Welfare Queen

Welfare Queen

“Whether the British ruling class are wicked or merely stupid is one of the most difficult questions of our time, and at certain moments a very important question.”

-       George Orwell

By J.M. Hamilton (8-27-15)

London, England -  At first, it didn’t make sense.  My sister, forever the Anglophile, insisted that we visit London, England this summer (a/k/a The Big Smoke).  The exchange rate sucks, I objected, and several family members noted we should go to Europe, with the weaker Euro.  But in retrospect, it all made perfect sense, and the family was glad we visited London.  Last year we were fortunate enough to have visited Germany and Berlin.  For a student of history, and an American, the two cities are perfect twentieth century bookends. 

Two world wars pitted Germany against England, and the Cold War united the two nations, and America.  When you think of the history emanating from these two capitols, Berlin and London, the mind reels.  Tales of empires won, lost, and thwarted.  London England, today, is the Mecca of all things financial (derivatives and swaps worth hundreds of trillions in notional value, and rehypothecation), but geographically a shadow of its former empire; Berlin Germany, today, having won – what it couldn’t take within two world wars – European economic conquest, and hence, European rule.  Love it or hate it, German economic and financial imperialism dominates the E.U.

London is a beautiful city, and as similarly observed in Berlin last year, there were more construction cranes in the air then one could count.  Building is booming.  Like Berlin, London is pristine with little of the grunge or grime one might expect; even the handful of punk rockers I ran into in the borough of Camden were squeaky clean and well behaved.  London is truly a city for the elite.  The ratio of Audis, Ceds, Jags, Beemers, and Porsches on the road, to ordinary cars and cabs, was possibly one to four.  There’s an incredible amount of wealth emanating from England’s capitol, not just from the financial district, but some of it is inherited and legacy wealth (foreign oligarchs and royalty are also in the city).  It is expensive to live here.  So much so, that many Londoners are fleeing the Island for Berlin, not unlike ordinary Manhattanites fleeing to the outer boroughs and suburbia. 

While visiting London, one is quick to observe that the surveillance and police state George Orwell warned us against is very much alive and thriving.  The citizen to CCTV camera ratio is said to be 11 to 1.  Add in facial recognition technology, and your invasion of privacy is complete.  But unlike Germany, where there was, and remains, an uproar over Mr. Snowden’s revelations (typewriter sales were said to have soared, post-Snowden), the British seem okay with sacrificing their freedoms and privacy on the altar of, alleged, greater personal safety.  Notably, many Germans disdain the surveillance state, and they suffer no monarch; the British largely, accept the surveillance state, maybe embrace it, and they enjoy the House of Windsor (f/k/a Saxe-Coburg and Gotha).  Hmmm.

Politically, England faces two hot button issues: one, what to do with the wave of immigration sweeping through Southern Europe and lapping up on England’s shores; and two, whether or not to continue E.U. participation?  Seems, like in America, immigrants are seeking out Western democracies, and hoping to escape the wars being fought in their home countries, whether the wars be of a religious nature or wars from America’s failed drug prohibition policies.  This, despite the fact that upward mobility, and the promise capitalism used to deliver – that of opportunity – has been thwarted throughout the West, by crony capitalism, the insider economy, monopolies, and cartels.  Ironically, despite immigration being such a hot debate topic in the U.S., many immigrants from South of the U.S. border have returned home, post- 2008 crash.

As for the European experiment, the British shrewdly chose to hang onto their own currency, and that decision has paid dividends ever since.  As mentioned, sterling is strong, vis a vis alternative currencies, despite facing similar machinations and manipulations that are in vogue among all the world’s central banks.  Alas, like America, London has an economy that is dominated to a considerable degree by banks, hedge funds, speculators, and private equity.  And not a few of the larger British banks, also like in America, had to be bailed out and nationalized, as a result of the 2008 crash.  Unlike America, Britain didn't fail in giving some mega-bank CEOs the boot.

Today, London has a melting pot vibe, perhaps more so than Manhattan.  Maybe because it was vacation season, maybe not, seemed that the number of persons of color was nearly equal to the number of white faces.  Remarkably, nearly every person I ran into spoke the Queen’s English, or was multilingual.  Impressive.  And the Tube, London’s underground railway system, is a dream of cleanliness, punctuality, and modernity compared to Boston’s T or New York’s MTA.

But most amazing of all was our visits to Buckingham Palace and Parliament.  The latter is bicameral, consisting of the House of Lords (appointed by her majesty, and historically a hereditary institution), and the House of Commons (an elected body and the house that, thankfully, holds the most power).  Rounding out Britain’s democracy is the P.M. or prime minister, and a Supreme Court (which was established in 2009).  Seems that the House of Lords used to be the highest court in the land, but like many of this chamber’s powers, this too has been stripped away.

As with any democratically elected government, there are pros and cons/positives and negatives, so let’s start with the pros first.  The fact that the P.M. gets up in front of House of Commons every Wednesday, and gets drilled, grilled, and questioned, is absolutely wonderful.  One may watch the debate on C SPAN in the states, and it’s incredible.  The opposition parties actually verbally abuse and do their best to embarrass, outwit, and shame the P.M., and the intelligence, intellect, and argumentation surrounding the debate is often on a much higher order, than what we see in the U.S. Congress.  To put this in perspective, imagine, if you will, Presidents Obama, or Bush, appearing before the House of Representatives weekly, and getting hammered – and hammering back.  I love it, and my guess is these debates are both productive and do much to educate the British people.   Too bad it only lasts for thirty minutes, weekly.

Unfortunately, the money flowing into members of parliament (M.P.) is not limited, but the amount of campaign expenditures are capped (so yes, like the U.S. Congress – the M.P.s too, are bought).  However, election for all M.P.s, which includes the P.M., must occur no later than every five years, and the campaign season starts when the Queen dissolves Parliament, or five weeks before Election Day.  Imagine, five weeks of campaigning, versus the unlimited campaigning that takes place in the U.S., and that’s an easy positive for British democracy.  It appears that the British actually expect their pols to govern, rather than campaign 24/7/365 and raise unseemly sums. 

What a novel idea.

Post Gulf-War II, it appears that the British and their government have lost their appetite for failed nation building exercises, and unlike P.M. Tony Blair, are less likely to be led into another U.S. war.  In fact, Britain just reopened its embassy in Iran, and there is even some political opinion (from his own political party, Labour) that former P.M. Blair could be brought up on war crimes.  This lack of jingoism, and the sated thirst for war, comes from a conservative/Tory government, no less.  Perhaps America can send over some of our Republican leaders for learning and reeducation? 

All of this is to say, the commercial conquest of Iran is underway, at least in Britain.  Is the U.S. Chamber of Commerce and the Business Roundtable aware?

And now for the “con,” or downer side of the British government.  I’m sorry, as an American, I don’t get the whole monarchy thing, and the Disneyfication of said monarchy.  You know, where we tell every American girl, and presumably British girls, that you too, can and should be a princess.  It’s not unlike the Horatio Alger fairy tale we like to tell in America, that with hard work and perseverance, that you too, can be Mr. Donald Trump or an aristocrat.  It’s complete tripe.  Upward mobility is abysmal in both countries, wage and wealth inequality are growing to unacceptable extremes, and the royals, with all due respect, are symptomatic of the aristocracy and class system that exists in both England and the U.S.

Imagine, if you will, taxpayers paying an American family $60 million – annually (add in several hundred million more for security and special events), tax free, putting them up in castles owned by the state, and asking them to do P.R. work for the government – on occasion?  Monarchy and aristocracy are both throw backs to the dark ages, before the age of reason and enlightenment.  It’s based upon the premise that by divine, that is Goddess given, right, they are ordained to rule over us mere mortals.  That somehow their, historically, inbred progeny are more refined and better than everyone else, and most importantly, above the law.  Flies in the face of the premise that all people are created equal… doesn’t it?

It’s the kind of insult and injury that revolutions are fought over.

Some have argued the royals are parasites living in gilded cages - making their living sucking off the taxpayer and the underrepresented worker…. In the U.S., the elite often pass their estates and riches down to “widows and idiot sons,” perpetuating our own class system.  The aristos in both America and England living a lie and double standard, heretofore unimaginable… hypocrisy defined and slaves to the crony/insider economy.   

The political right in both countries, Tory and Republican, both like to look down their nose at the indigent and those in need of government assistance, with great derision and scorn; and yet, the biggest “welfare queens” are:  the British monarchy, and wealthy corporations and plutocrats residing in both countries.  Remarkably, the free market deity, Adam Smith, the moralist for capitalism, appears on the back of the Queen’s twenty pound note.  Prince Charles reduced to writing black spider memos and pleas to government ministers, seeking favors from the British government.
  
Austerity is great for the middle class and the poor in both countries, but don't dream of imposing austerity upon the ruling class.

 Adam Smith, the Godfather of Capitalism.

Is the American system any different?  Hardly.  Both governments run by, and for, the corporation and the financial aristocracy, and the citizenry are taken for an unpleasant ride.  This is what post-modern democracy has become: Dry rot and decay, a free ride for the rich, at the expense of the middle class and those truly in need.

What defect residing within human DNA causes many Americans, and British alike, to praise and worship: the royal mafia; CEOs heading up criminal organizations (e.g. Hedge Fund and Private Equity firms); leaders within crony governments – owned and operated by banking cartels; and the House of Windsor?

And more importantly, can it be cured? 

Maybe genetic engineering is the answer?  Why the need for the public to go gaga over a baby royale, who will – more than likely - grow up to place a Russian oligarch‘s shear rapacity to shame?  All the while, one in four children in Britain, and the U.S., live in poverty.  Now, there’s a statistic to be proud of, right?  What could people possibly be thinking?  Why not rally around a flag, or country, or a belief or ideal, like equality, freedom, or justice…. Maybe even the Goddess above?   Do something completely fatuous and mad, like fall in love, but to worship the lowest common denominator, the predatory House of Windsor… it’s beyond the pale.

Yes, the crown jewels and Buckingham palace brings in money and tourism, but my guess is that same money would flow into the British economy, w/out an expensive royal family.  So why not downsize the House of Windsor, hand out pink slips to the royals, and enhance England’s bottom line?  J.M.H. won’t even charge for that word of advice, but McKinsey & Co. would.  (If the British want to save more, sack the anachronistic House of Lords, go Unicameral.)

And yet, they, the British people, love ‘em, and more than a few Americans love the royals, too.  Pining for a strongman… why not go all the way and worship Putin?  Some Republicans do.

In the end, the greatest tribute I can pay to America’s former master is this:  The British seem not to mourn their loss of empire; they are perfectly content not to rule the world; they are inwardly focused on their island and appear the better and healthier for it.  They appear content and happy, and feel no need to spend unseemly sums on a military, at the expense of its nation or people.   

Conversely, America, embarrassingly, spends more money on the fraud and waste that is our military industrial complex, and surveillance state, than the G-20, combined (gross fiscal mismanagment).  And blowback and liabilities from the MIC, and the resulting deficit spending, are mounting, in ways both foreseen and unforseen.

The British are watchful, aware, and on their guard, but appear to have abandoned the Bush/Blair doctrine, or the policies of preemption and certainly, nation building.

And for that, the British deserve praise.

I wonder if Pax-Americana, in her twilight, will recognize that we have something to learn from Britain? 

How to behave, post-empire.

Copyright JM Hamilton Publishing 2015

A Deal Worth Doing…

A Deal Worth Doing…

“We (the U.S.) can’t project power from bankruptcy court.”

-       Senator Rand Paul

By J.M. Hamilton (8-13-15)

Humans, to varying degrees, are all too often narcissistic, xenophobic, and racist.  Some of this might be genetic, and undoubtedly, much of this is learned behavior; some of this is fear driven.  Our brains, and subconscious, are wired for patterned thinking, and are prone to generalizations.  In many instances, we don’t do nuance well.  Once beliefs are hard wired, it can be taxing to learn something new, and many don’t try; but rather, often eschew any and all facts and information contrary to already established beliefs.  It seems that many go out of their way to avoid learning something new.

We can see some of this thinking, or the lack thereof, at play in the current debate over the Iranian nuclear treaty, presently before the United State Senate.

An example of some of the current generalized thinking might be:

U.S. Democracy:  Good

Iranian Theocracy:  Bad

But let’s look at it another way or add a shade of nuance:

U.S. Democracy, owned and operated by a Plutocratic Elite, which owns monopolies and cartels throughout the U.S.:  

Uh, Good… maybe.  Probably not?

Iranian Theocratic Republic, owned and operated by the Iranian Revolutionary Guard, which is worth billions generated by monopolies established throughout Iran:

Yes, bad.

Often conveniently omitted from politicians’ and the punditry’s dialogue about Iran is how the CIA, and British government, overthrew a democratically elected Iranian government in1953, because they had the audacity to ask for royalty statements from a subsidiary of BP (aka the British Anglo-Iranian Oil Company).  When BP failed to deliver the royalty information and was subsequently nationalized, the Iranian democratic government, conveniently, suffered a CIA/British backed coup.  Thus giving birth to one of the nastiest dictatorships ever installed by the Anglo-American governments, under the Shah of Iran’s auspices.  Post –Coup, the Seven Sisters oil companies moved into Iran, and the Shah’s reign of terror ran until 1979, when an Islamic revolution took hold.

Many decades later, one could say the ’53 Iranian coup defines “blowback.”   So with this added shade of nuance:

U.S. Democracy, engaged in CIA sponsored dirty tricks, and supporting a cruel dictatorship in support of an Anglo-American oil cartel:   

Abysmal at best.

Iranian Democracy, nationalizing an abusive British oil monopoly, while Iranian citizens lived in poverty:   

From the point of view of the BP oil monopoly, Bad!

The point I’m leading up to is that arms control and nuclear proliferation agreements are not negotiated in a vacuum.  Nation states pursue their own interests, and the counterparties certainly do not always act as the U.S. government and her citizens would want them to, or like to dictate.  Intertwined and superimposed within arms control negotiations are a deep, and sometimes mutual, understanding of the economics, history, and politics each country brings to the table. 

If we review then these dynamics (economics, history and politics), President Obama’s Iranian deal not only makes perfect sense, but may be a brilliant strategic coup, especially when we consider America’s troubled state of affairs.

Economics & The Military Industrial Complex

J.M.H. has written a couple of pieces recently about America’s debt predicament.   Our private and public debt to GDP ratio, particularly with unfunded and underfunded liabilities added in, is well in excess of 200%.  Our debt burden has grown so onerous that the Federal Reserve has printing trillions to keep the bond vigilantes at bay, help service the debt load, and bailout the Wall Street cartel.

How the U.S. got here was by no accident.  Two major wars were launched during the Bush (W) administration, and metastasized into nation building exercises without end.  To this day, we still have roughly 10,000 troops in Afghanistan, and a renewed advisor/troop build up in Syria and Iraq.  These two badly managed wars were pointless exercises, with foreseeable outcomes (i.e. U.S. failure, but MIC management and stockholder enrichment).

These wars effectively bankrupted the nation, and are symptomatic of a mentality (strongly prevalent among Republicans) that believes force and military might are the answer to every foreign policy problem the U.S. faces.

The Obama Administration deserves some credit for attempting to end and prevent the cycle of abuse, suffered by the men and women who serve and the U.S. taxpayer.  For surely, that is exactly what the detractors of the Iranian deal hope to achieve: Start up another Middle East war, this time against Iran.  President Obama took some heat for saying as much within the last week or two.  But anybody who listened to the GOP debate last Thursday evening basically heard the same thing:  A Republican Party that is clamoring for yet another war in the Middle East; a GOP that has learned absolutely nothing from Afghanistan and Iraq (or Vietnam); and who would put this country into an even deeper fiscal hole by starting up another credit card war.  (As an aside, it’s interesting isn’t it… from the perspective of the GOP leadership, there’s plenty on money to go bombing around the globe, but never quite enough money to give teachers a raise, rebuild U.S. infrastructure, or to care for the indigent.)

Of course, war, and waving the flag, are both highly convenient distractions from the real problems that this country faces.  Topics that were conveniently omitted from last Thursday’s Republican debate.  Problems such as:  race relations; ever rising wage and wealth inequality; campaign finance reform; and the obscene amounts of money flowing into U.S. elections.

Senator Rand Paul said it best:  It’s hard to project global power from a bankruptcy court.  The reality is America will never be able to pay back the money it owes, and at some point, this nation too (like Greece and Puerto Rico) will need to default or write down its debt.  In short, the national debt, TBTF banks, and the MIC are all threats to our national security and our financial well being. 

By supporting the Iranian deal, the nation prevents Iran from becoming a nuclear power for at least another decade, while also giving America an opportunity to address its very real domestic problems.  Problems the GOP obviously, would rather not address or talk about.

History

If we look back in history, great leaders have acted in a contrarian manner, and pivoted in ways that were completely unexpected to better protect this nation and its people.

President Kennedy, the Demo-Hawk, signed a nuclear test ban treaty with the Soviets to protect the planet from nuclear contamination and fallout. 

Richard Nixon, an ardent anticommunist, when the nation was war weary and in the midst of a recession, pivoted to China.  This was done at a time when it was feared in some quarters that China and Russia might unite against the U.S. (when the nation was exhausted and truly weakened, from another failed nation building exercise, called Vietnam).   The pivot to China was an excellent demonstration of both realpolitik (something that J.M.H. is not always a fan of, but it has its usefulness), and the opening of channels of communication with a powerful frenemy.

Ronald Reagan, perhaps the ultimate cold warrior, opened up significant dialogue with Chairman Gorbachev to bring about substantial reductions in both countries’ nuclear arsenal.  This too, was done at a time when the nation was coming out of a significant recession, and still war weary.   Like President Obama’s critics today, armchair warriors, and chicken hawks thought Mr. Reagan had lost his mind, and the criticism was harsh --- such is the power of the U.S. war lobby that President Eisenhower warned us about.  Here, it's particularly useful to note that Reagan took out the Soviet regime w/out firing a shot in anger.  That's the mark of a great leader, and very Sun Tzu.

Nixon and Reagan both had their detractors, at a time when this nation was far less politically polarized than it is today; but in retrospect, we now see that the moves made by the aforementioned Presidents were for the good of the country, and quite possibly shielded this nation from a war, or worse, nuclear annihilation. 

(Interestingly, America was far less polarized under Kennedy, Nixon and Reagan than under President Obama.  The top tax rates for these Presidents, respectively, were/are:  Kennedy 90% income/25% capital gains - the same as under Eisenhower; Nixon 77 to 70% income/36.5 to 27.5% capital gains; Reagan 69% income/28 to 20% capital gains; and President Obama 35% income/15% capital gains.  Is there a lesson here?  Yes, the lower the tax rates on the rich, the more economically and politically polarized our nation becomes, but that’s a topic for another day.)

President Obama has taken another bold pivot, done the unexpected, at a time when the nation is sagging under a mountain of fiscal mismanagement and debt (and two very badly botched wars).  Call this the gift that keeps on giving, left behind by his predecessor, Mr. George W. Bush.  History tells us that the Iranian deal should be viewed in exactly the same light as the deals and relations fostered by Messrs. Kennedy, Nixon, and Reagan.  

Don’t just take my word for it… dozens of U.S. Generals have already gone on record stating their support for the Iranian deal.

Really, the Iranians are more dangerous than the former Soviet Union? 

Hardly.  But you wouldn’t know it from the GOP’s cacophony of continuous calls for more war.

Politics

One can learn much about the Iranian deal by studying the parties that oppose it, and their reasons for opposing it.

First, we have the oil rich Arab monarchies or despots, Saudi Arabia, the U.A.E., and Qatar.  Also known as our so-called allies in the region.  These monarchies are well known for human rights abuses, abhorrent treatment of women, and the fundamentalist spread of Wahhabism, a most virulent form of the Sunni branch of Islam.  In fact, the oil rich monarchies have been responsible for the expansion of this religion and the chaos that often ensues, in the form of terrorism.  Here, think of ISIS or ISIL, and also, the House of Bin Laden and its ties to The Kingdom, as just a couple of examples.

The U.S. has been kissing up to these monarchies for decades because we needed the oil, and with U.S. military backing, these “royal” abominations have enjoyed considerable power and leverage over the Arab countries of Islamic Shia faith (i.e. Syria, Iraq and Iran).  In short, the U.S. has often run around the globe putting out fires started by Saudi Arabia and Qatar, w/out addressing the root cause, the Kingdoms themselves…. Again, because of the oil.

But the U.S. has rapidly become energy independent, and if like Germany, we push renewables to supplying 33% of U.S. energy needs, we can kiss our dependence on Middle East oil good by, forever.  And good riddance.

The aforementioned monarchies know this, and they especially don’t like a deal with Iran that will reinvigorate the Iranian economy, and drive the price of oil down further, globally.  This is a region that is heavily dependent upon natural resources for state cash flow.  The Middle East also has some of the highest unemployment rates in the world, which makes the region exceptionally volatile, and also makes jihad and fundamentalist Islam appealing.  A resurgent Iran (Shia) will be a direct counterbalance to the impunity with which the Sunni monarchies have been operating in the region for decades.

Here, President Obama’s and the Security Counsel’s (P5+1+EU) goal in striking the Iranian deal appears not unlike former Secretary of State Kissinger’s advocacy of realpolitik.  That is, at a time when the U.S. is over-extended economically, fiscally, and militarily, and our European allies have no will to fight, why not establish a Iranian/Shia force in the region to help offset Saudi/U.A.E./Qatar/Sunni hegemony’s worst excesses?  

Given history, Sunni oppression of a Shia minority is highly destabilizing.

For many of the reasons that Sunni Arab governments don’t like the Iranian deal, Israel, the preeminent superpower in the region, doesn’t like the deal either.  Israel, the only Middle East nuclear power, enjoys supremacy over all the countries in the region, particularly with U.S. backing (which is not going away).  Like any superpower, its regional, perhaps global, dominance is supported by, and conversely related to, the weakness of other Middle East countries.   While a resurgent Iran is not a direct threat to Israel’s primacy, it certainly does make things more challenging; but at a time when the U.S. is growing more energy independent, and winded from decades of failed Middle East military adventures, Israel is well positioned, indeed better positioned than ever, to continue its regional dominance and control. 

In short, nobody screws with Israel, and those that dare, have paid a very dear price.  The U.S. can no longer afford to police the Middle East, and so our allies/proxies/new found friends should, as they have the greatest interest in doing so. It's in the economic interests of all countries in the region to play nicely in the sandbox.

It’s interesting to note that the hawks in the Israeli government have a near lock on the United State’s Middle East foreign policy, by controlling at least one U.S. political party, the Republicans (in fact, GOP candidate Romney said he’d subcontract out Middle East foreign policy to the State of Israel).  Israel is a terrific friend and ally, but does the U.S. really want to subcontract out its foreign policy to any country?  Taking Mr. Romney’s logic a step further, why not pass U.S. sovereignty onto Canada or Exxon?  (Note, a majority of Americans of Jewish heritage support the Iranian deal.)

The GOP receives tens of millions of dollars in campaign contributions, and additional lobbying efforts, from AIPAC, Big Oil, Sheldon Adelson, and the U.S. defense industry.  These industries, and the aforementioned countries, have a vested interest in: not seeing the Iranian deal go through; war; and they also stand to profit from the deal's failure, mightily.

While J.M.H. is not a fan of Mr. Trump, if he’s said at least one thing truthfully, repeatedly, in the last sixty days, it’s this:  These politicians are owned by special interests, and they do whatever the special interests tell the GOP to do.  Therefore, the GOP leadership’s slavish devotion to Big Oil, the MIC, and right-wing Israeli politicians.

Hence, the extreme optics of nearly every GOP presidential candidate trashing the Iranian deal before the ink was dry, or they possibly could have read the agreement.

The Iranian deal is undoubtedly far from perfect.  But given the economics, history, and politics surrounding the region, the U.S., and members of the UN security counsel (P5+1+E.U.), there is little doubt that this deal is far better than the alternative, War with Iran (a War which will almost assuredly hasten Iran’s march towards nuclear weapons).

For as any world leader is quick to recognize, the U.S. doesn’t mind throwing its martial weight around countries who do not possess nukes; but historically, the U.S. takes a far more diplomatic tack, once a country has acquired nuclear weapons.  That’s not opinion, that’s fact.  A deal that pulls back Iran’s nuclear timetable by a decade or more is a deal worth doing.

The alternative, War with Iran, could prove to be the United States undoing.  The credit cards are maxed, and Mr. Paul’s comment about projecting power from a bankruptcy court is highly prescient.

Copyright JM Hamilton Publishing 2015