1. 2008 All Over Again
2. Here’s What We Want
3. Brexit: The Crisis Begins
This is a Nederlog of Saturday, June 25, 2016.
is a crisis log. I had a choice
today, namely between writing a more or less ordinary crisis log and
finishing my essay on fascism, and chose for the former, since Brexit
seems pretty momentous in terms of consequences.
Then again, there are thousands (tenthousands, hundreds of thousands?)
of journalists who now write on Brexit, but since (i) most of them
don't know much about economics or politics (in my opinion, for
I know a fair amount, after some 50 years of reading) and (ii)
anyway tend to be liars and frauds these days, much rather than
honest investigative journalists (that also still are there, but rarely
in the main media) I have chosen to have comments on Brexit from two
persons I trust (without agreeing with them) namely Chris Hedges and
Yves Smith. There also is a third item, not on Brexit, but on the plans
of Bernie Sanders. In brief:
There are 3 items with 3 dotted links: Item 1 is by
Chris Hedges on Brexit; item 2 is by Bernie Sanders
on what he wants; and item 3 is by Yves Smith, and
again on Brexit.
All Over Again
first item today is by Chris Hedges on Truthdig:
This starts as follows:
As to the first paragraph: I don't know
this (as yet), but it seems a likely scenario. We will soon see
(although much of the news will probably be manipulated).
Great Britain’s decision to leave the
European Union has wiped out many bankers and global speculators. They
will turn, as they did in 2008, to governments to rescue them from
default. Most governments, including ours, will probably comply.
Will the American public passively
permit another massive bailout of the banks? Will it accept more
punishing programs of austerity to pay for this bailout? Will a viable
socialism rise out of the economic chaos to halt further looting of the
U.S. Treasury and the continued reconfiguration of the economy into
neofeudalism? Or will a right-wing populism, with heavy undertones of
fascism, ascend to power because of a failure on the part of the left
to defend a population once again betrayed?
As to the second paragraph: This consists of four questions. Here are my
answers (I am sorry to be so negative, and you find the questions
(1) It is not so much about what the American public will "permit",
for what the ordinary public wants generally does not
get a hearing (unless it agrees with the makers of opinions, who are
all pro rich). So my expectation is that banks which need bailouts
probably will get them, regardless of the public.
(2) The same answer as to (1): If there are bailouts, the public
will have to finance them, from their taxes, regardless of what
it thinks or feels.
(3) No. Even the word "socialism" is still feared by most 40+
year olds, while the younger generation in the USA doesn't have many properly
socialist ideas anyway, while there also are great
differences among "the left".
(4) There is hardly a real left in the USA. My own expectation
is that the rightists will win, because they are organized (on the
level of the main media,
at least) and have a lot of money, whereas "the left" is not organized
and lacks money. 
Next, there is this on the present financial situation:
Whatever happens next will be
chaotic. Global financial markets, which lost heavily on derivatives,
are already in free fall. The value of the British pound has dropped by
over 9 percent and British bank stock prices by over 25 percent. This
decline has wiped out the net worth of many Wall Street brokerage
houses and banks, leaving them with negative equity. The Brexit vote severely cripples and perhaps
kills the eurozone and, happily, stymies trade agreements such as the
Note Chris Hedges' text was posted yesterday,
so this is very early. My guess is that he is correct that this
will have major
economic consequences, and indeed not only in Great Britain, but also
in Europe and the USA. But again we will have to wait and see, though I
am quite happy if indeed the TTIP gets blasted away.
Then there is this on Obama (mostly by Michael Hudson, who is an
“I expect Obama to do whatever he
is told to do by Wall Street,” Hudson said. “He has turned over
management of the economy to his campaign contributors from Goldman
Sachs and Chase Manhattan. He does not have views of his own, other
than self-promotion. He wants his presidential library. He wants to
have a big foundation like the Clintons. Most of the population will
oppose a bailout, of course, and he will cry all the way to the bank.”
This seems mostly correct, simply because,
while it is true that "[m]ost of the population
will oppose a bailout", it is also true
that "most of the population"'s opinions simply are irrelevant
to nearly all political choices policy makers do decide.
The last quote I have is this:
There are now calls from the
Netherlands, France and Austria for a similar referendum.”
I live in the Netherlands, and speak only
about that: Geert Wilders is against the EU since a long time
and will almost certainly call for a referendum like the British had.
But he seems not able to put together a functional
political party , and until he gets over 50% of
the vote, the Dutch politicians will probably succeed in isolating him
and his party.
“The debt imposed on countries like
Greece can never be paid off,” Hudson went on. “And the intention is
that it can never be paid off. The banks use this inability to pay to
insist that governments sell off more and more of the public domain and
privatize. Debt is the lever used to force privatization. It takes away
the power to carry out public investment and build a public
“Some financial firms, banks and perhaps
even governments will now default,” Hudson predicted.
And Hudson is right about major debts and its real use: to force
General summary: While I do not know whether Brexit will lead
a crisis like 2008 (which still continues for everyone who is not rich,
i.e. is part of the 90%), it is a major economic
And this is a recommended article.
Here’s What We Want
The second item is by Bernie Sanders on Common Dreams:
This starts as follows:
No, I am sorry to disagree, but it really is
much more important to know what Bernie wants than it is "to
know" what the 12 millon who voted for him want, firstly because leaders and their
opinions are important; secondly because nobody will ever
know "what the 12 million Americans" want (too many persons, with too
many varying interests, desires and values); and thirdly because nearly
everyone who voted for Sanders voted for him and his
As we head toward the Democratic
National Convention, I often hear the question, “What does Bernie
want?” Wrong question. The right question is what the 12
million Americans who voted for a political revolution want.
And the answer is: They want real change
in this country, they want it now and they are prepared to take on the
political cowardice and powerful special interests which have prevented
that change from happening.
Also, while I agree with the second paragraph that the people
who voted for Bernie Sanders "want real change
in this country", I must point out that 12
million persons among over 300 million people who are Americans, is less
than 5% of all.
Next, here is Bernie Sanders' list of the things (he thinks
that) those 12 million who supported him (and quite probably a
considerable number more, though how many is difficult to
We want an economic and political
system that works for all of us, not one in which almost all new wealth
and power rests with a handful of billionaire families.
These are five paragraphs (from different
places in the article). I will comment on them as I did in item 1, by enumerating them from (1) to (5):
We want to overturn the
disastrous Citizens United Supreme Court decision
and move toward public funding of elections.
We want a criminal justice system
that addresses the causes of incarceration, not one that simply
imprisons more people. We want to demilitarize local police departments
We want the United States to lead
the world in pushing our energy system away from fossil fuel and toward
energy efficiency and sustainable energy. We want a tax on carbon, the
end of fracking and massive investment in wind, solar, geothermal and
other sustainable technologies.
We want to end the rapid movement
that we are currently experiencing toward oligarchic control of our
economic and political life. As Lincoln put it at Gettysburg,
we want a government of the people, by the people and for the people.
(1) I agree in principle - but the "handful
of billionaire families" want a system
that works for them, and the present system, which mostly does
work for them, has been built quite consciously and quite successfully since
(2) I agree in principle - but the Citizens
United decision was long in preparing, and was a major
success for the few rich, while it really needs another Supreme
Court to undo it, and that may take ten or more years.
(3) I agree in principle - but the
criminal justice system has been reformed,
and while I agree it is corrupt and horrible, it also is profitable (in
case of private prisons) and is a strong sanctioning system for any
(4) I agree in principle - but the
whole GOP "doesn't believe" in climate change.
(5) I agree in principle - but
(it seems to me) the rightists have had over 35 years
(including Clinton and Obama: both were very strongly for
the neofascistic NAFTA, TPP, TTIP and TISA) to get their "oligarchic control of our economic and political life" in place, and
now that it functions will not give it up until "oligarchic control" is forced
General summary: I mostly agree with Bernie Sanders on what he wants,
but I see very little reason to expect any of this soon,
nor do I expect most points will be realized without (i) a
major economic collapse, and without
(ii) considerable fighting in the streets (and the second will probably
not happen without the first - i.e. a major economic collapse).
And I am sorry I am pessimistic, but we really have lived through 35
years of deregulations, welfare
crises, banks' bailouts, and a general shift of power from the
democratical representations of the many, to the oligarchic
representations by the few, and the few mostly succeeded
in the last 35 years.
This is a recommended article.
The Crisis Begins
The third item is by Yves Smith on Naked
This starts as follows:
British voters delivered a
stunning repudiation to their political and economic elites by voting
to leave the European Union by a margin of 52 to 48. The fallout has
already started. The pound is down by over 11%, and
some experts anticipate that it could ultimately fall to as low as 1.05
to the dollar, its low in the early 1980s sterling crisis. British bank
stock prices have fallen by roughly 25%. Safe haven investments have
spiked: gold is up 6% and the yen has traded through 100 to the dollar.
The Nikkei fell by 8% and US stock futures suggest that the Dow could
open down by 600 points.
I say - and this is a sum-up of some
economical factors by an economist.
Here is part of the background of Brexit:
Brexit is a crippling blow to the
neoliberal order of unfettered trade and capital flows, and citizens
being reduced to being consumers who have to fend for themselves in
markets, and worse, increasingly isolated worker who are at the mercy
of capitalists who are ever more determined to reduce labor costs and
hoard the benefits of productivity gains for themselves.
Yes, indeed - but I also think that it is quite
unlikely that the many poor who voted for Brexit will get any
easier life. (On the contrary, is my guess.)
Then there is this:
A major complicating factor is
that while unwinding the EU arrangements is comparatively easy (and
that still means the process would take roughly two years), negotiating
new trade relations is a far more time consuming process, and experts
estimate it would take a minimum of five years and still could fail.
Yes - although I wouldn't call a legal
process that takes two years "comparatively easy". Compared to what,
for example? (I have no idea).
Here is one Good Thing that seems to emerge from Brexit:
In the meantime, there are
immediate consequences and risks. The Transatlantic Trade and
Investment Partnership is probably dead.
For me, that is a major advantage, if
indeed it does happen. Then there is this:
The British government is likely
to lose its AAA rating, which also means higher funding costs for its
banks, since their borrowing rates are at a premium to the local
currency risk-free rate. A recession is almost certain (..)
Yes, indeed. The article ends as follows:
No matter how this plays out, the
UK and EU will have to blaze a difficult path. And this rupture is
taking place when advanced economies almost without exception have
singularly weak leaders. We are in for a rough ride, and the portents
suggest it will be much rougher than it needs to be.
I agree, also on the "singularly
General summary: I am not optimistic, indeed mostly because the
right has had 35 years to enormously
strengthen its position, though I see two glimmers of hope in Brexit: it
considerably increases the chances of another crisis, that also
will hit the rich, and it considerably increases the chances that the
TTIP will fail.
I think both are desirable, the first because I see little hope of
unsettling the powerful right without a crisis that also hits
the rich, and the second because the TTIP is horrible.
 I am saying
what I think, and that is that most of the real
left had been killed by the collapse of the Soviet Union, by Bill
Clinton's, Tony Blair's, Wim Kok's and other "leftist" "social
democratic" leaders, who followed the thoroughly fraudulent "Third
Way", and by the enormous rise to power of the right
since Thatcher and Reagan and took power in 1979 and 1980, since when
the right got stronger and stronger, and the real left mostly
died (and got replaced by a "left" that specialized in political
and identity politics, none of which are - real -
 He has been trying to do this
for around 10 years
now, and it still doesn't work, probably in part because of Wilders'
character. Also, he has been manipulated to stand mostly outside much
of the ongoing Dutch politics by agreements between other political
parties not to consult him or his party.