Why Victoria dumped the Coalition

Nick Fredman explains Why Victoria dumped the Coalition.

The Napthine government had lost support due to brutal public sector cuts, vindictive attacks on nurses, paramedics and teachers, the unpopular East West Link project, and corruption scandals that led to the removal of Ted Baillieu as premier last year and the sacking of several Liberal candidates before the poll.

Meanwhile in NSW, the Liberals are so scared that today, (a Saturday), there are Liberal canvassners infesting the neighbourhood. And the same things that the Liberals did in Victoria, they have done in NSW.

Labor had made a tack to the left, with slogans of “with the Liberals, you’re on your own”, and “Labor: Putting people first”, presenting at least a rhetorical alternative to the rampant neoliberalism of the Coalition. Labor also promised to increase spending on health, education and public transport although the amounts pledged do not replace the recent cuts. In the case of TAFE, the ALP promised to replace only $320 million out of $1.2 billion taken from the gutted public vocational education system.

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However the political vacuity of the Labour Party can be seen with its preference deals with the right-wing parties.

This is a minor setback to the neo-liberal agenda in general. Let's not forget that it was a Labour government back in the 1980's that started deregulation that led to the excesses of Alan Bond, Christopher Skase, etc.

The workers should never forget that Capitalism is all about the rich getting richer at the expense of the poor. This is a very hard thing for workers to understand when they are continually told that they are just one magic break away from being rich by winning Lotto, getting a brilliant idea, getting chosen by nice rich person to advance up the corporate ladder.

This is a sensible thing to do. Why risk this one chance by promoting Communism? Especially when one is unlikely to see it in one's lifetime.

My answer is that a just and equitable society is more than worth the risk.

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White Progress

Cathy O'Neill explores White Progress.

In my Occupy group, which meets weekly on Sunday afternoons, we’ve been talking a lot about white privilege, and whether that phrase is appropriate, and whether we can come up with a better one. Because for the most part, “white privilege” really refers to the rights white people have, which everyone should have, but which not everyone has.

For example, it is my white privilege not to worry about my three sons getting shot by the police. But that’s not a privilege, it’s a right. I’m entitled to that security. Everyone is, but not everyone gets to have it. Maybe we should call it “white entitlement.”

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The oppression of Capitalism relies on having racial tension. As Malcolm X said, “You cannot have Capitalism without Racism.” The only way to completely racism is to remove Capitalism.

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Top 5 ways US treatment of African-Americans resembles Apartheid South Africa

Juan Cole describes the Top 5 ways US treatment of African-Americans resembles Apartheid South Africa.

From 1949 though the early 1990s, South Africa was ruled by an Afrikaner Apartheid regime that made race the basis for law and politics, and which systematically excluded black Africans from their civil and national rights, empowering white Afrikaners alone. The social statistics produced by that regime, however, are not so different from those produced by ordinary every day legal and social practices in today’s United States. Impunity for white policemen who kill Blacks is one commonality between the two societies. …

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The primary difference between South Africa and the US (and Australia) is that the blacks were the majority in South Africa. In the USA, whites will soon become a minority among others: Chinese; Indian; Hispanic; African; Native. Whites in Australia are safe for a while longer.

Such racism can only exist when the whites succumb to the relentless racist propaganda everyday in the hope of some small material benefit. It is up to us white people to educate ourselves about what is really happening to non-whites all over the world. We cannot continue to blind ourselves with racist propaganda.

The only way to restore our own humanity is to see and realise the humanity in everyone else. There is no white, black, Asian: there are only human beings.

Again, this overcoming of racism is one of the biggest hurdles to the realisation of a Communist society. We cannot have people excluded from such a society unless they exclude themselves.

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The World's Dumbest Idea

Barry Ritholtz has John Maudlin's comments on The World's Dumbest Idea by James Montier.

SVM is Shareholder Value Maximisation.

Our intrepid author then explains how in the 1970s the Gospel According to Milton translated into the challenge of how to get corporate executives to focus on maximizing the wealth of shareholders. The solution: pay them a s***load of money (but not just cash — stock and options now constitute about two-thirds of total CEO compensation).

But, alas, there is pretty good research to suggest that larger incentives actually translate to lower performance, for reasons that James runs down for us. To make matters worse, both the average tenure of a corporate CEO and the average lifetime of an S&P 500 company have plummeted since the 1970s.

Bottom line: SVM has pretty well laid the kingdom to waste. James focuses on three areas of damage: (1) declining and low rates of business investment, (2) rising inequality, and (3) a low labor share of GDP. James takes these outcomes on one at a time, in his usual convincing manner. …

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But the question Maudlin and Montier do not ask: whom does the kingdom benefit? If they were to ask the question, I suggest their answer would be, based on their criticism, everyone.

One example Montier gives of the alleged distortion of Capitalism by this SVM paradigm is that of business investment. Here, funds that should have been used for investment are given to the shareholders instead:

This diversion of cash flows to shareholders has played a role in reducing investment. A little known fact is that almost all investment carried out by firms is financed by internal sources (i.e., retained earnings).

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Isn't the right of the owners to determine how their capital is used? If it is the short-term interest of the Capitalists to have their capital in money rather than machinery or such like, then why shouldn't it be so?

As Karl Marx wrote, one of the laws of motion in Capitalism is the reproduction of Capital. Capital is reproduced through investment. However, if the rate of return on investment is too low (subjective view of the individual Capitalist), then Capital is manifested as money.

This is what is happening here. The rate of return on investment has dropped below a certain threshold, and individual Capitalists are realising their Capital as money through the running-down of the firm's retained earnings (aka past profits).

Montier's conclusions are:

Shareholder’s Lesson

Firstly, SVM has failed its namesakes: it has not delivered increased returns to shareholders in any meaningful way, and may actually have led to poorer corporate performance!

Corporate’s Lesson

Secondly, it suggests that management guru Peter Drucker was right back in 1973 when he suggested “The only valid purpose of a firm is to create a customer.” Only by focusing on being a good business are you likely to end up delivering decent returns to shareholders. Focusing on the latter as an objective can easily undermine the former. Concentrate on the former, and the latter will take care of itself. As Keynes once put it, “Achieve immortality by accident, if at all.”

Everyone’s Lesson

Thirdly, we need to think about the broader impact of policies like SVM on the economy overall. Shareholders are but one very narrow group of our broader economic landscape. Yet by allowing companies to focus on them alone, we have potentially unleashed a number of ills upon ourselves. A broader perspective is called for. Customers, employees, and taxpayers should all be considered. Raising any one group to the exclusion of others is likely a path to disaster. Anyone for stakeholder capitalism?

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Is stakeholder capitalism really another way of saying that the means of production should be in the hands of the public? In other words, is Montier calling for Socialism? I do not think Montier and Maudlin have really thought this through.

Anyway, in any class society, the rulers are one very narrow group of our broader economic landscape. That is the nature of class society. And the rulers rule in their own interests.

Only if their survival is threatened and blatant oppression is not an option, then do they consider the minimum possible to quieten down the masses. Reform is is inly the placebo of oppression.

The workers must realise that only when the means of production are in their own hands, then they can start building a most just and humane society.

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War to the Horizon

Tom Engelhardt writes about how there is War to the Horizon.

To summarize: 13 years later, the War Party is ascendant. It controls Congress. The president is visibly, if with his usual reluctance, placing his bets on war. The military is riding high. The end of all calls for serious Pentagon budget cuts is clearly in sight. And more of the same is undoubtedly in the works, no matter who wins the 2016 election.

That’s the “new” Washington. Peacetime? A fantasy creation of lefties, libertarians, and noodle heads. Peace? A dirty word that no self-respecting politician would be caught using.

Meanwhile, the war hawks are crying out for more. At the moment, all the pressure in Washington is focused on the ramping up of its various wars and crises. Iraq War 3.0 and Syria War 1.0 are to expand. Afghanistan seems again to be a war on the rise. The pressure is increasing to make Cold War 2.0 ever hotter and to ensure that negotiations with Iran over a nuclear deal will prove less than fruitful. Drone wars are ongoing. Special forces ops are raiding away. Thirteen years later, we are yet again floating on what seems to be a rising, not ebbing, tide of war and the one qualification for a new secretary of defense is that he or she be a hot, not a cold, warrior.

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Engelhardt considers war to be an option under Capitalism. Instead, it is a neccessity to protect and take-over markets. The invisible hand is really that of the drone pilot or the bommer pilot.

However, the intensity of war is an indication of the troubles Capitalism is currently going through. But it is troubled enough to risk open war with either Russia or China yet.

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Incredible Populist Positions in Podemos' "Economic Manifesto"; Populism Explained

Mike Shedlock is aghast at the Incredible Populist Positions in Podemos' "Economic Manifesto"; Populism Explained.

If Spain abandons the euro and adopts anything close to this platform, expect a complete collapse in the Spanish economy.

These populist ideas are taking hold for the simple reason the burden of the euro crisis is falling on the average worker, while the banks, the bankers, and the political classes were bailed out.

It should be no wonder that with each passing day, radical left and radical right parties attract voters.

Eventually, there is going to be a revolt in Spain, Greece, or Italy. Podemos is a strong candidate to lead the opening salvo.

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That radicalisation is occurring is undisputed. Even Shedlock argues for the burden to fall upon the well-to-do.

But this will not happen without a strong movement based in the working class. A right-wing radicalisation would only serve to secure the status quo.

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The re-emergence of debtors' prison

Cathy O'Neill comments on The re-emergence of debtors' prisons.

This sense that "everyone is screwed" creates solidarity among poor whites and poor blacks, and especially young people. The Ferguson protests have been multi-racial, for example. And if you’ve read The New Jim Crow by Michelle Alexander, you'll recognize a historical pattern whereby political change happens when poor whites and poor blacks start working together.

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This is why racism is so vitally important to the Capitalists: it keeps the oppressed fighting among themselves. You have to remember who the real enemy is.

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In Hebron, Palestinian women face down daily settler home invasions

Juan Cole writes that In Hebron, Palestinian women face down daily settler home invasions.

While a Ma'an reporter was sitting in her home, two Jewish settlers with New York accents carrying automatic assault rifles accompanied by armed Israeli soldiers walked across the roof and climbed into the family courtyard. They entered the room where the interview was taking place and gesticulated at different parts of the home, discussing how to re-arrange the dwelling after they forced the al-Atrash family out.

None of the four intruders seemed at all perturbed by the presence of the family matriarch, her three children, or even the Ma'an journalists on the scene.

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This is racism at its most causal. The sensitivities, propriety, and privacy of the oppressed are no concern to the oppressors. They can just walk into any home without invitation and hesitation to invade the privacy and propriety of the women's and children's quarters.

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United States: Feeding the homeless banned in 'war on giving'

Jessica Hansen-Weaver writes United States: Feeding the homeless banned in 'war on giving'.

An October report from the National Coalition for the Homeless, Share No More: The Criminalization of Efforts to Feed People in Need, has documented a dramatic rise in city ordinances aimed at restricting individuals and groups from feeding people who are experiencing homelessness.

Capitalism cannot solve the problem of homelessness. It can only try to suppress it.

And in suppressing homelessness, Capitalism wants turn everyone into self-centred individuals for Capitalism despises solidarity among the lower classes. Solidarity is the beginning of resistance.

Back in 2009, I commented on Food Not Bombs Battles City Government - and Wins. This has been an ongoing war.

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Geddes on methods

Dan Little reviews Geddes on methods.

It emerges that what Geddes has in mind for testing mid-level causal hypotheses is largely quantitative: isolate a set of cases in which the outcome is present and examine whether the hypothesized causal factor varies appropriately across the cases.…

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One hypothesis that could be tested is whether a Bolshevik Party is necessary for a successful Communist Revolution:

Country	Year	Party?	Success?
Russia	1905	No	No
Russia	Feb 1917	Yes	No
Russia	Nov 1917	Yes	Yes
Germany	1919	No	No
Hungary	1919	No	No
Italy	1920	No	No
China	1949	No	Yes
Vietnam	1954	No	Yes
Cuba	1959	No	Yes

As Little noted, the problem with a quantitative approach to comparative politics is the small number of cases that one has access to. In this case, I came up with nine (9) cases. Even these are dubious because I have not rigourously defined what a Bolshevik Party is, and how one can classify a revolutionary leadership as such.

Even the success factor is somewhat vague as a revolution goes through several phases:

1. Dual power (as is the case in Venezuela)
2. Insurrection
3. Civil War
4. Intervention
5. Reconstruction

At what point is a revolution successful? And not all revolutions go through these stages.

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A glut of oil?

A glut of oil?.

So here’s the basic picture. The current surplus of oil was brought about primarily by the success of unconventional oil production in North America, most new investments in which are not sustainable at current prices. Without that production, the price of oil could not remain at current levels. It’s just a matter of how long it takes for the high-cost North American producers to cut back in response to current incentives. And when they do, the price has to go back up.

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So much for the invisible hand of the market. The economic incentives for new oil production from more ecological environments (oil sand; oil shale; tight oil; deep water oil) are not currently there at the present moment. And this production cost does not include the environmental costs.

Most of the recent glut appears to be due to some geo-political stability. However, the excess production can be gone once instability returns in such places as Libya, Nigeria, and Iraq. And, of course, the elephant in the room is Saudi Arabia where an oppressive government is sitting on a very big time bomb.

The the predictions of peak oil back in 2004/2005 were pre-mature. As the price of oil goes up, the more difficult oil can be extracted economically (if one ignores environmental costs).

In our industrial civilization that heavily relies on motor vehicles, such a rise in costs affects economic growth which is the golden calf of the Abbott Government.

On the negative side, the lower prices are affecting the Bolivaran Revolution in Venezuela. Lower national income is beginning to affect the social programs of the government. So, it is not all bad from the Capitalist's point of view. Temporary economic pain in order to destroy an alternative to Capitalism.

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