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Nederlog


  April
26, 2014
Crisis: Recovery?, Amazon, Wall Street, Inequality, Oligarchy* 2, Pelicans
   "They who can give up essential 
   liberty to obtain a little temporary
   safety, deserve neither liberty
   nor safety."
   -- Benjamin Franklin [1]
   "All governments lie and nothing
   they say should be believed.
"
   -- I.F. Stone.
   "Power tends to corrupt, and   
   absolute power corrupts
   absolutely. Great men are        
   almost always bad men."
   -- Lord Acton
















Prev- crisis -Next
Sections
Introduction

1. Dead roots lurk beneath the green shoots of Britain's
     economic recovery

2. Amazon UK boss: How can following the law be unfair?
3. Wall Street’s Secret Swindle
4. Now We Know: Economic Inequality Is a Malady—and Not
     a Cure

5. The Iron Law of Oligarchy Returns
6. America’s Surge Toward Oligarchy
7. Pelican books take flight again

About ME/CFS


Introduction:

This is the Nederlog of April 26. It is a crisis issue.

It also got started later than most other days, and the main reasons are that I slept a lot, and that today it is, for the first time since 1891, a mere 123 years ago, "King's Day". For the last 123 years it was "Queen's Day".

I don't hate the day - I had friends who for many years completely disappeared on the day, to escape seeing thousands upon thousands of Dutch who pretended to party - and went out to see a little of it, and got what I expected:

Sight of many thousands or many tenthousands of My Fellow Dutchmen, many dressed in the brightest orange money can buy, or else in grey, blueish grey, or purplish grey sacklike clothes, for grey seems the fashionable color, and clothes don't need to fit anymore, while none, except for a few very small children, is looking happy or enjoyed or even amused in any way, and all are amidst many policemen dressed in green fluorescent plastic, who deny entrance here, and there, and most other places, while all are constantly drenched in the very loud tunes of the least talented bands, playing songs with texts like "Oooo, aaaa, tralala,
Oooo, aaaa, tralala, Tralalalala", and such, which also may have even as many as three chords. It was all Dutch public enjoyment at its finest.

In brief, I felt very proud of belonging to this nation of pure geniuses. (<- This is a link to a file - called Laudatio Neerlandica, since this is the country where "
Everybody knows truth does not exist" and "Everybody knows everybody is equivalent", both taught for something like twenty years in the University of Amsterdam - of four years ago. And no, none of it is satire.)

Anyway.... here are today's crisis items. There are six of them,
which I will not summarize because it is rather a lot of text.

Also, this ended later than it usually does.

1. Dead roots lurk beneath the green shoots of Britain's economic recovery

The first article today is by Tom Clark on The Guardian
This starts as follows, quite unrealistically, for my money:
How big a deal is it when a rich society gets a bit poorer? It is a question that holds few terrors, especially not amid a recovery, where the dole queues are shrinking so fast that the Conservative chancellor has taken to talking about full employment. We may just have lived through the biggest slump since the Great Depression, but already there are "a record number of people in jobs", and this summer George Osborne will be able to announce that the British economy is bigger than ever before. After a confident budget, there is a new spring in the step of the Tory party, as it starts to imagine an election pitch that echoes that old interwar anthem – "Happy Days Are Here Again".
Really now? I mean, I don't put the making of any lies beyond the power of any prominent English politician, of whatever political color, but this is a bit strong, nevertheless.

But there is more, and that seems more sensible:

In all but the most affluent high streets, there is a sense of trouble below the surface. A gleaming new shopfront might catch your eye before closer inspection reveals that it hawks loans to the desperate, at annual interest charges of 4,000%. Market towns that have always thought of themselves as prosperous are waking up to discover that they are playing host to a food bank. And as anyone who had the misfortune to glance at Twitter during Channel 4's Benefits Street will know, there is an unmistakable heightening of resentment against the "undeserving poor".
Yes - and I have to grant I find especially that resentment of the lowest-but-one undereducated chanceless assholes, taking it out on the even poorer ill and colored ... well: pretty sickening, even though I know they have been propagandized into it, and all feel themselves to be 'independent customers' who wear their trade marked clothes with great pride - for in fact they have nothing else that they did themselves to be proud of.

Indeed, at present the situation in Great Britain is as follows:

Whereas the Labour government of 1931 fell because it refused to accept a 10% cash cut in unemployment benefits to reflect a cost of living that was actually falling, the coalition is imposing cumulative cuts of 10%-plus in real terms on many vulnerable families. Taking into account the way things are going in the jobs market, the most recent projection from the Institute for Fiscal Studies is for 3.7 million children and working-age adults to sink into absolute poverty over the rest of this decade, as the brief reduction in inequality seen at the start of the slump unwinds in the recovery.
Anyway... I find it sickening to speak of "a recovery" where most of the poor are getting poorer all the time, and only the fairly to very well off have decent to extremely decent incomes.

2. Amazon UK boss: How can following the law be unfair? 

The next item is an article by Simon Bowers on The Guardian:

This is about one of the top men in Amazon, who thinks that stealing from the taxes - namely: by using all the loopholes that have been left in it, for just this purpose - is noble, and good, and decent.

It starts as follows:

Christopher North is one of the most powerful figures in British retail, but for a period he was better known as a brand of shower gel marketed under the tagline of "rich, thick and full of it".

When the brand was trademarked by the angry cosmetics firm Lush, North, the UK boss of Amazon, was said to be "hopping mad". On Friday, however, the New Yorker who has run Amazon's British operations since 2011, laughed off the stunt: "My wife said to me, if they're planning to sell beauty products, they probably shouldn't put your picture on the package," he said.

In February Lush had cheekily trademarked the name "Christopher North" in a spat over Amazon's use of the word "lush" to sell its own lookalike toiletries. Now he finds himself back on more familiar territory for any Amazon executive: defending the company's controversial tax arrangements.

North, who oversaw £4.3bn of sales to UK shoppers in 2013 but whose unit paid only £3.15m in UK tax the year before, says it would be impossible to dismantle the online retailer's tax arrangements without withdrawing millions of products from its British website. The arrangements have been criticised by publishers, high street retailers, and politicians of all colours, as well as tax justice campaigners, because they allow Amazon to channel almost all of its European sales, and resulting profits, through Luxembourg.

Incidentally: Mr North indeed is far from pretty (but owes a whole lot of money), and  £3.15m : £4.3bn < 1 : 1000: You can see why he owes a whole lot of money if for every 1000 pounds he sells to British customers he pays less than 1 pound in taxes.

Mr North also has a strange relation with the truth:

"We pay all of the taxes we're required to pay in every jurisdiction around the world, including the UK … I don't think following the law gives the company an unfair advantage." For tax purposes, North and his 7,000 Amazon colleagues in the UK – in warehouses, software design, procurement, accounting, human resources, and other functions – do not work for the same company that transacts with UK customers. Instead they just provide "services" to the Luxembourg company. In doing so, latest accounts show they generated sales of just £320m, paying only £3.15m in tax.

He "pays all of the taxes", because his international corporation took care that he, although a Brit who sells to British, in fact provides "services" to the Luxembourg company. It's true this time £3.15m : £320m < 1 : 100, but I still can see how the very honest Mr North can grow very rich, very fast also, by using the loopholes his cronies in the government have created for this purpose.

3. Wall Street’s Secret Swindle

The next item is an article by David Sirota on Truth Dig:

This starts as follows, with one of the contributions of the Obama government (that insists One-Should-Trust-The-Noble-ObamaTM, if only because he makes everything he does a secret):

In the national debate over what to do about public pension shortfalls, here’s something you may not know: The texts of the agreements signed between those pension funds and financial firms are almost always secret. Yes, that’s right. Although they are public pensions that taxpayers contribute to and that public officials oversee, the exact terms of the financial deals being engineered in the public’s name and with public money are typically not available to you, the taxpayer.

And therefore, if you are going to be fucked over painfully by these deals, you will not be able to prove it: the deals are secret. Even so, something is known:

So what is happening to retirees’ money? As Siedle documents, more and more of it is going to pay the exorbitant fees charged by the Wall Street firms managing the pension money.

“Fees have skyrocketed over 1,000 percent since 2000 and have almost doubled since (2008) from $217 million to $416 million,” he writes, adding that “annual fees and expenses will amount to approximately $1 billion in the near future.”

The details get worse from there, which makes Siedle’s report a genuine must-read for anyone who wants to understand the larger story of public pensions. After all, North Carolina is not an isolated incident. In state after state, the financial industry is citing modest public pension shortfalls to justify pushing those pensions to invest more money in riskier and riskier high-fee investments—and to do so in secret.

It is a story that isn’t some minor issue. On the contrary, the fight over that $3 trillion is fast becoming one of the most important economic, business and political stories of modern times. The only question is whether the story can even be told—or whether those profiting off secrecy can continue hiding their schemes from the public.

My guess is that most of the pension funds will be used to gamble on the stock market, and may well be totally lost in the next crash, but it is true this is a guess only: Obama prevented anyone from knowing this.

4. Now We Know: Economic Inequality Is a Malady—and Not a Cure

The next item is an article by Joe Conason on Truth Dig:

This starts as follows:

It has been a long, long time since Americans accepted the advice of a French intellectual about anything important, let alone the future of democracy and the economy. But the furor over Thomas Piketty’s stunning best-seller, “Capital in the 21st Century”—and especially the outraged reaction from the Republican right—suggests that this fresh import from la belle France has struck an exposed nerve.

What Piketty proves, with his massive data set and complex analytical tools, is something that many of us—including Pope Francis—have understood both intuitively and intellectually: namely, that human society, both here and globally, has long been grossly inequitable and is steadily becoming more so, to our moral detriment.

What Piketty strongly suggests is that the structures of capitalism not only regenerate worsening inequality, but now drive us toward a system of economic peonage and political autocracy.

Well...yes and no.

First, Americans have accepted "
the advice of French intellectuals" rather a lot in the 1980ies and 1990ies, when much of linguistics, literary criticism, sociology, and philosophy went postmodern. But they were not the only ones, is also true.

Second, while I have so far not read Piketty, there is nothing about "
the structures of capitalism" that makes it necessary that it is a system of "economic peonage and political autocracy": In fact, that is about laws, carefully designed loopholes, and giving up laws that were designed to stop the rich taking over the government.

It has very little to do with the economy, but everything with politics and propaganda and power, and the laws these enact or retract. (But it is true that politics and propaganda again are being paid by the rich, in good part.)

Next, there is this:

If you read Piketty—whose translation into English by Arthur Goldhammer makes macroeconomics a literary pleasure—you will quickly realize that we’ve been told a big lie about this most basic social bargain. The stratospheric accumulation of rewards accruing to the top 0.01 percent of owners, at the expense of society and everyone else, is not only unnecessary to promote growth; in fact, that unfair dispensation retards growth.

Rather than argue honestly with Piketty’s findings, right-wing responses have varied from old-fashioned redbaiting, although he is plainly no communist, to juvenile misrepresentation of a book that at least one critic admits she didn’t bother to read! The boneheaded tea party reaction is to accuse him of demanding that sanitation workers earn the same salary as surgeons—although he explicitly agrees that a degree of inequality is important to encourage innovation, enterprise and industry. But then the wing nuts and trolls attacking him have no interest in debate, let alone knowledge. They hate social science just as much as they hate plain old science.

OK, and as I've said: I have not read Piketty, and may never do so because 700 pages is a lot of economy. Besides, I guess I mostly agree, but then I also did have a communist education (which is not to blame Piketty, but which is to explain that I have no problem with thinking the rich are nearly always undeservingly rich).

Finally, I disagree with the title: I disagree with "We" and with "Now" and I have never believed economic inequalities are fair or moral, though I also do not object to them - provided they are regulated and kept within bounds, and everyone, whatever his education or qualifications, has a decent income, which is quite possible in the West, except that the few rich are against it.

5. The Iron Law of Oligarchy Returns

The next item is an article by Danny Schechter, who explains Piketty again:

This starts as follows:

The word “Oligarchyhas finally come home. For years, it was a term only used in connection with those big bad and sleazy Mafioso-type businessmen in Russia. Russia had Oligarchs; we didn’t. That became a big difference between the official narrative of what separated our “land of the free and the home of the brave” from “them” in the post-Soviet period.

Actually, I first heard the term “oligarchy” when I was studying labor history at Cornell half a lifetime ago. We were taught about something called the “Iron Law of Oligarchy.” It was a concept coined by Robert Michels, a friend of sociology guru, Max Weber, way back in 1911. Here’s how it was defined in that relic of another age: The Encyclopedia Brittannica:

“Michels came to the conclusion that the formal organization of bureaucracies inevitably leads to oligarchy, under which organizations originally idealistic and democratic eventually come to be dominated by a small, self-serving group of people who achieved positions of power and responsibility. This can occur in large organizations because it becomes physically impossible for everyone to get together every time a decision has to be made.”.
In fact "oligarchy" is a concept of Aristotle, but it is true Michels took it up again, and also true I learned about both Aristotle and Michels in the 1960ies. Again, "oligarchy" means "rule (or: power) by the few", and a very good case can be made that all rules are oligarchic, since in any system those who rule are few.

So in fact - for this was also clear to Aristotle - the real difference between an oligarchy and a democracy is not that very few effectively rule - for that is nearly always the case - but who support these rules: the many, who rarely are rich or powerful, but who also are with many, or the few, who often are rich and powerful, but with few.

Again, that difference must have a legal basis: in a fully functional oligarchy, the powerful need have no elections. In this sense, the present US is not (yet) a fully functional oligarchy, though president Obama does keep many of his treaties and indeed quite a few of his laws, secret.

Next, there is this:

“Inequality is what has turned Washington into a protection racket for the one percent. It buys all those goodies from government: Tax breaks. Tax havens (which allow corporations and the rich to park their money in a no-tax zone). Loopholes. Favors like carried interest. And so on. As Paul Krugman writes in his New York Review of Books essay on Thomas Piketty’s Capital in the Twenty-First Century, ‘We now know both that the United States has a much more unequal distribution of income than other advanced countries and that much of this difference in outcomes can be attributed directly to government action.’”

I agree with most of this, though I probably do not belong to Krugman's "We": I have always known that "the United States has a much more unequal distribution of income than other advanced countries" - but it is true my parents were communists.

Then again, it were not only communists who said so: there were quite a few leftists who said so as well, also back in the 1950ies and 1940ies (and indeed Schechter names one of these, C. Wright Mills).

My final quotation is this:

Even the barons of business news admit that wealth is concentrated as almost never before, Here’s Bloomberg News: “Just today, the world’s 200 richest people made $13.9 billion.” In one single day, according to Bloomberg’s Billionaires Index.

This is the Fed’s “wealth effect.” It’s a construct that Alan Greenspan’s Federal Reserve conjured up out of thin air and presented to the incredulous American people as a valid economic theory. Greenspan’s successor, Ben Bernanke, then promoted it to the Fed’s stated raison d’Ítre. His theory: if we immensely enrich the richest few thousand people in the world during years of bailouts, money-printing and interest-rate repression, everyone would be happy somehow.

I doubt this is quite fair, but then again I do not doubt both Alan Greenspan and Ben Bernanke never should have had the positions of power they were given.

6.  America’s Surge Toward Oligarchy

The next item is an article by J.P. Sotille on Common Dreams, who again considers in what sense the United States is or is becoming an oligarchy:
This starts as follows - and this is probably the best informed of the articles of today:
Is America an oligarchy? Thanks to a new study from Martin Gilens of Princeton University and Benjamin I. Page of Northwestern University, social media, Op-Ed pages and the blatheri are all atwitter at the implication that American democracy is a sham.

In Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens, Gilens and Page used a data-set of 1,779 policy issues from 1981 to 2002 to compare actual policy outcomes with the prevailing policy preferences of three income groups: “10Th income percentile (quite poor), the 50thpercentile (median), and the 90th percentile (fairly affluent).”

Not surprisingly, the policy desires of the 90 Percenters (earning at least $146,000 per year) are the most likely to become policy outcomes. If they support a policy, it has a 45% chance of being enacted. But if they oppose a policy, there is an 82% chance it will be defeated, derailed on the way to becoming a law, even if a majority of Americans support it.

Which makes it quite clear, I would say, that the present United States is not a democracy anymore, even though it still has regular elections in which all adults (minus a few) can partake: the simple fact that 10% of the people are able to block over 80% of the policies is reason enough.

Then again, Sotille is not quite happy with the term "oligarchy":

But one word the authors did not use to describe the ruling class was “oligarchy.”

Although it’s being peddled in the news cycle, this somewhat imprecise term ignores the authors’ own characterization of the ruling class as “economic elites.” If editors and SEO (search engine optimization) advocates are looking for a snazzy word to spice up their traffic, they should use the more precise, but just as ominous-sounding term “plutocracy.”

Simply put, a plutocracy is defined by Merriam-Webster as “government by the richest people; a country that is ruled by the richest people; a group of very rich people who have a lot of power.”

I am quite willing to agree that "plutocracy" is better than "oligarchy" - though  I do not think Greek terminology is essential for understanding the state of affairs.

And there is this:

While the elite of the elites get richer and richer and, therefore, can afford to exercise more and more influence over elections, another new study shows that nearly “one-third of American households — 38 million of them — are living a paycheck-to-paycheck existence.” And a new Gallup poll shows an increasing number of households teetering on the brink of “hardship” due to a lack of savings.

Which is to say - and this is probably why Piketty made a considerable furore - 1 in 3 households is poor in order that 1 in 100 or less Americans are rich.

And this is indeed "in order": there is no economic or legal necessity for it, not at all. It is mere greed of the rich who use their money to get even more money, and don't care for the many millions whose lives and possibilities they destroy.

And that seems quite true to me.

7.  Pelican books take flight again

Finally, a non-crisis item, by Paul Lalty on The Guardian:
This starts as follows - and yes, I bought a whole lot of Pelicans and Penguins in my life, starting in the 1960ies:
"The really amazing thing, the extraordinary eye-opener that surprised the most optimistic of us, was the immediate and overwhelming success of the Pelicans." So wrote Allen Lane, founder of Penguin and architect of the paperback revolution, who had transformed the publishing world by selling quality books for the price of a packet of cigarettes. Millions of orange Penguins had already been bought when they were joined in 1937 by the pale blue non-fiction Pelicans. "Who would have imagined," he continued, "that, even at 6d, there was a thirsty public anxious to buy thousands of copies of books on science, sociology, economics, archaeology, astronomy and other equally serious subjects?"

His instinct was not only commercially astute but democratic. The launching of the Penguins and Pelicans ("Good books cheap") caused a huge fuss, and not simply among staid publishers: the masses were now able to buy not just pulp, but "improving", high-calibre books – whatever next! Lane and his defenders argued that owning such books should not be the preserve of the privileged class. He had no truck with those people "who despair at what they regard as the low level of people's intelligence".
Well... I agree with most, but I also believe in "the low level of people's intelligence", on average. (In fact, that is the main underlying problem of most human problems.) Then again, that is no reason not to design "good books cheap", and I am quite glad there was Pelican, and learned a lot from these.

There is also this (and this is a fairly long article):

The leftish association with improvement – self and social – had always been part of the Pelicans. The wartime years were good ones for autodidacts. Orwell wrote that a "phenomenon of the war has been the enormous sale of Penguin Books, Pelican Books and other cheap editions, most of which would have been regarded by the general public as impossibly highbrow a few years back."
I like Orwell a lot, but here he speaks more about the British class-structures and the opinions that belong to it, than about "the general public" outside Britain - and in fact, I found in Hazlitt, from the 1820ies, an excellent defense of the widespread habit of reading first class literature all through society. (But I do not know whether that persisted.)

As to the decline of Pelicans:
But then decline. The Pelican identity seems to have become diluted in the late 70s and 80s, and 25 years ago the last book appeared (The Nazi Seizure of Power by William Sheridan Allen, 1989, No 2,878). As an imprint it was officially discontinued in 1990. The reasons are murky. The Sunday Times suggested it was "for the most pedestrian of reasons: the name was already copyright in America and was not so well known in foreign markets". A Penguin spokesman also mentioned at the time that the Pelican logo gave the message: "this book is a bit worthy".
That indeed is murky. But now they are back, which is excellent news:
And now they are back, in a new series of originally commissioned books.

According to Penguin the hope is that readers will once again "turn to Pelicans for whatever subjects they are interested in, yet feel ignorant about – Pelicans can be their guides". It's the latest incarnation of the unofficial university, and of the optimistic belief in the appeal and influence – and profitability – of "Good books cheap".
The reason this is excellent news is that I did learn a lot from them, and indeed they were cheap, and quite often quite good.

P.S. Apr 27, 2014: Corrected two small typos.
---------------------------------
Note
[1] Here it is necessary to insist, with Aristotle, that the governors do not rule, or at least, should not rule: The laws rule, and the government, if good, is part of its executive power. Here I quote Aristotle from my More on stupidity, the rule of law, and Glenn Greenwald:
It is more proper that law should govern than any one of the citizens: upon the same principle, if it is advantageous to place the supreme power in some particular persons, they should be appointed to be only guardians, and the servants of the laws.
(And I note the whole file I quote from is quite pertinent.)

About ME/CFS (that I prefer to call M.E.: The "/CFS" is added to facilitate search machines) which is a disease I have since 1.1.1979:
1. Anthony Komaroff

Ten discoveries about the biology of CFS(pdf)

2. Malcolm Hooper THE MENTAL HEALTH MOVEMENT:  
PERSECUTION OF PATIENTS?
3. Hillary Johnson

The Why  (currently not available)

4. Consensus (many M.D.s) Canadian Consensus Government Report on ME (pdf - version 2003)
5. Consensus (many M.D.s) Canadian Consensus Government Report on ME (pdf - version 2011)
6. Eleanor Stein

Clinical Guidelines for Psychiatrists (pdf)

7. William Clifford The Ethics of Belief
8. Malcolm Hooper Magical Medicine (pdf)
9.
Maarten Maartensz
Resources about ME/CFS
(more resources, by many)



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