The Perils of Populism

An epitaph for the 20th Century could very well be Socialism; Fascism; and Communism.

The world experienced the advent of all three "ism's" with tragic consequences in the latter two and interesting incursions into the basic capitalist setup by the former.

Socialism and Communism developed to combat the perceived injustices of capitalism combined in many cases with the remnants of monarchism and the established class systems.

Fascism on the other hand was designed to restore some warped perception of past glory essentially recreating a monarchical caste to "defend" against the ravages of Socialism not to mention Communism.

They all have the requirement for an enemy or scapegoat: the rich; the poor; the Jew; basically the "other" against whom they can rant and rave.

In this aspect they all have the potential to fall prey to the latent disease inherent in democracy-
populism.

For populism has the ability to take a kernel of truth and turn it into a monster of exaggeration and lies.

Take the recent vote of the Swiss which passed a referendum to limit immigration with the slightest of majorities- 0.6%.

Two million out of a total Swiss population of eight million are foreign. 

The largest contingent are Italians who make up just under a third.  The second largest are Germans who make up a little less and lastly the Portuguese who make up the majority of the rest.

The Germans are almost exclusively in the professional classes.  The Italians are professional and skilled labour and the Portugese provide a significant part of the menial labour and the lower eschelons of the health care.

The majority of the foreign workers are in the cities.  The "no" vote- that is the vote not to introduce limitations on immigration came from the cities.  The "yes" vote- the anti-foreign vote- came from the countryside where the number of immigrants is minimal.

A perfect example of the creation of a scapegoat, of fomenting fear and loathing of the unknown by a populist, nationalist xenophobic movement .

Unfortunately this seems to be the traditional route taken by the Right.  Create an enemy.  Exaggerate the danger.  Come to power.  And then consolidate your position by creating ever more scapegoats.

My problem is not the Swiss.  They are a relatively small group and don't appear to have territorial aims in Europe.

My concern is that every other right wing populist party in the EU will now latch on to the Swiss example and parlay that into a "seat at the table" of the political elites.

This has happened before.

It didn't end well.

Simple answers to complex questions don't really exist.

But they are alluring.

Net Neutrality

Years ago Noam Chomsky wrote the book "Manufacturing Consent".  In it one of the things he railed against was the small circle of families-26 I believe was the number-across the globe who together essentially owned the world of print media.

In the US they were held in check by the "Fairness Doctrine" which was created in the 30's to counter the power of the print media barons and to check the growth in the "new" area of media the radio.

It was proposed among others by some of the leaders of print and electronic media, perhaps to level the playing field, and was incorporated in the tenets of the FCC.

I have written earlier of how President Reagan dismantled the Fairness Doctrine and that President Carter went on to weaken it even further with the removal of barriers to owning national radio and television stations as well as cross-ownership of print and electronic media.

The next step in the ever increasing attack on freedom of communication are the continuing attempts to dismantle net neutrality.

"Fundamentally, net (short for "network") neutrality is the idea that the Internet works best when ISPs deliver every Internet site's traffic without discrimination. At its core, net neutrality demands ISP equality in the treatment of consumers who pay for the same or a greater quality of service, permitting peer-to-peer communication in any platform of the consumers' choosing, regardless of the amount of content transmitted or bandwidth utilised."*

 

It is a strange fight. 

 

Pro net neutrality supports are looking at "freedom of speech" and the right to have free choice in the sense that they wish to maintain an open broadband in which major Internet providers cannot control what information people see, at what speed and at what price as promoted by the Federal Communications Commission.

 

On the other side of the debate are those looking to ensure that they control the content, the speed and the price of the Internet.  These are the major Internet providers and their congressional supporters like Subcommittee Chairman Greg Walden (R-Ore.), who introduced H.J. Res. 37 on Feb. 16, 2011, a few weeks after the FCC had put forth a regulation maintaining a high level of net neutrality. 

 

The Honourable Mr Walden's Resolution held that:  "....that Congress disapproves the rule submitted by the Federal Communications Commission relating to the matter of preserving the open Internet and broadband industry practises (my italics), and such rule shall have no force or effect."

Just to confirm what happened.  The House Commerce Subcommittee on Communications and Technology voted to repeal an FCC Regulation because the Regulation preserved the open Internet and broadband industry practises.

And wanted to replace it with a sort of Cable TV structure controlling the Internet.

*Sedgewick Law Los Angeles Daily Journal

What is the Point of Employment if it Doesn't Pay the Bills?

I am not sure where I sit in the left/right scale in that I am an aggressive proponent of a strong middle class.   And strong means a large, vibrant middle class.  Not a portion of the population which is better off then the unemployed.  Nor a class employed at wages condemning them to poverty.  And not a portion of the population that looks up to the 1% and feels that in comparison they too are being pushed to the brink.

I think it begins with a minimum wage that allows people to work and live above a subsistence level.  Yet every conservative rants and raves at how setting a minimum wage is governmental interference taking away the invisible had of competition from the marketplace. 

A livable minimum wage is the building block to move from poverty- employed or not- into the lower echelons of the middle class.  It forms the floor for the compensation of more skilled jobs be they on the shop floor or in white collar activities, and it motivates the receipients of welfare to move into employment.

The ranters against a liveable minimum wage  are the very architects of outsourcing.  The advocates of a global economy predicated on competitive advantage which results in a race to the bottom, always looking for the next group willing to become wageslaves as opposed to just dying, but still living in abject poverty.

We need an economic policy dedicated to providing employment to as many as possible, at reasonable wages, delivering people the prospect of socio-economic mobility, which was the stone upon which the US was founded.

To many this will sound like the next step is protectionism.  It is.  But not of the American Dream,
but rather of the worldwide dream of a better life, beginning at home.

The Decline of the Middle Class

I recently read a description of capitalism as an overloaded horse drawn carriage on an extremely muddy road with water filled ditches on both sides.  Inside the carriage, drinking tea and munching biscuits were the monied 1%-the upper class.  Scrambling to keep a foothold hanging on for dear life on the outside of the carriage and kicking at the hands reaching up from the muddy track were the middle class.  And climbing over each other, balancing on the heads and shoulders of the poor devils sinking into the morass and reaching up trying to pull themselves onto the carriage were the lower class.

It was written over 100 years ago and was an anti-capitalist treatise.

Over the weekend I read another piece.  It was on the potential demise of the American dream, which is predicated on a healthy middle class sitting comfortably on the carriage and a lower class that is not sinking in the bog but rather walking along a proper road.   If they can't get on the first carriage, they are confident that another will come along.

The median income for a family in the United States is $49,000.  That means there are as many people earning more than that, as there are earning less than that.  And that is for a family which in more cases than not requires two incomes  to support a family at the mean and above.

Blah blah blah I'm sure many are thinking.  Tell us something new.  Don't be so left-wing.

Well, the truth is this is a massive problem.  Not just for the USA- but very seriously for the USA.

This is a nation built on consumer spending.  It was also somewhat built on a cradle-to-grave mentality which provided security and a slow but steady income growth-as a single-earner family.

Times have changed.  The two earners that it requires to earn the mean or above are working primarily to stay in place.  They do not have job security and they do not have a steadily increasing income.

Global competition has torn that model up and replaced it essentially with "just-in-time" employment, at sharply reduced wages. 

And those below the median are most likely to be single-parent (mother) families-and they represent 50% of the nation's families.

So we have a large swathe of society living on a form of subsistence income i.e. they have little if any discretionary income which means they DON'T BUY anything other then essential goods and services.

That's not a consumer-driven economy.  That's an economy surviving on providing essentials. 

As I read reports of steady enonomic growth in the US and that things are getting better and that there are more people being employed I am struck by the fact that incomes are not rising....

This is not good.

The Dangerous Waters of Immigration

One of the founding principles of the European Union was the free movement of people within the Union.  This was strengthened even more with the creation of the Schengen zone which essentially stopped border controls between signatories of the Schengen Agreement.

One of the goals in this was to allow workers in a country with a less robust economy to move to another country where their chances for employment would be greater.

This was always going to be somewhat contentious as unemployed workers would possibly take jobs at less favourable terms than many local workers, especially in those countries where the social welfare net was relatively attractive in comparison to the lower paid more onerous jobs often sought out by immigrants.

That being said that this would be the case is more a reflection of the mismatch between unemployment benefits and compensation at the lower end of the range as well as the "entitlement" mind-set of some sections of the unemployed.

For that reason I am a strong proponent of minimum wages which, despite their cost at source to employers actually can help move people off welfare lists into employment.

This was behind the German Social Democrat (SPD) party's demands in the coalition negotiations which were recently approved by the SPD membership.

What was not intended by the free movement of people within the European Union was that people from high unemployment countries with poor social welfare systems would move to countries with strong social welfare systems thus providing them with health coverage, housing and unemployment benefits.

It does not matter if the numbers involved in this sort of "welfare" tourism are low or not.  What they do is put the whole structure of the EU at risk.

I am not promoting an anti-immigration policy.  I am suggesting that there have to be controls and regulations governing the movement of people even if they make it more difficult. That does not mean that intra-EU immigration should stop.  It does mean that there should be stronger controls as to who is eligible for health, housing and unemployment benefits.

It cannot be the case that host countries suddenly are responsible for "internal" immigrants.  No system can withstand this economically, and perhaps more importantly, it opens the door to right-wing nationalist groups long on rhetoric and short on substance, whose populist slogans find resonance in the population at large.

But clever, and more importantly, ethical politicians should not use such controls merely as a means of garnering support predicated on populist propaganda. 

They should not only be rigorous regarding EU immigrants; they should also be relentless in pursuing their own "domestic" tourists who have become ingrained in a benefits culture with no intention of assuming responsibility for their own well-being, and happy to blame someone else for their predicament.

I am a strong believer in the benefits of the EU but recognise it can only be as strong as its' member states.  It all starts with the social contract between the state and the electorate at large.

Champerty and Betting and Who's to Blame

It is interesting upon reflection how connected at the hip, or perhaps the head, Mrs Thatcher and Mr Reagan actually were and how the some of the changes they brought in had far-reaching repercussions which they may or may not have appreciated. 

Mr Reagan was responsible for removing the Fairness Doctrine in media which had been created in the 1930's and supported by the media moguls of the time who, strange but true, felt a responsibility to report the news in an even and fair-handed manner using the editorial pages for their personal diatribes.

The result of Mr Reagan's intervention:Fox News, polarisation of society and in the end a somewhat stymied political system.

Mrs Thatcher had a few tricks up her sleeve as well.  The first was to remove the Common Law prohibiton on Champerty, and its' cousin Barraty  which essentially allowed for the promotion of or the incitement to bring legal proceedings.  Mrs Thatcher felt that this was restraint of trade thereby opening the door to allowing uninvolved third parties (i.e. lawyers) to take a case on simply to gain in the winnings if the successfully prosecuted or defended the case. 

Now one might find that less onerous than I do, but it basically opened the door to litigation "chasing" which I believe was instrumental in creating  a culture which takes no responsibility and is always looking to blame someone else.

Moving on, another serious intrusion into the fabric of society perpetrated by Mrs Thatcher was to remove laws banning the "incitement" to bet.

When I first came to Britain in 1987 there were many professional football (soccer) teams sponsored by contraceptive manufactures.  Now despite the fact that there was never any indication as to the wares a sponsor's name brazened across the shirts of a football team was actually advertising, the product was considered to be morally unacceptable and potentially damaging to the nation's youth. 

So, on the shirttails of Mrs Thatcher's decision to promote betting there suddenly appeared a host of football teams sponsored by betting companies.  To add insult to injury, after one has already paid for the pleasure of watching football on a private television station, views are then subjected to a barrage of advertisements before and during the games from the same betting companies suggesting that you should be betting on everything and anything to do with the game "live".

And what is the result?

A game-fixing scandal has burst onto the scene reaching up to just below the Premier League and England has the highest incidence of (unwanted) teenage pregnancies in Europe and in the developed world are second only to the USA.

Funny that.

I think the saying goes along the lines of  "your reap what you sow....."

Grassroots Democracy-Pro and Con

After the German elections there was no majority winner despite the fact that the CDU/CSU (Christian Democratic Union and Christian Social Union (centre-right parties) garnered approximately 42% of the vote.  Their more normal coalition partner, the FDP (Free Democratic Party-also centre-right) failed to make it past the 5% hurdle which is there to ensure that there are not a myriad of splinter parties that allow the tail to wag the proverbial dog.

Instead, the CDU/CSU was faced with either joining up with the Left-highly unlikely- who had 8.6% or with the Greens-my choice-who had 8.4%.  In the event they decided to create what is called a Grand Coalition consisting of the two main blocs- the CDU/CSU and the SPD (Social Democrats- centre-left) who won 26%.

They grappled with one another for weeks to hammer out an agreement on what basis the government would go forward given that the campaign platforms of the two groups had a bit of blue water between them.

Last weekend they managed to come to agreement including contentious issues like the introduction of a national minimum wage and no new taxes.

So far so good.

With a voter turnout of over 70% one could call the election a successful grassroots affair.

In most instances where a coalition government has to be formed the leadership of the two parties sit down together and work out an agreement..Then, as part of executing their electoral mandate they go  tell their constituents what they have agreed.

Not this time.

The SPD, after negotiating with the CDU/CSU is now going to put the agreement to a vote of the party membership.  Over 44 million Germans voted, some 11 million of whom voted for the SPD.  Now, the 475,000 party members will vote on the coalition agreement. 

So the fate of the coalition is in the hands of 1% of the population.

Seems like a good example of shirking responsibility on the part of the SPD leadership and potentially allowing a splinter group within the party to block a national agreement.

The result will be revealed December 14th so stay tuned.