish forces throughout the period of revolt in the early 1970s (during which time they also had the backing of SAVAK) and formed early contacts with journalists such as Peter Jennings and David Hirst to ensure that the struggle was conveyed adequately in the Western press. He was obliged to terminate these activities when civil war broke out in Lebanon in 1975. The Chalabi elders fled to England, and left MEBCO in young Ahmed's hands. He had to quit teaching to run the bank and said au revoir to mathematics for good.

And, as we know, it was in the business of banking that Chalabi first attained notoriety. Petra Bank, which he built and controlled from 1977, was astonishingly successful, increasing its assets from $40 million to $400 million between 1978 and 1982. Chalabi used his success to form connections not only with the Arab bourgeoisie but also with people like Judith Kipper of the American Enterprise Institute and Peter Galbraith of the Senate Foreign Relations Committee. He cultivated journalists with varying success and seems to have first made a tenuous connection with Judith Miller of the New York Times in this period. Supposedly, the CIA even considered recruiting him in the early 1980s, but gave up on the idea. However nice Chalabi was to his American friends, though, he was openly backing the Iranian side in the Persian Gulf War, and held the US - particularly the CIA - responsible for the Ba'athists even being in power in Iraq. Incidentally, it wasn't exclusively for instrumental reasons that he wanted Iran to defeat Iraq. Though he had been loyal to the Shah, he seems to have switched sides very quickly, and expressed excitement at the idea of Shi'ite self-assertion. On the other hand, there was a banking empire to tend to, and - practicalities being what they were - Chalabi decided to do business with the Iraqi government, a decision which was apparently being formalised in the days before the Iraqi invasion of Kuwait.

The collapse of the Chalabi family's banking interests began in 1989, and Chalabi could well have been brought down by the scandal if it weren't for his discovery of the uses of American power after 1990. The Swiss Federal Banking Commission revoked his banking license on 27 April 1989, a month and a half after the death of the Chalabi patriarch, Abdul Hadi Chalabi. MEBCO Geneva was finished. In August, Petra Bank went down, and was taken over by the state. And then Socofi in Geneva, and then MEBCO in Beirut. And following this, a series of criminal investigations was launched. It seems that Ahmed had a penchant for risky, aggressive banking schemes. That had certainly been the case in Jordan, where he obtained far more leverage over the economy than his capital base would permit. One of his schemes was in league with an American brothel-owner and felon named Wayne Drizin, with whom he set up a financing mechanism for a proposed 300-foot ship called the Nissilios, which raised about $15m from various donors. Petra Bank promised to pay back the donors in the event that Drizin defaulted. Well, trouble is, the money never went to the ship. It seems it never went to Drizin either: in fact, the preponderance of known facts suggests that the Chalabis simply appropriated the cash. Similarly improbable deals with similar crooks such as Taj Hajjar, a Jordanian businessman and Greek financier Spyridon Aspiotis, led to arrests and sometimes charges. Chalabi himself ended up being a fugitive from Jordan as the economy tumbled and the state tried to shore up the banking system. As all banks were ordered to deposit some of their foreign currencies in the depleted Central Bank, only Petra Bank refused, and Chalabi was not able to give a satisfactory explanation. The reason soon became obvious: the books were cooked. Chalabi absconded, leaving others to cop the arrests, even while calling journalists to tell them it was all a misunderstanding or - as he still claims - the result of a political conspiracy by Iraq and Jordan to ruin his family. He set up a banking security company with an office in Knightsbridge known as Card Tech (incorporated in the Cayman Islands), financing the business with profits from Petra Bank.

While in London, Chalabi was once more at liberty to pursue his political goals, forming alliances with Iraqi exiles such as the Shi'ite cleric Muhammad Bahr al-Ulum. The invasion of Kuwait was a gift for him in so many ways. He became a regular feature of the op-ed pages: "A Democratic Future For Iraq", his 1991 Wall Street Journal piece proclaimed, urging that the US could and should overthrow Saddam Hussein. While he had never been known to care particularly about democracy, he now found that the rubric of 'democratic reform' was a useful way to galvanise support. With other opposition groups, he formed the Joint Action Committee, which prevailed on the West to allow them to enter Iraq and overthrow Saddam. Chalabi himself had no grassroots base, but he had networks of contact and influence with circles of power, and had media savvy. He became coordinator of the International Committee for a Free Iraq, which drew in various supporters including the recently shamed Senator John McCain. Also involved was then antiwar left-winger Ann Clwyd MP, who would later form a tight bond with Chalabi, and also Bernard Lewis, Albert Wohlstetter, and Richard Perle. Whatever Chalabi's protestations when the US left Saddam in power and facilitated its crushing of the Kurdish and Shi'ite rebellions, he was to prove that he didn't bear a grudge for long. Unknown to him, the CIA had been tasked to devise a plan for a managed overthrow of Saddam, and in the Spring of 1991, Bush signed a 'finding' authorising covert action against Saddam. They were given a budget of $38 million. In May that year, the CIA moved to recruit Chalabi, sending their agent Whitley Bruner to visit him at his swish residence overlooking Mount Street Gardens. Having sealed the deal, Chalabi was then contacted by Linda Flohr, a veteran of the Counter Terrorism Centre (which acquitted itself so beautifully in Reagan's own 'war on terror', particularly in Nicaragua). He haggled over funding and insisted that he would not sign a single receipt for any of the funds he was given. He also persuaded the CIA to nix a threat of interdiction by Interpol, who had been asked by the Jordanian authorities to nick him in the absence of any interest on the part of the British state in doing so. It was while visiting the State Department to co-ordinate with Iraqi exiles that he first caught the eye of Paul Wolfowitz.

Chalabi was as yet not the Americans' preferred leader of any future Iraqi regime, and resented the fact that he had been employed more as a facilitator for the other exiles. According to diplomat David Mack who dealt with Chalabi, "he bided his time until he could improve his position as an Iraqi national leader". He had become convinced, it seemed, that it was a particular entitlement of his to lead Iraq. Soon, he convinced plenty of others, including the doggedly loyal Kanan Makiya. In the meantime, he set up a front company - IBC Communications - to channel CIA funding, and warded off alarmed queries from some of the more serious exiles by pretending that he was being funded by wealthy Iraqi businessmen. They knew it to be a lie, because no Iraqi businessman would hand Chalabi a dime at that point. Nonetheless, he was gradually able to fix it so that he was the indispensable point man for the US. The front organisation, which received $4m a year, was run by Chalabi and this meant that he had direct and unaccountable control over the money and therefore direct control over the new opposition front, the Iraqi National Congress (the name taken from the African National Congress and the Indian National Congress). In alliance with the John Rendon group (about whom, you really should read this), Chalabi set about building up a hardcore of supporters who would help sell the organisation as a genuine, independent movement of dissenting democrats, while negotiating with Kurdish groups and some Iraqi tribes, to whom he delivered the dollars in person (thus giving himself even more leverage). He knew that he had been effectively promoted when in 1993 he received a personal letter from the new Vice-President Al Gore who conveyed his dedication to the INC cause.

The Clinton administration had some interventions of its own to take care of, however, and it didn't feel like immediately rushing to manage the remainder of Bush Sr.'s war. Chalabi relentlessly proselytised for a 'Three Cities' strategy in which his group would incite rebellions in three major cities north and south, and thus stimulate a mass defection by the Iraqi army. The army would keep order in the conquered cities, while Chalabi's men moved ever forward, ready to strangle the regime's base in Baghdad. Certainly, it was a preposterous idea, but it seems that the ultimate plan was to force the US government's hand, and drive them to invade. By 1995, he was working with Bob Baer, the now ex-CIA agent who is generally given far too much praise in the media. He urged Baer to help him get Washington to approve his plans for inciting a rebellion, although he claims that in fact the plan was all Baer's idea. After a long delay, a response emerged from Anthony Lake, Clinton's National Security Adviser, telling Chalabi in barely veiled terms where to get off. Chalabi's sails were only temporarily punctured, and he planned to launch the insurgency anyway. It didn't work. Barzani didn't go along with it, Talabani's forces melted on the border, and the Iraqi army did not engage in mass defections. This hopeless muddle, combined with revelations that Chalabi was doing business with Iranian intelligence, inclined the CIA to look into Chalabi's books: what was he doing with all this money? It turned out, he wasn't spending much of it on the operations he was supposed to be spending it on, and it also seemed he had been spinning his paymasters a series of lies.

At any rate, Chalabi was far less useful to the American state at this time than Ayad Allawi, and his Iraqi National Accord. Allawi was a longtime asset of MI6 and the CIA. He was a Ba'athist and could recruit among Ba'athists. He was quite prepared to execute a coup that conserved the basic power structure. And, as far as I know, he wasn't a habitual thief. Chalabi, by contrast, was opposed to any future for the Ba'ath Party whatsoever, which is why had to rely on the idea of stimulating a rebellion that would then draw in American troops. The CIA chose to transfer its support to the INA and sponsor a coup that actually turned out to flounder as badly as most of Chalabi's initiatives. Meanwhile, the INC base in northern Iraq was shut down during the civil war between Talabani and Barzani's factions and, when they realised the extent to which Chalabi had been playing one off against the other, the Kurdish leaders said they didn't want him back. By 1996, the CIA had cut him and his organisation off, and he had no base. But he did have his supporters in Washington, including some figures from his earlier operation such as Francis Brooke, a Democratic politico and beer industry lobbyist, Warren Marik, a CIA agent who resigned one year after Chalabi was cut off, and Linda Flohr who introduced him to a man who ought to need no introduction, one Duayne Clarridge, who was then rebounding from his Iran-Contra difficulties. Chalabi and Clarridge were soon as thick as thieves, and Clarridge recruited retired US Army Gen. Wayne Downing to devise a more sophisticated version of Chalabi's 'Three Cities' plan to sell to the administration or its Republican opponents. It revived the old model supplied by Reaganite interventions into Angola and Central America, in which local guerilla movements were created, trained, armed and funded by the US. In this case, the plan was that the US would use its air power to provide 'armour exclusion zones' that Saddam had to keep his tanks out of or risk being devastated. Another part of the revival strategy was to win the news agenda. Thus, Chalabi got ABC News to broadcast his narrative of American betrayal of an authentic national revolution, in a documentary presented by his old acquaintance Peter Jennings. Also featuring in the documentary was a man named 'Ahmed Allawi', the alter ego of an old Chalabi loyalist from the early days of the INC, Aras Habib Kareem, who told viewers that they could easily have defeated the Hussein regime, but the Americans let them down. And finally, there was the business of finding a new political constituency - this was supplied by the neoconservative right, including Paul Wolfowitz, Doug Feith and Richard Perle. He knew how to say the right things to persuade Mey Wurmser, co-founder of MEMRI and wife of David Wurmser, that he wasn't some dreadful antisemite. He was supportive of Israel, and said nice things about democracy too. This was an Arab the neocons could like, even if he could never be fully one of them. He got good play from institutions like JINSA as well, and all of this helped make up for the fact that Mossad wouldn't touch him with a stolen bargepole. Chalabi also had the backing of a number of Democrats at this point, including Joe Lieberman and Bob Kerrey, which suggests that too narrow a focus on the neocons is unsustainable. And then he got back with his old friend Ann Clwyd MP and persuaded her to launch group called INDICT, which was supposedly designed to expose Saddam Hussein's various atrocities. This was an enormously successful move: US Congress devoted "not less than $3,000,000" to the organisation, and the Clinton administration considered it a relatively low-risk way to support the exiles without putting money directly in Chalabi's hands. However, the registered office of the organisation was Chalabi's Mayfair residence, and he himself was registered as corporate secretary and co-director of the organisation. Two old-time Chalabi supporters, Zaab Sethna and Nabeel Musawi, were appointed to senior positions in the organisation. It was championed by GOP Congressmen, especially when the Clinton administration appeared to delay funds. The Senate provided him with a platform to outline his plans for a future Iraq, and to declare himself "an elected representative of the Iraqi people". And when Congress passed the Iraqi Liberation Act in 1998, it was literally designed to help Chalabi's cause, though in fact the money earmarked to help the INC - $2 million - was slow to come, due to State Department reticence. In order to overcome this, the Iraqi National Congress Support Foundation was set up as an incorporated group to channel money to the INC. But the US government insisted that rivals such as Allawi and representatives of the Kurdish parties be included on the board. Chalabi was able to get PR lobbyists BKSH, owned by Burston-Marsteller, to work for his campaign, and the company assigned one of Jonas Savimbi's former PR agents, Riva Levinson, to work with him.

As the 'war on terror' kick-started, the INC's propaganda operations began in earnest. They recruited assets such as Adnan al-Haideri, a man in need of asylum who was prepared to spin appealling fictions for the CIA on behalf of the Congress (though the CIA were not in fact taken in by him). Chalabi himself worked several journalists, most notably David Rose of The Observer, who began to ventriloquise INC propaganda. Among the falsehoods he relayed in this role was the story of mobile laboratories, set up in 1996 to develop biological weapons. The source was Mohammad Harith al-Assef, another INC asset, and the claims were repeated in a DIA report. But Chalabi's main role, as he saw it, was to try to unite the Bushites with the Supreme Council for the Islamic Revolution in Iraq, currently the main occupation partner of the US. Cheney met with a representative of the outfit, facilitated by Chalabi, much to the alarm of liberal exiles - if SCIRI were essential to a post-war state, surely Chalabi would at least insist on fundamentals such as womens' rights, democracy etc? No such luck. Chalabi was also supposedly instrumental in getting the INC's Information Collection Programme to be transferred from the State Department to the Pentagon, who looked upon the information with more welcoming eyes. But the decision was taken by the National Security Council and would presumably not have been had the administration not already opted for war (here, as with much else in Roston's book, too much weight is given to Chalabi's particular input).

When, in 2002, the White House decided to set up the Committee for the Liberation of Iraq, it appointed Bruce Jackson, a former Lockheed Martin lobbyist to assemble the right people to run it. Jackson enquired as to what he might say the reasons for war would be, and was told that the President had not yet decided. Nonetheless, he signed up and contrived his own rationale: Saddam's regime was responsible for grave atrocities and should be replaced by a democratic government. This organisation was able to gain the support not only of politicians of both main parties, but also of Washington intellectuals such as Bob Kagan and Christopher Hitchens. This outfit came to orbit the INC directly. During the years 2000-2, Chalabi's group had been given $33m by the State Department. But the INC wanted more - precisely, $97m which they said had been allotted by the Iraqi Liberation Act. What the Bush administration offered in reply was to build up a trained militia for the INC, to be known as the Free Iraqi Forces, and the Pentagon recruited Vietnam war criminal Senator Bob Kerrey to oversee the process, which was run out of the US Army Training Centre at Fort Jackson. While the Bush administration's plan was to integrate these with the US invasion force, Chalabi had plans to make them an independent "Iraqi military force". It was also during this period that the INC elaborated its plans for de-Baathification, which would help moralise the invasion by assuring liberal opponents that it wasn't just going to result in the same dictatorship with a new pro-American figurehead on top. Further, Chalabi insisted to anyone who would listen that there would be no occupation, that he would oppose such a status as a matter of principle - even so, the INC was clearly recommending an occupation, modelled on the postwar occupation of Japan, in its internal documents. It is perfectly natural, therefore, that Chalabi's front should have been chosen by the administration to help devise its occupation plans. For what the INC wanted was more or less what was intended by the administration, and Chalabi was himself highly adaptible when it came to any matter of principle involved.

And so, Chalabi arrived in Iraq alongside his feckless 'Free Iraqi Forces' militia, and tried to stage a march into Baghdad modelled on De Gaulle's 1944 liberation of Paris. Well, the trouble was that the FIF weren't real killers but poorly trained, undisciplined and desperate men who would have been crushed by the Iraqi army. The US army was the only real killer in this territory. Still, he tried to find some way to obtain more of a role for himself in the occupation, and successfully lobbied his supporters in the administration to discipline General Jay Garner, who was seen as undercutting the INC. The FIF, hopeless as it was, was eventually terminated: it was not the "nucleus" of a new Iraqi army after all. But Chalabi himself ended up on the Interim Governing Council as well as the Higher National Committee for De-Baathification, where it is alleged he tried to shake down Iraqi businessmen under the rubric of 'economic de-Baathification'. (Chalabi's name comes up a lot when missing money in Iraq is mentioned). He got his nephew installed as the head of the multibillion dollar Trade Bank of Iraq, and his cronies made a great deal of money from reconstruction. Even when he didn't fare too well in his 2005 bid to be the candidate for Prime Minister of Iraq as part of the United Iraqi Alliance, he was given the post of Deputy Prime Minister and acting oil minister. Soon, his company Card Tech was given a big contract by the Trade Bank of Iraq, and subsequently sold off for a plum bonus of $54 million. He has manouevred constantly, tilting toward the Americans and away from it, siding with the UIA and then the Sadrists, tacitly accepting occupation and then opposing it.

But what comes through most clearly in Roston's account is precisely the extent to which the underlying heuristic is wrong. Chalabi did not push anyone into war. He has been a useful asset, a clever manipulator, and a world-class fraud. And, being of an old comprador elite, he makes a natural ally for imperial power. But he used the systems of corruption, coercion and blandishments that were available to him because of the way Washington politics works, because of the agendas that are current in the US political elite, because of the gullibility of corporate journalists and of politicians, and because of the endless opportunities that exist for a wealthy, intelligent operator in this system. When it comes to crookedness, lying, and bilking money from taxpayers, I am certain there is a whole class of people who make him look pretty average. What is far more interesting is to see how certain interests gelled, how millions were duped, and how people were directly coopted over prolonged periods of time, sometimes without their knowledge, for a policy that they didn't understand.

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Monday, September 29, 2008

The Fix Is [Not] In [Yet] posted by Richard Seymour

They got the $700bn bailout, with one or two 'provisions' that, in fact, don't really deviate that much from the Paulson plan, contrary to some of the analysis. A few things to note when looking at the summary: they still get their $700bn, phased and with a bit more oversight than was planned (ie, more than zero) - but remember that the $700bn figure was just pulled out of thin air, a large enough number to allow maximum latitude to the Goldman Sachs wonderboy in helping out Wall Street; they won't cap executive remuneration, but they will tax it a bit more if it's above $500,000, so the inevitable bragging about zero tolerance for executive pay is unwarranted; there will be some taxes on golden parachutes, but the "era of golden parachutes" is far from "over", as Nancy Pelosi has been bragging. Finally, the government supposedly expects to make a small profit on the enterprise once it's returned to the private sector, which is how previous bailouts have worked. This will be the selling point. They will say that they have no intention of draining the public purse, and that every penny will be restored in due course. But this assumes that the bailout will have the effect of restoring these institutions as profit-making enterprises. There is no guarantee whatsoever that any of this money will be seen again. In fact, the markets are plummeting, supposedly because of doubts about the efficacy of the bailout. And it also raises the question of why the public shouldn't just own it, and keep all the profit. After all, private ownership and markets don't seem to have been particularly advantageous in the past.

This is not about economic competence, moral hazard, perverse incentive, or any of the other cynosures of neoliberal policy wonkery. And preserve us from the absurd claim that this is some kind of socialism. It is about class power. If they wanted to resuscitate the economy, here are some possibile uses for that $700bn. Think of households and public sector institutions that are failing largely because the system is failing them: they couldn't put $700bn to better use? How about just nationalising the healthcare system? All of that would certainly stimulate the economy, provide jobs and help people who really are in need, but it would also risk revivifying the exiguous social democratic constraints on the operations of capital. You give people the idea that the tax base should be used in their interests, to give them secure jobs with decent pay, public services, well-funded inner city schools, any of that, they might never be away from the till with their hands out. Greedy taxpayers have to learn that this money is earmarked for conscientious wealth creators and their warriors, not for sloths with their heads stuck in the bargain bucket.

Meanwhile, the Brown administration didn't waste any time this time in nationalising most of Bradford and Bingley, much to the chagrin of the Tories, who are just frantic - frantic, don't you know? - about the costs to lower income taxpayers. The Conservatives want the Bank of England to take over the company and run it down. The trouble is, of course, that the government are not nationalising to protect jobs, and therefore probably will run it down in muchy the same way as they have run down Northern Rock. The Tories know this. It's being done to protect liquidity, to keep the banks lending to one another. This is why even right-wingers like Vince Cable approve of the nationalisation. But the Tories, aside from once more positioning themselves to the left of the government, are being disinguous: this particular nationalisation cost millions rather than billions, and it isn't going to drain the public purse. It is almost as if the three main parties are playing a game of 'chicken', each urging the other to do least to ward off the crisis. What I suspect is actually happening is that the rules of the game are changing far too rapidly for them to assimilate it. The language of economic liberalism will survive the practise for a long while, for what is emerging is an increasingly interventionist state. Even the Tories, while talking about the virtues open markets, are pleding tough regulatory regimes. This is by no means a reversion to a less predatory form of capitalism, although resistance by workers can make it so in the short term, but it does open up the argument somewhat: put briefly, if the state can protect profits and stock exchanges, it can protect jobs and public services.

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Saturday, September 27, 2008

Facts, myths and media posted by Adam Marks

7/7 could have been a turning point in British political history, more important than the abolition of the 10p tax band. It was a chance for the British ruling class to start again.

The Republican regime used 9/11 to push changes in American political life: denature democracy, rig the odds even more heavily in favour of the neo-liberal consensus, strengthen the military/industrial complex and so on. The British ruling class, in the form of the Labour government, tried to hop onto this movement to push similar changes: from various anti-terrorism acts, to new narratives about “extremism”, right down to denouncing striking fire-fighters as “fascists” and “Saddam’s little helpers”.

They failed in one crucial respect: they did not take the people with them. They alienated millions of people from official power structures and sowed seeds that are now being reaped as the current crisis: wipeout in 2010.

The government counted on a passive population readily receiving and absorbing the official line about the war. Labour banked on Blair’s broad (but shallow) authority and charisma, backed by their undefeated media machine, winning people over (as happened in 1999 with the Balkan conflict). They underestimated the number of people who would take an active interest in the War on Terror. Why did 9/11 happen? What is al qaeda, who is Osama Bin Laden and what did they have to do with Iraq?

But if 7/7 was a chance to start again the Labour government (and the ruling class more generally) being graded on building a ruling class movement, would have a comment next to their mark: “must try harder”. In the past few years the population has built up immunity to the word on high.

Even in the most authoritarian societies ruling class power is built on a mixture of force and consent. In a democratic society there is an expectation that ordinary citizens can contribute to the political process. Ruling class movements have to take this fact into account

Ruling class movements have to be built from the ground up. Capitalist ideology has to be shaped around people's everyday experience, often phrased in everyday language, delivered and explained by trusted people and institutions. Ideas and themes generated from below have to be incorporated into consensus (the illusion of meaningful participation often helps draw potential opposition groups into upholding the system).

Of course said themes used won't be be solidarity, internationalism or such like (although Make Poverty History was an attempt to divert latent anti-capitalism into paternalistic concern for the less fortunate, i.e. people not blessed with working neo-liberal regimes). In terms of ideological struggle “On Your Side”, the by-election campaign for Liam Byrne in Birmingham in 2004, was a key moment. Labour has increasingly tried to appeal to all that’s hateful and afraid in the working class, positing the average voter as a little Alf Garnett or Self-Righteous Brother.

Byrne’s campaign was themed around crime and immigration (he was going to be tough on both). But in case you didn’t get the point the leaflets were decked in the St George’s Cross.

This is called Dog Whistle politics, where symbols and code are used to say things to a specific audience without actually saying them out loud. When you stick the St George’s Cross on a leaflet and use the language of “them and us” it is easy to infer who ‘we’ are.

The next question is, if the ruling class message relies on trusted and capable media, what are those media, and how do they work?

Hot and Cold Media

The philosopher Marshall McLuhan is most well known for his aphorisms “the medium is the message” and “we live in a global village”. His analysis of media is often brilliant, certainly materialist and at times neck and neck with the great Marxists who looked at communication and ideology (Gramsci, Lukacs, Benjamin and so on).

One of his key concepts is that of hot and cool media. A hot medium is one that imparts large amounts of information where meaning and form is mostly predetermined. A cool medium is one where the audience participates much more in the creation of meaning.

One interesting example he gave was the medium of dance. The Waltz is a hot medium, where things like movement and etiquette were strictly determined. McLuhan compares this to the Twist, which is mostly improvised.

An interesting diversion: at the time of writing McLuhan compared the popularity of the Twist in America with the Charleston in the USSR. The USSR had been through a tremendous period of industrialisation and modernisation. Conformity and precision were regarded as positive qualities, improvisation and individualism were discouraged. The twist was apparently considered taboo in Soviet Russia.

The significance of hot and cold media is in their general effect on social and individual consciousness. Hot media, loaded with information, over-stimulate the senses. The mind (social or individual) is thrown into imbalance. In order to cope it has to numb itself to the assault until it can recover. There are a number of illustrations that spring to mind, voter apathy, compassion fatigue, insensitivity to violence, channel hopping, internet surfing…

McLuhan develops this idea to the point where he suggests the content of a medium is socially almost irrelevant (the medium is the message).

Here comes the science part… ish

We touched a little on the significance this has for politics (voter apathy etc…). Another great twentieth century writer, Aldous Huxley, actually saw over-stimulation, a flood of information as a source of oppression.

The people who control our information-saturated media are able to do two things. The first is bury bad news, facts, opinions and stories detrimental to the consensus, in a welter of (often trivial) information. Second is use almost pure sensation to create meaning.

This second tactic is the most incredible as it can transform lies into facts and madness into reason in the public mind. To go back to the start, the pro-war government movement was a particularly egregious example.

The Axis of Evil was generated out of thin air, along with weapons of mass destruction and the connection between Iraq and al qaeda. Lies, guesses, half-truths and suspicions were worked up into facts, magnified and repeated endlessly. ‘We’ were 45 minutes from destruction. By ‘we’ it was meant British bases in Cyprus (no one asks why there are British military bases in Cyprus), and by destruction it was meant possibly, if Iraq had chemical and biological weapons and if the delivery system could carry them that far and that accurately.

Another short diversion: the social implications of sensationalism are clear. Each new dose of sensationalism, added to cut through the numbing mix, leaves a longer and deeper hangover. Porn becomes ever more graphic, horror ever more gory, comedy becomes an imperial adventure into the realm of taboo.

There are those who know how to use the media…

One of them is Karl Rove. He is supposedly “Bush’s Brain”, certainly the mastermind behind his career and the current Republican domination.

John McCain has revived him in a rather soviet-like way. McCain was firstly cut out of power rather brutally by the Bush election machine in 1999-2000. Now that George Bush is a deadly liability and the Republicans tainted by his years of misrule McCain had no choice but to… bring Rove back.

He first made his mark in direct mail appeals (cool medium). He would apply a deep interest in voting groups and sub-groups to hone his message precisely to their prejudices and fears. Telephone campaigns (also cool) were variation on this. According to legend, at the climax of one election campaign in Texas he had his staff phone people to earnestly tell them the Democratic candidate was a closet lesbian.

It doesn’t matter whether lesbians run the Democratic Party or not. Most people cold-called to be told this ‘fact’ would laugh or hang up. The calls were targeted, narrowcast to people likely to believe such a statement and find it significant. The suggestion has been made, but it’s up to them what they find significant.

Remember, Republican activists have a bee in their bonnet about the “liberal media”. There is no such thing of course, but that’s not the point. 80s and 90s saw the rise of media that bypassed the supposed liberal stranglehold, talk-radio and the internet. Conservative activists and advocates developed media where they could specifically control the message. The success of these new media had an immediate effect on the old, supposedly liberal media outlets (see the Bush 'election' in 2000 or the build up to the Iraq war).

Well, what’s the old skuldugger up to today? Evil genius though he may be, he’s not above playing on the name of Barack Hussein Obama. Go out and look for Americans, before long you will find some who honestly believe Barack Obama is a Muslim and that that’s a baaaad thing.

A quick dip into the news finds this:

DVDs of an anti-Muslim documentary film are being distributed to 28 million voters in swing states like Florida, Pennsylvania, Ohio, Michigan, Colorado and Wisconsin…

The 2005 film, called Obsession: Radical Islam's War Against the West, warns that Islamic jihadists aim to take over the US government and destroy our way of life and urges voters to consider which candidate will best protect the nation. Among other subtleties, the film attempts to equate Islam with Nazism, juxtaposing scenes of children being encouraged to become suicide bombers with shots of Nazi rallies…
The film's production and promotional campaign were bankrolled by the Clarion Fund, an obscure non-profit that has not filed the required IRS form that would allow the public to see who its officers and major funders are. The group was founded, however, by Raphael Shore, an Israeli-Canadian citizen and supporter of John McCain. Shore's website, Radical Islam, featured an editorial endorsing McCain for president. That's a big no-no: 501c3s aren't legally allowed to endorse candidates.


Jewish voters in swing states have also been the targets of push polling from Republican-affiliated marketing outfits. Joelna Marcus of Key West, Florida received a telemarketing call asking if she is Jewish. After replying "yes", she was asked whether she was religious. Then the push poller then asked her if her opinion of Barack Obama would change if she knew that Obama had given lots and lots of money to the PLO. In Pittsburgh, Pennsylvania, Debbie Minden received a call asking whether her support for Obama would be swayed if she knew "his church was anti-Israel" or that Hamas endorsed him and that its leaders had met with him. The caller also asked if she would change her mind if she learned he was Muslim.

The New Republic's Jonathan Cohn also received a call in Michigan and took notes of the smears: According to the caller, some of Obama's best friends in Chicago were "pro-Palestinian leaders"; Jimmy Carter's anti-Israel national security adviser Zbigniew Brzezinski is an Obama foreign policy adviser; Obama sat on a board which funded a "pro-Palestinian charity"; Obama said that if elected he would call for a summit of Muslim nations and exclude Israel.

Minden reported that her call came from a firm called Research Strategies, which is none other than Wilson Research Strategies, whose founder is Chris Wilson. Wilson is a top Republican consultant and friend of, you guessed it, Karl Rove. Cohn said his call came from a company called Central Marketing, which has done push polls on behalf of the campaigns of Republicans John Thune and Michael Bloomberg.

The nice touch here is Rove (let alone McCain) is never directly involved. Nonetheless are “obvious Republican scare-tactic[s], right out of the Rovian playbook”. They are examples of cold media being used. How is the Republican campaign dealing with hot media? An example:

So I was abed this morning listening to NPR and on comes Mara Liasson with a report about the women's vote. Typical silly evenhandedness, and then she plays a snippet from a McCain-Palin radio commercial that sums up the whole problem, really.

The commercial is about the "sexist" attacks on Palin. The script is read of course in a woman's voice, and she conveys just the right tone of anger and contempt for the sneering hypocritical liberal elite misogynists. They tried A, and B, and C, the woman says. And then, when that didn't work, "they called her a liar." She brands this "despicable."

Okay. I spent yesterday afternoon fretting that Obama's message was too muddled, not pointed enough. Almost everyone I know thinks this. Maybe we're right. Or maybe we're just compulsive fretters, because that's what liberals tend to be based on experience.

So maybe the Obama team is flailing. But now I hear this ad and I think, how do you fight an opponent that not only lies, but then tells lies about the lies?

Palin is a liar. Of this there's no question. She supported the bridge to nowhere. She asked for earmarks as governor – and not just one or two, but $453 million worth. She still goes around the country saying the exact opposite of both of these things.

Having already created a new audience through naturally cool, narrowcast media, the Republicans are better placed to fight for control of the hot, broadcast media.

The line about ‘sexist’ attacks on Sarah Palin is to create a foolproof defence for a weak candidate. If it’s sexist to attack your opponent for lying then its sexist to attack your opponent for anything. The idea hangs on the well-developed meme of the hypocritical liberal elitist. If you subscribe to that meme in any way the case is all but won. The hypocritical liberal elitist is put on the backfoot, they have to defend themselves when they should be attacking their opponent.

Hot media are pumped full of sensational (mis)information, in the style of cold media, in the knowledge there is an audience segment that will pick up and absorb the misinformation: dog whistle politics. It doesn’t matter if said information is eventually proved wrong or misleading, as it will quickly swamped.

In this case a temporary advantage has been won for the Republicans. However, the advantage has been won thanks to years of preparation. The audience was created by Rovian strategy, by a movement from the ground up.

Closer to home

I think we’re still a long way from the lunatic culture wars of America. We’re going through a similar warping process, one that, I believe, is starting to be applied consciously.

An example to begin with: in the 2005 general election campaign, seemly out of nowhere, the Labour party campaign in Bethnal Green and Bow put out stories of how Oona King was subject to anti-Semitic abuse. Two particular incidents were mentioned. One where a group of Bengali lads insulted her as a “Jewish bitch”, another where unknown youths egged a World War Two veterans event. There was a general insinuation put round that “Respect supporters” were encouraging local Muslims not to vote for her because she had Jewish ancestry.

Not once did the campaign say that Respect had been doing such things, or that Respect had an anti-Semitic programme or membership. Despite the dubious nature of the accusations (someone directly involved in or touched by the campaign could know or prove them to be wrong or right), they were carefully placed to cause damage. They tried to establish guilt by association and, even if they failed, they would put the Respect campaign on the back foot, deflecting attention from King’s record as a New Labour stooge (the other tactic was to remind everyone she was only one of two black, female MPs in London: so much for the system).

Labour’s dirty tricks failed. They were unleashed too late. The Respect campaign had too much momentum; too many people were doing too good a job overturning the King’s majority.

The Bethnal Green and Bow Labour Party picked on the theme of anti-Semitism developed by a small group of ex-leftists based in the media and academia as part of a programme for entering the right via the War on Terror. The anti-war movement of course supports justice for the Palestinian people. With the same kind of logic (put your opponent on the back foot, deflect from the flaws in your argument) the ex-leftists insinuated consistently this solidarity was anti-Semitic.

They developed and magnified their arguments through the conventional and electronic press, in particular through the web log and discussion forum. These are cooling media, with a veneer of popular participation (the final say always goes to the proprietor). To a greater or lesser extent the readership is drawn into the idea they are contributing to meaning, in this case the shape of the news agenda (comment is free, have your say, Speak you’RE Brane).

The vox pop and poll have been parts of the news media for a long time. As media divide and combine the idea of audience participation has blossomed. Each newspaper now has its own blog with comment section. Newsreaders now ask for your comment via email. On TV you can vote for just about anything (except of course a change in government policy). If you’re bored with TV go to Youtube and you can make your own films.

The content, however, near universally poor: often bigoted and illiterate. The significance of audience participation is now when right-wing newspapers churn over legends about hated minorities (such as the Swan Bake legend) online Alf Garnetts’ can vent together, adding to the meaning of the story.

This process is almost certainly being cultivated for political ends. When the government pushes out islamophobic propaganda it is increasingly taken up and developed from below. Pro-war racists may have seen the anti-war demonstrations, the mass meetings, the stalls, they may have felt the general anti-war consensus pointed against them and concluded they were alone. Now they can go to BBC online, listen to LBC or pick up a London Lite and feel validated and confident.


The ruling class has always used its dominance to control information, manipulate consciousness, divide and rule, hegemony. They don’t get everything their own way, however. Personal experience often contradicts official theory and can potentially generalised into counter hegemony. Ruling class ideology has to be shaped to fit ordinary experience and expressed by trusted people.

The Labour Party, the mainstream media and parliamentary democracy took great hits from the anti-war movement. They still haven’t recovered. The ruling class will have to find alternative means, alternative media to secure its hegemony.

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Friday, September 26, 2008

Burn the witch. posted by Richard Seymour

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While you were watching your money disappear... posted by Richard Seymour

As the Bush administration taps US taxpayers to keep refilling the vessels of the Danaides, largely with the connivance of congressional Democrats, something on the periphery of mainstream political vision is troubling. A frontier of the war on terror is expanding. Every day, it seems, there is a new report of an attack by US troops inside Pakistan. Then there are increasingly regular reports of engagements between said US troops and the Pakistani army, who are nominally US allies. One reads that Bush has authorised strikes in Pakistan without seeking the consent of the Pakistani government. Then said strikes take place, followed by astonished denunciations from the Pakistani government. Look, the government says, we are your friends: we are killing the evil-doers, and being killed by them. They say they've killed 1,000 'militants' in one operation alone. No matter: the US Secretary of Defense knows that the US can't expect Pakistani support for the strikes, but says they will carry on regardless.

Why, you might ask, would the United States persist in operations that clearly destabilise Pakistan and undermine the effectiveness of its government? Let there be no doubt that this is what is happening. The International Republican Institute (IRI) takes, as you might expect, a great interest in Pakistan. It's a strategically vital zone for preserving US hegemony in southern and central Asia. Their regular polls [pdf] show great dissatisfaction among Pakistanis both about the general direction of the country under administrations that are to a large extent subordinated to US interests, and overwhelming opposition to the 'war on terror'. Only 1% of Pakistanis regard 'Al Qaeda' as a serious threat, though the majority consider religious extremism of various kinds to be problematic. They much prefer negotiations and dialogue to military strategy adopted by the state. And I daresay the bombing of the Marriott hotel reinforced the widespread doubts that military operations can cope with the problem. Some reports suggest that Pakistan's future as a country is being put at risk.

However, one thing that the Bush administration and Obama's campaign agree on is the need for a renewed focus on winning the war in Afghanistan. That is to put it somewhat coyly: there is no immediate prospect of winning the war, and the chances of winning it in the distant future are vanishing. It would be nice to get a better insight into official thinking on this, but the National Intelligence Estimate on Afghanistan, reportedly "grim", is being kept classified. Avery significant report coming out of Afghanistan suggests the US client-state is isolated, and that the 'Taliban' - rather, a constellation of military rebels with limited coherence - is advancing on the capital. NATO forces are reportedly stuck in "stalemate". Taliban leaders boast, probably with some justice, that their success owes itself to being rooted in and supported by much of the civilian population. Previous reports by the pro-war Senlis Council have suggested that the level of support for the insurgency in southern Afghanistan is woefully underestimated by the occupiers. Nonetheless, a consensus in the US political class has clearly emerged: Iraq is less important, strategically, than Afghanistan. A managed 'withdrawal' from Iraq, leaving behind permanent bases protected by a status of forces agreement (in which the comprador elite may well have to pay the US for its 'protection') will enable a greater commitment to Afghanistan. The UK has already committed to sending thousands more troops to Afghanistan, having started the withdrawal from Iraq. Global allies of the US are being pressed to escalate their military role, while the US has engaged in a terrifying amplification of its bombing campaignss. Major General Charles Dunlap Jr. of the US air force has argued that the bombing raids should be intensified further, regardless of the impact on Afghanistan's civilian population, and that probably reflects the mainstream in US military thinking - it certainly reflects the conduct.

And so, expanding the war into areas of Pakistan where the 'Taliban' and sympathetic forces operate in and retreat to, knowing that the widower president could not conceivably approve of such actions if he wanted to avoid being assassinated, is a logical further step. "Logical," that is to say, from within the twisted purview of terror warriors. As Paul Rogers points out, even if Islamabad tacitly acquiesces with Zardari theatrically shaking his fist for public consumption, US military attacks inside Pakistan are likely to raise opposition both among the Pakistani public as a whole, and - crucially - in the army. It is insanity, plainly, and raises the prospect of an escalating engagement that becomes a war to subdue much of Pakistan. Those who want to "stay the course" vaunt the prospect of prolonged 'civil war' in Afghanistan, of rising politico-religious extremism, of regional states moving in to defend their interests, and of the country becoming a "narco-state" which incubates threats to global security. What staying the course actually means is prolonged, intensifying and spreading civil war, probably stimulating what are for the moment quietest, conservative bazaari layers into military insurgency, and a ramping up of the opium trade that at the moment funds US allies in Afghanistan more than it funds the 'Taliban'. As for threats to global security (to the extent that this term is not used as a synonym for the security of US geo-economic interests), one could hardly imagine a worse prospect than the breakdown of a nuclear state and an expanding civil war that interplays with deadly regional dynamics. Nor does one fancy the entirely probable escalation in the conflict in Kashmir with a further radicalisation of India's own 'war on terror', and potentially renewed hostilities between India and Pakistan. And, incidentally, as the recent crisis in Georgia has demonstrated, America's struggle for supremacy in the region produces the danger of major inter-imperial rivalry and a revivified global arms race. One could go on: it's just that while the financial system is tanking, the 'war on terror' is going to strange and dangerous new places that may well cost more than $700bn.

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Wednesday, September 24, 2008

$1.7 trillion posted by Richard Seymour

The total amount being transferred to the rich according to Senator Byron Dorgan.

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Two polls: spot the difference. posted by Richard Seymour

This one asks: "As you may know, the government is potentially investing billions to try and keep financial institutions and markets secure. Do you think this is the right thing or the wrong thing for the government to be doing?" 57% support the bail-out, 30% oppose it.

And this one asks: "Do you favor or oppose the proposal for the federal government to purchase up to $700 billion in assets from finance companies?" 44% oppose it, 25% support it.

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Tuesday, September 23, 2008

Gilding the lily posted by Richard Seymour

The rich are beautiful people. They never set a foot wrong, and yet everyone is constantly out to get them: the haters, the whiners, the terrorists, the jealous, the hippies, the lefties, the liberals, the protesters, the welfare queens, the quakers, the bakers, the candlestick makers etc. You, hypocrite lecteur, have never actually tried to live their lives, yet you persist in finding them at fault for some putative flaws. You're just jealous of their freedom. The latest challenge faced by the rich is that their mega-welfare-handout might not be processed through the system as rapidly as they had anticipated. The reason is that there might actually be some slight reflex in the state that still demands legislative review and judicial oversight.

Apparently, there are some little flaws to the proposed bail-out that cynics might carp about. For one thing it really does look like a parachute for the empire, in that it will bail out any global financial institution that happens to have what Paulson deems 'significant' investments in the US economy, whether they are in deep trouble already or not. This looks like a move to consolidate America's faltering command of the financial system and to ensure that the global appropriation of labour continues to operate overwhelmingly in the interests of US capital. Secondly, there are no protections for homeowners or taxpayers, no limits on executive remuneration, no plans to stimulate the economy, and no demands for reciprocity (ie, we give you $700bn, you give us...). This is just throwing money at the ruling class. So, as one might have predicted, the crisis is being used to shore up the class power of the rich through a massive act of expropriation. Thirdly, so it seems, the legislation includes a clause ruling out executive or judicial oversight of any part of this wealth transfer. So, the state is taking the opportunity to enhance its ability to act on behalf of capital without accountability.

Obama initially backed the Bush administration, but is offering some opposition to the current plans. A slew of right-wing commentators are also opposed, on the grounds that they thought all this bullshit about the 'free market' and 'moral hazard' and 'accountability' was in some sense meaningful. Only the reactionary statists of the Bush administration could force 'fiscal conservatives' into the same corner as liberals and leftists. No wonder the markets rallied on hearing of the Bush administration's plans: the owners saw a naked attempt to restore profitability by jacking the taxpayer further, thus ensuring a future 'belt-tightening' period of restricted income for Americans workers. And now we have an interesting bit of blackmail to deal with: if the legislation doesn't pass very quickly and without amendment, the markets may tumble again, thus threatening jobs, growth and trade.

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Monday, September 22, 2008

Bloggery is not the world posted by Richard Seymour

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What's the matter with Sunderland? posted by Richard Seymour

Ingratitude, if Madeleine Bunting's apologia for New Labour is any guide, is what is the matter with Sunderland. The city has been ploughed with an avalanche of development cash. A school is to be rebuilt every year for the next fourteen years. Health centres, children's centres, business parks, new development zones with the marina (below right), fancy apartments and coffee shops... And the locals react by sputtering "you've done nothing for me", slagging off immigrants and voting Tory. There is some weird "disconnect" between Labour's actually loveable behaviour toward one of its most loyal constituencies and its dismal status in the popular perception. Working class Toryism, in the form of support for a set of sentiments including 'individual self-reliance' and 'community' and 'family values', is on the rise once more, a la 1979. The obvious conclusion is that the left must rally behind the government. Some version of this is likely to be the overall diagnosis of the soft left as Labour loses its so-called heartlands: regardless of all the disappointments and betrayals, despite the warmongering, privatization, pandering to employers and union-bashing, the real problem is the basic inability of the working class to recognise its true allies. The root problem is its affectless indifference and disloyalty, its susceptibility to racism and nationalism, and its gullibility as regards Tory propaganda.

So, what is the truth of the matter? What is the matter with Sunderland? What might Madeleine Bunting have found out had she not been relying upon the word of Chris Mullins MP? One of the most pressing issues facing working class areas in this country, without question, is housing. In Sunderland, as elsewhere, the government has been pressing for the complete privatization of housing stock. Sedgefield Borough Council, for example, having lost a vote in favour of transfer in 2005, has been trying to persuade residents yet again to go with privatization. What is causing the residents to doubt the word of council chiefs is that the company that would take over the houses - Gentoo, formerly the Sunderland Housing Group (eulogised here) - has a track record of failure. The company was awarded an £80m contract in 2002 to regenerate a poor estate called Doxford Park, some six years ago, and it has only recently begun work. Similarly, when thousands of council houses were transferred to the group in 2001, Gentoo/SHG invested millions in new private homes, and neglected to build the rented accomodation it was obliged to build. 6,200 council houses were demolished, sold off or left empty, but the company only built 111 new houses over the next four years. The number of people seeking a home rose from approximately 5,000 to over 19,000. Meanwhile, it did successfully build the private developments, including maritime housing and the Athanaeum - the sort of investment and development that Bunting lauds, albeit with a grudging admission that "critics say" it may not seem of much use to single mothers and those on incapacity benefit.

Bear in mind that Gentoo/SHG is a Registered Social Landlord (RSL), exactly the kind of landlord that the government says we have least to fear from. An RSL is answerable to the Housing Corporation, and supposedly behaves better than other private landlords. If the Housing Corporation doesn't hold them accountable, then those co-responsible for sealing the deal should. In fact, the behaviour of Gentoo/SHG had been noted before by local Labour councillors Mike Tansey and Brynley Sidaway, and they did try to alert residents and fellow councillors to the problem. Both Sidaway and Tansey rejected stock transfer because the result, where the government had been able to impose its scheme, was a rise in rents and an increase in homelessness. However, by 2006, they had been driven out of the Labour Party for their pains. They became independents, and on the back of a successful campaign against stock transfer a lively local Respect group was built. What they had to say was important, and their actions benefited the people they represented. By contrast, Labour policy at both a local and national level pitted it against its traditional working class supporters. There is a clue right there: those elected Labour Party members who try to represent their constituents effectively have been punished and expelled.

It is important to understand the rationale behind the government's transfer policy. It wants to fund housing, but it is committed to a taxation structure that cannot raise the necessary funds without hitting the poor harder. So, either local authorities would have to borrow, thus breaking the government's fiscal rules, or they would have to neglect housing, thus destroying the working class voting base. By transferring homes to private housing groups like Gentoo/SHG, they can allow huge amounts of money to be borrowed for investment, because the costs will be formally borne by the social landlord. If the government were not so committed to a neoliberal policy mix, it could raise taxation on upper income brackets and on corporations, to fund such investment. The ugly side of this neoliberalism is a tendency to blame the poor for their plight. One of the government's recent proposals, dreamed up by Housing Minister Caroline Flint, was to compel unemployed recipients of council housing to sign degrading "commitment contracts" which compelled them to agree to actively seek work if they wanted to be allowed a council house - thus blaming the unemployed for their situation and forcing them to humiliate themselves in a lifeless labour market at pain of losing their home. Local Labour Party loyalists felt compelled to distance themselves from Flint's ideas. There is another clue: the government has been complacent about its core working class vote, assuming that they had nowhere else to go, and therefore has scapegoated working class people for its failures.

Another of the government's prominent policy agendas, so dear to its heart that it made this a central plank in the 2001 election despite over 80% public disapporval, is the private finance initiative. I have written enough about its obscene wastefulness here before. Once again, the rationale behind the policy is that it appears to provide something for nothing: money for investment without incurring debts or driving up taxes in the short-run. But the net result is almost invariably a poorer quality of service and a higher cost. For example, in Coventry, two hospitals were replaced by one hospital, with fewer beds and staff overall, and a final cost of £900m, 30 times higher than it would have been to simply renovate the two existing hospitals and keep the beds and staff. In Northumberland, four fire stations were closed and replaced with two under a £10m PFI scheme. One could go on at some length. In Sunderland, as elsewhere, local government functions including in health, education, road-building, street-lighting and waste management have all been outsourced to private companies under expensive PFI and PPP schemes.

Perhaps the most controversial application of the PFI model is in the national health service. Patricia Hewitt announced in 2006 that there would be big cutbacks in public spending on the NHS. She said that the reason was that generous government investment had not been spent on reforms but on salaries for greedy public servants. In fact, as Allyson Pollock pointed out, the government's market-driven reforms had created the crisis. The costs of this marketisation consumed between 6% and 14% of the NHS national budget, on a conservative estimate. As a result, thousands of NHS staff were shed in hospitals up and down the country. The impact has, predictably, been to alienate Labour's usual supporters. One of the main campaigners against the government's NHS cuts in Sunderland has been a well-known local nurse named Kathy Haq, who had been lauded in 1999 for embarking on an unpaid, voluntary mission to improve healthcare in Bangladesh and who had run a support network for victims of a doctor who had raped patients. Haq might have been exactly the sort of person whom New Labour would wish to win over: a devoted public servant and campaigner, who had worked for the NHS for forty years. But she joined Respect when it was launched in the area in 2006, and became the branch secretary. One reason is that City Hospitals Sunderland Foundation Trust ran up debts of over £5m and therefore made plans to shed 10% of its staff, particularly in the Sunderland Royal Hospital. Patients were also angered when local hospitals started to charge for parking, following the lead set by PFI hospitals across the country. Problems within the NHS have been a prominent theme in the local press. In fact, although Bunting refers to the Tory capture for the Ryhope constituency in a bye-election with a low turnout, she does not notice that a surprisingly large component of Labour's vote, perhaps more than a third, appears to have been redistributed over some years to an independent local campaigner and former journalist known as Patrick Lavelle, who made his name by campaigning on the NHS. Another clue, then: investment isn't the same thing as provision, and one cannot disaggregate the money supplied from the way it is spent and the policies underpinning it. If working class voters experience a decline in service, the fact that a large amount of money has been spent on producing the decline makes it even worse. The PFI was originally a Tory policy, but by adopting it, the government has handed the Tories one of their main propaganda planks: higher spending equals more bureaucracy and less efficiency.

Sunderland is one of the poorest places in England. Mainly as a result of the destruction of its extraction and manufacturing industries, it has suffered a declining population, particularly among working age males, and this trend is projected to continue at least until 2023. That means a smaller tax base for the city, especially as those who remain are likely to be those with the least resources. More than fifty percent of its children live in low income families, according to the Child Poverty Action Group, which is well above the national average. Even official unemployment is almost double the national average according to the Office for National Statistics, while a total of 31% of the working age population is estimated to be out of work. Large numbers of people are kept on long term incapacity benefit to conceal the real rate of unemployment, albeit incapacity among older males in former mining areas is in fact quite widespread. The government has a number of solutions for the industrial hinterlands, but among them is not a revival of the manufacturing base or of the unions that can maintain decent incomes. One of the few big manufacturers in Sunderland is the Nissan car plant, which was built in 1986. The plant is symbolic of a supposedly 'new' high-tech economy vaunted by neoliberals of all stripes. But Nissan has repeatedly threatened to close the plant or slash thousands of jobs, and has repeatedly been bailed out with millions in government grants. And while it does employ thousands of local people, who are unionised, it is hardly a substitute for the massive industries of the past. The government is committed to a City-based growth policy with a strong pound, and as a consequence has seen well over a million manufacturing jobs lost on its watch. As has been widely noticed by now, this is one reason why the UK economy is particularly exposed to the chaos in the financial markets, and why it stands least prepared to withstand a crash.

Under New Labour, the remaining mining pits in Sunderland were allowed to disappear, with nothing to replace them. Today, the biggest employer in Sunderland is the government, while the services industry is the biggest sector of employment in the city. The council has sought to rejuvenate the economy by gentrifying it, making it into a more tourist-friendly zone, and building up a financial services industry, which is today almost as big as the manufacturing sector. All of these factors make Sunderland particularly susceptible to the toxic situation that we now face: public sector pay cuts, cuts in spending, a crisis in the financial sector, and higher food and energy prices. In addition, while Bunting mentions a disproportionately high rate of single motherhood and incapacity in Sunderland, she does not mention the government's policies of rolling back single mother benefits and incapacity benefits. These, in addition to a vindictive plan to force the long-term unemployed to do 'community service' as if they were criminals, are poison for a local Labour Party seeking to gather votes. Further, in a city with life expectancy well below than the national average, the government's plans to raise the retirement age and privatise the pension system - while demanding that people save money they don't have to invest in a pension scheme that floats on the oh-so-reliable stock market - is asking for trouble. To that should be added a recent rise in pensioner poverty, when a fifth of pensioners already lived on less than £5,000 a year.

Sunderland is supposedly an example of where the government has genuinely tried to help the poor, yet is losing support from voters who fail to recognise New Labour's loyalty to them, while imprudently flirting with the Tories. In truth, while New Labour has delivered some very mild reforms, there could hardly be a more dramatic example of its policies failing the working class on the one hand, and punishing them on the other. The story of Sunderland is typical in this respect. There remains one question: will Sunderland go Tory, and if so, will it be for the reasons Bunting suggests? Sunderland still has a majority Labour council, and will probably return a Labour MP even on a relatively low turnout. The worst wipeouts for the government will be in the south-east, while the polls show the Tories making least headway in core Labour areas. Further, there is nothing to support the claim that once heartland Labour constituencies are won over to right-wing sentiments, and Bunting offers no evidence for this assertion. There is certainly nothing comparable to 1979, when Thatcher won on a platform of aggressively right-wing and anti-union policies. David Cameron is successfully appropriating the centrist language and sentiments of New Labour, even positioning themselves to the 'left' of the government on some questions. In Wales and Scotland, where there are centre-left and sometimes radical left alternatives, the Tories are not reviving at anywhere near the rate that they have been in England. And while the Tories are likely to be the beneficiaries of government unpopularity in England, the process of party identity breaking down is advancing rapidly for both Labour and Conservative parties. What is the matter with Sunderland is what is the matter with the UK as a whole. The system is failing, the neoliberal solution doesn't work, parliament is increasingly impervious to our needs, and we're facing a crisis in which we find elected officials happy to pour money into the City, but extremely reluctant at best to do anything which alters the fundamentally unfair distribution of wealth and power in the society.

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Sunday, September 21, 2008

Convention of the Left posted by Richard Seymour

Meanwhile, Red Pepper has reported from the Convention of the Left. It seems to have gone well so far:

A contributor from Permanent Revolution caused even more consternation when he said: ‘the elephant in the room ... [pause for dramatic effect] ... is Respect. It collapsed, that’s the truth of the matter. And before that we had the Socialist Alliance.’

‘Why did they fail? We need to ask the question or we risk repeating their mistakes.’

Then Lindsey German was up, doing a decent job of tranquilising that elephant. ‘We can all put our hands up to what we’ve done wrong,’ she said, ‘but there’s no point in sitting here and saying 20 years ago we fell out over this question or two years ago we fell out over that question. We have to find a method of working that unites us and doesn’t divide us.’

Nick Wrack, from the other wing of Respect, shared the sentiment. ‘I’m prepared to debate and discuss what went wrong,’ he said, ‘but what is far more important is that there is more that unites us than separates us.’

‘The working class out there is facing a terrible situation and it’s going to worsen. We don’t need to make differences over tactical issues a dividing line at this moment.’

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Manchester special brew posted by Richard Seymour

Predictably, yesterday's thousands of antiwar protesters outside the Labour Party conference in Manchester received less coverage than the BNP's pathetic 300 turnout for its totemic rally at Stoke. On the other hand, David Cameron's bicycle helmet got more coverage than the antiwar protesters. Anyway, like the contents of said helmet, this week's festival of New Labourism is likely to be a hollow affair. Anyone expecting a coup is going to be disappointed. The supporters of David Miliband wouldn't be so stupid as to use the conference as their springboard, the Left isn't going to be represented, and the unions will save their blows for block voting on policy desiderata such as higher public sector pay. Jon Cruddas may be staking out territory for a broad left leadership campaign, but for now he is backing Brown's pathetic loyalty campaign, presumably sensing that he hasn't yet the strength to prevail in any sudden leadership election.

Even so, with figures this bad, it has to be an uneasy week for the Brownites. The Independent tries to save Brown's hide with this deceptive headline, showing a big fall in the Tory lead. They attribute this to Brown's pledges to 'clean up' the City. In fact, the rise in Labour's standing is within the margin of error, while the Tory fall is mainly due to a 5% surge in Lib Dem support, which I would imagine is a statistical anomaly rather than a tribute to the former Hitchens intern Nick Clegg and his aristocratic charisma. As the Indy's report demonstrates, voters may not like Miliband or Cameron that much, but they are sick to the back teeth of Brown's leadership. So, the fact remains that Labour is headed for a wipeout in both marginals and 'heartlands' in 2010. They will lose seats they've held since the Great War, and the cabinet will be gutted. Given the logic of defending Brown at all costs, those soft left PLP members who want a modest change of policy - by, for example, imposing a windfall tax on the energy companies - are relenting on any serious campaign to obtain such change. Ironically, though they seem to be worried about the arch-Blairites taking over, this strategy concedes the argument to Charles Clarke et al: Labour can't win with Brown, they will say, and no one else is stepping up to the plate. Everyone else is locked into Brown's electoral suicide-pact.

This week's proceedings, though there will be tussles below the surface, will not be about a leadership challenge, but about re-asserting Labour's claim to government. To that extent, it will in all probability deliver the following sentiments (in no particular order): things are tough, but the main problem is that our message isn't getting out to people (a whinge about the media); British people are rightly concerned about the economy, but don't want to go back to the old ways (rebuke the Left, reassure business); we said we'd do x and we've done x, we said we'd do y and we're doing y, we said we'd do z and plans to fastrack z are already in place (delivery schtick); people have legitimate concerns about immigration, and we are responding to that, but we must also make the argument for a sensible immigration policy (we should be prudently racist); let's have a frank and honest debate about a, b and c (shut up and listen); we must work to strengthen our international commitments, to defend our values - sure to be pronounced 'vawlyews' at some point - not only against extremism but also against poverty and disease (let's hope Obama wins so that we can continue to throw troops at perpetual war zones and impose neoliberal measures without being associated with a bunch of headcases); we must act on the environment using the most technologically efficient solutions for a clean, modern economy (more nuclear power stations for us, less for Iran); so let us show boldness and vision, now more than ever, and let us show that the people of this country - who are intelligent and rational - will do better with a government of 'the many, not the few' than with a party that whatever their promises to the contrary will always represent the few against the many (we have nothing else up our sleeves, but it's either us or the Tories). Unto which, the party faithful will lard praise and exultation in the desperate hope that their enthusiasm will prove cathing enough to prevent the inevitable massacre.

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Saturday, September 20, 2008

The Thatcherite Insurgency posted by Richard Seymour

And, just for fun:

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Le Gaffeur posted by Richard Seymour

...Bernard-Henri Lévy — universally known in France as BHL — who cuts a commanding figure both in the circles of the Left Bank intelligentsia and in the world of Parisian high fashion and salon society...

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Friday, September 19, 2008

It ain't racist, cuz Islam ain't a 'race' posted by Richard Seymour

A computer game in which players control an American soldier sent to "wipe out the Muslim race" has been condemned as offensive and tasteless by a British Muslim group. The goal of Muslim Massacre, which can be downloaded for free on the internet, is to "ensure that no Muslim man or woman is left alive", according to the game's creator...

A Google search for the phrase "Muslim race" yields over 13,000 results.

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The Game posted by Richard Seymour


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Class hatred posted by Richard Seymour

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Thursday, September 18, 2008

Breaking News posted by Richard Seymour

Khalid Sheikh Mohammed, the Self-Confessed Mastermind of Evil, has just told investigators that Al Qaeda plotted the destruction of the Western financial system and is behind its current difficulties.

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Time to read Capital posted by Richard Seymour

No better time than now, in fact. So let David Harvey take you through it:

That's the introductory lecture. You can follow the rest of the series here.

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Planet of the toppling giants posted by Richard Seymour

How fabulous. Everyone is scared, insecure, ready for the brown envelope and the foot in the arse, because of a totally irrational, wasteful and destructive system of production whose beneficiaries and apologists have not ceased to laud as the most efficient and benevolent institution mankind has yet invented. The latest financial giant about to tumble is Morgan Stanley. Say what? Yeah. Morgan Stanley, which last year posted a net income of over $3bn, which manages $779bn of assets worldwide, that services states and corporations the world over, is hitting the fucking bricks. There are potential buyers for Morgan Stanley. Both HSBC and, which is more interesting, the China Investment Corp are making their bids. Actually, there will probably be a few more, since so many banks are heavily exposed to that company. But that just means any suitor will take on Morgan Stanley's weaknesses, and large numbers of jobs will still be shed anyway.

Of course, I don't care about their shareholders or their gold-plated investors, but the simple fact is that we have a struggle to make sure they don't make us pay for their crisis. After all, the capitalist class has a procedure for situations like this: cut your losses, shred papers, fire staff, take the profits, retreat behind some gated communities with armed guards, let everyone else fight over the scraps, and wait patiently for a decent investment opportunity. Didn't these motherfuckers just come for your social security recently? Wasn't it only months ago that the UK government was talking about cutting disability benefits and the entitlements of single mothers? Aren't they pushing for a roll-back of your state pension entitlements? And how many people no longer have a pension to speak of because it has disappeared into a financial black hole? If these people have the monopoly of political initiative, they'll be able to use this crisis to roll back your rights even further. They'll say that trade unions are distorting the market by artificially raising wages and discouraging hiring, and they'll want new laws restricting membership. They'll say that social security distorts the market by disincentivising labour and encouraging widespread abstention from work. They'll say that pension entitlements are unsustainable with an ageing population, that the retirement age needs lifting since people are living so long, and that the taxes paid by corporations and the rich to help fund such bleeding-heart programmes are discouraging investment. If people resist, they'll say that violence is being promoted by political extremists and that for the time being certain rights need to be suspended until such time as people prove themselves mature enough to have them restored. Oh, but, don't worry: they're your friends, and they're there to help you. Just be patient and the wealth will trickle down.

Being equal to this situation is difficult in part because this is a crisis with no real historical precedent. In many ways, it could be worse than the Depression. The urgency of this moment has to result in a strong protest at the Labour conference, a good attendance at the Convention of the Left (Guardian report here), and some serious weight being put into such initiatives as People Before Profit. It has to result in a grassroots push in the trade unions for a massive fightback against the incomes policy, and for a radical new economic programme. The government, another toppling giant, has nothing to offer. It is spent. This, for example, is some lame-ass shit, the latest of a series of embarrassingly puny moves by an administration on its last legs. The best they've got to offer is the head of Gordon Brown, and so what? Whoever takes over will lead the Labour Party to a humiliating defeat, and the most likely successor is some right-wing scumbag like Alan Johnson or John Reid anyway. Or there'll be a 'dream ticket', whatever the fuck that means. There are those who still want to 'reclaim' the party - good luck to them, but they haven't got a choirboy's chance in Winchester. No, it's time to move on, regroup, and urgently get our shit together.

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