Ian Welsh

The horizon is not so far as we can see, but as far as we can imagine

Category: The Twilight of Neoliberalism Page 1 of 11

Democrats will not adapt to this defeat

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On November 6, 2024

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There won’t be any introspection.

Empires, like fortunes, are lost slowly and then all at once.

I’m afraid what is coming is going to fall on every American fairly equally like the snow on the graveyard at the end of James Joyce’s “The Dead”

Yes, the newspapers were right: snow was general all over Ireland. It was falling softly upon the Bog of Allen and, further westwards, softly falling into the dark mutinous Shannon waves. It was falling too upon every part of the lonely churchyard where Michael Furey lay buried. It lay thickly drifted on the crooked crosses and headstones, on the spears of the little gate, on the barren thorns. His soul swooned slowly as he heard the snow falling faintly through the universe and faintly falling, like the descent of their last end, upon all the living and the dead.

Democrats who have themselves not yet fallen into precarity or the economic abyss can not and will not accept that our system is completely rotten and we need to change course and leadership.
It took the GOP from 2008 to 2016 to admit that the Reagan/Bush playbook and leadership class was bankrupt and had to go.
It will likely take multiple election cycles before some figure or movement arises that can win a Democratic primary. And given that the Democrats have a long and proud history of sabotaging the most popular and most likely to win the general election candidates it might require a whole new party emerging.
Democrats had their chance at a new direction and likely multiple administrations and an even longer dominance of the Congress with Bernie Sanders but rejected the clear will of the overwhelming majority of the young voters of their party.
Those young voters are drifting away in multiple directions.
Of my comfortably retired upper-middle classic acquaintances none are even willing to admit publicly (some will in private) that the Democrats make poor tactical choices, much less admit that the whole party and every individual needs to really re-evaluate their approach and even core beliefs.
Trump is at least a wild card which presents some chance of positive change, but the odds of radically negative change are much higher.
Regardless, the status-quo has been thoroughly rejected by the majority of the American public.
That is a fact people need to accept in order to try and steer that majority in the least self-destructive direction possible.
It’s unfortunate that the members of professional-managerial class (and those of us who have pretensions to it) have never truly accepted the idea of majority rule.
We’re going to lose a war in humiliating fashion — with an outside chance that it will be over quickly — which will trigger economic collapse (and that’s if we don’t start nuking people).
Then and only then will our ruling elites turn on each other in something that will be like a post-modern parody of the first American Civil War.
Hopefully it’ll be over in 5-7 years and some of us will be alive to adjust to the new normal and enjoy a few decades of relative peace as we adjust to penury, plagues, and rapidly worsening climate change.
Jonathan Cook had some good observations:

Kamala Harris didn’t lose because she’s a woman or because she’s black.

She lost because, if your political and media system – rigged by donors – limits the choice to two hardline neoliberal candidates, with anything else denounced as “communism”, the most hardline, neoliberal candidate has an edge.

Over time, the system keeps moving further to the hardline, neoliberal right. You can’t stop that relentless shift by voting for one of the two symptoms of your diseased political system.

You have to rise up against the diseased system itself.

As did Freddie de Boer:

You can’t blame losing the popular vote and all seven swing states on Jill Stein.

You can’t blame losing the popular vote and all seven swing states on Putin and the Russians.

You can’t blame losing the popular vote and all seven swing states on Bernie Sanders and his supporters.

You can’t blame losing the popular vote and all seven swing states on Joe Rogan.

You can’t blame losing the popular vote and all seven swing states on Glenn Greenwald and The Young Turks.

You can’t blame losing the popular vote and all seven swing states on the decision to run with Tim Walz.

You can’t blame losing the popular vote and all seven swing states on the New York Times and its occasional Democrat-skeptical opinion pieces.

You can’t blame losing the popular vote and all seven swing states on Joe Biden for getting out of the race too late.

You can’t pull all the usual Democrat tricks. You have to actually figure out what’s wrong with your party, root and branch. Because you called the guy a fascist, again, and he walked right through that insult to the Oval Office, again. And the eternal question presents itself: what are you going to do about it?

No Gods, No Demons, No Superpowers

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On October 30, 2024

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The era of the superpower is over. The new missile and drone technologies have made naval dominance impossible and ended the ability to devastate relatively advanced nations without them being able to shoot back. There is no power in the world that has the capabilities and might of the old USSR and the USA from 1945 to 2010 or so.

We have three great powers: China, the US and Russia.

There are regional powers: Brazil and Iran and the EU and Turkey and Japan and even India, which punches way below its population numbers.

But even a backwards, bombed to hell country like Yemen can defy America’s hold on the seas.

(This blog is for understanding the present, making educated guesses at the future, and telling truths, usually unpleasant ones. There aren’t a lot of places like this left on the Web. Every year I fundraise to keep it going. If you’d like to help, and can afford to, please Subscribe or Donate.)

The EU is particularly amusing, in that they could have been one of the great powers, but over and over again chose austerity, contraction and vassalage to America. The ship is sailing out of port, it’s theoretically possible they could turn it around, but politically impossible. Their day: indeed, their centuries, are done. Pathetic.

This is going to be a fair different and more constrained world. There will be more wars and revolutions. Great Powers will actually have to seriously compete for the allegiance of important minor powers, though China’s been doing this for a couple decades now, offering huge benefits compared to the US.

Russia’s getting in on the game. Where China offers development, Russia offers to fix your military problems for you, or at least make them manageable and to sell you oil and grain cheap.

America and its allies offer your elites membership in the club, in exchange for impoverishing or otherwise screwing over your own population. If you don’t do what they say, they lecture the hell out of you and try to sanction you into an early grave, if they don’t launch a coup or use you as a cat’s paw in a war.

If America wants to compete, it’s going to have to start offering some deals that don’t suck.

Nations will be more free to act as they choose than they have been in, literally, centuries. Since they were forced into unnatural shapes and relations by the great powers and superpowers, this will lead to significant changes, especially in places where ridiculous borders were drawn which ignored geography and ethnicity. (This is most true in Africa, but not only there.)

But the most important thing is simply that the age of the military colossus is over. China is the new industrial colossus, but climate change and environmental collapse is likely to spike that before they reach their full growth.

Welcome to the post-European Age.

Postliberalism, Liberal Apogee, Routine Elite Failure and Then?

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On October 23, 2024

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I was alerted to Nathan Pinkoski’s “Actually Existing Postliberalism,” by N.S. Lyons’ response “The Post-Cold War Apotheosis of Liberal Managerialism,” and enjoyed both tremendously.

Pinkosi’s piece is an excellent short history of the public-private partnership currently aiming for absolute global cultural control via the weaponization of finance that he calls postliberalism.

I thought it would be fun to excerpt all the times Antony Blinken’s name appears in the piece.

First mention:

When Bill Clinton took office, he continued the pursuit of openness. In 1993, he ratified NAFTA and relaxed the ban on homosexuals in the military. However, he made it clear that the old liberalism was not enough. Eager to extend the reach of democracy and confront foreign enemies who stood in its way, his administration developed new tools to advance America’s global power. In September, National Security Advisor Anthony Lake outlined a new paradigm. His speech, “From Containment to Enlargement,” bespeaks a political revolution. It provided the blueprint not only for the foreign policy agenda of nearly every U.S. president since then, but for the convictions of every right-thinking person. Lake’s speechwriter was Anthony (sic) Blinken.

Second mention:

After Biden was sworn in as president, his administration shelved a plan to overhaul sanctions policy. A consensus held that if the kinks of the past could be worked out, then the Americans and Europeans had all the weapons in place to launch a devastating financial first strike against their preferred targets. Planning began in the first year of the new administration, with Secretary Blinken’s State Department taking the lead. So by February 2022, just as the Russian invasion of Ukraine faltered, the arrangements were already in place. The strategic possibilities seemed limitless. Russia could be brought to its knees; Putin would follow in the ignominious footsteps of ­Milosevic and Gaddafi.

The execution of the strike was dazzling. The scale, especially the involvement of SWIFT and the targeting of Russia’s central bank, caught the Kremlin by surprise. It was ­Barbarossa for the twenty-­first century. Yet the first strike did not yield the promised results. Nor did the second, third, or fourth. Putin’s approval ratings soared, Russia’s industrial output increased, and its military continues to grind away at the Ukrainian army. Despite implementing nearly 6,000 sanctions in two-plus years, the euphoria of spring 2022 (let alone that of the holiday parties of 2011) is long gone. Although American policymakers have said again and again that they have mobilized a global coalition against Russia that has left the country isolated, that is not the case. The map of the countries that have imposed sanctions on Russia closely resembles the map of the countries that have legalized same-sex marriage. Economic warfare against Russia has exposed the limits of the global American empire.

Lyons applauds Pinkoski’s essay but rejects the notion that this is a revolution against liberalism — instead, it is its apogee.

Sadly, he doesn’t mention Blinken, but he does elaborate on the frightening ambition of this movement:

The managerial ideal is the perfect frictionless mass of totally liberated (that is, totally deracinated and atomized) individuals, totally contained within the loving arms of the singular unity of the managerial state. To achieve its utopia of perfect liberty and equality, liberalism requires perfect control.

This ideal is, of course, the very essence of totalitarianism. Yet if we wonder why the distinction between public and private has everywhere collapsed into “the fusion of state and society, politics and economics,” this is the most fundamental reason why. Perhaps, for that matter, this is also why the U.S. and EU now habitually sponsor LGBT groups in Hungary or India, and finance human-trafficking “human rights” NGOs in Central America and the Mediterranean: because managerialism’s blind crusade to crush any competing spheres of social power has gone global.

In response, a comforting tonic from The Archdruid, John Michael Greer at Ecosophia, whose reader “Dave” asks him:

I’ve noticed a growing and extremely worrying trend of the “elites” of politics and entertainment pursuing reckless and (to me) clearly wrong courses of actions that blow up in their faces, and then instead of honestly looking at the situation they’ve had a large hand in creating and doing a mea culpa, either doubling down and getting mad at regular people when they’re less keen to do what the elites tell them, or trying something else without ever really honestly accounting for their mistakes. The actions remind me of signs of elite collapse that this blog has talked about for years now and it’s very surreal and worrying to see happening in real time. What is going on and why can’t the “elites”, the people with access to more data and resources and advisers than anyone else, seem to realize what’s going wrong? Do they not care or are their actions part of a larger plan, not to sound conspiratorial?

Greer’s response was just what I needed to hear:

Dave, I don’t think that it’s any kind of plan. Quite the contrary, this is normal elite failure, the thing that comes right before an elite replacement crisis. Just as the capitalist elite of the 1920s crashed and burned, and was replaced by a managerial elite in the 1930s and 1940s, the managerial elite of the 2010s is crashing and burning, and will be replaced by an entrepreneurial elite in the 2020s and 2030s. The entitled cluelessness of a class that has remained in power too long is a familiar thing; comparisons to French aristocrats just before the French Revolution also come to mind.

Although, honestly if this means that Elon Musk and company are going to win what Chris Hedges calls “The Choice Between Corporate and Oligarchic Power”…eek!

Kamala Harris, anointed by the richest Democratic Party donors without receiving a single primary vote, is the face of corporate power. Donald Trump is the buffoonish mascot for the oligarchs. This is the split within the ruling class. It is a civil war within capitalism played out on the political stage. The public is little more than a prop in an election where neither party will advance their interests or protect their rights.

And what do the oligarchs want?

Warlord capitalism seeks the total eradication of all impediments to the accumulation of profits including regulations, laws and taxes. It makes its money by charging rent, by erecting toll booths to every service we need to survive and collecting exorbitant fees.

Trump’s cohort of Silicon Valley backers, led by Elon Musk, were what The New York Times writes, “finished with Democrats, regulators, stability, all of it. They were opting instead for the freewheeling, fortune-generating chaos that they knew from the startup world.” They planned to “plant devices in people’s brains, replace national currencies with unregulated digital tokens, [and] replace generals with artificial intelligence systems.”

As much as I eagerly anticipate the long-overdue fall of our current elite, I truly dread what’s coming up in their wake.

The End of Austerity & Reindustrialization

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On October 23, 2024

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Austerity Is Mostly Stupid… Mostly.

This blog is for understanding the present, making educated guesses at the future, and telling truths, usually unpleasant ones. There aren’t a lot of places like this left on the Web. Every year I fundraise to keep it going. If you’d like to help, and can afford to, please Subscribe or Donate.

But there is some logic to it, especially in places like Britain. The fundamental problem is de-industrialization. You can print as much money as you want, sure, but if almost everything you need is made or grown or dug somewhere else well, you have a problem. The US avoids this thru having dollar hegemony, for now, but the UK doesn’t have that and the Euro ain’t what it used to be either. The solution is simple in concept: you need to re-industrialize with than printed money.

(This is a theme and topic we’ve covered before, but forgive me running thru it again from another angle.)

Industrializing or reindustrializing is hard, especially with open markets. You need very careful use of tariffs and subsidies, and you need to cut deals with the current hegemonic industrial power: aka. China. You need real industrial policy, in other words. And neoliberalism doesn’t believe in that.

Instead neoliberalism believes in this weird idea that markets are self-correcting and that whatever markets do is right. Nor does it believe in increasing wages for domestic demand, because it came to power during the oil shocks/stagflation period.

Raising wages and thus general domestic demand when you don’t produce enough domestically means money flooding out of the country. This isn’t necessarily bad. A lower pound or Euro is an export subsidy and helps reindustrialize, but it’s still a hard sell and it has to managed.

You can’t let the trade and balance of payments deficit grow too large. And you have to manage domestic demand: pushing people to buy what is produced locally and making imports for consumer goods expenisve, while funneling import buys towards capital equipment.

This playbook has been run many times. Japan, South Korea, Taiwan, the US in the 19th century, China most recently. We know how to do it. But it does require discipline and an ideological change from neoliberalism, plus a willingness to cooperate with the main industrial power

It’s damn near impossible to industrialize or re-industrialize without aid from the current industrial hegemon. That means getting into a trade war with China is counter-productive. You need to import capital goods from them, and sell them what you produce at competitive prices.

Japan and the USA had Britain. Japan (2nd time), South Korea, China and Taiwan had the United States. You need the markets, knowledge and capital goods.

This mean, in effect, that you need to cut a deal with the current industrial power. They don’t precisely have to be good deals (China offered to make American rich people richer), but the deal has to be something they want.

For US/China one obvious deal is to let them get goods like EVs into the US without tariffs if they build branch plants and help create a supply network in the US. Another obvious deal is to stop supporting Taiwan so much & another is to let them have the South China sea. The EU and Britain can make the same deals.

If the last two bother you, well, look at it this way: they’re going to get Taiwan and the South China Sea anyway, you’re just making it easier for them. You’re giving up things you’re going to have to give up anyway.

This requires a psychological change among Western elites. They need to be willing to admit that they are no longer the top dogs, at least economically and that they can no longer just impose the terms they want.

The longer you leave cutting deals with China to help you reindustrialize, the worse deals you’re going to get. Leave it too long, and reindustrialization may be essentially impossible.

Of course there’s much more to it than this. A complete rejiggering of internal markets is necessary. You have to gut finance and put it at the service of industry. Private equity has to be destroyed wholesale. People can only get rich by exporting or making goods for the domestic market which replace imported goods. Anyone doing significant import of anything but capital machinery (with an eye to building your own) can only be allowed to survive, not prosper.

Generally speaking, to use econo-speak, incentives have to be aligned for re-industrialization, and dis-aligned for anything predatory. Betraying elites must be crushed.

There is no solution to declining standards of living in the Anglosphere and the EU without re-industrialization (maybe Canada and Australia could find another way.) You’ve got to either produce what you need, or produce what others want to buy from you. It’s that simple.

 

The Rise & Fall Of Higher Education & The Medieval Universities Crisis

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On September 20, 2024

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This is based mainly on “Crises and Decline in Credential Systems”, found in Sociology Since Midcentury, Randall Collins, 1981.

We’re currently in the late-middle stage of a higher education crisis in the West. This isn’t a worldwide crisis: the Chinese system is still in its expansion phase, but it’s very real here. Recently I was talking to a friend in Norway, who noted that most young people want a trades education and to avoid university.

I’ve noticed when discussing this that most people are resistant to the idea that this isn’t the first time it’s happened. We have this weird idea that before the modern era, there weren’t large post-secondary education sectors: that degrees and credentials from schooling are something new. This isn’t even slightly true: heck, if we had the data I’m sure we could find something similar in Ancient Egypt, and for sure the massive university systems of Buddhist India went thru more than one cycle. This before we even get to China, a civilization which was based on a credential system for something like two millennia.

But neither is it new in the West.

Schools produced standard culture (and standardized people, as far as that goes.) Culture allows the creation of longstanding institutions: not just the universities themselves, but bureaucracies of various forms, including corporate bureaucracies. It’s not an accident that companies demand degrees, especially for managers.

This culture creation is used in political competition. Think the medieval church vs. various kings, or the kings v.s their feudal lords, or Confucian scholar officials v.s hereditary nobility. In the modern world consider what happened when university trained, mostly Ivy league, degree holders took over the media, or the effect of MBAs taking over from engineers in companies. Boeing is a good example of the consequences, but so is the entire shipping of industry out of the US, and the enablement of China.

Education is one of the sinews of political conflict.

Universities (or credential systems in general) go thru four phases. All four don’t always happen, sometimes the cycle is stopped before it reaches its end.

Expansion. Lots of new students pour in. More institutions are created. Formal requirements for professions are credentialized thru the institutions. In the Medieval era this was civil law, canon law, medicine and theology. In the modern era it includes much more, but of particular note are engineers. During this period having a degree means an almost complete certainty of getting a job. Think of the 50s: a BA was all you needed to vault into management.

Cultural Production Outstrips Positions. An end to the easy early period. You have to compete for positions, there aren’t enough. Credential inflation starts: what once required a B.A. now requires an M.A. The amount of time for higher degrees gets longer and so on. (Back in the early 90s a friend taking a PhD in psychology told me that a PhD alone was no longer enough. Ten years earlier, it had been.) The price of getting an education increases, and in this and the third stage, it tends to skew more and more to the wealthy.

This, I note, has obviously happened in our society. Back in the sixties, education was practically free, now it requires a loan students may not pay off for decades, or ever.

All the positions are filled. (We are here.) There isn’t just a lot of competition, the degrees are increasingly worthless unless you also have clout from something other than education because the positions are filled. The number of people who live off the productive system but don’t contribute to it goes up.

This goes in phases: right now BAs get you nothing but a chance to apply and be rejected, and BA enlistment is falling, but STEM still offers a decent chance. (This won’t remain true in the West for much longer.) During this period alternate culture production really gets fired up: intellectuals who can’t get positions produce books, pamphlets, blogs, podcasts and so on. They attack academia and seek forms of legitimacy other than credentials.

Finally, collapse. The state stops enforcing monopolies, university enrollment drops and many institutions fail entirely. Other forms of cultural production become dominant.

The Medieval University Cycle

The rise really gets going in the 1100s, though some institutions are created earlier. By the 1200s they are accredited by the Church of the Holy Roman Emperor. This makes the credentials valid throughout Christendom, which no other higher credentials are. At this time both the papacy and various kings and principalities are expanding their administration, and there are tons of positions. As with the Confucian scholars in the early days, these administrators are used to expand central authority: feudalism begins its decline. In addition the monopoly of law, medicine and theology works against feudal nobles.

Every major pope from 1159 to 1303 held a degree in law from a university. One of the signs of the end of the reign of the medieval scholastics is when other ways of training come to the fore. In England in the 1400s, for example, lawyers no longer learn and OxBridge, but in London in what amounts to an apprenticeship system. By the 1500s OxBridge no longer teaches physicians, this moves to the Royal College of physicians and soon after the monopoly of clergy on medicine is ended.

The height of the system is significant: two thousand to four thousand students were enrolled at Oxford and Cambridge, for example. This is 4x as many, proportionally, as were enrolled in Elizabethan England and as a proportion of the population the medieval height wasn’t surpassed until after 1900. At this height at least five percent of the male population attended university and it could have been as high as 10%.

The medieval system, note, goes into decline fifty years before the black death: so it wasn’t caused by declining population.

As the medieval system goes into decline, the humanists rise. They work outside of universities often as publishers or authors and rely on noble patronage. They mock the old academics as rigid, fusty and out of date.

But the decline isn’t good for ordinary people: as mentioned in our own case, education becomes less and less available unless you have money and stops being a major way for people to rise. This was very much true in the medieval university decline: at the beginning many poor individuals could attend, but as time went on this became much less true.

Signposts of Decline

  • smaller institutions folding. (The closure of many of the small liberal arts colleges in our time, for example.)
  • a fall in the number of students.
  • decline in number of institutions.
  • loss of monopolies over credentials.
  • widespread attacks on what is taught and how it is taught. (We see a great deal of this now, and it has progressed to politicians passing laws.)
  • Increase in the cost of education, with poorer students being cut out.
  • Cheap degrees which are mere formalities: degree mils and so on.

Note that phases three and four also can feed into political instability. In recent years Peter Turchin has popularized this, and many think he created the idea but it’s long been discussed as important in revolutions such as the French and Russian ones. People who are highly educated but didn’t get the positions they wanted are vastly destabilizing: they feel betrayed and they have the tools to fight ideologically and often the understanding of how to administer movements and other organizations.

Raise someone’s expectations, train them, then let them rot in poverty and you’ve made yourself a potential enemy.

These cycles are dead common. Collins identifies a number, just in the West:

  • The Medieval cycle – starts in the 1100s, peaks in the 1200s, over in most places by the 1400s.
  • English cycle from 1500-1860
  • Spain from 1500-1850
  • France 1500-1850
  • Germany 1500-1850
  • US 1700-1880

The various national ones, though they start at about the same time, other than in America, are separate and have different patterns of rise and decline. Not all of them go all the way: the American universities never go thru phase four, for example.

Education Systems Rise and Fall like all else in human society. What is happening now in our system is very similar to what has happened before and if we want to understand what will happen to our system, the best way to know is to see what happened before. It will never be a one-to-one match: the details will differ, but the pattern will hold.

The obvious thing to do for those who want to slow the fall and end it before collapse is to figure out what sort of training they can produce which isn’t in oversupply. For individuals the question is where the new form of cultural production is and how to legitimize it and reap the benefits of that legitimization. One might wonder if the rise of podcasting intellectuals who use their celebrity to sell their books is a fad, or a sign of something greater, for example. I may return to that in the future.

In the meantime: it’s all happened before.

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Dollar Hegemony Decline Watch

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On September 17, 2024

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So, nice little chart here:

Seems… bad. At least for America and Europe.

Let’s lay this out:

  1. Most of what you want to buy you can buy from China, you don’t need to get it from the West, so why use dollars?
  2. China almost never uses sanctions or seizes foreign currency. The US often does. US dollars are risky, the right to use them can and is often taken away, and so often are the dollars themselves.

So why use the dollar, except that it’s still easier in some cases?

What happens when it’s no longer easier? The BRICS are spending a lot of time on an international banking system which bypasses the West and it’s allies (Japan and South Korea, basically). As that system becomes easier to use, why use the Western system or the dollar? It only exposes you to risk.

This is similar to what happened after the Huawei sanctions. Chinese firms saw the damage that was done to Huawei (they’ve roared back, but it was touch and go for a couple years.) The cry in Chinese business was “delete America.” If you bought anything important from the US you needed to find another source outside of the West, which for manufactured goods usually meant domestically, and for resources meant Africa, South America and Russia.

For a long time the way the banking system was set up you had to use the dollar, but more and more you don’t. And for a long time some key providers, like oil producers, would only take dollars, but now they’ll take Yuan.

So, again, why use the dollar when there is a safer alternative which can be used to buy or sell almost anything you want?

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Big Picture Financial Collapse

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On August 5, 2024

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Though newer readers will be forgiven for disbelieving it, during my early online career I was primarily considered a finance and economics blogger, though I’d write about almost anything. Among other things, I predicted the financial collapse, including the DOW bottom and the month it would happen in. A correspondent once went thru the Wayback machine and found that there were less than forty people who made the prediction in advance.

I lost interest somewhere around 2010 and moved my primary focus to other topics: at the time mostly ideology and how it interacted with the political economy. There was no reason in continuing: my goal had always been change, and the Fed, Congress and Obama had all confirmed that the only change was to be the end of any real spar of capitalism.

So I’m not going to write about the proximate cause of the current financial collapse, but instead look at the bigger picture that lead here.

First we have the offshoring of real industry, primarily to China. There is a real economy, and financial skyscrapers, no matter how high, are based on them. The bottom line is that the West no longer has the industry to hold up the skyscraper.

Second is that the 80-now long bull market was entirely a creation of government policy: mostly thru the Federal Reserve, but with serious assists from Congress and the President. There was a time when stock buyback were illegal, for example. There was a time when the Fed didn’t run a “the markets must always go up” policy: in fact, during the 50s and 60s the stock market traded sideways, even though real economic growth was, by every measure, higher than in the post 80 period.

Third is the response to the 2008 financial collapse. Not the collapse itself, but the response, which was to bail out the people and institutions which had caused the crash, to immunize thru fines and agreements those who had engaged in massive and widespread fraud, to force the burden onto homeowners by allowing banks to steal houses; and in general terms to ensure that the same people who had caused the crisis were in charge afterwards, but more powerful and controlling larger institutions.

Then they patted themselves on the back and said they’d saved the world. Capitalism isn’t a system I like, but one of its virtues is that if you fuck up you go out of business: if you’ve made a lot of bad decisions you aren’t allowed to keep making bad decisions. Bernanke, the Fed, Congress and the Presidency put an end to that dynamic and essentially ended even the shadow of real capitalism in America, and indeed, in the West.

This meant that resources were terribly misallocated, and that further economic decline was inevitable, since there was no possibility of a new economic elite rising based on actually producing good products and solving real problems. It also mean that further financial crises were inevitable, and that in the end those crises would not be able to be papered over, because, Virginia, there may be no Santa Clause but there is a real economy where things have to actually be made and built and grown and dug up and refined.

The fourth factor is the decline of US dollar hegemony. It isn’t obvious in the numbers yet, but it’s real and those who are making long term bets against it will regret doing so. I won’t go on about this, since I’ve written a dozen articles or so on the topic in the last two years.

We’re at the end of somewhere between two and five centuries of European/Western world superiority and dominance. It’s going to suck for Europe, the Anglosphere and most of our allies. There’s just no way around that, and the decision points are past. A recovery is theoretically possible, and I could even write an article giving the outlines of what’s necessary, but there’s no political possibility of doing it and our current elites are too incompetent to make it work anyway. A revolution which throws out our entire leadership class is a pre-condition and by the time we got that done, the day would have passed anyway.

All of which is, I suppose, just a long way of saying “economic decline sucks and isn’t going to stop,”

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UK’S Reform Party Is Poised To Destroy the Consersvatives, and Deserves To

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On June 24, 2024

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The latest polls show Reform, led by Nigel Farage neck and neck, or slightly ahead of the Tories.

I took some time to read their manifesto and it’s pretty bloody awful.

BUT, and it’s a big but, there’s some stuff Reform is promising that no one else is offering. For example:

  • lower rents through reduced migration
  • free tuition for STEM degrees
  • lifting income tax allowance to £20,000

Farage talks about the housing crisis all the time, and these specific policies are laser-targeted at younger people.

Farage wants to stop all non-essential immigration. Britain is like Canada, there’s vastly more immigration than there is housing being created and rents and house prices have sky-rocketed. (A detailed post on that soon.) Tuition averages about $6,000 pounds a year and young adults tend to be poor and have little income.

He also wants to reduce estate taxes, go all-in on anti-trans policies, get rid of clean energy and so on. He’s still a conservative loon.

But he’s offering what neither Labour nor the Conservatives are, or can.

He has the best chance of breaking the Labour/Conservative duopoly that Britain has seen in generations for the same reason LaPen is surging, Brexit happened & Trump is viable: the status quo sucks for most people and they want radical change. Since radical change to the left was stopped with Corbyn’s defeat and the Starmer’s purge of the left from Labout, it’s now the right’s turn.

Like an animal in a leg-trap who chews its own leg off to escape, people in pain who see their lives getting worse and no hope of improvement will take a chance on something radical. Sometimes, as with Javier in Argentina, that something radical is extremely stupid, but at a certain point people will try anything.

For a lot of people in Britain, as in France and Argentina and America, the risk is worth it.

As with Corbyn, the press is now turning hard against Reform. Any change from the neoliberal status quo will be opposed with their full weight. It worked against Corbyn, but at some point it will stop working.

Reform won’t win the election, but they don’t need to. They need to replace the Tories as the second party, either in this election or the next. Once they are part of the duopoly, power is only a matter of time.

Let us hope the left learns from this and raises its own challenge to Labour, replacing it, because Reform’s policies, overall, are horrid.

Neoliberalism is dying in country after country, who and what replaces it matters.

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