The Vanishing Middle Class

October 5, 2012 at 3:46 pm | Posted in Uncategorized | Leave a comment
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News today that the US unemployment rate dropped in September 2012 to 7.8 percent from 8.1 percent in August and is now at the lowest level since President Barack Obama took office will undoubtedly boost his campaign for re-election, two days after his dismal performance in the first debate with his Republican opponent, Mitt Romney. If this is good news for the president, the situation is less rosy than it appears. According to the Bureau of Labor Statistics, the number of workers stuck in part-time jobs in September stood at 8.5 million, an increase of 581 million from the previous month and double the level it was in September 2007. Even worse, the number of full-time workers in the US  has declined by 5.9 million since September 2007 while the number of part-time workers has increased by 2.6 million.

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In fact, if the number of part-timers looking for full-time work, the U6 unemployment rate, is considered, it is unchanged

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And as Moira Herbst writes in the Guardian,

 It’s distressing to think that after 20th-century labor struggles won the battle for the 40-hour work week, the 21st-century struggle is a fight for enough working hours to make a living wage.

In another report in today’s New York Times, the average number of employees per new firm declined from 7.7 persons in 1999 to 4.7 in 2011. For almost the last half-century, new companies have accounted for the bulk of jobs created in the United States, In fact, without new start up companies, the United States would have seen a growth in jobs for only 7 years since 1977! The numbers of new jobs created by new companies was the greatest in 1999 as a result of the dot com boom and by 2011, it had declined by some 46 percent.

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One major result of the decline of full-time employment and the rise of part-time employment is that part-timers are denied virtually all benefits. Without healthcare and other benefits, workers are increasingly compelled to rely on Medicaid and emergency room visits for illnesses and as Herbst noted, this leads to a shift in costs from employers to tax payers. This is of course covered up by both political parties in the United States: the Democrats tout the new decline in unemployment figures but never mention that 6.9 million people were working multiple jobs in the US in September. The Republicans stress cutting taxes–making health care even less accessible to the poor.

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Both focus on a middle-class that is rapidly shrinking and not on the increasing numbers of people below the middle class. For them, neither candidate has anything to offer–and therein lies the shame! In today’s politics, the concerns of the masses are silent–the decline of manufacturing not only hollowed out industries but by also kneecapping labor, it has made both major political parties alike–both shifting further and further to the right, and both having nothing to offer to the vast majority of the population.

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Reversing the Tide? Southern European People’s Challenge to Neo-Liberalism

September 28, 2012 at 4:16 pm | Posted in Uncategorized | Leave a comment
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Earlier this week, confronted by massive street protests and criticism from his coalition’s junior partner, the center-right Portuguese Prime Minister, Pedro Passos Coelho, reversed his controversial plan for “financial devaluation.” When tax revenues fell by 3.5 percent in the first seven months of this year–due to unemployment rates spiking to above 15 percent–against a projected increase of 2.6 percent for the year, it became apparent that Lisbon would not be able to meet the budget deficit target of 4.5 percent of GDP imposed by the troika of the European Union, the European Central Bank and the Interantional Monetary Fund as a condition for disbursing the next tranche of the €78 billion bailout they promised.

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 Passos Coelho’s solution to this dilemma was to cut employer’s social security contribution by 5.75 percent and finance this by increasing workers’ contributions by 7 percent. This would have been tantamount to a currency devaluation by significantly reducing unit labor costs and was heralded as a “potential game changer” by the IMF’s Poul Thompsen.

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In the continued decline of the country’s GDP and high rates of unemployment, this proposal was condemned by members of the prime minister’s own party as well as by the leader of the junior partner in his coalition–the conservative People’s Party–and by many business leaders as well as of course by more than half a million people who marched in Portugal’s cities in the largest demonstrations since the end of the Salazar dictatorship in 1974.

 

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We are not the children of the revolution.” their posters said, “We are the parents of the next revolution.” Meanwhile, in Spain, the miners of Asturias have been battling the police for months with rocket launchers, and protestors jn Madrid were met with a fusillade of rubber bullets. With over half the youth unemployed, and the government of prime minister Mariano Rajoy planning to implement deeper austerity measures in order to say that these were taken by their own volition rather than imposed by the troika as a condition for a bailout, the right and the left united in opposition. In recognition of this united opposition, the riot police in Madrid hid their identity badges:

A startling example of police culture came in a tweet from José Manuel Sánchez of the Unified Police Union (SUP). “We support them not wearing badges for violent demonstrators,” he said during the demonstration. “Give it to them hard.” Television pictures of baton charges and rubber bullets suggest they did exactly that.

 And in Spain’s second city, a million and a half people led by the provincial government marched for Catalan independence–here it was not merely the demonstrators but the regional legislators who were challenging the post-Franco accord.

 

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 Athens exploded as well in a burst of flames as the unions called a general strike grounding flights, shuttering shops, museums, and monuments, and docking ships for hours as over 200,000 people demonstrated outside parliament protesting the new round of austerity measures the three-month old government of prime minister Antonis Samaras. Though details of the cuts were not made public, it was expected to slash pensions, wages and benefits even more.

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All across Europe, these riots seem a repetition of the ‘anti-IMF’ riots that raged across Latin America and Asia in the 1980s and 1990s. As Ha-Joon Chang writes 

it is ironic to see the European governments inflicting an old-IMF-style programme on their own populations. It is one thing to tell the citizens of some faraway country to go to hell but it is another to do the same to your own citizens, who are supposedly your ultimate sovereigns. Indeed, the European governments are out-IMF-ing the IMF in its austerity drive so much that now the fund itself frequently issues the warning that Europe is going too far, too fast.

Just as the IMF number crunchers did not take into account the people whose livelihoods would be crippled by the savage cuts being proposed by the troika and imposed by their puppets in Athens, Lisbon, Madrid. But as the Gurardian editorialized:

Amid all their talk of haircuts (on debt values) and tranches (of loans), European leaders have barely talked about the people who are bearing the brunt, first of the crisis and then of the throat-clearing that passes for firefighting in Brussels. This is not accidental. The euro project has relied upon draining the politics out of the inherently political: the very existence of a 17-nation economic union without a common treasury is testimony to that.

The protests are now inserting the politics back into the issue–demanding that those who had no part in the financial mess created by the collapse of housing bubbles, bad loans, and high deficits should not bear the price of these costly gambles made by bankers and politicians. it is not merely the question of bad financial regulations–it is the more the question of democracy that is at stake in Europe. The Portuguese reversal of its “financial devaluation” is the first step towards reversing the tide of neo-liberalism! A small step for Portugal, a giant leap for Europe!

Poverty of Political Imagination

August 17, 2012 at 11:48 am | Posted in Capitalism, democracy, Free Trade, International Relations, Labor, Political Economy, Production, World Politics | Leave a comment
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Though it should not have caused any surprise, the news that Eurozone economies had contracted by 0.2 percent in the second quarter of 2012 underscored the deepening economic crisis faced by the 17-state bloc. Though the German economy may have grown by 0.3 percent, France recorded a third straight quarter of no growth, and the Finnish, Italian, Portuguese, and Spanish economies all fell sharply. Greece, of course, suffered the steepest fall: 6.2 percent in the second quarter–and was 18 percent below its GDP level in the April-June quarter of 2008.

There is little doubt that the declines have been aggravated by a failure of political imagination. Confronted by budget deficits brought about by high levels of government borrowing and by the collapses of housing bubbles, the creation of a common currency has meant that indebted Eurozone economies have not been able to resort to a currency devaluation to gain a competitive edge. Consequently, the troika of the European Commission, the European Central Bank, and the International Monetary Fund sought to impose an “internal devaluation” on these economies by forcing budget cuts to lower government deficits and wage cuts.

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It follows as the night the day that if budgets and wages are cut, the economy will shrink. Lower government spending due to budget cuts means welfare and pension benefits fall, the cost of health care rises, and educational opportunities vaporize. These impact far more adversely on the elderly and the young. With wage cuts, people have less money to spend and this will depress all sectors of the economy–as sales reduce because of lower spending, companies will slash their work forces leading to greater declines in sales and to further cuts in employment. In the most severely affected of the southern European economies, unemployment rates for the youth are already at 50 percent or more. By May 2012, unemployment in the euro zone had already reached 11.1 percent or 17.5 million people and the International Labor Organization (ILO) estimates that it would rise to almost 22 million in the next four years. And if the euro zone were to break up, the ILO estimates unemployment in the 17-state bloc could reach 17 percent.

The adverse conditions created by the stringent cuts mandated by the troika are aggravated by the greater interest rates imposed on the weaker economies by international financial markets–thus for instance, while Austrian banks and other financial institutions can borrow at 2 percent, Italian banks have to pay 6 percent. As these higher interest costs are passed on by the banks to their borrowers, the cost of doing business in Italy, Spain, Portugal, or Greece increases correspondingly and could even negate the wage cuts imposed by the troika!

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The effects of economic contraction will spread to the better performing economies. After all, Germany has been able to have a strong industrial sector because cheaper credit to other eurozone members had allowed them to buy German products while the German small-scale sector–which employs 60 percent of the country’s labor force–did not have to worry about currency movements in other European countries or fear that a strong German mark will price them out of the market in other countries.

As Susan Watkins has written, German lessons on debt repayment are especially galling to the Greeks.

Under the Nazi occupation, a hefty monthly payment was extracted from the Greek central bank to cover the Wehrmacht’s expenses; in March 1942 an additional forced loan of 476 million Reichsmarks was levied by the Axis powers. Greek partisans put up some of the toughest military resistance to the Nazis in Europe; the damage wreaked by the occupiers’ revenge was commensurate. Reprisals were exacted on the civilian population at a rate of fifty Greeks for every German killed. Much of the country’s infrastructure was destroyed; forced exports and economic collapse helped bring about one of the worst famines in modern European history.

German occupation (strictly a tripartite occupation since the Italians and the Bulgarians also participated) of Greece also led to hyperinflation–Richard Clogg says it was

five thousand times more severe than the Weimar inflation of the early 1920s. Price levels in January 1946 were more than five trillion times those of May 1941. The exchange rate for the gold sovereign in the autumn of 1944, shortly after the liberation, stood at 170 trillion drachmas.

After the war, the question of German reparations were deferred till German reunification and in the so-called 2+4 (Bonn and Berlin with the US, the USSR, the UK and France) agreement of 1990, Greek claims were excluded. Though several Greek politicians including the current prime minister, Antonis Samaras when he was the foreign affairs minister in 1991, had raised the issue of 476 million marks with the Germans, their demands were summarily dismissed. If this money had, in fact, been paid as the Germans are legally obliged to do, with interest for more than half a century, Greece would no longer be a problem economy.

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It is galling too because while ancient historical myths as Greece being the ‘birthplace of democracy’ are routinely trotted out in discussions of the contemporary situation, recent history that people over 70 remember are carefully hidden from view! Be that as it may.

What is crucial is that the crisis demonstrates that capital and finance markets need to be regulated more stringently. It was irresponsible lending that led to high government deficits in Greece and to the housing bubbles in Spain and Ireland, to the subprime crisis in the US, and to the meltdown of the Icelandic economy to mention just the most obvious cases. Financial markets are continuing to demand punitive rates of interest from the weaker economies. The unchecked power of finance must be corralled–or we will enter another great depression just as the obsession with the gold standard led to the depression as Karl Polanyi showed in his Great Transformation.

What is required is a new political imagination not the shrill advocacy of measures that have already aggravated the situation!

End of the Gaddafi Regime and the New Quagmire in Libya

August 23, 2011 at 9:46 pm | Posted in Capitalism, democracy, Human Rights, International Relations, Political Economy, Uncategorized, World Politics | Leave a comment
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If the fall of Muammar Gaddafi’s 42-year regime is to be celebrated as much as the way in which it was brought about must be condemned. A bunch of regime turncoats, Western agents like the rebels’ “field commander” Khalifa Hifter, and assorted others organized protests against the regime in Benghazi some six months ago in the wake of the fall of autocrats in neighboring Tunisia and Egypt. When Gaddafi counter-attacked, under prodding from France’s Nicholas Sarkozy and Britain’s David Cameron, the United Nations sanctioned NATO to use its air power to “protect civilians” and imposed an arms embargo on Libya. As Simon Jenkins writes in the Guardian, from then mission creep set in–from establishing a ‘no-fly zone’ over Benghazi, the NATO mission turned into a bombing campaign against Tripoli. NATO leaders quickly claimed that Gaddafi had to go–from protecting civilians, regime change became the new goal and even the assassination of Colonel Gaddafi was contemplated.

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Shamefully this came about because five members of the UN Security Council–Russia, China, Germany, Brazil, and India–abstained from the resolution 1973 sanctioning intervention, there was no sustained protests across the world against the massive aerial bombardment of Libya for five months by NATO forces. Emboldened by this global quiescence, the fall of the Gaddafi regime was accomplished by NATO’s Operation Siren at the break of the Ramadhan fast last Saturday. As Pepe Escobar writes:

With “Siren”, NATO came out all guns (literally) blazing; Apache gunships firing nonstop and jets bombing everything in sight. NATO supervised the landing of hundreds of troops from Misrata on the coast east of Tripoli while a NATO warship distributed heavy weapons.

On Sunday alone there may have been 1,300 civilian deaths in Tripoli, and at least 5,000 wounded. The Ministry of Health announced that hospitals were overflowing. Anyone who by that time believed relentless NATO bombing had anything to do with R2P and United Nations Resolution 1973 was living in an intensive care unit.

NATO preceded “Siren” with massive bombing of Zawiya – the key oil-refining city 50 kilometers west of Tripoli. That cut off Tripoli’s fuel supply lines. According to NATO itself, at least half of Libya’s armed forces were “degraded” – Pentagon/NATO speak for killed or seriously wounded. That means tens of thousands of dead people. That also explains the mysterious disappearance of the 65,000 soldiers in charge of defending Tripoli. And it largely explains why the Gaddafi regime, in power for 42 years, then crumbled in roughly 24 hours.

NATO’s Siren call – after 20,000 sorties, and more than 7,500 strikes against ground targets – was only made possible by a crucial decision by the Barack Obama administration in early July, enabling, as reported by The Washington Post, “the sharing of more sensitive materials with NATO, including imagery and signals intercepts that could be provided to British and French special operations troops on the ground in addition to pilots in the air”.

Only this massive NATO assault can explain the dramatic fall of Tripoli. But the fall of the Gaddafi regime poses several problems.

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First, unlike in Tunisia and Egypt, the fall of the autocrat has also destroyed the institutional props of the regime. Unlike in Egypt, there is no army to step into the breach. While this could mean better prospects for the establishment of a genuine democracy, it is more than counterbalanced by the widespread dispersal of arms among a divided people. Gaddafi had nurtured tribal rivalries as a means to ensure his own survival and these rivalries had already erupted among the rebels when its top military commander General Abdul Fattah Younes was killed by his own troops on July 28. Fierce armed rivalry between tribes and other groups may ensue prompting further international intervention.

Second, five months of unchecked bombing has destroyed much of the country’s infrastructure and especially its oil industry. Before the civil war, Libya produced about 1.6 million barrels of oil a day but this has now dropped to about 50,000 barrels a day. Javier Blas reports in the Financial Times that under the most benign scenario, it woulds take until 2013 or well beyond for Libya to return to its pre-civil war levels of production.

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But any such estimates do not account for the enormity of the destruction visited on Libya by NATO bombings–of the highways, bridges, hospitals, homes, essential services, utilities destroyed. Some of us remember all too well the Neocons saying that Iraq’s oil wealth will pay for the war and reconstruction–and look where that got the Iraqis. No aid to Libya can be expected from a Washington held captive to the ‘small government’ policies of the Tea Party acolytes or from a Eurozone dealing with sovereign debt of its weaker members. Like other states of the global South, Libya will be left in a quagmire as NATO seeks other locations to intervene and destroy with nary a whimper from the ’emerging powers’ of Brazil, India, China, or South Africa!

Oil, Civil War, and the Politics of Intervention

March 6, 2011 at 1:34 pm | Posted in democracy, Human Rights, International Relations, Political Economy, World Politics | 2 Comments
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Reports of four British Special Air Service (SAS) troops being captured 30 kilometers from Benghazi is ominous especially since the rebels they were ostensibly sent to help had no inkling that these troops were being parachuted into the areas they control. The refusal of the Gaddafi regime to crumble in the face of widespread protests–unlike the regimes in Tunisia to its west and Egypt to its east–has meant that the struggle for power in that oil-rich desert state had flared into a full-blown civil war.

While it is much too early to predict how the civil war will pan out, it has provided a wedge for US and European leaders to speculate openly about intervening in Libya. That Senators John McCain and Joseph Lieberman called to arm the rebels comes as no surprise, it is troubling that President Barack Obama has refused to take the options of imposing a ‘no-fly zone’ and military intervention off the table, especially after his Defense Secretary, Robert Gates, injected a rare bit of sanity when he told cadets at West Point:

“In my opinion, any future defense secretary who advises the president to again send a big American land army into Asia or into the Middle East or Africa should ‘have his head examined,’ as General MacArthur so delicately put it.”


Ostensibly, the case for intervention is couched in humanitarian terms and cloaked under the UN doctrine of the “responsibility to protect.” It is easy to dismiss the humanitarian justifications as Seumas Milne has shown:

“When more than 300 people were killed by Hosni Mubarak’s security forces in a couple of weeks, Washington initially called for “restraint on both sides”. In Iraq, 50,000 US occupation troops protect a government which last Friday [25 Feb 2011] killed 29 peaceful demonstrators demanding reform. In Bahrain, home of the US fifth fleet, the regime has been shooting and gassing protesters with British-supplied equipment for weeks.”

The ‘prime directive’ if you will of the UN doctrine of “responsibility to protect” is that intervention does no harm–and on these grounds, any intervention in Libya would fail spectacularly! Even some opponents of the Libyan regime have warned against foreign intervention. Certain Russian and Chinese vetoes ensure that there will be no UN Security Council sanction for intervention and that any intervention will be under NATO auspices–or by the US, the UK and some of their allies acting on their own initiative.

If there is intervention, it is almost certain that it will have to be followed by an occupation–the opposition is disparate and only united against the regime; it is clear that the regime has some significant support–otherwise it would not have been able to mount an offensive. Since both factions will have access to weapons, an occupation to pacify the country would have to follow.

Moreover, for all the talk of Libyan government forces launching murderous assaults against its citizens, the Libyan military has been largely ineffective. Opposition forces already are reported to control some 80 percent of Libya’s oil supplies. Government planes have been unable to bomb targets–leading to speculation that the sympathies of pilots are with the rebels though it is at least equally plausible that it is because they are poorly trained.

Aljazeera English that the strength of the Libyan military is overly exaggerated. Years of sanctions and poor maintenance has meant that much of its military hardware are obsolescent or unusable and it estimates that the regime has only about 10-12 thousand well-trained and well-armed troops.

The very weakness of the Libyan forces makes threats of foreign intervention ominous. If US, British or NATO forces can intervene on a pretext, they can establish bases in Libya as they can install another kleptocratic regime–once such bases are established, they take a life of their own and are rarely dismantled as shown by the history of post-Second World War US bases.

Libya has the largest oil reserves in Africa and that as world demand for petroleum surges insatiably, there is a greater urgency to control sources of supply. However, Michael Klare has documented that every effort by the UK and the US to control supplies has led to disaster–stretching from the coup d’etat that London and Washington engineered to depose the democratically elected government of Mohammed Mossadeq in Iran in 1953, to the fall of the Shah in 1979, and to the two invasions of Iraq in 1991 and 2003. To site bases that could be used for war against another Arab country would be anathema to the protestors.

Advocates of foreign intervention, as Milne also notes,

“seem brazenly untroubled by the fact that throughout the Arab world, foreign intervention, occupation and support for dictatorship is regarded as central to the problems of the region. Inextricably tied up with the demand for democratic freedoms is a profound desire for independence and self-determination.”

Riots across North Africa and the Persian Gulf for once is not about imperialism or Israel–but about food and employment, for democracy and dignity, and against corruption and nepotism. Here too Libya is noteworthy in that it has the best Human Development Index among all African states. Here it is a case of the young and the middle class demanding an end to autocracy more than the bread-and-butter struggles that animated the Egyptian revolts and these rebels are not going to tolerate the establishment of another pro-Western kleptocracy.

Recession? What Recession ask the bankers!

November 26, 2010 at 9:48 am | Posted in Political Economy, World Politics | Leave a comment
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Earlier this month, Lord Young of Graffham, the 78-year old ‘enterprise advisor’ to British Prime Minister David Cameron was forced to retire after claiming that most Britons “never had it so good” in this ‘so-called recession’ because interest and mortgage rates were so low! If his comments were politically too difficult for the Coalition government in Britain, it was at least true for bankers and financiers in the UK and the US. Though trading is down and Congress is tightening regulations, Wall Street firms are setting aside large sums as bonuses. According to Nomura, the Japanese bank, five Wall Street firms–Goldman Sachs, Morgan Stanley, Citigroup, Bank of America, and JP Morgan Chase–are setting aside $89;54 billion this year for its employees’ bonuses even though revenues for the firms fell by 4 percent.

While the bonuses will not be paid till January 2011 as the financial firms assess their performance in the fourth quarter, luxury purchases are booming and The Lion, a new restaurant that opened in New York;s Greenwich Village in May, recently sold a bottle of Chateau Mouton Rothschild for $3,950. Though public outrage has led firms to scale back on corporate excesses like private jets and corporate retreats, personal indulgences have come roaring back.

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While much of the attention has been focused on the top executives who make the 19th century ‘robber barons’ look like petty juvenile delinquents–Goldman Sachs’ chief executive, Lloyd Blankfein pocketed a cool $68.5 million in pay and shares in 2007–this has obscured the fact that lower-level employees making between $100,000 and $200,000 receive hefty year-end bonuses. Wall Street firms typically set aside 40 to 50 percent of their revenues as bonuses.

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In the bizarre logic of Wall Street, if firms do not pay top bonuses to their employees even if the firms post losses, the employees will jump ship to a competitor willing to pay higher bonuses or salaries. This is of course a case of inverted logic: if the employee was responsible for losses, why not let the employee go–or better yet, fire and blacklist the employee?

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And now that the Republicans have won control of the US House of Representatives, they are clamoring to make the Bush era tax cuts permanent. Though Candidate Obama had campaigned on a platform that promised to end the tax cuts for those earning over $200,000, there are signs that the White House will now cave in to Republican demands or at the very least extend them for another two years.

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Despite the media claiming that the Democrats’ loss of approximately 60 seats in the House of Representatives was a “bloodbath”–to which President Obama concurring by admitting they received a “shellacking”–if the overall percentage of votes cast for the two parties are examined, John Kane noted, the Democrats received 47.3 percent of the vote and the Republicans 50.1 percent: hardly a “shellacking”. Moreover, only 38.2 million of the eligible voters cast their ballots–hardly a case of the “American people” rejecting the President’s message. In fact, the reason for the large fall in the percentage of eligible voters exercising their franchise in the 2010 mid-term elections may precisely be because they did not see the Democrats making a difference. After all, the $700 billion bailout may have secured the health of the financial sector–and guaranteed the return of good times to the financiers–but has done little to ease unemployment.

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Hence, it would clearly be a mistake for the Democrats to throw in the towel and cave in to Republican demands. But perhaps it is too much to expect of this President!

A Defining Partnership or a Post-dated Check?

November 9, 2010 at 10:26 pm | Posted in Human Rights, International Relations, Political Economy, World Politics | Leave a comment
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President Barack Obama’s declaration that relations between the United States and india will be a ‘defining partnership‘ of the 21st century and that the United States will support India’s quest for permanent membership in the UN Security Council may have been exactly what the Indian political elite wanted to hear but it eerily resembles the Cripps Mission sent by the Churchill government to enlist the support of the Indian National Congress and the Muslim League as belligerents in the Allied war effort against Nazi Germany and its allies.

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Just as Sir Stafford Cripps came with the offer of full Dominion status to India if it joined the Allied war effort, President Obama said that he saw India being a permanent member of the UN Security Council sometime in the future. Not only was Obama not specific about when this would happen–and since it depended at the very least on the agreement of the four other veto-bearing members of the Security Council, he was in no position to offer a timetable unlike Cripps–but what it would entail. Indeed, the current members of the Security Council jealously guard their veto privileges and would not easily surrender it nor admit other veto-bearing powers to their ranks.

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At the same time, with breath-taking arrogance President Obama declared that India must play a ‘responsible’ role in world affairs–chiding India for not speaking up against Burma’s military rulers. This was echoed by an editorial in the Los Angeles Times: “India’s government has seldom acted in the interest of the world, and humanity, when doing so might clash with its own economic interests. Nowhere is this more apparent than on India’s border, where New Delhi is coddling a repressive military junta in Myanmar. India’s trade ties with this brutal regime, and its silence on human rights abuses there and elsewhere around the world, don’t recommend it for greater influence in the United Nations.”

And yet, US abuses of human rights are legion: Obama’s predecessor, George W. Bush, still defends water-boarding as not being torture. The last few US administrations have wantonly killed hapless civilians: Madeleine Albright, President Clinton’s Secretary of State, said that the death of half a million Iraqi children as a result of sanctions imposed after the end of the first Gulf War was worth it in a 1996 60 Minutes interview, George W. Bush’s murderous assault on Iraq and Afghanistan killed hundreds of thousands of Afghans and Iraqis, and Obama has escalated the use of drones to indiscriminately kill Pakistani villagers on the Afghan border. When has the United States spoken about Israeli abuses against the Palestinians…and the list goes on.

While Obama was calling the US-India partnership as a ‘defining relationship, his Secretary of State Hillary Clinton was defining the US-Australia alliance as a “core partnership” and explicitly calling for Australia to relegate its relationship to China–a country that accounts for 23 percent of its exports–to a secondary partnership because of the shared ideals between the two countries.

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She said, “And it is important to recognise that just because you increase your trade with China or your diplomatic exchanges with China, China has a long way to go in demonstrating its interest in being – and its ability to become – a responsible stakeholder.” Once again, the US sets itself as the arbiter.

Yet, what has the US got to offer India? Much as the Indian political elite wishes for a permanent seat with veto powers in the UN Security Council, that is not in the power of a US President to bestow–and even if it were, how ‘great’ can a country be if its ‘greatness’ is bestowed by some other power as a favor?

If Obama plays up to the aspirations of the Indian elite, it is to enlist them in an alliance to check the rise of China–and in tandem, Hillary Clinton was given the easier chance of recruiting Australia, one of the more slavish allies of the US.

It is a pity that Manmohan Singh and other Indian leaders did not tell Obama, as Gandhi told Cripps, that his offer is ‘a post-dated check on a failing bank!’

 

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