Bannon and Trump Joined in Mercantilism

When Steve Bannon was in President Trump’s crosshairs a couple months ago and it looked as if he was going to receive the Apprentice reject treatment the question was how different would Trump’s agenda become if Bannon was kicked to the curb. It was generally agreed that not much would change because, as Perry Bacon Jr. pointed out, Trump was the way he was before Bannon climbed aboard the campaign. Indeed, Trump and Bannon have a shared mercantilist view of capitalism and that’s why they hit it off and have meshed so well. In a 2014 speech at the Vatican, Bannon described the “enlightened capitalism” he espouses, which echoes the mercantilist concern with the sense of mutual obligation and responsibility between countrymen and, consequently, the distribution of wealth for the general welfare:

“I want to talk about wealth creation and what wealth creation really can achieve and maybe take it in a slightly different direction, because I believe the world, and particularly the Judeo-Christian West, is in a crisis… This will be looked at almost as a new Dark Age. But the thing that got us out of it, the organizing principle that met this, was not just the heroism of our people…that fought this great war… The underlying principle is an enlightened form of capitalism, that capitalism really gave us the wherewithal. It kind of organized and built the materials needed to support, whether it’s the Soviet Union, England, the United States, and eventually to take back continental Europe and to beat back a barbaric empire in the Far East. That capitalism really generated tremendous wealth. And that wealth was really distributed among a middle class, a rising middle class, people who come from really working-class environments and created what we really call a Pax Americana… And I believe we’ve come partly offtrack in the years since the fall of the Soviet Union and we’re starting now in the 21st century, which I believe, strongly, is a crisis both of our church, a crisis of our faith, a crisis of the West, a crisis of capitalism… Now, what I mean by that specifically: I think that you’re seeing three kinds of converging tendencies: One is a form of capitalism that is taken away from the underlying spiritual and moral foundations of Christianity and, really, Judeo-Christian belief. I see that every day. I’m a very practical, pragmatic capitalist… I was as hard-nosed a capitalist as you get…But there’s a strand of capitalism today—two strands of it, that are very disturbing. One is state-sponsored capitalism… where you have this kind of crony capitalism of people that are involved with these military powers-that-be in the government, and it forms a brutal form of capitalism that is really about creating wealth and creating value for a very small subset of people. And it doesn’t spread the tremendous value creation throughout broader distribution patterns that were seen really in the 20th century… However, that [Randian Objectivist] form of capitalism is quite different when you really look at it to what I call the “enlightened capitalism” of the Judeo-Christian West. It is a capitalism that really looks to make people commodities, and to objectify people, and to use them almost—as many of the precepts of Marx… I think it really behooves all of us to really take a hard look and make sure that we are reinvesting that [wealth] back into positive things.”

Bannon was right to think that capitalism went off the rails after the dissolution of the Soviet Union because, as David Graeber points out, the generous post-war era capitalism that Bannon lauds shared the wealth as much as it did due to the ideological Cold War challenge of Bolshevism:

“The period when capitalism seemed capable of providing broad and spreading prosperity was also, precisely, the period when capitalists felt they were not the only game in town: when they faced a global rival in the Soviet bloc, revolutionary anti-capitalist movements from Uruguay to China, and at least the possibility of workers’ uprisings at home. In other words, rather than high rates of growth allowing greater wealth for capitalists to spread around, the fact that capitalists felt the need to buy off at least some portion of the working classes placed more money in ordinary people’s hands, creating increasing consumer demand that was itself largely responsible for the remarkable rates of economic growth that marked capitalism’s “golden age”. Since the 1970s, as any significant political threat has receded, things have gone back to their normal state: that is, to savage inequalities, with a miserly 1% presiding over a social order marked by increasing social, economic and even technological stagnation.”

So the only guaranteed way to get capitalism back on track—where there is a voluntary sharing of wealth to minify the natural, savage inequalities of capitalism—is for there to be an atmosphere where the capitalist class has to battle with antagonists that present economic alternatives. This could explain why Washington has been seeking a replacement ideological Great Power enemy and why Bannon is fixated on hyping up radical Islam as the titanic threat of our time. But such a helpful foe is still nowhere in sight and may never be for, as Graeber notes, “Since no one in their right mind would wish to revive anything like the Soviet Union, we are not going to see anything like the mid-century social democracy created to combat it either.” Bannon’s clarion call for a return to “enlightened capitalism” will hit another snag. Take for example Nick Hanauer’s argument–addressed to his fellow plutocrats–on the benefits of a higher minimum wage to both them and society. While his colleagues in corporate America would agree that Hanauer is technically correct in the short-term, they also know paying their employees more will end up being bad for capitalism in the long run as the working class, enjoying their rising riches, begins to demand more and more. Errico Malatesta summed up the phenomenon thus: “If [workers] succeed in getting what they demand, they will be better off: they will earn more, work fewer hours and will have more time and energy to reflect on things that matter to them, and will immediately make greater demands and have greater needs.” It wouldn’t be long at all before they started demanding the full value of the product of their labor and workplace democracy.

In all, it looks like bad news for Bannon’s dream of reviving “enlightened capitalism” but it’s a grand opportunity—though a nightmarish one in Bannon’s eyes—for us to go beyond capitalism altogether. “If we want an alternative to stagnation, impoverishment and ecological devastation,” concludes Graeber, “we’re just going to have to figure out a way to unplug the machine and start again,” instead of doing what Piketty and Bannon hopes will work—that is, “try to build a slightly smaller vacuum cleaner sucking in the opposite direction” to ineffectively counter a “gigantic vacuum cleaner sucking wealth into the hands of a tiny elite.”

President Trump the Mercantilist?

President Donald Trump’s shtick—during the campaign and now in his presidency–is that he’s all about going to the mat for the Forgotten Americans and to him the marrow of that mission entails tangling with the outsourcing U.S. corporations whose business decisions have left millions with the short, shitty end of the economic stick. To his credit, he has kept his word, utilizing his bully pulpit to condemn and berate domestic companies that hurt the American worker as unpatriotic. Trump’s tongue-lashings have been done with such effectiveness that he has made corporate leaderships uneasy about proceeding with business as usual, as Reuters reported right before his inauguration:

Some U.S. companies are reviewing potential mergers while others are rethinking job cuts or looking at their manufacturing operations in China for fear of being cast as “anti-American” by President-elect Donald Trump, according to Wall Street bankers, company executives and crisis management consultants. Having seen some of America’s largest companies, including General Motors Co, Lockheed Martin Corp and United Technologies Corp, bluntly and publicly rebuked by Trump on Twitter, many others are worried they may be his next target–especially if they have significant overseas manufacturing, have had U.S. job cuts or price increases for consumers. “Any business that leaves our country for another country, fires its employees, builds a new factory or plant in the other country, and then thinks it will sell its product back into the U.S. without retribution or consequence is WRONG!” Trump tweeted in December… Government relations and public relations advisers say they have received a number of calls from companies wanting help in assessing if they have any red flags that could draw Trump’s ire. Advisers say these potentially include outsourcing of manufacturing, consumer price increases and lower tax rates than peer companies… Corporate leaders, say the advisers, can no longer focus only on maximizing shareholder value; they must now also weigh national interest. “CEOs are talking to their boards saying we’ve got to be viewed pro-America. If something is more on the margin–like layoffs, or moving manufacturing, then they are not going to do it,” said one Fortune 500 CEO, who said he had spoken with other U.S. companies…”You never want to be against the president–especially not one as vocal as (Trump),” the Fortune 500 CEO said.

Many must wonder at Trump–a billionaire businessman who has himself been guilty of the business practices he now attacks passionately–becoming the punisher of corporate America but it’s understandable when one considers that Trump takes a wide-ranging view of capitalism. Thanks to financial capitalists being the predominant capitalist faction and taking the wheel of the U.S. economy for decades, Trump’s thinking likely goes, the capitalist system as a whole became badly out of whack and by restoring his capitalist sect to its proper place he will reorient it and prudent, responsible capitalists will take the reins once more. He knows, as OECD Chief Economist Pier Carlo Padoan said at Davos back in 2012, that “Rising inequality is one of the major risks to our future prosperity and security,” and consequently that “The main challenge facing governments today is implementing reforms that get growth back on track, put people to work and reduce the widening income gap.” He knows that, according to an opinion poll Former White House aide Larry Summers once cited, “40 percent of Americans no longer have a positive opinion of capitalism” and he believes, like Summers, that “the crisis of confidence in the system could be addressed with sufficient fiscal and monetary stimulus to kick-start growth.”

Trump’s strategy for pumping the sorely needed money back into the U.S. economy is to browbeat his elite peers and be the boot in the ass that they need to recognize the same truths he does, which will spur them to voluntarily re-invest their wealth here at home and accept tax hikes that will give the middle class a helping hand. It’s not like the money for the public betterment can’t be easily obtained—the elite could simply dip into their fund of trillions that they have squirreled away through tax evasion.

Given that Trump’s modus operandi is to balance interests of particular groups so as to ensure the stability of the entire economy, I asked myself–does President Trump fit the description of a mercantilist? Mercantilism is an older form of capitalism that was understood by mercantilists themselves as transcending economics and embracing a social order that is ever striving to achieve the common good.* We can judge by this passage from William Appleman Willliams’ Contours of American History [Page 35] if mercantilism is comparable to Trump’s outlook:

“Should the merchants be allowed to run unchecked with no effort being made to control and balance the economic changes and the social consequences which followed in the wake of their activities? From almost every point of view, the answer supplied by England’s existing traditions was negative…he [the king] could neither risk unlimited power in the hands of the merchants per se nor the probability of their excesses provoking rebellion in the lower classes (and in the old agrarian aristocracy). From the economic angle, untrammeled freedom for the merchants did not produce general economic improvement. Food production, for example, was sadly neglected in the rush to wool-raising and mining. Finally, even the merchants came to realize that they had to have a more unified and balanced society in order to attract other segments of society to support the Crown in undertakings that would help them to expand their overseas operations. It should be apparent, therefore, that mercantilism was anything but the narrow ideology of the commercial interest, for while it stressed the need for trade and was supported by the merchants, it defined the problem as one of directing such activity so as to produce the common good.”

Personally, I think Trump being a mercantilist checks out and would unriddle the worldview of a man so baffling to so many analysts.

* “Both men [John Quincy Adams and James Monroe] realized that there was more to mercantilism than economics. Monroe persisted in his conviction that “one system” of interrelated and balanced parts would accomplish “great national purposes” and “promote the welfare of the whole people.” Contours, 209

Donald Trump and the Clash of Capitalists

The LA Times, in part two of its six-part series of articles pummeling President Trump, seems to echo my point that he is the Figurehead-in-Chief, a conduit through which others can work their agendas and that contributes no input of its own: “Trump’s easy embrace of untruth can sometimes be entertaining…But he is not merely amusing. He is dangerous. His choice of falsehoods and his method of spewing them…are a clue to Trump’s thought processes and perhaps his lack of agency. He gives every indication that he is as much the gullible tool of liars as he is the liar in chief. He has made himself the stooge, the mark, for every crazy blogger, political quack, racial theorist, foreign leader or nutcase peddling a story that he might repackage to his benefit as a tweet, an appointment, an executive order or a policy.” Saying that Trump lacks agency is largely true but it would be a bit uncharitable, however, to claim that he’s a totally blank slate because he did, after all, have both a paramount political strategy and an economic worldview that motivated him enough to hop into politics.

His political goal was to become the Populist Pied Piper, using the credibility he gained from his campaign’s supporters to become a highly-influential pundit who winds up taking the wind out of populism’s sails. That he still sees himself as playing this role as President helps make even more sense of why Trump oddly dropped the ball on the rollout of his agenda. By trying to ram his policies through Washington the way a true uncompromising outsider populist would, Trump’s intention was to provide the ultimate teachable moment for his followers. He would then point to the ineffectiveness of the hasty, haphazard, and thoroughly anti-establishment method of enacting his campaign platform along with how disastrous the fallout from those failed attempts was and conclude that these ideas were crude, ill-considered, and should be either watered-down or abandoned. Changing to a centrist tack after this initial flubbing (which Trump has done) would be a subliminal admission that populism doesn’t work and that making America great again would have to be done through the art of the deal, negotiating with the unsavory D.C. swamp creatures.

In addition to derailing populism, Trump is also using populism to help restore a particular sect of capitalists to their former prominence, as Benjamin Waterhouse illustrates:

“Trumponomics presents a conundrum: One of the wealthiest human beings on earth seems to be cribbing from the Occupy Wall Street playbook… How can we make sense of this populist mogul? Is the consummate one-percenter a new kind of Republican? History suggests no. Trump is not a new kind of conservative. But he is a specific type of one-percenter. (Really, 1 percent of 1 percent of 1 percent) From where the rest of us sit, all billionaires tend to look alike. But now, as in the past, divisions within the economic elite can be fierce, with enormous political consequences. As a real-estate developer, Trump has a different set of material interests than, for example, the Wall Street investors he maligns with such glee. To understand his economic populism, we have to grapple with the long history of the fractious business elite. The myth of a unified business community is a powerful one in American history. But it is also largely false. More often than not, competing economic interests have clashed fiercely over the vital issues of the day—from Alexander Hamilton and Thomas Jefferson’s ferocious battles over imposing protective tariffs to the tumultuous fights over airline industry deregulation in the 1970s. (The big carriers fought for the regulations!) The history of capitalism suggests that sector-on-sector political fighting has been most pronounced when the economy underwent profound structural changes. The rise of industrial capitalism created just such a destabilizing moment. Early factory owners cast themselves as virtuous “producers”—unlike the usurious entrenched wealth of the merchant, banking and slave-holding classes. In the 1830s, President Andrew Jackson declared war on the Bank of the United States because, as the historian Arthur Schlesinger Jr., put it, “no institution played a more important role in transferring wealth from the producing class to accumulators.” As industrial capitalism expanded, its practitioners grew bolder in challenging the old order… In the past 40 years or so, the mass consumption industrial economy of the post-World War II era has given way to something new—often called “financialization.” Today, investment and financial speculation generate greater profits than manufacturing, natural resource extraction or service provision. Financial institutions and the elites who run them have become the faces of Big Business, replacing the once-mighty CEOs of U.S. Steel, DuPont and General Motors, who dominated at mid-century. As early as the 1980s, old-guard industrial executives noted the perils of this transition. In 1987, the Business Roundtable—a consortium of Fortune 500 firms—spoke out loudly against corporate raiders, leveraged buy-outs and short-term stock price manipulation, which have now become the mainstays of the modern economy. Many members of the Business Roundtable banded together in the “Coalition to Stop the Raid on America,” a bipartisan campaign for tougher regulations of hostile takeovers. Financialization is the capitalist disruption of our era, and it is the root of Trump’s economic message. Just as his position on immigration recalls an idealized, earlier (and whiter) America, so too does his attack on Wall Street and global corporations reflect a deeply conservative longing for a bygone epoch in American capitalism. An era when the United States dominated global manufacturing as Europe and Asia dug out from the rubble of war. An era when Big Business didn’t mean investment banks and hedge funds. When it meant domestic production—of steel to make buildings with and airplanes to fly. When business looked…more like him … His economic identity may make him an unlikely champion of a pre-financialized mode of capitalism. But since luxury hotel construction can’t be easily outsourced—and Trump can invoke the classic manufacturer’s claim of “making,” not “taking”—he has nothing to lose by calling out the hedge fund managers. Trump’s anti-elitism is neither crass pandering nor a betrayal of his class. Instead, his politics are of a piece with a long history of in-fighting among business elites as well as a nostalgic campaign to revive an older economy, to “make America great again.”

Trump has long been awake to the dangers of this shift to the primacy of finance capitalism and of neoliberal globalism run amok and wishes to reverse this trend, not just so his type of businessmen get their status back and get wealthier to boot, but because, if it’s not checked, the economic status quo poses an existential threat to capitalism as a whole. I can imagine that the 2008 financial crisis was the final straw for a man who has had presidential ambitions for decades. So, Trump is out to try to make capitalism responsible again–an eternal struggle because it’s impossible for capitalists to be responsible when capitalism relies on constant growth no matter what. Saving capitalism from itself usually requires an external force–like the state–to rein it in but Trump must believe that the solution can come from within the capitalist class. In this manner, Trump can be thought of as a pragmatic plutocrat like Nick Hanuer who advocate policies where the upper class voluntarily sacrifices slightly to stave off the rabble grabbing their torches and pitchforks. All told, I’d still agree that Trump is mostly a figurehead but he nonetheless has an ambitious vision that he will cling to and strive towards even if he isn’t quite sure how to get there yet.

The President Has No Clothes

The 2016 presidential election boasted the two most unpopular candidates in U.S. history and I’m sure many disgusted voters wished they could both lose. Well, in a sense, they have because Trump will not be fulfilling the role of Chief Executive. Instead, he will be content to play the part of America’s first figurehead president, as was his intention all along. The New York Times reported that during Trump’s search for a running mate, his son, Donald Trump Jr., allegedly made the offer to a senior advisor of dropped-out presidential candidate John Kasich by asking if Kasich had “any interest in being the most powerful vice president in history.” When the advisor sought clarification about what exactly that meant, Trump Jr. replied that “his father’s vice president would be in charge of domestic and foreign policy” while Trump himself would have the sinecure-sounding job of “Making America great again.” Naturally, Trump Jr. denied this exchange took place but, from what I’ve seen of the Trump presidency, I’d say there’s good reason to believe it was true.

But now, one might ask, doesn’t Trump’s burst of activity since his swearing in refute the notion that he’s an empty suit? I’d counter that by noting how Trump has actually accomplished little and that his status quo-shifting policies have yet to become reality. Anyone who doubts this will be disabused by Zack Karabell’s piece “President Trump has done almost nothing”, the following excerpt of which sums up the case nicely:

“There is a wide gap, a chasm even, between what the administration has said and what it has done. There have been 45 executive orders or presidential memoranda signed, which may seem like a lot but lags President Barack Obama’s pace. More crucially, with the notable exception of the travel ban, almost none of these orders have mandated much action or clear change of current regulations. So far, Trump has behaved exactly like he has throughout his previous career: He has generated intense attention and sold himself as a man of action while doing little other than promote an image of himself as someone who gets things done. It is the illusion of a presidency, not the real thing… Trump can issue as many documents called executive orders and presidential memoranda as he wants. As the fate of the travel ban shows, however, that doesn’t mean that even the more meaningful ones are actionable, and the preponderance of the orders to date would in any other administration have been news releases stating broad policy goals that may or may not ever become actual policy.”

The illusion of a presidency—that’s just what Trump needs to sustain if he wants to escape his term without having to implement populist policies that, as a globalist, he never had any intention of delivering on. Every move that the White House has made–and will make–can therefore be best explained by the Trumpian tightrope act where because he branded himself as a fiery outsider–utterly unlike the typical insincere politician–who would shake up Washington for the sake of the forgotten Americans he cannot simply ditch his populist campaign promises but nor does he want to fulfill them and do harm to globalization. But President Trump has found how to maintain the balance and not alienate either side—i.e. he can appear to be trying to make good on his campaign promises but do so in a consciously clumsy and madcap manner that will see these attempts fail in the end. The most conspicuous instance of this was the travel ban and the recklessness with which it was rolled out—almost as if President Trump, in an act of self-sabotage, went out of his way to botch it so that it would become both widely unpopular and legally untenable. Then there’s the added bonus of Trump seeming to adhere to his campaign platform spooking the Democrats and spurring them into becoming obstructionists, as Edward-Isaac Dovere writes:

“Trump’s executive order banning immigration from certain Muslim-majority countries—one of his most controversial and widely dismissed campaign promises—has sparked a panic among his critics about what else President Trump might actually do: create a Muslim registry, deport undocumented immigrant children, try to take oil from ISIS or kill terrorists’ families. Those campaign promises were all laughed off and dismissed by many, just like when he tweeted about sending federal enforcement into Chicago or stripping flag burners of their citizenship—or even changing libel laws to sue reporters or throwing Hillary Clinton in jail. “I was one of the folks that had hoped that he was just saying things to get elected and that he didn’t really believe in them,” said Rep. Ted Lieu (D-Calif.), who after the election sent an email to his supporters urging them to move past the election and be proud of a peaceful transfer of power. “I’m now convinced that I was wrong. We should not give him a chance to govern. I believe he is a danger to the republic.”

Getting the Democrats to rally together and block most of Trump’s agenda would suit him perfectly, especially if all these executive orders re-energize the Democrats to the point where they win the Congressional midterms in 2018.

In all, I think it can be confidently asserted that President Trump, like the emperor in the fable, has no clothes and, moreover, that he knows it and isn’t inwardly bothered by being in the (figurative) buff. As I wrote before, Trump never wanted the presidency and so he likely wants to coast through his time in office, do nothing that rocks the ship of state, and wind up with an okay rating of his performance by historians.

Palestine and the Middle East Great Game

Joining the chorus imploring the Israeli political establishment to straighten out its priorities and tone down the anti-Iran hysteria is Lt. General Benny Gantz, chief of the Israel Defense Forces. Gantz is convinced that “the Iranian leadership is composed of very rational people” and has adjudged that Supreme Leader Ali Khameini will not decide to pursue nukes, saying “I don’t think he will want to go the extra mile.” Contra his boss, Prime Minister Netanyahu–who totally opposes upcoming negotiations, is skeptical of the efficacy of sanctions, and demands Iran be rid of all its enrichment capabilities-for Gantz all the international pressure is “starting to bear fruit” and he nods approvingly at diplomacy along with Defense Minister Ehud Barak. Barak, formerly the foremost proponent of bombing Iran, has done an about-face of late, opening up a schism within the Israeli leadership. An anonymous Israeli senior official confided to the AP’s Jean-Luc Renaudie that, “Ehud Barak has evolved and seems more moderate,” and “In fact, the prime minister is somewhat isolated on Iran.” The doomsday clock has been set back by hours with Netanyahu in check.

One would think that Gantz’s admission would squash talk of all hostilities (including those occurring under the radar) but, for all his insight, the military chief is patently no pacifist on Iran. Indeed, in his interview with Haaretz, Gantz made sure to lace his language with equivocations. Iran doesn’t aspire to atomic weaponry but the military option–all but called-off–must still be “first in terms of its credibility”–Really? More than this, he announced recently the resumption of covert operations against ‘enemy nations’ after they were suspended last month for Netanyahu’s fear that they would “be discovered or go awry.” Writing about this discontinuance in Time Magazine, Karl Vick noted that these operations–which included assassinations of Iranian nuclear scientists–were halted because they risked “recasting the nuclear issue itself, from one of overarching global concern into a contest confined to a pair of longtime enemies.” Vick intimated at the gist of things here, namely that this is truly a trumped up rumpus between two regional rivals and that the whole world has been sucked into it so one side could gain an advantage in an ongoing asymmetrical war.

Both Israel and Iran are waging ‘soft war’ against one another via proxies: Iran by using Hamas and Hezbollah to deter Israel’s regional ambitions, Israel by using the MEK and Jundullah. That explains why Gantz is having covert ops continue although other high-ranking officials have repeatedly acknowledged that even a hypothetical nuclear Iran wouldn’t pose an existential threat. This clandestine campaign is part and parcel of the Great Game being played between these adversaries. But they haven’t always been at daggers drawn and Israel wouldn’t balk at keeping the Islamic Republic regime provided they become convinced to again participate in Israel’s ‘periphery doctrine‘ wherein Iran will ally with them against the Arabs and cease being a bulwark of Palestinian resistance to occupation. The covert ops which are aimed at weakening Iran (but not to the point where they can’t be a counterpoise to the Arabs) will likely be cancelled for good and all when wayward Tehran wanders back into the fold.

What never seems to enter the Israeli calculus is that peace with the Palestinians would be infinitely easier to achieve. Per the Saudi-proposed 2002 Beirut declaration, all of the Arab states (and Iran) would offer full normalization of relations with Israel upon the dissolution of the occupation. Israel would be instantly integrated into the neighborhood requiring none of the intricate machinations of the periphery doctrine. Whether Israel accepts a one or two-state solution thus would the Gordian knot that this conflict has morphed into be severed. The former course is looking more likely since, in a startling development, land-famished West Bank settlers are mulling over the merits of having that territory annexed and its Palestinian inhabitants granted Israeli citizenship. The Atlantic’s Robert Wright adverted to this attitude shift reminiscing over his trip to Israel last summer where he was told certain settlers were “‘more attached to the land than to the state’ and would rather surrender Israel’s officially Jewish identity than surrender their settlements.” This turnaround goes a long way in surmounting a further hurdle-transcending the ideology of Zionism-but that’s a subject for a subsequent article.

The liberated Palestinians in turn must make concessions of their own including acquiescing to only a token right of return. The number of repatriates is contingent upon there being one or two states and, as columnist Eric Margolis in his book “American Raj” fairly suggests, chosen by lot “from those Palestinian families who lost their homes in 1948 and 1967.” Though this beau geste might seem a triviality, the permission would be immensely treasured. Margolis explains that “In a part of the world where symbolic gestures and proper manners are of paramount importance… even small gestures of humanity often can exert surprisingly potent effects.” Having realized justice for their brethren, the majority of Palestinian refugees would gladly be absorbed into the nations where they reside and would at last be welcomed by those nations since peace nullifies the Arab League’s position of deliberately deferring the refugees citizenship until their right of return and compensation is addressed by the UN.

The refugees are also kept at arm’s length by Arab despots who view the deracines as radical agitators. Margolis notes that although “Arab and other Muslim rulers had personal sympathy for Palestinians” they “feared them as a…source of revolutionary zeal.” These apprehensions were actualized, for instance, during the 1970 ‘ Black September ‘ incident. But this destabilization dilemma vanishes upon peace with Israel and then it would be up to the Arab autocrats to assimilate the destitute refugees and reform accordingly. Incentivizing them to do so, the U.S. should announce that it is dissolving all political connections to these countries out of republican, non-interventionist principle. Lest those elites wish to lose everything, representative government will bloom amidst a renewed Arab Spring. Oh, and did I mention that rectifying the Palestinian situation would defuse the Iranian nuclear issue too?

A Bit Of Context For The Pacific Pivot

It is perfectly understandable that some would be frustrated at the lack of progress in the P5+1 talks but there’s little reason to despair. In the wake of the latest round in Moscow, Kremlin adviser Sergei Markov captured the sense of pessimism in the Russian delegation, which felt uniquely suited to bridge the gap between Washington and Tehran. “For Russia the result is moderately positive,” but Markov cautions that “quicker developments” are required in order to foreclose the “quite high” chance of an Israeli strike in the summer months. As if in response comes Aaron David Miller reminding us that we needn’t be “nervous Nellies” because “The fact is that nobody-not the Israelis, the Iranians, nor the Americans-wants a war or a deal right now.” Miller is correct that it won’t materialize immediately but a deal is indeed in development–albeit at a glacial pace–and will be reached next year. Iran will at last be granted the right to civilian nuclear enrichment but, alas, will not receive the overarching rapprochement with America that it craves most.

It has become a commonplace that Iran is implacably against the West, its regime too irrational for compromise. Contradicting this popular perception is the forgotten Iranian proposal offered in 2003 which would have been the preliminary for a “grand bargain” where, as Glenn Kessler describes, “everything was on the table–including full cooperation on nuclear programs, acceptance of Israel and the termination of Iranian support for Palestinian militant groups.” In the estimation of Flynt Leverett, it was “a serious effort, a respectable effort to lay out a comprehensive agenda for U.S.-Iranian rapprochement.” Incredibly, the Bush administration not only sniffily dismissed this initiative but was furious at the Swiss ambassador for having the effrontery to send it along. Moreover, according to Richard N. Haass, the unprecedented offer was peremptorily rejected by the administration because “the bias was toward a policy of regime change.” Consider the myth of Iranian intransigence exploded.

Iran obviously wants a détente but then why, a skeptic might inquire, does Iran delight in vexing the West over its own version of nuclear ambiguity (will they build a bomb?) and its ongoing progress in uranium enrichment? Look no further than the Kessler piece where one finds Trita Parsi penetrating to the heart of the addled matter. “Parsi said that based on his conversations with the Iranian officials, he believes the failure of the US to even respond to the offer had an impact on the government,” which came to realize that “the US cared not about Iranian policies but about Iranian power.” Parsi explains that the uncouth refusal “strengthened the hands of those in Iran who believe the only way to compel the United States to talk or deal with Iran is not by sending peace offers but by being a nuisance.” Iran’s sole recourse is to be pesky and puckish, getting the West to blunder into making wild claims about Iran’s atomic ambitions only to eventually be made ridiculous on the international stage by chasing after nuclear hallucinations.

Not to be outdone in purposely causing provocation, Washington is relying on the option of regime change to instigate the Iranians to nationalist indignation. Overthrowing the Iranian government is a delusion but a useful one that forces Iranians to conform to the aforementioned stereotype of irrationality when they’re faced with potential Western intervention again. This tactic is also being used against China to similar splendid effect. A recent Center for Strategic International Studies report details how our Pacific Pivot serves to antagonize China: “The U.S. Asia pivot has triggered an outpouring of anti-American sentiment in China that will increase pressure on China’s incoming leadership to stand up to the United States. Nationalistic voices are calling for military countermeasures.” This reaction plays right into the hands of the Pentagon which will demand that any increase in China’s military budget be met with commensurate spending here. A China incited by our policies will keep the axe from slashing the overblown $1 trillion defense budget.

The centerpiece of U.S. foreign policy henceforth will be a grand Cold War directed at China. The Pacific Pivot is in fact a re-pivot, for China was set a decade ago to be Washington’s Public Enemy Number One as recommended by a defense strategy review composed in the earliest days of the Bush administration. China was to be targeted, according to Martin Kettle’s summary, on account of that nation being “now perceived as the principal threat to American global dominance.” With the Global War on Terror winding down, this contest can be prosecuted in earnest and it is to be waged by militant meddling in the Middle East. To secure this “American global dominance”-otherwise euphemized as “benevolent global hegemony”-Uncle Sam must have his hands on the spigots and be able to choke off the flow of oil. And this is where the concurrent mini Cold War against Iran comes into play.

There is much uproar in our media when Iran threatens to close the Strait of Hormuz but the nation most likely to execute that threat is our own. Conn Hallinan informs us that “It is estimated that, sometime between 2030 and 2050, China will surpass the U.S. and become the world’s number one economy-provided that it can secure enough energy for its growing industrial needs.” Fearing China becoming a peer competitor, Washington has to harass Iran-China’s number two supplier of oil and gas-through sanctions and power projection in the Persian Gulf.

The policymakers don’t want a shooting war but low-simmering tension and occasional escalation-a suitable excuse to, as the BBC’s Jonathan Beale asserts while reporting aboard the USS Abraham Lincoln, “send a clear message to Iran as to who really controls these waters.” Controlling those waters is crucial for subduing an ornery and rising China in future and this imperial scheme is why the Iranian people are made to suffer and why average Americans must pay the price of empire instead of earning the wages of peace with Iran.

 

Trump Will Drain the Swamp? Not a Chance

Edward Isaac-Dovere was floored by how nonchalant President Barack Obama was about Donald Trump succeeding him during his first post-election press conference, writing “After a year of warning that Trump was uniquely unqualified for office, temperamentally unfit for the job, a challenge to democracy, a man who shouldn’t be trusted with the nuclear codes, and who should not, could not and must not win, Obama spent an hour standing in front of the White House seal acting like he didn’t mean any of it, and the president-elect didn’t mean any of what he said, and not much is going to change on Jan. 20 or anytime after.” Although Dovere doesn’t pursue this glaring possibility that neither Obama nor Trump were sincere in their campaign trail rhetoric, it’s what best explains why Obama is so calm and composed over Trump’s victory.

It must have been clear to Obama that Trump was trying to throw the election and had another objective in mind instead of the White House and so should Trump unexpectedly win it wouldn’t be a big deal. After his inauguration he would drop his intentionally-repellent candidate persona like a hot potato and do a complete 180 on the provocative elements of his platform. Indeed, the Great Trump Walk back has already begun. But the billionaire businessman was always going to flip-flop on his populist promises since they were never in line with his actual views on globalization. But even if Trump did subscribe to those positions, he would be compelled to ditch them by the deep state and capitalist class, as section B.2.3 of the Anarchist FAQ—which discusses the three barriers to direct democracy—explains to us:

That is the first barrier, the direct and indirect impact of wealth [i.e. the wealth needed to finance political campaigns]. This, in itself, is a powerful barrier to deter democracy and, as a consequence, it is usually sufficient in itself. Yet sometimes people see through the media distortions and vote for reformist, even radical, candidates. As we discuss in section J.2.6, anarchists argue that the net effect of running for office is a general de-radicalising of the party involved. Revolutionary parties become reformist, reformist parties end up maintaining capitalism and introducing polities the opposite of which they had promised. So while it is unlikely that a radical party could get elected and remain radical in the process, it is possible. If such a party did get into office, the remaining two barriers kicks in: the bureaucracy barrier and the capital barrier. The existence of a state bureaucracy is a key feature in ensuring that the state remains the ruling class’s “policeman” and will be discussed in greater detail in section J.2.2. Suffice to say, the politicians who are elected to office are at a disadvantage as regards the state bureaucracy. The latter is a permanent concentration of power while the former come and go. Consequently, they are in a position to tame any rebel government by means of bureaucratic inertia, distorting and hiding necessary information and pushing its own agenda onto the politicians who are in theory their bosses but in reality dependent on the bureaucracy. And, needless to say, if all else fails the state bureaucracy can play its final hand: the military coup…The capital barrier is obviously related to the wealth barrier insofar as it relates to the power that great wealth produces. However, it is different in how it is applied. The wealth barrier restricts who gets into office, the capital barrier controls whoever does so. The capital barrier, in other words, are the economic forces that can be brought to bear on any government which is acting in ways disliked of by the capitalist class…The mechanism is simple enough. The ability of capital to disinvest (capital flight) and otherwise adversely impact the economy is a powerful weapon to keep the state as its servant. The companies and the elite can invest at home or abroad, speculate in currency markets and so forth. If a significant number of investors or corporations lose confidence in a government they will simply stop investing at home and move their funds abroad. At home, the general population feel the results as demand drops, layoffs increase and recession kicks in. As Noam Chomsky notes: “In capitalist democracy, the interests that must be satisfied are those of capitalists; otherwise, there is no investment, no production, no work, no resources to be devoted, however marginally, to the needs of the general population.” [Turning the Tide, p. 233] This ensures the elite control of government as government policies which private power finds unwelcome will quickly be reversed. The power which “business confidence” has over the political system ensures that democracy is subservient to big business.

The wealth barrier did not apply to Trump—and he proved that a presidential candidate does not need a plenteous war chest to win if one is popular enough–but the other two certainly will. This is one stark reality that has already dawned on Trump and accounts for why he has–according to Newt Gingrich–disclaimed his campaign talk of “draining the swamp” that is the Washington establishment. Furthermore, Corey Lewandowski said purging the government of lobbyists and corruption was at the bottom of Trump’s priorities. If this is accurate—and I believe it very much is, no matter what Trump tweets–this means Trump is aware of the two barriers (and he either knew about them going into the election or was recently brought up to speed about who really runs the show in our nation’s capital). So, having experienced firsthand the presidency’s limitations, Obama isn’t faking being unfazed by a Trump term.

He isn’t, as Dovere maintains, “obviously” donning a mask “to avoid sparking the panic in the country and the economy that would likely come if the sitting president actively resisted the president-elect” but because Trump will indeed hardly change a thing. After all, as Rich Lowry notes, Trump “has assembled a Cabinet that by and large could have been put together by Ted Cruz, or for that matter, Mitt Romney.” He’ll promote and try to push through Congress a couple things here and there that one wouldn’t normally find within a conventional Republican agenda but that’s all. Trump is destined to disappoint and hopefully the millions of voters who were excited by the populist message he used to get elected will absorb the lesson that “draining the swamp”—i.e. creating radical change—can never be achieved through the ballot box or the state

Trump Dumped on D.C.

The 2016 U.S. presidential election will go down as the most stunning political upset of all time. Donald Trump’s victory blindsided and gob-smacked virtually everyone. It was shocking for me because I was laboring under the assumption that Trump was taking the most plain to see dive ever in a presidential race but pulled off the win anyway. That’s the best way, in my view, to make sense of Trump campaigning like he was a contestant on a reality TV show that was going on in his head–“America’s Next Top President”–and constantly spouting outrageous statements and stirring up controversies to drive up that imaginary show’s ratings. You just don’t alienate entire constituencies and go after a gold-star family and realistically expect to get elected come November. So while everyone else is frantically asking why Trump won, the real question, I think, is why did he try his damndest to lose? If his heart wasn’t really in it, what was he out to accomplish?

Howard Stern was on the right track in the answer he gave to his own question of ‘why did Trump even want the presidency when his life was paradisiacal?’ which was that NBC was going to lower the pay he was getting for The Apprentice: They were going to fuck with him on the contract. He [Trump] said, ‘You know what I’ll do, I’ll run for president. Even if I don’t win, I’ll announce, it’ll up my game, and I’ll get a better deal.’ Which is a smart move…I truly think the biggest shock in all of this is to Donald Trump. Because I think it was more of a, ‘Hey!’ a publicity kind of thing. ‘I’ll get my name out there. I’ll see what happens, we’ll have some fun. I don’t know that he could’ve imagined that this could’ve been the outcome. An entertaining publicity stunt to add value to the Trump brand was part of it but there was another, more substantive explanation for him throwing his hat in the ring and it stemmed from a phone call the Donald had with Bill Clinton.

Clinton had rung up Trump just weeks before he decided to run and, according to the Washington Post, “Four Trump allies and one Clinton associate familiar with the exchange said that Clinton encouraged Trump’s efforts to play a larger role in the Republican Party and offered his own views of the political landscape.” Clinton “listened intently” as Trump spoke of his White House aspirations and he “then analyzed Trump’s prospects and his desire to rouse the GOP base,” and added that Trump “was striking a chord with frustrated conservatives and was a rising force on the right.” Clinton supposedly “never urged Trump to run” but nevertheless “was upbeat and encouraging during the conversation, which occurred as Trump was speaking out about GOP politics and his prescriptions for the nation.” I don’t think it was likely that Clinton wasn’t eagerly pushing Trump to go for it given the stratagem his wife’s campaign had cooked up a month before, as Ben Norton writes:

“What was not often acknowledged in Trump’s heated race against Democrat Hillary Clinton, however, was how her campaign fueled his rise to power. An email recently released by the whistleblowing organization WikiLeaks shows how the Clinton campaign and Democratic Party bear direct responsibility for propelling the bigoted billionaire to the White House. In its self-described “pied piper” strategy, the Clinton campaign proposed intentionally cultivating extreme right-wing presidential candidates, hoping to turn them into the new “mainstream of the Republican Party” in order to try to increase Clinton’s chances of winning. The Clinton campaign and Democratic National Committee called for using far-right candidates “as a cudgel to move the more established candidates further to the right.” Clinton’s camp insisted that Trump and other extremists should be “elevated” to “leaders of the pack” and media outlets should be told to “take them seriously.” The strategy backfired—royally.”

But let’s give the former President the benefit of the doubt that he merely wanted Trump to assume a prominent role in the GOP. What was that role to be? I’d bet that Clinton and Trump discussed the latter becoming a pied piper for populists in the Republican Party who leads them in a positive, business-friendly direction. Both Clinton* and Trump could see there was a working class ferment ahead that could define politics for a generation and that careful action had to be taken to counter and de-radicalize it. So, no matter how far he got in the presidential race, as a “rising force on the right” Trump’s task was to go about gaining a ton of credibility among anti-establishment voters by saying exactly what they were thinking regarding the economy and the Washington status quo. Then, once Trump changed his tune and moderated his views (to what they were all along) after looking thoroughly at the issues, the disaffected would follow him into the political mainstream. This process is already unfolding with Trump as President-elect shifting in his view of climate change. “Trump said he would study the issue “very hard,” reports Tom Friedman, “and hinted that if, after study, he was to moderate his views, his voice would be influential with climate skeptics.” This can obviously apply to any other topic he ponders. Trump being convinced by the necessity of certain things will sway his supporters and lead them to the centrist light and it’s huge that Trump himself suggested that this would be the case. Thus will Trump expedite the GOP’s evolution—another thing he and Clinton must have addressed in their survey of the political scene—and saved it from extinction. So, overall, it seems Trump ran, as I wrote before, as a favor for the establishment

Hierarchy’s Next Evolution

About two weeks ago, Senator Chuck Schumer told CNBC’s John Harwood that should the Trans Pacific Partnership agreement be brought up in Congress during the post-election lame duck session “it may well get its 51 votes in the Senate even if some Democrats change their views. But it’s an iffy question for the House to get a majority in the House.” I don’t think there’s really any uncertainly at all and that it isn’t too presuming to predict that if the TPP passes the Senate that its advocates will be able to rig up a slim majority in the House and get the double legislative stamp of approval. Most representatives will find it practically impossible to vote down the TPP when they are confronted with the arguments for its ratification and seriously have to engage with them. Take this one from Secretary of State John Kerry’s remarks to the Chicago Council on Global Affairs, for example: “If we see the TPP rejected, it would be a gigantic self-inflicted wound—a setback to our interests in the region… it would be an act that will hurt American workers, slow our economy, hinder our ability to advance the full range of U.S. objectives [in East Asia].”

Or how about this one from President Barack Obama: “So the question is: Do we want that trade to be driven by American rules and American values? Or do we want the rules of the road written without us? Because failing to pass TPP would mean that U.S. exporters get squeezed out of Asia and some of the millions of American workers whose jobs are supported by exports to this region could find their jobs at risk. So this is about our prospects here at home, and a test of our leadership around the globe.”

Then there’s this from a piece from The Hill about Speaker of the House Paul Ryan and the TPP: “Still, Ryan noted the benefits of trade, especially for his home state where dairy and cheese exports fuel the economy. He argued that other nations are forging trade deals that are hurting U.S. exporters. “That means we have to engage in the world,” he said. “We need to open those markets up and prevent them from being closed.” Maintaining exports? Preventing markets from becoming closed? Now you definitely have the House of Representatives’ full attention. Those are the highest priorities of the U.S. government and so, when the importance of this agreement is framed in those terms, there’s no way the TPP will be nixed.

We will also see the TPP grudgingly accepted by workers because the argument that the health of the nation’s economy is on the line will hit home. They know that the U.S. working class is damned if the TPP passes and damned if it doesn’t, for either way there will be job losses. It comes down to this: would you rather those losses to come in the form of off-shoring or a major economic depression? Anyone would quickly pick the first choice but this doesn’t mean that afterwards people won’t be keeping the heat on the growing number of companies that will decide to set up shop overseas once the TPP opens up East Asia. The TPP will continue to be rightly condemned by its critics for all the offshoring it will enable and hopefully while they’re on the topic of things that are eliminating jobs they should expand their critique further and rip into the bigger culprit in that category.

That more sinister job killer has been the machine automation that has already been taking place for decades more so than anything trade-related done in Washington D.C. as Harold Meyerson points out:

“But an even more fundamental factor in the declining share of working Americans is the technological automation that has eliminated millions of jobs and is poised to eliminate millions more. The mechanization of work has already taken a toll in the nation’s ports (where cranes have reduced the longshore workforce to roughly 10 percent of its size 60 years ago), factories (where machines and computers have substituted for millions of workers), construction sites (where the prefabrication of parts has reduced the number of construction workers ) and offices (whatever became of secretaries?)”

But what has been the impetus for this automation? It is just the latest step in the quest of capitalists to make ornery, insolent workers obsolete through technological innovation. Pierre-Joseph Proudhon in his book System of Economical Contradictions, quotes an “English Manufacturer” who wrote “The insubordination of our workforce has given us the idea of dispensing with them. We have made and stimulated every imaginable effort of the mind to replace the service of men by tools more docile, and we have achieved our object. Machinery has delivered capital from the oppression of labour.”

Capitalism—like all hierarchical systems—has within it the seeds of its own destruction by inspiring resistance in those whom it oppresses (along with its other structural flaw of bosses not paying their employees enough to sustain the demands of capitalism). Awake to this resistance, the ruling classes are constantly engaged in formulating the next form of authoritarianism that will replace capitalism just as capitalism had to replace feudalism. One evolution has presented itself before with the appearance of the Bolsheviks’ state capitalism—a logical progression given capitalism’s tendency towards monopoly; why not consolidate to the point of joining its partner, the state?–and with the advent of the Fourth industrial revolution the successor to capitalism will now have to soon assume another shape because, as Proudhon replied to the “English Manufacturer”, “What a misfortune that machinery cannot also deliver capital from the oppression of consumers!”

What Will We Do When Bots Take Our Job Spots?

It looks as if the push by President Barack Obama and the business community to get the Trans-Pacific Partnership agreement passed before year’s-end may have had some new life infused into it. According to John Engler, the President of Business Roundtable, “Public support for TPP has come up” and he is positive that “all the arguments are lining up for TPP.” Those pro-TPP arguments that the American people have heard–and will continue to hear as part of this “full court press”–have largely been the same but there was one made by President Obama that stands out from the bunch. During his recent trip to East Asia while attending a joint press conference with Singapore’s Prime Minister Lee Hsien Loong, Obama acknowledged the wariness working class people have about growing globalization (because they see that they are only getting a raw deal from it) but he addressed their mistrust and “legitimate” anxieties by defending the TPP as the answer to the question “how do we make sure that globalization, technology, automation, those things work for us, not against us?” That’s the first I have heard anyone link the TPP with automation—the takeover of jobs on a grand scale by artificial intelligence and consequently a phenomenon which will be much more far reaching in its economic effects than any free trade agreement.

This epochal development, hailed by the World Economic Forum as nothing short of the Fourth Industrial Revolution, has also been denominated as the “Job Apocalypse” by Washington Post columnist Harold Meyerson and indeed the rise of the machines will prove to be Doomsday for millions of workers. Reuters reports that the WEF is forecasting that “more than 5 million jobs could be lost in 15 major economies by 2020” and that’s just the beginning. Meyerson cites a paper by Oxford University’s Carl Benedikt and Michael Osborn in which they predict 47 percent of U.S. workers have a high probability of seeing their jobs swept away in a wave of automation over the next two decades.  So what will become of the huge multitudes of unemployed who have been booted out of their occupations by a robot? How would capitalism survive if people have no means of earning money to buy the products that the robots are now manufacturing?

Meyerson’s way for dealing with the social dislocations caused by automation is a wealth transfer policy, for “as computers pick up more and more skills, we will have to embrace the necessity of redistributing wealth and income from the shrinking number of Americans who have sizable incomes from their investments or their work to the growing number of Americans who want work but can’t find it.” That idea is already in line with that of Silicon Valley techies who recommend that everyone be provided with a Universal Basic Income. “Rather than a job-killing catastrophe,” writes Farhad Manjoo, “tech supporters of U.B.I. consider machine intelligence to be something like a natural bounty for society: The country has struck oil, and now it can hand out checks to each of its citizens. These supporters argue machine intelligence will produce so much economic surplus that we could collectively afford to liberate much of humanity from both labor and suffering.” UBI sounds encouraging but whether it would work is very much in doubt, as Matt Black explains:

“The reason why the idea of a Universal Basic Income is being floated is because of the inequality that exists under capitalism. While the basic income is designed to remedy some of those inequalities, it is exactly because it will be implemented within a capitalist system that should it ever be implemented it would be strangled at birth. Firstly, society and work functions in a way as to ensure that the boss class has the whip hand. An in-built unemployment line is a central component of the capitalist system. This coupled with the divide and conquer tactics from the government of the day, pits worker against worker. In theory, a Universal Basic Income would go some way to reversing this. For that reason, we will never see a Universal Basic Income, and if we did, it would be very different from that which is being proposed. The ruling class cannot and will not tolerate a system that puts working people in the driving seat. Secondly, as soon as every adult is guaranteed a Universal Basic Income; company bosses will be rubbing their hands with glee. Pressure to increase wages annually or provide decent terms and conditions with go out of the window. Business exists to create and maximise profit, therefore, the state providing workers with £400 a month will undoubtedly lead to a severe driving down of wages in the medium to long term; rendering the Universal Basic Income, completely worthless. The same idea applies to inflation. If you provide everyone with an extra £400 a month to spend, this will have a knock-on effect on the cost of things like rent, shopping, and energy prices. The more money you have in your pocket, the more that big business knows it can charge you. This really is elementary stuff. Again, within no time at all your extra £400 becomes worthless. Advocates of the Universal Basic Income would say that–“We could legislate to prevent bosses from cutting wages and against retailers increasing prices.” Oh really? That begs the question why we wouldn’t or can’t do that now. If it was so easy to reform the corrupt and rigged system we live in then we wouldn’t require a Universal Basic Income in the first place.

Danny Vinik also noticed along with Black that a UBI cushion would empower the working class, writing that “Americans would have greater leverage to demand higher wages and better working conditions from their employer thanks to the increased income security.” The capitalist class has always fiercely resisted and prevented any shift in the boss-worker power dynamic that genuinely benefits the working class so the odds are that UBI won’t be getting off the ground or, as Black said, it would get watered-down. It would probably take a revolution to give everyone a guaranteed income and if that’s the case we might as well have an anarchist-communist revolution that rids us of money entirely. We’d be heading on that route anyway since by that point the robots would be producing so much that we will be living in a post-scarcity economy where superabundance makes currency superfluous.