Archive for March, 2011


I was reading this exchange between Glenn Greenwald and Juan Cole and it struck me that Greenwald is probably posing the wrong question, although, given it was in reference to a previous statement made by Cole, the fact that he asked the question he did is fair enough.

So Cole ends up saying that he is willing to bleed in Libya -as he says, ‘if NATO needs me, I’m there’- and that if the ‘intervention’ succeeds in allowing Libyans to have a normal life, it will be worth the ‘sacrifices in life and treasure’. His response, I think, is a good illustration of how the prospect and excitement of the event of war can warp people’s thoughts in all sorts of unexpected directions. War is the health of the state, but it is not the health of people’s minds.

In reality, the fact you are prepared to risk your life for something does not make your cause or your actions any more or less just, cf Berlin 1945, September 11, 2011. So Cole saying that he would be prepared to die himself doesn’t strengthen the case he was making for supporting the ‘intervention’ in any shape or form.

But if there is some sort of test to be put so as to gauge whether you are making your argument in good faith, I think it would be better formulated thus: would you be prepared to run the risk a NATO bomb getting dropped on your house, wherever it is you might live -Dublin, New York, wherever- killing your children, so that the Libyan people might shake off Gaddafi’s rule? If you’re satisfied that no NATO air strikes are ever likely to kill civilians, and that even if they did, and a child got killed, then that child’s death would be ‘worth it’, then, if you’re prepared to back NATO’s ‘intervention’, you should be at least prepared to say that your own child’s death from a NATO air strike would be worth it too in order to emancipate the Libyan population.

Besides that, there is another problem with Cole’s answer, and that’s the word ‘if’: ‘if it succeeds’ – it may not succeed, but he’s happy to support the sacrifice of the lives of others anyway.

Beasts of Burden

Post-general election, the laundry of the EU-IMF ‘bailout’ appears complete, since the ‘bailout’ is now presented not as an ongoing imposition, but an assumed historical reality: an inheritance from the now decimated Fianna Fáil party. The main product of Enda Kenny’s ‘democratic revolution’, so far, is a sort of normalised robbery. Or maybe an inverted magic realism, according to which a pained insistence on assuming the grim reality of austerity is expected to produce magical results at some point down the line.

Yesterday evening I heard a Drivetime feature in which a journalist was talking about the forthcoming banking stress tests and how ‘experts’ had been brought in from BlackRock, which is the biggest asset management firm in the world. As befits a programme sponsored by an investment bank (it’s still sponsored by HSBC, right?), any question as to why BlackRock had been selected did not arise. (A few months back I thought BlackRock was a firm based in …Blackrock).  The fact BlackRock has been ‘brought in’ to do the stress tests should give a clear indication of precisely whose interests are behind this particular round of technocratic knob twiddling. As NAMA Wine Lake wrote a few weeks back:

A stress test for BlackRock ® « NAMA Wine Lake

Last night on Prime Time the Central Bank governor indicated that he was acting under instructions when he engaged BlackRock. Presumably instructions from the IMF or EU. I cannot find any tendering process on the government’s etendering system for this engagement with BlackRock (there is a tender won by Barclays Capital in February 2011 but nothing for BlackRock or indeed BCG). It has not been disclosed how much BlackRock is to be paid for its work on the stress tests but an article in the Irish Times in January 2011 suggested that the three firms involved in the stress tests would be paid an overall total of less than €20m. Bloomberg reported in January 2011 BlackRock CEO, Larry Fink saying with respect to the assignment with the CBI “this is bigger than AIG with the Federal Reserve; this is bigger than what we did with the Bear Stearns; this is a gigantic assignment”.

But sure they’ll sort it all out in the best interests of the population, no doubt.

Below the interview with Rick Wolff a little further down is a transcript of what I thought was the most relevant parts. I am posting the transcript because I presume no-one listens to interviews on YouTube that don’t have any moving pictures, but the interview is worth listening to in full. It gives precisely the sort of account that is entirely missing from media coverage of the current capitalist crisis in that it relates the Irish situation to the wider crisis of capitalism.

The international character of the crisis is habitually omitted from Irish media narrative, for lots of different reasons -e.g. the reliance on Irish government officials for briefings, the systematic denial that there might be anything wrong with capitalism other than a severe bout of cronyismbut the effect of this omission is noxious: it fosters a despairing isolationism that makes it all too easy for draconian measures to be introduced without a whit of forceful dissent. Hence the importance of perspectives like that of Wolff. Against the laundry operation of the bailout, there is a lot of dirty linen that needs airing in public.

And the transcribed excerpt:

Wolff: In order to focus it all on Greece and Ireland you have to want to avoid the pain of adjustment elsewhere – that’s what’s going on. The British leaders, the French, the German business community, they would like to escape from the economic costs of this crisis, and they would like to see all of those borne by poorer countries like Greece and Ireland. So if you destroy your own economy in order to keep paying off your sovereign debt, you save them from the economic pain that they really ought to be bearing because they had more to do with bringing this crisis than Ireland or Greece ever could have.

Interviewer: We have seen that the European Financial Stability Facility has not been able to calm the markets yet. If this facility is strengthened and its scope of operations expanded, will it be able to protect the Eurozone?

Wolff: It depends on the larger policies that are followed in Europe. It depends a lot on what the French and the Germans and the British and the Italians and so on finally do in this situation, whether they’re prepared, of the economic problems that have come up in this crisis. That’s a fundamental question. No particular agency, no particular body either in these countries or across these countries can reasonably be asked to solve this problem by itself. For example, if the German economy, because it is the strongest right now, because it has such a high level of employment and exports doing so well. They would have to be prepared one way or another to take some of the burden of this crisis onto themselves. Whether it’s through the financial agencies they’ve created, or through a change in their wage structure that benefits moving more production out of Germany and into countries like Greece and Ireland and so on: these are the questions they have to ask. They don’t want to do it. They would like as much of this burden to be carried by other societies as they possibly can.

Let me give you a parallel of this. Here in the United States we have been speaking for about a year and a half about a ‘recovery’. All that has happened in the United States is that the business community has succeeded in getting the government to pour huge amounts of money into banks and insurance companies and large corporations. Their profits have recovered. The mass of unemployment has not been touched. The foreclosures, people being thrown out of their homes, is larger in 2011 than it was in either of the previous 2-3 years. So what we’re seeing in the United States is I think what you’re seeing in Europe: a recovery for some, and indeed for those who were most responsible for bringing the crisis, who have received most of the benefits of government money to date, and they have decided to try to push the burden of paying for all of this onto the poorest and least strong among them. In our country, it’s the mass of the working class. In Europe, it’s the working class especially in the poorer countries like Greece and Ireland.

Interviewer: What you’re saying is that Germany for example, the strongest country in Europe, should take part of the burden for this financial crisis, but on the other hand what they’re doing is they are lending money to countries like Greece and Ireland with an extreme interest rate instead.

Yes, and I think you can see very clearly what is going on: the largest holders, for example, of Greek sovereign debt, of Irish sovereign debt, of Portuguese and Spanish sovereign debt, of Italian sovereign debt – the largest holders of these are the biggest banks in Europe, particularly those in France and Germany and so forth. If you permitted the renegotiation of debt, as it should be done, Greek debt and Irish debt and so on, so that in a sense you make the investors -which are in this case large European banks- take a haircut as we call that in the United States, have to give up some of their wealth because of the crisis that their behaviour produced, then you would put the problem in the hands of the German, French and British governments because they would have to bail their banks out again.

They would have to help those banks, because those banks’ investments in Greek and Irish bonds had been cut in half, say. That’s what they don’t want to have to do. That’s politically difficult for them, they would then have to bear the blame, they would have to feel the pain of an economic adjustment. But that’s what ought to be happening now. They ought to be facing that situation and they don’t want to have to do that – they would prefer that the Greek government cut its wages, laid off its workers, that all the pain be concentrated somewhere else rather than be taken out on the big banks in those countries, and then on the governments of those countries who would have to step in and help the banks, which they don’t want to have to do.

Interviewer: Now Professor Wolff, how would you assess the International Monetary Fund’s track record up to now with the programmes it has implemented in the various countries it has lent money to?

Wolff: It has a long history of being mostly interested in maintaining the concerns and serving the interests of the biggest banks, the biggest and richest countries. No smaller country, and certainly, no mass of the working class in any country, has anything to hope for from the International Monetary Fund. That’s not what they do, that’s what they have never done. They will be waiting till the last possible moment, and only under massive political pressure will the Iternational Monetary Fund take any step that really resolves these kinds of questions. Their participation in the Greek ‘solutions’ of last year was only as an adjunct to a policy that was worked out that basically threatened Greece -and it’s doing the same in other countries- with even worse difficulties if they didn’t knuckle under and perform this act of, literally, economic self-destruction in the name of solving a problem. It is clear, both in the name of Greece, and even more in the case of Ireland, that the austerity programmes supported and promoted by the IMF, for example, that these problems in many ways make the economic crisis worse. They are not solutions. They maintain the income flow of the banks and investors, but they do so at the price of economic damage done to the underlying working class, commitment to labour, infrastructure, social structure of a country that is put through this kind of crisis.

You can see it in Ireland, you can see it in Greece, but by the way you can even see it in England. This is a way of helping one sector of the economy but it is at the long-term cost of the whole system. For many of us economists, what we think we are observing, is not only the saving of only the saving of a small financial core of the economy at the expense of everybody else, but we don’t think that’s a succesful policy, and it’s more and more looking to us like a capitalism that is imploding, that is shooting itself in the foot, that is undercutting its own long term survivability by this horrifically ineffective short-term effort to get out of the crisis for the few who produced it at the expense of the many who will determine the future of the economy.

Publics and other matters

Let me continue with my adventures in stating what appears to me as bleeding obvious. The co-ordinated assault on working conditions and living standards of workers in European countries, especially those countries said to be on the periphery, such as Ireland, Portugal, Spain and Greece, is more easily conducted than would be the case if those countries spoke a common language and its workers formed part of a common public and experienced the measures as part of this public.

There is no reason for European elites of whatever member state to engage in the creation of a European public, and it’s wrong to imagine that greater integration across member states at the level of economic policy will of itself produce greater solidarity among people living in Europe. On the contrary, the ‘spatial fix’ likely to accompany institutionalised austerity will be a set of member states competing among one another to ratchet down labour costs, i.e. wages and living standards, pursuing policies characterised by the increasing tendency within each member state to privilege one category of worker (the citizen) above another (the ‘non-national’), and to identify the condition of the local working class with the health of the corporate state – cf Enda Kenny’s heroic trip to Brussels in a bid to maintain Ireland’s corporation tax rates.

Therefore it is wrong to wait for European elites to do the job of creating a European public: for it to happen, ordinary people are going to have to build it in spite of them. Precisely how this might be achieved is well beyond the scope of my mental processes, which hardly makes it any less necessary. It is worth pointing out, however, that this sort of thing, while it appears remote, is hardly entirely alien: people across Europe identified with the revolution in France as a universal event, not as this great thing that the French (who at that time didn’t even exist as ‘the French’ anyway) were getting up to.

Moving on, I meant to post this what appears below but never got round to it.

This is a video of Julio Anguita, former secretary general of Izquierda Unida (United Left) in Spain, speaking last year on a TV programme about the current crisis. The format of the programme, if I recall correctly, is a debate in which each participant has one minute to speak uninterrupted.

What this video shows is the compilation of each of Anguita’s interventions. I have translated the most relevant parts of these below:

In the 90s, Hans Tietmeyer, who was president of the Bundesbank, told European leaders the following, face to face: “you politicians, ladies and gentlemen, need to get used to obeying the diktats of the markets”. This has happened. Those who have started to take these measures have said “because the markets tell us to do so”. Do you realise that this damages the principle of democracy? Who elects the markets? We elect political leaders. Who elects the banks, the ratings agencies, investment funds? Before talking about taxes and if this or that one ought to be raised, it would be useful to sit down and clarify things: the democratic system is at risk. Those who do not appear in elections tell us what has to be done – against us. They tell the governments. And the governments obey.

Why have they (the PSOE government) attacked public servants, and pensioners, and why have they cut public investments that generate employment? This was not planned. There has been tremendous pressure in the street, and even within the PSOE itself. And now they agree that they have to increase direct taxation. What about SICAVs, wealth tax – why haven’t they started there? They’ve started with the easiest of all. And on top of that, they’ve received the approval of the European Union, who’ve said “great”. Why? I go back to my first intervention: the markets are who says what has to be done. And until we get tough with the markets and we tell them that democratic power will rule -not promises, but that it is done in fact- we will always have this. The banks, agencies, investors will be in charge – there is no European power, because there is no real European Union, no co-ordinated economic policy to take these decisions.

I ask again: what Europe? They have congratulated us because we’re going to tax public servants more, we’re going to stop pension increases: they’ve said “great”. However, that Europe that obeys the markets -who, yes, they’re the ones who lend, but they’re also the ones who pull the stunts, tricks so that debt drives up interest rates, those who win with these questions- when have the markets ever been denounced by all the heads of government, starting with Sarkozy, Frau Merkel, or Rodríguez Zapatero himself? We are back carrying out the policies that the markets demand, according to them.

What a shame to only have 59 seconds. Lorenzo Bernaldo de Quirós [whom I assume was another participant in the programme, profile here – HG] has presented the problem thus: that economics is above politics. No. Economics is politics too, and he has political ideas, and here there are two economists with different politico-economic ideas. So, one must get stuck in, and not present economics as though it were a law above the decisions of human beings.

Bringing It

Interesting times at the Irish Times, as one of its columnists admits to lying to a tribunal, or, as she describes it, putting it into context, ‘denying it when first asked about it’. Before we judge too harshly, let us remember that the cock crowed thrice for St. Peter, and look what he went on to achieve.

Let me ignore most of the article to zoom in on one of the ostensibly truthier parts, and we note in passing that a theme of commentary from people working for institutions owned or part owned by O’Brien in the last couple of days has been the role of faceless civil servants, who, they suggest, may be the real villains here.

At the time Esat Telecom was trying to bring competition into the fixed line market. It had the backing of the European Commission but no support whatsoever from the civil servants at the department, who were busy protecting Telecom Éireann’s patch.

This account of events presents Esat Telecom as agents of progress and freedom, teaming up with the enlightened cosmopolitan callacticians in Brussels against the recalcitrant and insular monopolists of the permanent government. Now if I was going to write a maxima mea culpa, this is not really the line I would take, but that is by the by.

What I want to focus on here is the precise intention attributed to Esat Telecom: it was ‘trying to bring competition into the fixed line market’. As though -saints of this parish- there was nothing in it for them!

There is a rather excellent, condensed account of telecommunications liberalisation in Digicel (St Lucia) Ltd & Ors v Cable & Wireless Plc & Ors [2010] EWHC 774 (Ch) (15 April 2010), which, lord help me, I read last night.

The last decade of the 20th century saw vast changes in the global telecommunications industry. Across the world, numerous state-owned telecommunications operators were privatised. A wave of pro-competitive and deregulatory telecommunications policies swept the globe. Competition was perceived to be beneficial as a spur to technological innovation, as leading to reduced prices and leading to growth in the economies of countries with advanced telecommunications. The process of opening up the market to competition was called “liberalisation”.

Liberalisation led to certain identified consequences. In liberalised markets, the penetration of mobile telephony grew very quickly. As predicted, this led to a growth in the economy of the relevant country. New entrants into the market benefitted significantly. Incumbents also benefitted. First, an incumbent with a fixed network sold its services to the new entrant into the mobile market. Secondly, an incumbent with a mobile network benefitted from the expansion of the entire mobile market.

So we can see quite clearly that opening up the market to competition meant new entrants would benefit significantly. And thus there was every reason for Esat to ‘bring competition into the fixed line market’ – because they would make a killing by owning a share of the market.

This is no doubt painfully obvious to all of you and I am sorry to labour the point. However, there is a certain take-home lesson from Carey’s presentation of Esat’s activities as social altruism: whenever you read someone in the papers (say, the Irish Independent) or hear someone on the radio (say, Newstalk or Today FM) proclaim that such and such a market needs to be opened up for competition or such and such a public asset needs to be sold off, make sure you know what those words mean. They mean: we want a piece of the action.


Today, we are all Denis O’Brien. But not like that, however much Newstalk commands it. I mean more the way you become someone by inhaling them.

It is not that there are particles of O’Brien’s corporeal form general over Ireland and we breathe them in the way we breathe in a foul stench. It is more in the field of language, where every grunt and squiggle feels freighted with O’Brien’s presence.

By ‘Denis O’Brien’ I don’t really mean the person: not the bumptious fat boy on the make who fears the country is falling to the communists, who gloms onto the desires and vanities of wealthy elites and nudges them in his direction, who trousers untold riches from the bounty unleashed by privateers as state-owned assets are sold off and rented back to the population, who trawls the bottom billion for bargains and then flips the sale to even bigger billionaires. Who cares about him? Yes, he’s Denis O’Brien all right, but so are we.

Turn on your tap and fill a glass of water and drink it. Does it taste like Denis O’Brien? No? Take a small sip and hold it in your mouth and think about how you’ll be paying for this soon. Don’t swallow until you’ve sluiced around the idea that water charges were a recommendation of the McCarthy Report, and the most instrumental cheerleaders and legitimators of the McCarthy Report were individuals in the pay of Independent News and Media and Newstalk (including, perhaps, Colm McCarthy, if he doesn’t write those columns simply for the good of his health). How’s that water tasting? Swallowed it yet?

When your neighbour who has been out of work since the housing bubble burst tells you the way of sorting out the country is to slash the health budget by €10bn and privatise all the semi-states and sack all the useless civil servants and bring in some people into government who really know how to run a business, is it your neighbour talking? Are you sure? Can you hear anyone else?

What do you think about the Moriarty Tribunal? Do you think it was an awful waste of taxpayer money that demoralised the population and hasn’t really revealed anything other than the fact that lawyers are very expensive and civil servants are useless and businessmen are very competitive and when the difference between winning and losing is using a bit of influence on a venal politician, it is a natural enough occurrence for a red-in-tooth-and-claw go-getter to offer some sort of inducement?

Do you know who else thinks that?

Both-And Bombing Campaigns

A very quick note on what’s going on in Libya, and I apologise if it is blindingly obvious. Even within the limits of what can be seen, heard and read, I have not been following things all that closely since the US-led bombing of Libya began. And yet what is coming across fairly clearly from the reportage and opinion is a sort of dichotomy that characterised coverage of the Iraq invasion, and going further back, Kosovo. That is, you are pushed into a choice of thinking that either this really is the time when the humanitarian protections under international law are vigorously asserted by its most powerful (and, natch, enlightened, Western) actors in the interests of democracy, or this is one more time when the imperialist powers are bombing some foreign devil in order to exercise strategic control over natural resources that do not belong to them. Well, why can’t it be both? I mean, what could be more enticing for imperial powers to assert control over a region’s resources -and its people- than the clear cut likelihood of a massacre about to be conducted by a foreign devil (who of course was their ally not so long ago etc etc) against people who want to overthrow a dictatorial regime? The fact that Gaddafi would be unremittingly vicious in inflicting his punishment against the insurgents is a clear green light for imperial powers to roll out the heavy artillery.

Oily Waters

This is a comment left on the Irish Times site in response to today’s article by John Waters.

One of the heroes of John Waters’s piece, Tony Blair, whom he has singled out of praise on other occasions, describing him elsewhere as ‘someone who has looked into everything at the greatest depth’, has certainly ‘done something’ about the tyrant Col. Gadafy: he cosied up to him.

A Vanity Fair article in January described how ‘Saif al-Islam, Qaddafi’s probable heir, said last summer that Blair was “a personal family friend” and added that Blair -an employee of JP Morgan- had visited Libya “many, many times” since leaving office.’ Blair ‘briefed the dictator about what to expect from the new British coalition government led by David Cameron’.

One would have hoped, given the -to put it delicately- problematic nature of the links between Blair and Gadafy, John Waters might have been a bit more circumspect in presenting Mr Blair as a hero ‘in the face of tyranny and evil’. That he has not done so leaves us with the impression that he has inhaled what he describes very well as ‘the verbal flatulence of an era characterised by delusion, cowardice and empty talk’.

I on Twitter

March 2011