It is more than a little alarming that it is right-wing political forces that have gained more and more political space in the wake of the crisis. The range of forms of this insurgent right defies a single classification: electoral victories opening political space for a hyper-nationalist alt-right (U.S. and Germany); incorporation of neo-fascist forces into “formal” liberal democratic states (Italy, Hungary, Poland, the Philippines, Austria, Poland, and others); exceptional judicial-political coups (Brazil, Honduras); authoritarian constitutional regimes (Russia, China, India, Turkey); military coups (Egypt, Thailand); and still others.
It is often claimed, in the simple-mindedness that passes for political analysis in Canada, that our inclusionary polity has been innocent of these developments (although Canada is, perhaps, the most orthodox adherent to neoliberal policy precepts in the world). But with the far right gaining political space inside and outside the Conservative Party — as in the long years of the Stephen Harper governments, and now with the United Conservative Party in Alberta, the People’s Alliance in New Brunswick, and the Saskatchewan Party and Coalition Avenir Québec governments — this claim bears no scrutiny.
The election of the Doug Ford-led Conservative Party to a majority government in Ontario, Canada’s largest province by output and population, should leave little doubt that an authoritarian phase of neoliberalism is sinking deep roots in Canada. Ford’s election platform, A Plan for the People, played to the “Ford Nation” built by his brother Rob as mayor of Toronto in its themes of social conservatism, law and order, unwanted “illegal” migrants, and market populism. Ford adopted much of the inflammatory rhetoric of Trump, and a parallel narrative of “making Ontario great again” after years of “criminal” Liberal spending (with the same chants of “lock her up” for then-premier Kathleen Wynne as targeted Hillary Clinton) and domination by cultural “elites” in Toronto. In this, Ford fused a suburban, multiracial bloc of voters with traditional conservative support — many with longstanding hard-right leanings — among rural and wealthy voters. In turn, Ford empowered even more militant — some fascistic and openly racist — elements of the far right to come out from their sewers (as with ex-Rebel Media figure Faith Goldy placing third in a run for Toronto mayor).
There is no policy handbook that guides these emergent authoritarian regimes as they blend nationalism with neoliberalism. Still, features of the Ontario government policy matrix under Ford that fit this pattern can be discerned.
First, the Conservatives are committed to further “liberalisation” of the economy — with “open for business” signs symbolically installed at each border crossing. These policies will be layered into a growth model that is as “extensive” (larger market) as it is “intensive” (higher productivity), and sustains Ontario as a low-cost, low-tax regional production system. Some of Ford’s first moves were to scrap the carbon trading system, while simultaneously cutting the gas tax, 750 renewable energy projects, and the Green Ontario Fund (shamefully leaving Ontario without a climate change policy). Shortly after, Ford tabled legislation to roll back modest labour reforms addressing some of the problems of low-paid workers and to freeze a planned increase of the minimum wage to $15 per hour, while also cutting back workplace inspections. New spaces for accumulation are, as well, to be pushed in the “ring of fire” in northern Ontario for mining, opening up “green spaces” for exurban development sprawl, and cannabis privatization.
Second, Ontario fiscal policy has been constrained for decades by targeted maximum fiscal deficits (normed, more or less, to move toward balanced budgets, with total debt kept in a range of 30–35 percent of provincial GDP). This has meant a budgetary practice under the Liberals of keeping program spending below the combined rates of inflation and growth to reduce steadily the size of government as a portion of the economy (with Ontario now having the lowest per-capita program spending in Canada). For the election, the Liberals allowed a modest deficit to fund a range of programs. Ford, in turn, ginned up charges of reckless Liberal spending and appointed a Financial Commission of Inquiry and an Ernst & Young Canada audit of the books to produce a $15 billion deficit (with some dispute over accounting procedures, in the same range as the Liberal projections). The Conservatives, however, promised during the election to increase spending on public transit, housing, childcare, and long-term care beds, with no cuts to services and public employees, and gas, income, small business, and corporate tax cuts. This is all to be funded, Ford argued, by $6 billion in savings through unnamed efficiencies.
This is, to say the least, a confused and incoherent fiscal policy that cannot hold. Indeed, it is austerity that has already been rolled out: a public-sector spending and hiring freeze; axing of a pharmacare program for young people; cuts to a school-repair program, cycling infrastructure, and mental-health funding; and appointment of a Task Force on Healthcare Reform led by a two-tier advocate. The precise mix of spending cuts, user fees, and monetization and privatization of assets will be sorted out in the coming economic statement and budget.
Third, the neoliberal deepening of economic institutions works in conjunction with measures that promote “social discipline” as the hard right sees it. The Conservatives have, for example, moved quickly to turf a modernization of the sex-ed curriculum, as well as materials to deal with reconciliation with First Nations; to legislate CUPE back to work at York University; to cut a basic-income pilot program and social-assistance rate increases (on the road, it seems, to revising some form of workfare); to withdraw from provincial obligations to settle and house refugee claimants; to block new oversight laws on the police; and to re-establish specialized policing units (the “guns and gangs” forces associated with extensive carding of racialized groups) in high-priority neighbourhoods. This is only a partial inventory of the ideological and economic mechanisms to instill the culture of fear and market discipline that Ford is deploying.
Finally, the Ford regime has been unhesitating in reinforcing the anti-democratic and authoritarian tendencies that have been integral to neoliberalism. Indeed, Ford’s most dramatic initial move was a unilateral cut to the size of Toronto’s city council in the midst of an election (as well as eliminating the elections of several regional government chairs). Ford was so keen to reduce the space for electing, as he put it, “lefties” in Toronto, he belligerently invoked the constitutional notwithstanding clause to limit judicial oversight. The personalization and concentration of power around Ford is notable: the hypercentralization of executive power in the Premier’s Office; the ending of public ministerial mandate letters; the centralization of control over ministerial staff appointments and media contacts; the naming of special advisors and commissions to the Premier’s Office; the demotion of the ministerial status of First Nations issues; and the altering of parliamentary rules to limit the capacity to oppose government bills.
In sum, Fordism in Ontario is an extraordinarily contradictory — and dangerous — agenda. The antistate, market populism used to sustain the rate of accumulation at any cost exists alongside — indeed, depends upon — an increasingly interventionist and authoritarian state mobilizing its resources and reordering its administrative apparatuses to buttress this process. Ford’s “government for the people” thus pivots, like Trump’s regime in the U.S., around ideological appeals to a hard-right provincialism, patriarchal family values set against a hostile world of crime and terrorism, mobilization of ethnic and racial chauvinisms, and mystical market solutions for every ill.
Ontario under Ford has not mutated into an exceptional regime existing, as it does, within the faint veneer of liberal democracy. But Ford operates with ever fewer constraints — a nascent Bonapartism? — over his exercise of power. Both Ford’s core populist instincts and political calculations authorize and sanction the hard-right sections of his caucus, party, and extra-party militants; and his economic strategy hinges on ever more speculative, politicized, and extreme forms of accumulation. It would be utter folly to predict where this will end (no less in other regions of Canada). It is clear, moreover, that the Liberals are indicted in these very same processes; and the NDP has proven more inept than capable of developing an alternative to neoliberalism, as these policies have also made their claims on its vision and platform. Political fronts, a fighting and transformed union movement, ambitious socialist organizing, and alternatives have seldom been more urgent to confront the challenges of these uncertain and grave times.
Greg Albo teaches political economy at the Department of Political Science, York University, Toronto. He is currently co-editor of the Socialist Register. He is also on the editorial boards of Studies in Political Economy, Relay, Capitalism, Nature, Socialism, Canadian Dimension, The Bullet and Historical Materialism (England). Co-editor of A Different Kind of State: Popular Power and Democratic Administration and author of numerous articles in journals such as Studies in Political Economy, Socialist Register, Canadian Dimension, and Monthly Review.
Capitalism Is Broken
The announcement came rolling from the Eccles Building at 2 p.m. Eastern…
No rate hike today.
Jerome Powell has decided to sit on his hands — for now.
In his very words:
It’s important that monetary policy not overreact to any one data point… The FOMC will closely monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion.
That is precisely why the next move will be a rate cut.
We have reckoned lots lately about the inverted yield curve… and the recessionary menace it represents.
The 10-year versus 3-month yield curve recently inverted to its lowest level since April 2007.
Meantime, 10-year Treasury yields hover at two-year lows — 2.04%. One Bloomberg opinion piece instructs us to prepare for 1% yields.
As the old-timers know… the bond market gives a truer economic forecast than the chronically dizzied stock market.
Meantime, the New York Fed’s recession model reveals a 30% probability of recession within the next year.
It last gave those same odds in July 2007 — merely five months before the Great Recession was underway.
JP Morgan places the odds of recession in the second half of this year at 40%.
And Morgan Stanley gives a 60% likelihood of recession within the next year — the highest since the financial crisis.
Yes, the Federal Reserve will soon be cutting rates.
Conspicuously absent from today’s statement was the word “patient.” Thus Mr. Powell telegraphs that he is ready to move.
Federal funds futures presently give nearly 90% odds of a July rate cut.
The market further expects as many as three rate cuts by this time next year — perhaps four.
We are compelled to restate the blindingly obvious:
The Federal Reserve has lost its race with Old Man Time.
The opening whistle blew in December 2015… when Janet Yellen came off the blocks with a 0.25% rate hike.
If the Federal Reserve could cross the 4% finishing line in time, it could tackle the next recession with a full barrel of steam.
Alas… it never made it past 2.50%.
The Federal Reserve cannot return to “normal.”
The stock market will yell blue murder and take to violent rebellion if it tried — as happened last December.
No, Wall Street has Mr. Powell in its hip pocket — as it had Janet Yellen, as it had Ben Bernanke, as it had Alan Greenspan before him.
But it is not only the Federal Reserve…
Last year the world’s major central banks were pledging to “normalize.”
But now they are in panicked retreat…
All have taken to their heels, hoofing 180 degrees the other way.
Both the Bank of Japan and European Central Bank are now gabbling openly about rate cuts and/or additional quantitative easing.
“It’s all in the open now. Front and center. The new global easing cycle has begun before the last one ended.”
This is the considered judgment of Sven Henrich, he of NorthmanTrader.
We must agree.
Yet the central banks have only themselves to blame…
They grabbed hold of the poisoned apple during the financial crisis.
They gulped… and took the first fateful nibble. It proved nectar to the stock market.
Encouraged by the results, they soon munched the full dose… and later went plowing through the entire tainted orchard:
Zero interest rates, QE 1, 2 and 3 — Operation Twist — the lot of it.
Even with trade war raging and recession hovering, stocks are within 1% of record heights.
And so the banks are too far gone in sin to turn back now.
Their greatest casualty?
Henrich on the wages of central bank sin:
Let’s call a spade a spade: Equity markets and capitalism are broken. Neither can function on any sort of growth trajectory without the helping hand of monetary stimulus. Global growth figures, expectations and projections are collapsing all around us and markets are held up with promises of more easy money, in fact are jumping from central bank speech to central bank speech while bond markets scream slowdown.
We fear Mr. Henrich is correct.
We further fear capitalism will get another good round pummeling in the years to come…
The Federal Reserve’s false fireworks will land as duds against the next recession.
Cries will then go out for the artificial savior of government spending — Modern Monetary Theory (MMT).
Free college tuition… universal Medicare… jobs for all… a $15 minimum wage…a possible Green New Deal…
These and more will be in prospect.
Politicians will go running through the Treasury as a bull runs through a china shop… and leave the nation’s finances a shambles.
Only then — too late — will they discover that debt and deficits matter after all…
Managing editor, The Daily Reckoning
The Secrets of Surveillance Capitalism
Google surpassed Apple as the world’s most highly valued company in January for the first time since 2010. (Back then each company was worth less than 200 billion. Now each is valued at well over 500 billion.) While Google’s new lead lasted only a few days, the company’s success has implications for everyone who lives within the reach of the Internet. Why? Because Google is ground zero for a wholly new subspecies of capitalism in which profits derive from the unilateral surveillance and modification of human behavior. This is a new surveillance capitalism that is unimaginable outside the inscrutable high velocity circuits of Google’s digital universe, whose signature feature is the Internet and its successors. While the world is riveted by the showdown between Apple and the FBI, the real truth is that the surveillance capabilities being developed by surveillance capitalists are the envy of every state security agency. What are the secrets of this new capitalism, how do they produce such staggering wealth, and how can we protect ourselves from its invasive power?
“Most Americans realize that there are two groups of people who are monitored regularly as they move about the country. The first group is monitored involuntarily by a court order requiring that a tracking device be attached to their ankle. The second group includes everyone else…”
Some will think that this statement is certainly true. Others will worry that it could become true. Perhaps some think it’s ridiculous. It’s not a quote from a dystopian novel, a Silicon Valley executive, or even an NSA official. These are the words of an auto insurance industry consultant intended as a defense of “automotive telematics” and the astonishingly intrusive surveillance capabilities of the allegedly benign systems that are already in use or under development. It’s an industry that has been notoriously exploitative toward customers and has had obvious cause to be anxious about the implications of self-driving cars for its business model. Now, data about where we are, where we’re going, how we’re feeling, what we’re saying, the details of our driving, and the conditions of our vehicle are turning into beacons of revenue that illuminate a new commercial prospect. According to the industry literature, these data can be used for dynamic real-time driver behavior modification triggering punishments (real-time rate hikes, financial penalties, curfews, engine lock-downs) or rewards (rate discounts, coupons, gold stars to redeem for future benefits).
Bloomberg Business Week notes that these automotive systems will give insurers a chance to boost revenue by selling customer driving data in the same way that Google profits by collecting information on those who use its search engine. The CEO of Allstate Insurance wants to be like Google. He says, “There are lots of people who are monetizing data today. You get on Google, and it seems like it’s free. It’s not free. You’re giving them information; they sell your information. Could we, should we, sell this information we get from people driving around to various people and capture some additional profit source…? It’s a long-term game.”
Capitalism Versus Democracy
It was always just a matter of time before the reemergence of establishment Democrats reminded people why they were booted from power in 2016. As ugly as Donald Trump is and as not constructive as his tenure in the White House has been, the Democratic establishment would rather lose with establishment candidates and retrograde policies than loosen its grip on its service to the oligarchs.
Phrased differently, if Democrats cared about ‘defeating Trump,’ they would offer programs that people want. But they are so firmly in the grip of corporate interests and the oligarchs that they won’t do so. The Republicans are just as beholden, but they offer fewer (manufactured) illusions. They represent the interests of capital. This transparency provides political clarity for those who oppose their policies.
Graph: American politicians act as if the rich minority should control our politics. Policies in the public interest are invariably corrupted through the legislative process to serve them. This is a near perfect inversion of democratic control where the richest 1% + 9% would only exist at the behest of the polity. Because it concentrates wealth, capitalism is antithetical to democracy. American elections will remain a farce until democratic control is put in place.
When announcing a congressional Medicare for All hearing recently, senior Democrats sought to control the admissible language to exclude the phrase ‘Medicare for All.’ They intend to focus instead on ‘access’ to healthcare which keeps health insurers as the extractive layer that has given the U.S. the most expensive healthcare system in the world with the worst outcomes.
What this signals, for those to whom it isn’t yet obvious, is that there are no circumstances short of revolution that will move the Democrats from service to their rich patrons. Given the stakes of environmental crisis, deaths of despair overtaking the hinterlands and military inclinations pushing the U.S. toward wars it can’t win, Democrats are signaling that they would rather go down with the U.S.A. Titanic than offer up the solutions being put forward by young socialists.
Lest the larger picture be missed here, American capitalism, for which claims of ‘efficiency’ have been used to shape and rebuild the world, has produced the least efficient healthcare system in the world in order to fill the pockets of a class that feeds on human misery. Thanks to Obamacare, health insurance executives are now the most overpaid in the entire insurance industry. This, as medical bankruptcies are undiminished since passage of the law.
The illusion of political competition facilitates the lie of democratic control. Republicans deny climate science while the Democrats place the interests of the businesses that are degrading the environment ahead of the popular will when they craft nominally public policies. Look again at the graph above: given the numbers in terms of citizens represented (executives + oligarchs), why would they have any say in the determination of public policies in a democracy?
As was the case in 2016 and for decades prior, the so-called political center is a radical outlier in terms of formulating policies in the public interest. Fifteen times as many people in the U.S. die every year from not being able to afford healthcare than have died in all of the terrorist attacks of the last century. The political ‘center’ is code for the interests of capital. It is killing the planet and bleeding the polity dry. It functioned as misdirection when the vestiges of the New Deal were intact— before ‘precariat’ described everyone who isn’t in the 1%.
The West is now four decades into a neoliberal ‘experiment’ that has failed on its own terms, but that shows no signs of either waning from its own contradictions or being dislodged politically. The political ossification that it has created comes through class control of the public sphere, domination of the political process via campaign contributions and the economic role that corporations have assumed at the heart of Western political economy.
Graph: CO2 emissions are both fact and metaphor for the seemingly unstoppable march toward environmental Armageddon. The capitalist version of a Green New Deal is premised on greatly increasing destructive environmental production in order to reduce it at some as-yet unspecified future date. As basic arithmetic has it, 5 + 1 = 6, not 4. An eco-socialist GND requires getting capitalists out of the way while the American political establishment exists to keep them in control. Source: c2es.org
While confusion has been sown around the meaning of ‘corporatism’ that stood at the center of (Benito) Mussolini’s vision of the good life, a defining characteristic of both Italian and German fascism was capitalist-state alliances where state power was used for the benefit of select capitalists and select state actors. Labor unions were systematically disempowered, and the interests of powerful economic and state actors were put forward as those of the polity.
An irony of the present is that with all the mechanisms of capitalist-state control— a capitalist media that places business interests ahead of civic accountability; corporate control that regulates the lives of citizens as surely as totalitarian regimes throughout history; and the systematic immiseration and debasement of the democratic core of the polity; a plurality is still able to look past its own interests to the public good.
A secondary irony is that as true as denunciations of Donald Trump and the Republican Party may be, the Democratic establishment has no history of challenging the substance of their programs in recent decades. Establishment Democrats want to preclude a Green New Deal and Medicare for All as surely as Republicans do. Differences between the Parties are over how to best do so— outright opposition versus killing them legislatively.
And in fact, this difference in strategy suggests the basis of bourgeois loathing of the ‘lesser’ classes. Republicans deny climate science (the ignorant heathens) while Democrats accept its conclusions while continuing to let their donor class dictate policy that perpetuates environmental degradation. Given the stakes, the Paris Accord was a fig leaf placed over a missing environmental policy when Barack Obama gave it rhetorical support.
Here is the IPCC (UN) report, released a mere two years after Mr. Obama left office, stating that far more radical action is needed to address climate change. Here is IPBES (UN) report, released a mere two years after Mr. Obama left office, stating that far more radical action is needed to address mass extinction. Environmentalists have been providing evidence that radical action is needed for five decades.
The method of the Democrat’s grift is to hand public policy to business interests just as Republicans do, but through abstract devices like trade agreements. ALEC (American Legislative Exchange Council) writes local, state and Federal policies that Republicans put forward as legislative proposals. Democrats push trade agreements that have Investor-State Dispute Settlement clauses to prevent governments from passing laws in the public interest.
As the graph of total CO2 emissions (above) suggests, the effect is a continuity in public policies hidden behind a veil of faux political competition. The American bourgeois congratulates itself on its clear understanding of climate change while earning its living in the service of the oligarchs and corporate chiefs who benefit from environmental degradation. Democratic politicians sooth psyches through language of ‘working toward’ and ‘access’ that gets its professional class constituents from one PowerPoint presentation to the next. The point: the bourgeois are an impediment to effective public policies, not its guardians.
With their growing use of loyalty oaths and exclusionary tactics, Democrats have adopted the logic of the radical right for the reasons of the radical right— to protect the business interests of their donor class from rising bolshevism (socialism) and market mishaps. But commies didn’t crap the environment. And market mishaps are an aspect of capitalism, not socialism. So, Democrats are joining Republicans to protect capitalists from the consequences of their own practices.
Those not directly benefitting from it want to be protected from capitalist predation. Medicare for All, a Green New Deal, raising taxes on the rich and having a political voice are popular with the little people. The political establishment also exists to protect the oligarchs and corporate executives from democratic accountability.
The self-aggrandizing ‘Art of War’ drivel of 1980s capitalist mythology posed capitalist warriors competing against one another in the rough and tumble marketplace. By 2000 or so this had given way to K Street lobbyists, congress and the Federal Reserve doing back alley deals to protect them from market failure. Payday loans, government granted monopolies and instigating wars to sell munitions all combine state with private power to extract economic rents— market competition has nothing to do with it.
Any honest assessment of American business— war, financial gamesmanship, environmental degradation and pillaging the polity, would make evident that some fair portion of the oligarch class 1) belongs in prison and 2) should be made to give up its ill-gotten gains. Some politely worded version of this political program would likely win any election hands down, suggesting that the actual political center is a few miles left of the political establishment.
Graph: Any environmental accounting based in history would place the U.S., and more precisely capitalism, front and center as both cause and beneficiary of environmental degradation. The U.S. + the E.U., really Germany and Britain, caused climate change through greenhouse gas emissions from the dawn of the industrial revolution to the present. China has become to major emitter only recently. But Chinese emissions built the export economy that flooded the West with cheap imports. In other words, Western emissions were outsourced. Source: c2es.org
A question to be answered sooner rather than later is: what configuration of political economy is needed to resolve the multiple crises that are underway? With political hopefuls offering policy proposals going into the 2020 elections, those that aren’t tied to workable political economy are likely to be little more than empty posturing.
A Green New Deal and Medicare for All would alter economic relationships. The establishment posture is: we need for ‘our’ political proposals to serve multiple economic interests. Not addressed is that it is these very interests who turned a livable environment and health care into political problems in need of resolution. So why would they be 1) left intact and 2) considered ‘partners’ in resolving the problems they have created?
The path of least resistance within the establishment frame is market-friendly proposals like carbon taxes and public-private partnerships to build renewable energy technologies. The logic is to increase the use of environmentally destructive technologies to reduce them at some future point. Again, 5 + 1 = 6, not 4. The only path to meeting IPCC and IPBES (above) goals will be to reduce cumulative environmental degradation, meaning 5 – 1 = 4.
All of the establishment plans, including those from socialists, are variations on 5 + 1 = 6, again meaning that environmental degradation must increase to reduce it at some future point. This is the same capitalist ‘growth’ logic that isn’t working. Any plan that isn’t at least cognizant of this paradox should be rejected out of hand. Moving from industrial to human-scale agriculture will require land redistribution. If people can reconnect with ‘the world,’ they might even be happier for it.
Through the concentration of economic power, capitalism is antithetical to democracy. Capitalist ‘freedom’ is the freedom of the oligarchs to exert political control through this power. This contradiction explains why the polity has little to no influence over government policies, causing growing antipathy toward the political establishment. Democrats aren’t going to voluntarily abandon their donors and Republicans wouldn’t even pretend to, suggesting that the preferred direction of the political establishment will continue to be hard right.
As Democrats are in the process of demonstrating, existing political economy must be gotten out of the way before there is any chance that solutions to current crises will be workable.
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