This Long Disease.

September 29, 2008

Julius Malema was talking about having President Mbeki expelled from the ANC on the radio today. It makes considerable sense — an ANC dominated by Malema would be no place for Mbeki, or anyone else with intelligence, courage or knowledge. Notwithstanding, Malema was talking about how this would do absolutely no harm to the ANC because nobody in the ANC supported Mbeki, he said, apart from people who should not have been in the ANC in the first place. Presumably that includes the two-fifths who voted for Mbeki at Polokwane. It made the Creator want to vote for the Reusagtige Babbelende Malkoppe Party, out of sheer spite.

However, in the real world there are no choices to be made. There is no alternative; hence the ANC is going to be elected whether we vote for it or not. So the only question is, objectively (if possible, which it probably is not) what is going to be done after the ANC is elected and Jacob Zuma becomes President, with Kgalema Motlanthe, presumably, as Deputy President?

The Creator cannot pretend to know who is going to be in Zuma’s Cabinet; we don’t even really know, though it is widely believed, that Routledge-Madlala, currently subverting ANC structures in the Boland, will become Health Minister. Hence details of policy are difficult to work out and very little of significance has been released. Nevertheless it is possible to pick out a few elements — which are seldom particularly encouraging. Let us try to assemble these fairly and see what they suggest.

 

1. Democracy.

There has been very little consultation of Party or public by the Zuma faction since they took power. There has also been no attempt to explain why so many things promised to the Party at Polokwane, such as political education and a radical policy review, have disappeared. All discrepancies and apparent misconduct by leading Party figures is explained by the blanket concept of conspiracy where it is explained at all. The Party’s leaders in the public eye pursue demagogic agendas which are essentially policy-free; if there are any policies being developed they are being kept secret.

 

2. Party organization.

The ANC has shrunk — not decisively, but significantly — while Zuma’s current followers have been in charge of its organisation (since 2002). It has been plagued by unresolved internal conflicts since 2006 and these conflicts have become more serious since Zuma’s leadership took over. There are obvious problems of careerism, corruption, election manipulation and gerrymandering which Zuma’s followers have in part noted, but which they have also intensified for their own purposes. Sometimes, as in Malema’s words above, they seem not to care about how the organization works as long as they get their own way.

 

3. BEE and AA.

These are real policy issues. BEE was introduced under Mbeki as an attempt to challenge white dominance of finance capital, although it has not proved to function effectively in this regard. AA was introduced in the Mandela era to challenge the white gatekeepers who kept blacks out of responsible positions. In general, the left wing of the Zuma group appear extremely hostile to BEE for its own sake, conflating it with finance capital itself. The right wing of the Zuma group, meanwhile, appear hostile to AA, or at least willing to countenance its elimination.

 

4. Broader Class and Race Issues.

While the Zuma clique has since Polokwane devoted much more time to liaising with big business and affluent communities generally than with workers and the poor, it might be argued that this is because they are confident of their leftism and desire to reassure the affluent that this leftism does not pose a threat to them. However, this seems to suggest that their leftism is not real, for if it were, they would simply be fooling the affluent, who undoubtedly have ways of discovering the truth (and are not easily fooled, since they are extremely suspicious of the ANC). Real leftism would pose even more of a threat to the affluent than the moderate social democracy of Mbeki, which the affluent hated. The fact that business organisations have come out strongly in open support of Zuma seems to confirm that there is a real connection between them.

Meanwhile, although the unions appear to be in a somewhat stronger position than before, the vast bulk of workers appear to have been ignored. There has been no attempt to provide them with anything except promises. As already pointed out, COSATU’s economic analysis appears to favour bosses and the bourgeoisie much more than workers or the genuinely poor. Meanwhile there seems to be no class analysis taking place. Even the SACP simply provides structural economic analyses which seem to omit class almost completely.

On the other hand, one might consider the Zuma group as a “popular front” along the lines of the UDF. One might then assume that it would draw, not on the relatively divisive politics of the SACP, but on the inclusive politics of that organisation, which enjoys considerable promotion from the bourgeois press and pundits. In practice, Zuma is certainly “reaching out” to whites of all sorts, in the same way that he “reaches out” to the business community. However, in effect this is reaching out to the privileged and promising that their privileges will not be reduced; that the modest suspicion of affluent whites expressed in the Mbeki era will be dismantled and replaced by endorsement. In practice this suggests that, as in the “rainbow nation” scam, “racial reconciliation” will be used as a cloak for the consolidation of the ruling class against the working class.

5. Gender issues.

There has certainly been no firm promotion of gender issues by the Zuma group as was done by Mbeki. Indeed, before and after Zuma’s rape trial, the rumour has been disseminated that Mbeki’s promotion of women in the administration was purely due to Mbeki’s uncontrollable lusts and the need to provide himself with a vast harem (he would have had very little time for anything else if that had really been the case, given the number of women promoted on his watch). This obviously appears intended to smear the case for gender equality. The calls by black business to remove white women from the category of historically disadvantaged, while understandable in some senses, can also be seen as an act against women. There are few outspoken women in Zuma’s camp, apart from his spokesperson Jessie Duarte, and Speaker of Parliament Mbete (who was only included in Zuma’s list, and took the ceremonial position of ANC Chair, after the Women’s League was widely castigated for supinely voting for a male-dominated NEC).

6. Safety and Security.

It seems probable that the hysterical calls for greater police violence from Deputy Safety and Security Minister Shabangu are more related to Zuma than to Mbeki. Such calls bear the conservative stamp of Zuma, and they are also public-relations gimmicks without substance. More importantly, of course, Zuma’s decision to disband the Scorpions instead of reforming or making use of them shows a complete disregard for the actual needs of safety and security as regards high white-collar and organised crime. (This is hardly surprising.) It also shows Zuma’s almost childish vindictiveness, which is not a promising indicator of good criminal justice.

7. Economic matters.

Zuma seems wedded to the spend-and-borrow policies of COSATU. This is not surprising, as such policies would probably be good for his popularity at first. (Possibly the current campaign to have Mbeki removed relates to a desire to establish some such credibility in advance of the forthcoming election.) How bad this will be depends on how high the borrowing rate is and how much it costs. The desire to cut interest rates similarly might not be too harmful — depending on the consequences for the value of the rand, and for promoting irresponsible borrowing. (It is interesting that there has been no sign of a policy turnaround amid the strong evidence from the United States and Britain that unduly low interest rates in time of recession can be downright harmful.)

Amid all these issues, there is another conditioning factor. This is that Zuma owes a great deal to his supporters. These supporters are not the “people”, for in all the period of his campaign, the “people” have been treated as fodder to be fooled or threatened. There has not been a single campaign for Zuma which has not been driven by Zuma or one of his affluent or politically powerful supporters.

Some of these supporters are big businessmen. Some are high officials within the ANC who would be higher had others not gained preferment (for good or bad reasons) under Mbeki and therefore are backing Zuma. Some are journalists and editors who have opposed Mbeki for his entire political career and see Zuma as a way of discrediting Mbeki’s legacy (about which, more later). These categories of supporters, who are important, all share common features; they are all politically conservative (within the ANC, Zuma is generally supported by the right) and, with the possible exception of the ANC officials, they are generally hostile to the ANC itself to a greater or a lesser extent. (In general the businessmen’s ideas were formed under apartheid, and the journalists have wedded themselves to making propaganda against Mbeki because he was seen as the ANC’s Achilles heel, a belief which has not — before Zuma upset the apple-cart — turned out a particularly realistic one.)

There are also forces outside the ANC who support Zuma — the SACP, COSATU and the ANC Youth League. The former two groups are supposedly left-wing, and the latter group is supposedly radical (although, unlike the Youth League of 1944, nobody can say what is radical about the Youth League of 2008). Many of these forces have been able to win support within the ANC; Polokwane and subsequent developments have shown how effortlessly the SACP has been able to browbeat ANC members into acceding to its demands. However, none of these forces has any loyalty to the ANC as a structure or as a party. If another structure or party arose which suited their interests more, they have made it clear that they would join it.

No party has arisen, or is likely to arise, which corresponds to this desire. On the other hand, these external forces are now, nominally at least, in charge of the ANC, something which they have been demanding since before the ANC was in power. They have shot their bolt; if they cannot now implement the radical policies which they continually boast about but have never actually revealed, or if these policies don’t work, then there is actually no reason for supporting them.

There is, however, the problem that these supporters on the left are in a very ambiguous position. The Youth League, as is known, is heavily endebted to the business community — in other words, their radicalism is as likely to be a radicalism of the right as of the left. COSATU, bizarrely, is led by people who are very largely financial speculators, despite their apparent political radicalism. The same is true of the SACP. Hence their motives for seeking power must be doubted; are they doing it to further the avowed political agenda (which they have done so little to pursue for so long), or are they doing it to further their private financial agendas? In which case, are they any different from the corporate figures backing Zuma, and will the pressure they put on Zuma be any different? Even if they are nominally different, surely they are unlikely to take a principled stand against financiers — the public political calls of both the SACP and COSATU have been heavily skewed in the interests of capitalism in recent years.

In other words, it is possible that there is not really a right and left wing to the anti-Mbeki faction, but rather, two right wings — both of which express themselves, in order to appeal to the public, in left-wing jargon. (Perhaps the three epitomes of this contradiction are Tokyo Sexwale, the Communist property speculator and mining magnate under the authority of Anglo American, Kgalema Motlanthe, the Communist financial speculator on behalf of the ANC’s investment trust, and Karima Brown, the Communist political columnist for the neoliberal reactionary Business Day newspaper.)

Zuma is infinitely more vulnerable than Mbeki was, because his behaviour has been divisive within his own party — meaning he has powerful, broad-based enemies who need to be conquered or sidelined — and because his record is filled with various levels of misconduct. (Apart from the misconduct in the run-up to his Presidency, such as the Masetlha affair and the Mo Shaik affair, there is also the rape trial to be remembered, and the current indictment for bribery and corruption. Also, Zuma is almost certainly implicated in much of the human rights abuses committed by the ANC’s intelligence wing, which ran the “Quattro” prison camp and other nefarious activities.) If the press ever turns against him, it will be much easier to undermine Zuma than it was to undermine Mbeki, because the press has only to print the truth — which is less work than making up lies about Mbeki, and probably more effective in the long run. In short, the solidity of his position depends on the sympathy of the media, and therefore, on the sympathy of big business.

The solidity of his position also depends on his keeping big business happy, and on his keeping the Communist Party happy. This is not as contradictory a position as it sounds. Many of these people are careerists, and provided that enough lucrative sinecures can be found, such people will remain happy. It is likely that this is what motivates the Zuma camp’s desire to break up the merged universities; this will, of course, throw the universities into the same chaos which they faced during the merger process six years ago, and thus destabilise higher education precisely at the time when it will be having to cope with the disastrous results of the new school curriculum (married with the deliberate sabotage of the corrupt “Democratic” Teachers’ Union). However, it will create four or five jobs paying several million rand a year without requiring much effort; what could be a better gift for an aspiring, but lazy and stupid, Zuma cadre? (Let us not ask what would happen to the Mmabatho campus of the University of the North-West if Julius Malema becomes its vice-chancellor.)

It is probable that the whole public service will be treated in this way. Possibly not at all levels, but probably at the top, people loyal to Zuma will be appointed as rewards. This will also have the beneficial consequence of stripping people who might be loyal to Mbeki of their authority. (The blanket condemnation of the entire state apparatus as criminally corrupt, made by Nzimande on repeated occasions, provides an excuse for this but also gives a hint of the paranoid psychosis which has gripped the Zuma camp. They have nothing to be afraid of anymore, yet they appear more terrified than ever that the glittering prize of wealth and power without responsibility will be taken away from them.)

In consequence, we can anticipate two major issues:

1. The policies which have been proposed by the Zuma camp are predominantly pro-business and anti-poor (also anti-middle-class), being anti-redistribution and anti-redistributionist attitudes. What is worse, these policies are presumably the most palatable ones held by the camp, being the easiest to express; it is quite likely that much more hardline chauvinist or neoliberal policies are the ones which Zuma’s supporters would like to see, and which the SACP will find pretexts for endorsing. Thus it is probable that the next five years will see a considerable policy shift towards corporatism, even though there may be more initial public spending through borrowing at low interest rates.

2. The appointment of incompetents into high positions in both government and administration, out of political motives, seems a virtual certainty (a very large number of Zuma’s closest allies appear to be startlingly stupid and bewilderingly ignorant), and this will have severe consequences for the efficiency of government, particularly if these incompetents are also corrupt (and Zuma’s inner circles includes a very large number of people dismissed for corruption — which does not mean that those in Mbeki’s inner circle are all honest, but it does imply that corruption is considered acceptable to Zuma). As a result, any potential positive short-term consequences from an increase in public spending would be severely restricted by maladministration and thievery. As a result there would be the possibility that public spending increases would not lead to improved economic growth — meaning that the negative consequences of massive public borrowing would come into effect almost at once.

Corruption, incompetence, bad policies, economic deterioration and a government founded on lies, bullying and exploitation. If the Creator is right, South Africa faces a rerun of the Bush Administration. The first time as tragedy, the second time as farce? Alas, most probably Zuma’s reign will still be a tragedy — but a tragedy for almost everybody except Zuma and his merry men.

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Anal Ysis.

September 15, 2008

IN THE SUBLIME COURT OF NO APPEAL:

PRESIDING INFINITE JUSTICE THE CREATOR

HEARING THE CASE OF JUDGE CHRISTOPHER NICHOLSON v. SANITY

 

CREATOR: All right, clear out the courtroom and fill up my gin and tonic. Obviously it’s going to be a long one. Bailiff, where’s the accused?

BAILIFF: His Malignity declines to attend on the grounds that it might incriminate him.

CREATOR: No change there. Where’s my assessor who knows how to handle loonies? (The GHOST OF SIGMUND FREUD becomes momentarily visible on the rear bench.) Hokay, we can try him in absentia and ex cathedra, as usual. Summon the accused’s defense counsel! (The court-appointed lawyer, BONZO THE CLOWN, flops through the door of the courtroom on gigantic shoes.) Stick him in the box! (BONZO instinctively protects his genitals but is dragged to the packing-crate which makes do for an accused’s stand.) I’ll handle the prosecution myself. Saves money.

BAILIFF: Bailiff says, silence! Bailiff says, all rise. Bailiff says, all sit. All rise — caught you! You’re out!

CREATOR: You shaddup. You! Bonzo! Speak, Bonzo!

BONZO: Say what?

CREATOR: Do you have anything to say before sentence is passed? Like, maybe, some kind of defence?

BONZO: But there haven’t been any charges laid yet.

CREATOR: The charge is gross grotesquerie in the matter of the Pietermaritzburg High Court and Jacob Zuma v. Justice and Common Sense.

BONZO: Meaning?

CREATOR: Can you in any way justify letting that scumbag Zuma off the hook?

BONZO: Objection. My client is not a scumbag!

ENTIRE PLANET: Yes, he fucking is!

CREATOR: Objection overruled. Answer the question, my china.

BONZO: All right. My client found that the President of the ANC had been unfairly treated upon two substantive counts: number one, he ought to have been consulted before he was charged, and number two, he was the victim of a conspiracy against him by President Mbeki and his Cabinet.

CREATOR: And your client will claim that he was sober, and not on drugs, and in his right mind?

BONZO: I have here three blood-alcohol test results and the sworn testimony of my client’s therapist.

CREATOR (interested): What’s all this about an addiction to wearing women’s underwear?

BONZO: I submit that the files may have become confused.

CREATOR: All right. Now, do you have any evidence in mitigation of sentence?

BONZO: What the fuck? I mean, you can’t sentence my client without hearing whether he did anything wrong or not?

CREATOR: Well, your client did that to President Mbeki, but all right. Have you got anything to say about count number one?

BONZO: It stands to reason that President Zuma ought to have been consulted before he was charged.

FREUD’S GHOST: In our desire to suppress the phantasy of innocence arising out of our denial of the excrement emerging from our bodies, we are driven to embrace the belief that we control the whole world and can do as we please. Hence our unconscious desires to have sex with everybody, to murder everybody, and to declare that we cannot be judged for anything.

CREATOR: No fair, Zuma’s already been charged with rape. But maybe you have a point, assessor. What in the name of Ahriman do you mean, “ought to have been consulted”? You mean that every criminal should have a veto over whether he is charged or not?

BONZO: What about women?

CREATOR: Get on with it, you slavering sexist. Can criminals always decide if they get charged?

BONZO: No, but they should be consulted.

CREATOR: Why?

BONZO: In case there is some reason they shouldn’t be tried.

CREATOR: Such as what?

BONZO: I don’t think I have to give details.

CREATOR: I think that’s a load of pox-ridden bullshit. What do you make of it, assessor?

FREUD’S GHOST: Those who abandon their hold on life must fall prey to the death-instinct and become destroyers of all that they once held dear. It is a natural response to a fear of the physical world which is driven by a fear of the mirror-image of the self.

CREATOR: Sounds as if you agree with me.

FREUD’S GHOST: No shit.

CREATOR (produces whistle and blows it loudly): Foul! Mr. Justice Nicholson is guilty of sucking up to the ruling class and pretending rich and powerful people are above the law. Which is perfectly true but you aren’t s’posed to say it. (Bailiff refills glass.) Can I have the envelope please? (Rustling sounds.) Mr. Justice Nicholson, you are the winner of the Golden Toady Award, a fetching statuette of a platanna in gold-plated activated sludge. If you do not collect yours, one will be imposed on you. Thank you very much — I love you all, have a great weekend!

BAILIFF: Sorry, Your Infinity, but there’s still Count Number Two.

CREATOR: Bloody hell, do we have to be here all day? Get on with it, then. (Waves a straight Samurai sword at BONZO.)

BONZO: Very well. Count number two: the conspiracy against Zuma by President Mbeki. Which everybody knows is true. You can’t deny it.

FREUD’S GHOST: That which is undeniably accepted as true by all is a phantasy rooted in early childhood. The two men are both images of the father; both must be destroyed, the better to get at the mother’s nipple.

CREATOR: By which you mean, the state sugar-tit?

FREUD’S GHOST: It is not so simple, of course. Nothing is.

CREATOR: OK, let’s have it. What evidence have you got that there was a conspiracy against Zuma?

BONZO: The investigation into the arms deal was a conspiracy against Zuma.

CREATOR: Let’s be having the details. (Several armloads of documents are presented.) Hm. Looks as if the investigation into the arms deal started out with the Shaik who was chairing the committee on arms procurement and who had links with Zuma, then went off to his brother, the Shaik who was Zuma’s financial consultant, and then went off to investigate Zuma. And Zuma was the man coordinating the whole arms deal. What’s wrong with the investigation?

BONZO: It was all very conspiratorial.

CREATOR: Knickers. Anyway, it turned out that Shaik had been slipping Zuma bucks and then got the credit-card license contract, and then it turned out Thint had been slipping Zuma bucks too, and that Zuma and Shaik had been dealing with Thint. Doesn’t that all smell fishy to you?

BONZO: Only if you look at it from the viewpoint of the conspirators.

CREATOR: Watch it, sonny. Then they charged Shaik.

BONZO: Yes, and that was where the whole thing went wrong. They refused to charge Zuma too. As my client so rightly points out, this proves that President Mbeki and the Minister of Justice were in collusion against Mr. Zuma.

CREATOR: How come did Zuma benefit from not being charged? I wouldn’t like to be charged.

BONZO: You do not understand. Mr. Zuma was, thus, defamed without the opportunity to clear his name.

CREATOR: Well then, why didn’t he insist on appearing as a character witness for Shaik? He could have cleared himself there.

BONZO: Mr. Shaik chose not to accept that.

CREATOR: Oh, come on. Mr. Shaik wanted to go to jail? For no reason? Pull the other one, it has an anklet with bells on it. (The Creator tingles softly.) What do you make of that, assessor?

FREUD’S GHOST: It is important to recognise the difference between the excremental vision and the counter-excremental vision; that which rejects excrement on the command of the Mother, and that which embraces excrement in defiance of the Mother.

CREATOR: You saying it’s shit? (FREUD’S GHOST shimmers delicately.) All right. Shaik went to jail. Where was the conspiracy in that? Judge seemed to be pretty sharp to me.

BONZO: Yes, but then Mr. Zuma again was not charged and was denied the opportunity to clear his name.

CREATOR: He was eventually charged, wasn’t he?

BONZO: Aha, but the charges had to be dropped because the Scorpions hadn’t prepared them.

CREATOR: Well, fuck my old boots. How was that a conspiracy? Sounds like incompetence.

BONZO: It was a conspiracy because everybody knew that the Scorpions had a strong case against Zuma. As my client points out, the charges against Zuma were virtually identical to the charges against Shaik. But then somehow when it went to court, the charges weren’t prepared and the whole thing collapsed. Very suspicious, wouldn’t you say?

CREATOR: And that was under Vusi Pikoli?

BONZO: Oh, yes. It seems obvious that Vusi Pikoli and Mbeki and the Minister of Justice were all working together to ensure that Zuma was never charged.

CREATOR: Huh?

BONZO: So he could never clear his name.

CREATOR: Now wait a minute. (Two railway-carriages piled with documents are brought into the courtroom along with a cartload of video footage.) Here is the documentation from Zuma’s court cases thus far. It would appear that every single legal activity his lawyers undertook was aimed at preventing him from being charged, or preventing evidence from being led in case he ever was charged. Do you deny that, on peril of your soul, remember?

BONZO: Well, if you put it that way.

CREATOR: So if there was a conspiracy to ensure that Zuma was never charged, Zuma must have been part of that conspiracy?

BONZO: It was a very insidious conspiracy.

CREATOR: I’ll say. What do you make of that, assessor? (FREUD’S GHOST shifts on the back bench and farts noisily.) I’ll take that as it comes. All right. That takes us down to the end of 2007. All this time the Scorpions have been amassing evidence but not making any effort to use it against Zuma, although they are making efforts to enable themselves to use it if he is ever charged again. What do you say about that?

BONZO: All part of the conspiracy.

CREATOR: And you say — your client says — that Mbeki and Pikoli were conspiring together against Zuma.

BONZO: There can be no question about that.

CREATOR: Until Mbeki fired Pikoli.

BONZO: Yes. You could say that the conspirators fell out with each other.

CREATOR: Over what?

BONZO: Over Commissioner of Police Selebi. Pikoli tried to have him charged with defeating the ends of justice. Mbeki then fired Pikoli in order to protect Selebi, and appointed Mpshe in his place.

CREATOR: So then presumably Mbeki was conspiring with Mpshe. To protect Selebi, and to prevent Zuma from being charged.

BONZO: That is precisely my client’s position.

CREATOR: But then within a couple of weeks Mpshe had Selebi and Zuma both charged.

BONZO: That must have meant that the conspirators had fallen out again.

CREATOR: Although this time Mbeki did not fire Mpshe.

BONZO: Well, no. But the time was very significant. It was right before Polokwane. That was an obvious conspiracy —

CREATOR: Hang on, let me hold onto my head. You are saying that Mbeki and Pikoli conspired to prevent Zuma from going to trial, but then Pikoli was fired to prevent Selebi from going to trial and then Mpshe came in and decided to put Selebi and Zuma on trial, against the wishes of Mbeki, and somehow this is all a big plan by Mbeki to embarrass Zuma at Polokwane?

BONZO: How could it be anything else?

CREATOR: And now Zuma is so concerned to go on trial so as to clear his name, that he has managed to win a court battle ensuring that he will never go on trial, and this is also part of the Mbeki conspiracy?

BONZO: I don’t understand how you can even ask questions — it’s obvious.

CREATOR: Assessor, your opinion?

FREUD’S GHOST: I would not take on this case. It is completely hopeless. No amount of therapy can resolve certain psychoses. In fact I would recommend euthanasia before the patient does violence to others, or possibly to the entire country.

CREATOR: Get out of here, you maniac. And take that confounded cartoonist with you. Court! Nation! Attention. (Sound of a hundred million boots crashing together.) We, by the power of creativity and creationism not to speak of intelligent design (no, absolutely never) do hereby declare that this joker Judge Chris Nicholson is guilty of extreme and explicit grotesquerie to the point that he can never be taken seriously again. And in the afterlife, may it arrive very soon, he can expect to devote eternity orbiting the planet Saturn inside this. (An iron coffin with spikes on the inside is displayed.) Meanwhile, of course, matters proceed as before.

BAILIFF: Bailiff says, all rise. Bailiff says, all fall down. Bailiff says, ah what a fall was there, my countrymen.

(All exeunt to take various psychoactive drugs.)

 


They Had Given All They Had For Something New.

September 15, 2008

It is a little odd that COSATU, writing under the name of Zwelenzima Vavi in the same way that Communist intellectuals used the pen-name of Josef Stalin during his dictatorship in the Soviet Union, should choose to expound its economic theory in the Mail and Guardian. The Mail and Guardian is a right-wing newspaper, anti-ANC and to a great extent neoliberal. It’s as if the American Socialist Workers Party should choose to present its new platform in the wages of the Wall Street Journal. But perhaps things are not what they seem. They usually aren’t.

Let us not go there, where the evening is spread out against the sky like a voter etherized upon a ballot-box. Let us rather go and visit what “Vavi” is saying. Let us also number the statements to make them easier to refer to.

1. The rich are getting richer and the poor are getting poorer.

2. Economic growth is a bubble which is damaging the productive sector of the economy and making the economy more vulnerable.

3. There is too much financialisation and the government should do something about it.

4. There is not enough productive investment, especially in manufacturing, as a result of the free market.

5. Most of these problems are promoted by conservative monetary policy.

6. Short-term capital inflows have been bad for the economy and too much money is flowing out of the country in dividend payments to foreigners.

7. The current account deficit is a big problem, and the exchange rate of our currency is too high, because of the Reserve Bank’s fear of inflation which would be promoted by allowing the value of the currency to fall.

8. Big companies which are monopolies need to be disciplined and subordinated.

9. Small businesses should be supported more, especially because they like COSATU.

10. BEE is bad.

11. We need to bring back the agricultural marketing boards of the apartheid era.

12. Industry faces unfair competition from abroad because we don’t use import tariffs and export duties enough. (Possibly here export subsidies are meant.)

13. Not enough is being spent on the industrial strategy by the government and its policies are bad for it.

14. There is not enough public infrastructure investment by the government.

15. The Treasury is too powerful, and too friendly to big business, which explains why the government is running a surplus, which is bad.

This is dumbing down what was already dumbed down for the benefit of the dumb audience of a dumb newspaper, but you get the general idea. To what extent is all this true? Also, where does it lead? The Creator hesitated a little, partly because of the need to engage with the galaxy and partly because the Mail and Guardian promised to publish another article explaining what all this would lead to, but of course, they lied. One might have expected so, for reasons which shall appear. Let us deal with these assessments numerically.

1 is true. The rich are getting richer — more so than they should. The poor are feeling poorer because things which they are paying most of their income for, are getting more expensive, so even if they aren’t really getting poorer in money terms, their wealth buys them less. There is, however, one problem with all this; the rich are also feeling the pinch, with the rise in interest rates (which doesn’t affect the poor because they can’t get credit) and the rise in the petrol price (the poor don’t have cars). Hence, any planned change has to accommodate the fact that the rich, far from generously wanting to share more with the poor, will be shouting for support for themselves and pretending that this will help the poor (for instance, demanding cuts in interest rates).

2 is pretty much false. South African economic growth is not a bubble; it is not largely based on financialisation. It is largely based upon two factors; the redistribution of wealth promoted by the government (which is significant even though it is limited) and the increased demand for minerals as a result of the growth of Asian industry. The former is sustainable; the latter is not, and is going to be the cause of South African economic crisis. There is a degree of bubbling (for instance, insurance, real estate and medical aid schemes) but these do not dominate the economy.

3 is, in consequence of the above, nevertheless true. Financialisation is when you prefer to invest in unproductive activities because they give a higher return than productive ones. Basically, organised bucket-shopping. This is quite common in South Africa, and it is obviously undesirable because while it makes a profit for the individual investing, it does not provide the “multiplier” effect which productive investments (which generate jobs) would do. Again, however, the question is how to deal with this. Many institutions investing in financialisation are also investing to a lesser extent in productive activities; simply destroy the financialised institutions and you risk tearing productive investment down with it and causing a wholesale economic crisis. Any meddling would thus have to be careful. There is little sign in the COSATU argument that this is what is proposed. (Actually, very little is proposed.)

4 is also true, but only up to a point. Investments such as tourism or service industries are not as productive as investments in manufacturing, in the sense that they do not make physical objects which can be exported or eliminate the need to import physical objects. Therefore, all other things being equal one would like to see more investments in manufacturing. On the other hand, tourism and service industries often employ more people than manufacturing, being less capital-intensive in many cases. Hence, investment even in these areas is more desirable than no investment at all. Ideally there should be a balance of investment, but it is difficult and even dangerous to ensure this, since this would entail taking an enormous amount of control over the national economy. If this were done by people who were lazy or incompetent, it could be destructive.

5 is, bluntly speaking, false. It is more false than 2, and probably more intentionally so. In principle it would be possible for economic growth to be a bubble, but it is not really possible for bubble economies, financialisation and lack of proportionate investment in manufacturing to be caused by monetary policy. To believe so, you would have to be Milton Friedman and believe that everything is a product of monetary policy. It is not. It is possible to argue that the government could improve the economy by altering the supply of money (for instance by massive borrowing), or the availability of money (by lowering interest rates). However, this would not eliminate the problems identified in the earlier points. Instead, other measures would have to be taken in order to make sure that the more available money, whether state-supplied or bank-supplied, was spent wisely. The alternative could be simply to accelerate the roulette wheels in the casino economy — that more money would be ploughed into ever less sensible investment. This was approximately what happened in the United States when Reagan lowered interest rates, deregulated banking and borrowed largely, and one consequence of this was the Savings and Loan crisis which emerged towards the end of his term of office.

6, however, is true in a broad sense. Short-term capital inflows are not bad things in themselves, but stability is desirable and stability requires long-term inflows. Alternatively, it requires that capital stays in the country and is used productively. The problem with short-term inflows is that they can be withdrawn rapidly, which weakens the economy; this is not just a Third World problem, for it has been a perennial crisis in Britain (it was the reason for the collapse of the pound in 1992, which ironically occurred just after the Conservative Party was re-elected because it was deemed more able to manage the economy than Labour).

The business about “dividend payments to foreigners” sounds a bit xenophobic. In fact, some South African companies have sold shares to foreigners which means that those foreigners are getting money out of South Africa. In the same way, foreigners who have invested in South African physical plant are also getting money out of South Africa in the form of profits; they would not have made the investment if they did not expect to make something out of it. Objecting to this only makes sense if you are objecting to foreign investment in South Africa at all — if you are calling for a kind of socialist siege economy, which Patrick Bond proposed in Commanding Heights and Community Control. There is no doubt that this would be bad for the economy in both the short and long term, and it would also wreck our society and probably lead to a counter-revolution overthrowing the government.

7 is right about the current account deficit. This is a problem because we cannot sustain it, though in the short term we can lure in foreign money with which to pay, sooner or later that will run out. Therefore we need to reduce the amount we are buying or increase the amount we are selling. The suggestion, however, that reducing the exchange rate of our currency would solve this problem is absurd. It should work for a short time after the value of the currency against other currencies fell, but quickly the matter would equalise — after all, our currency is much less valuable than it was in 1994, so if the argument were true, we ought to be much better off now than we were then, and in current account terms we aren’t.

In fact, any substantial increase in the money supply, if channelled towards productive investments, would probably increase the current account deficit, since a great deal of manufacturing plant cannot be made here and must be imported. This would be made worse if the value of the currency fell, for temporarily, before costs and prices equalised, foreign goods would be much more expensive.

The most effective way to cause the value of the rand to fall would be to encourage people to sell rands and buy foreign currency. This could best be done by dramatically reducing the interest rates; people buy South African currency because the returns are better, because the relative interest rates are higher. If they could get better rates elsewhere they would sell rands and buy bhat or roubles. As a result we would have a glut of rands in this country and a shortage of foreign currency, which could make buying anything from abroad rather difficult — in fact, it would approach the siege economy concept again.

High inflation is not a massive problem, but it does hit people with money in the bank. If government policies led to high inflation, there would probably be capital flight. Unfortunately, one of our current problems is capital flight. It seems that COSATU wishes to make this worse. More accurately, it seems they are proposing policies which would make this worse without realising it.

8 is no doubt true in the sense that it is better to have a single reliable, intelligent agent managing the economy, and having large companies managing it instead is as unwise as having overmighty barons and dukes ruling big chunks of the country and disregarding what the King has to say. Of course, this requires that the central government be both powerful and sensible, for big companies with nothing to lose can do a great deal of damage to the economy, and unfortunately many South African companies have powerful friends abroad. Hence there must be extreme care that these companies are controlled rather than just annoyed.

9 is a bit of a misrepresentation of the actual statement, but basically it is an argument in favour of small businesses as opposed to big businesses. Everybody claims to love small businesses, of course. Some small businesses are indeed startlingly successful. All the same, it is dangerous to assume that a small mining company or a small power company will be automatically better-off than a big one. What is a problem is that big companies have the power to impose their will on the government, as in point 8. But in a sense, if small companies have great lobbying power, they could do that too. This is not necessarily good.

10 is legitimate within its limits. BEE has not been what it set out to be, essentially because black corporate capitalists have turned out to be just as greedy and corrupt as white ones; indeed, they have largely got together with white ones, and the result is President Zuma. Of course, all other things being equal it is better that blacks have a seat at the capitalist table, which BEE has provided. In a sense, BEE was a distraction from the real attempt to take charge of the economic system. Eliminating BEE would not resolve any of the problems which we now possess.

11 is also legitimate within its limits and, unlike the previous point, has some broader validity. Agriculture in South Africa was cushioned from the vagiaries of price fluctuations by the various Marketing Boards, although these also functioned as a system for ensuring the political loyalty of the large farming community. The farming community is no longer so large, proportionately, and thus is less politically important, and this is one reason why the marketing boards were abolished. Nevertheless the marketing boards could, potentially, keep consumer prices lower for agricultural products, through state subsidies for those prices. This would interfere with the World Trade Organisation’s plans, and thus the WTO disapproves of such structures and would probably impose sanctions upon South Africa. This would not necessarily be disastrous, but it needs a good bit of planning first. After all, the WTO benefits the rich, so the rich were all for the abolition of the marketing boards; to cite one example, in Argentina the upper classes successfully blocked an attempt to keep food in the country to hold prices down, claiming, with the assistance of their Supreme Court, that it was illegal and unconstitutional. (Remember those three words; they are the last refuge of the affluent scoundrel.)

12 is also true, but once again we are up against the WTO (and also the World Bank and the International Monetary Fund) and large multinational corporations. Also, of course, we are up against our own ruling class. Then again, we are up against the very logical fact that we would like to sell our stuff abroad. Obviously, if South Africa is refusing to import anything and insisting on exporting lots of stuff, countries will be reluctant to buy our stuff unless it is very good or very cheap, and the trouble is that a lot of the stuff we have to sell is neither particularly good nor particularly cheap on the world market. Hence, blocking out imports may also block our capacity to export. So there are huge political problems, problems of global capitalism, and also problems stemming from the policy itself. Protectionism is not always a bad thing, but it is not always a good thing either; it is certainly possible to featherbed companies which do not really deserve protection (though this has been systematically exaggerated by neoliberal economists who pretend that protectionism is always bad; the era of import-substitution, from the 1940s to the 1960s, was an era of rapid industrialisation in many countries including South Africa).

13 is definitely not true. It would undoubtedly be better if the government spent more money on industrialisation, but that is not the same as spending money on the industrial strategy. Nor is it necessarily true that government policies are bad for industrialisation; the current crisis caused by interest rates is a world-wide crisis, which cannot easily be solved. The industrial strategy as it is, did not work much better in 2004 when interest rates were low. No, the problem is not on poor application of an industrial strategy; this is an excuse much like the excuse of the International Monetary Fund, when a structural adjustment programme (now usually known as a poverty relief plan) fails; you didn’t do it right. In fact the problem lies in depending on an “industrial strategy”, which means trying to get corporate capitalism here and abroad to shape up and fly right, and which entails giving them pots of money in return for very little. Instead you should simply promote local industrialisation, as was done in the past.

14 is probably true. Also, public infrastructure spending is too skewed towards large, capital-intensive corporations using machinery rather than people, and too focussed on roads and not enough on rail, light rail and urban renewal generally. On the other hand, there is enormously more public infrastructure spending than there used to be a few years ago, because there is more money. At the same time, in the distant past under apartheid when there was a lot of public infrastructure spending, this was largely because there was less spending on other things such as health, education and social grants, and because public infrastructure was easily recycled into big white-owned corporations who were friendly to the government. In short, promoting such spending can cut out other money, and can lead to corruption — and, of course, it can lead to boondoggles like the Gautrain.

15 is partly true in its first phrase, more accurately true in its second phrase, and absurdly wrong in its third. The power of the Treasury lies in its power to prevent what it considers overspending. A bean-counting attitude can undermine the capacity of a Ministry to function effectively; for instance, Housing has been starved of money because the Treasury is rightly suspicious of its projects, but at the same time that means that not enough houses get built. If Ministries were more effective in themselves, the Treasury could be more relaxed. But they are not, and a Santa Claus Treasury which gives everybody what they want will spend the nation into bankruptcy in a few years.

It is well known that the Treasury is sympathetic to the needs of big business. This is a truism, but no less true for that. The reason is that big business has the capacity to harm the overall economy — partly because the economy has been structured so that big business can also help the economy if it so chooses. This vulnerability is regrettable, and something should be done about it, but the Treasury responds to it by trying to be as nice to big business as is consistent with its mission.

However, at the moment the Treasury’s mission is to keep the fiscus growing on a stable footing. To do this it has cut taxes, which seems weird, but in fact it has also tightened up the implementation of taxation, so in a sense the tax cuts were a quid pro quo for increasing the revenue from actual taxation. In theory, the tax cuts also ought to have lured business in, but they did not because other countries have still lower taxation. Business wants South African taxation cut to the lowest possible level, but the Treasury has refused this. Business also wants South African public spending (especially on poor people) cut, which the Treasury has refused. Hence business does not like the Treasury even if the Treasury likes business.

The fact that the government is running a budget surplus is quite remarkable. Right-wing economists at the beginning of GEAR’s implementation predicted that the economy would crumble because of a lack of borrowing (when it suited them, they were Keynesians). When this failed, they predicted that the government would spend itself into a hole. When this failed, they carried on as normal; no corporate economist ever lost her or his job through making wrong predictions — only through making statements which embarrass the ruling class. In truth the budget surplus is modest, but is happening despite a growth in public spending. It means that debt servicing has fallen sharply in every year (in this instance, high inflation will further shrink the debt-GDP proportion) which means that the government is constantly able to devote a higher proportion of spending to productive projects rather than handing it to banks. That COSATU disapproves of this suggests that COSATU either does not understand what is going on — or has other ideas in mind.

In fact the whole article was disinformation. It is necessary for disinformation to contain truth — or, at least, things believed to be truth; the article was riddled with juicy accusations familiar from anyone who has read much in the South African left, and short on detail. However, the disinformation all seemed to point in the direction of a particular cluster of policy initiatives:

1. Increase public spending by borrowing at a greater level than the level of economic growth;

2. Cut interest rates to allow the rich to borrow more (and temporarily mark the effect of an expanding national debt);

3. Eliminate restraints and controls on provincial and departmental spending;

4. Allow the currency to go into free fall versus the dollar;

A number of problems which are not soluble by such methods were identified. However, the article pretended that such methods will have some effect on these problems. Hence it is likely that these four policies will be pursued. The following are the probable real reasons why such policies will be pursued:

1 will allow the government to channel money to its rich friends, and to its own pockets, without at first appearing to harm the economy — instead there would be a temporary boom, and when the boom collapsed the government could claim that it had done its best to stimulate the economy and that the problems (which it had created by endebting the state) were structural in nature.

2 will allow the government’s rich friends to obtain more money. It will also probably promote inflation, since that money is not necessarily going to be wisely spent. Also, it will undoubtedly expand the bubbles in the economy about which the article rightly complained. However, it is important to remember that leading Zuma supporters are virtually all devoted to economic bubble-blowing.

3 will promote corruption in the government, a natural product of the anti-Treasury, anti-conservative policies implicit in the article, but also a product of Zuma-style thinking. Zuma’s methods are to essentially ignore policy in the regions while making sure that the regions are controlled by Zuma supporters; thus in return for political loyalty, corruption and incompetence are winked at. Very much what the press complained about in the Mbeki era, but more serious because of the removal of the restraints which Mbeki introduced.

4 is inevitable anyway with a cut in the interest rate under current economic conditions, but is also likely because under Zuma there will be (there already has been) a gradual collapse in business confidence. Loosening up controls will mean a fall in the currency. No doubt the Zuma finance capitalists are already taking a position in the market which will enable them to profit by it (buying lots of foreign currency before the crash will enable them to earn loads of rands when the currency collapses, with which they can quickly buy assets in South Africa for subsequent sale to foreigners — and they will be in the best position to know when such a crash is imminent, so they will be in the best position to gain). They will pretend that the rand is “finding its natural level” and that the dwindling currency is “promoting competitiveness”. Watch them.

Put these issues all together and it appears that about five years down the line, around the second Zuma term of office, South Africa will face economic conditions which it will not be able to escape from; a situation rather like Zimbabwe in about 1995.

So it would appear that good, or at least not altogether bad, analysis is being turned into disinformation for exceptionally bad policy. This is the standard operating procedure of the Zuma regime. It is not something for us all to look forward to with glee and confidence.


Ex Africa, Semper Big Bucks Novi.

September 15, 2008

How bad is it going to be then, eh?

The Big Fat Fuss over Freddie-Mac and Fannie-Mae has flopped flat as a flail. Yesterday the hype boomed the markets in the direction of the stratosphere, but since they were deep in a well, their movement was only perceptible because of the eager shouts of the corporate economists, for which, read ruling class propagandists. Today the markets resumed their grim slide. No surprise.

Basically, nothing has changed. The U.S. has builded its economic house upon the rock of debt and low-wage service industries. Unfortunately debt can be pumped up only so high before it begins to deflate. The mass employment for hamburger-flippers and Starbucks baristas is not injecting enough money into the economy now that the paper-hatted “management associates” can no longer sustain the loans for their cars and pay the interest on the mortgage on their houses. As for the cigar-sucking Masters of the Universe on Wall Street, you cannot run an entire national economy on yachts, limousines and a steady trickle of foul-stinking, dysenteric bullshit.

What will be, will be. The United States will stop consuming as much as it has in the past. The dollar, which is currently rising just because the euro is falling, will eventually fall. The Chinese will be left with an immense glut of manufactured goods which they cannot sell. They will dump the goods at record prices, but they will also start shutting down their surplus factories. Tens of millions of Chinese will be out of work, and the dumping of goods will throw other manufacturing industries all over the world out of work in sympathy. Commodity prices — especially minerals — will fall, as will energy prices. The world stock markets will continue to plummet, as they are now, but probably faster as everybody tries to get out of the market before things get much worse.

Then the Americans will be left with debts which are so much worthless paper. The Chinese will retrench and stop investing in American Treasury securities; indeed, they will probably sell them, especially as their value falls with the dollar. The Americans will no longer be able to buy their imports; since they will still be importing oil and other commodities, they will cut back on imports of manufacturing further. That will cause depression in Europe. The three main productive zones in the world will, for the first time since 1973, all be in depression together, and probably will all be in a worse depression than they have seen since the second world war. Banks will go bankrupt; heavily-endebted firms, confronted by soaring interest rates and plummetting profits and stock value, will collapse. Governments will try to cheat each other and will probably mainly succeed in cheating themselves. The rich will find ways to continue avoiding paying taxes and taking any positive action which costs them anything.

No doubt many governments and financial institutions will advise governments to balance their budgets, cut back on public spending, and privatise whatever they can. Under the circumstances there will be a global fire-sale of national assets unprecedented since the Asian markets crisis. But there will be nobody buying.

How bad? Pretty bad. 1929? Probably not quite so bad. 1873? Perhaps worse. A thirty-year economic slowdown, then, accompanies by grand-scale political turmoil.

Just what does that mean for us, eh?

South Africa at present has a current account deficit, meaning that we are importing more value than we export. Since what we export are commodities whose value is falling, this is going to get worse. We have to finance our deficit by foreign inflows of dollars, much like the United States, and much like the United States we cannot expect this to carry on in an economic crisis. Hence we are soon going to have to limit our imports. On the other hand, the World Trade Organisation more or less forbids any action taken to limit imports — tariffs, for instance. The WTO has been enfeebled by the collapse of its dogmas, but it is still a dangerous poison-fanged dog to challenge.

South Africa exports agricultural commodities and minerals, and some manufactured goods. Some of these goods are going to be needed, but there is going to be a fall in demand which will lead rapidly to gluts — especially as internationally, everybody is going to be facing a crisis which will lead everybody to drive for exports. We can’t compete with the richer countries which can subsidise their exports and defy the WTO. Therefore our international trade is going to suffer. Unfortunately, thanks to our opening up to international markets, all our trade, in a sense, is international trade; it is priced according to international standards. Therefore all our trade is going to take a knock.

If we export less, our exporting activities will potentially be reduced. Farmers will throw labourers out of work. Mines will close down, as will factories. Unemployment will rise rapidly. As a result, there will be less money in the local markets, and therefore industries and services catering to locals will find demand falling. They, again, will start laying workers off. If this continues, government revenue will fall, because with less economic activity there will be less to tax — especially there will be less customs revenue and less revenue from VAT. It’s probable that government projects will stall — perhaps there will even be layoffs in the public service. This is all, potentially, very ugly stuff.

South Africans are heavily indebted. Many people will not be able to service the interest on their debts, having lost their jobs. The banks will try to foreclose, but in a dwindling market there will be little advantage in taking people’s houses and cars away if the bank cannot sell them. (This is basically what the Americans, Europeans and now even the Chinese are starting to discover.) Meanwhile the fact that companies are going bust all over the place will put a lot of strain on the banks. It is perfectly possible that the banks will start cutting back (insurance companies are already laying people off) and will also become less sympathetic to lending. In other words, just as the country badly needs more access to credit, the banks are going to start freezing it off — another thing which is happening in America at the moment. Of course if credit is harder to get, it will be harder to address the problems of lack of markets; for instance, a farm or a factory will not be able to change over to a more profitable crop or manufactured commodity, because such changes cost money. Therefore South Africa’s economic flexibility, such as it is (not nearly flexible enough) will suffer.

Is it all bad news? Probably. However, there are possible ways of addressing some of the problem and perhaps these are worth mentioning even though they may well not be implemented — especially since just as all this is taking place we shall be having a general election and a changeover from the relatively competent and honest Mbeki team to the incompetent and corrupt Zuma team — not ideal circumstances. It is a bit as if in 1932 the Americans, responding to the Great Depression, had triumphantly rejected Franklin Roosevelt and instead elected Joe McCarthy as President.

But one can leave the economic analysis, such as it is, of the Vavi/Nzimande clique for later. Rather think of how things could be handled in an ideal world, in which such people would spend the rest of their lives shovelling gravel onto sieves and then tamping it down into holes in dirt roads near Zoar. How can South Africa get out from under the crisis?

A major problem is capital flight. Rands are not very useful when sent abroad, but they can be changed into foreign currency at a discount, at least for the moment. (Obviously if this process becomes too powerful, as it will if there is a real economic crisis, then the rand will lose its value and become as impossible to exchange as the Zimbabwe dollar. But rich South Africans would have made a lot of money before that would happen.) However, when rands go abroad they are not being invested in South Africa. They are not generating jobs, nor applying the “multiplier effect” so beloved of Keynesian economists. Therefore, a logical step is to impose exchange controls, essentially entitling the government to veto the transmission of funds abroad. This veto has to be used wisely, of course (foreigners would not invest in South Africa if they were not allowed to send any money home) but in essence if the flow of capital abroad is staunched, the logical thing to do with the capital is to invest it in South Africa.

However, nothing is clearer than that capitalists cannot be trusted to invest their money wisely. Hence the state has to develop an effectual means of improving the situation by itself. The state has limited resources; how to use those most effectively? The answer is to develop a way of giving as much money as possible, distributed as widely as possible, to the poorest possible people — preferably, the people who currently have no income at all.

The most natural way to do that is through a public works programme. Suppose that half a million people currently unemployed and unable to find work were given the opportunity to earn R20 000 a year, plus subsistence and minimal shelter (let us say that providing this would cost R10 000 a year for each of them) by doing very basic work with picks, shovels, saws, hoes and wheelbarrows (let us say that providing the equipment and administering the programme would cost R5 000 a year). All told, let us say that these half a million people are each absorbing R40 000 a year, of which R20 000 goes directly to the individuals or their families (who are exempted from having to feed them), R10 000 goes predominantly to small businesses and rural communities capable of providing food or basic accommodation facilities, maybe R5 000 goes to small businesses capable of providing the necessary tools, and R5 000 goes to the bourgeois bureaucrats administering the projects. That comes to a total of R20 billion, of which R10 billion would go entirely to the poor, R7,5 billion would go partly to the poor, and only R2,5 billion would go definitely to the middle class. Maybe you would have 20 000 people doing the supervision and administration, averaging R125 000 each. Nice work if you can get it.

Where would this money come from? It could be borrowed. That’s less than 2% of the gross domestic product. It could be obtained through raising taxes by about 5%. You takes your choice, and then pays your money. In either case it is affordable (2% is likely to be little more than the economic growth rate). In either case, however, money which would be sitting around in South Africa relatively unproductively would be given to very poor people, who would spend virtually all of it on buying food and services in South Africa. (Maybe they would also be buying Chinese clothing, but that would be a question of whether the WTO would still be strong enough to keep us from imposing tariffs.) In other words, it would be a direct shot in the arm for the economy, which would probably grow much faster as a result.

But also, what could these people do? They could mend gravel roads, helping out Zwelenzima, Blade and Kgalema. Or they could clear away alien vegetation. Or they could mend dams, or restructure the landscape in other ways. They could assist in the building of structures such as wind and ocean-thermal power plants. They could repair municipal structures, schools and clinics. There are a million things to do which need to be done and are not being done out of apathy or lack of cash.

Of course there are plenty of other actions which need to be taken to buttress South Africa against the economic crisis. We need to build up local manufacturing, and yet the manufacturing needs to be simple and cheap, to be labour-intensive. We need to build up the capacity to manufacture manufacturing equipment itself — which is necessarily going to be expensive and capital-intensive. While South Africa is a global backwater, while the big players are focussing on their own problems and not trying to waste time on robbing foreigners — this is the time when South Africa needs to start building itself up, as it did between 1930 and 1945. But we cannot do that unless our economy holds together, and to do that we need to start spreading the money around. Now.


2009: An Electoral Odyssey.

September 4, 2008

 

So — who’s going to win the South African general elections, now not more than nine months away? Stupid question. We know that the elections will be a walkover for the ANC under any circumstances whatsoever. Why, then, should there be anything at all interesting about them?

The interesting thing is that Zuma has managed to do some damage to the ANC. Will this translate to electoral weakening? The ANC is a structure and an organisation, but it is also a symbolic body for which people vote. Has Zuma’s behaviour done significant harm to that symbolic stature which Mbeki maintained, cossetted and improved on?

The corporate propagandists who supported Zuma have taken a big risk — a remarkable thing for corporate capitalists to do, since (contrary to their propaganda) they hate nothing more than risks. The risk is that Zuma might take their money and their support and then go on to be a normal ANC leader instead of a corporate hack. In that case, big problems, for all they can do is smear him, and Mbeki has shown that ANC leaders need not fear media smears. On the other hand, Zuma is greedy and corrupt, and therefore perhaps may be, himself, no more than a corporate hack. He is certainly surrounded by them. In that case, the ANC may go down, and the DA — which, all kidding aside, is the party really backed by big business in South African today — go up. But will it happen like that? Come, let us reason together.

The 2009 election is a General Election (the municipal elections will happen in late 2010 or early 2011) meaning that the national and provincial governments will be elected. Let us consider the provincial governments and see how many of them are likely to be affected significantly by the conflict between Zuma and the people who formerly supported Mbeki — one might also say, perhaps in a partisan spirit but nevertheless accurately, between the people who are violating the ANC’s constitution and those who are not violating it, or at least are violating it in insignificant ways. How much has Zuma’s gerrymandering and internal electoral fraud, along the lines of Tony Leon’s behaviour in the DA, actually damaged the ANC’s chances?

KwaZulu-Natal, South Africa’s most populous province, is quite likely to improve its performance under Zuma. The Zulus will turn out for a Zulu — this is tribalist, but not complete nonsense, for Zuma has played the tribalist card and a lot of Zulus, smart or not, are falling for it. To a lesser extent, the same is probably true of Mpumalanga, no small province population-wise.

The Eastern Cape, the North-West and Limpopo were all Thabo Mbeki provinces. No doubt some of the leaders and the membership are disgruntled at having lost out at Polokwane and having been humiliated and bullied incessantly ever since. However, these are provinces where ANC support is extremely strong — we are talking 80% or so — and also where the support is tenacious. People will not walk away from their party just because their faction has been defeated; that would be both cowardly and unpatriotic.

That means that five of South Africa’s most populous provinces are not going to be lost by the ANC. That means, effectively, that South Africa will be governed by the ANC after the 2009 election. There will be no startling surprises. There may be a slight decline in the Eastern Cape (though the ANC is rock-solid there) because of the unfair treatment of the provincial Premier, and some declines in the Limpopo (where Zuma gerrymandering has been clumsily obvious) and slightly less in the North-West. But none of this will influence the actual outcome.

That leaves four provinces. Nobody seriously thinks that the Free State is going to experience any major changes. The Free State is dominated by the Bloemfontein cabal, and this cabal trimmed its sails to the wind and went for Zuma even though it had been appointed by Mbeki. People are not going to be upset by anything that is happening there. The Free State will continue to be solid for the ANC. Six provinces for the ANC; game, set and match. Zuma, therefore, will be able to say that despite all the problems his leadership has won the election (and his acolytes are already setting up Mbeki’s supporters for the blame if anything goes wrong.)

So that leaves only three places where other parties might conceivably do anything effectual. That is, Gauteng, the Northern Cape, and the Western Cape. As Alex would say in A Clockwork Orange, “What’s it going to be then, eh?”.

These are three areas where the Democratic Alliance has a certain strength and no other party apart from the ANC has major significance. This is, in a sense, great for the plutocracy. They can pretend that their party has a chance in these provinces, and that having a chance in these provinces means that they will someday have a chance of taking control of the country. Unfortunately for the plutocracy, both of these pretenses may be mistaken.

Gauteng is a very small but populous province which went solidly for Zuma at Polokwane. In proportion to its population, its ANC membership is very small — which means it is easily controlled, especially since it is highly urbanised. Its ANC vote has climbed steadily since 1994 when the ANC won a majority, though it is still not nearly as high as in the provinces mentioned earlier. Therefore, on the one hand the Zuma disruption has barely affected Gauteng organisationally, and on the other hand, Gauteng, by its nature as a province and as an ANC organisation, is easily restructured if problems seem to be coming. Gauteng also has a solid black majority.

What all this means is that Gauteng is not a place where the DA is likely to get much traction. The Zuma situation will not bring them much advantage. Meanwhile, by the nature of the place, with the black population growing much faster than the white (africans continue to flood to the cities from the rural provinces surrounding Gauteng, while whites are emigrating) and the DA continuing to treat blacks as lepers because their current support-base is racist and their funding-sources are mostly whites — well, it’s not a good prospect. The DA would do well not to try too hard, wouldn’t it?

But in fact it has to, for internal reasons. The dominant portion of the DA was rooted in the old Prog party, from which all actual progressives and democrats were purged in the late 1980s and early 1990s in readiness for a conscienceless merger with the apartheid National Party, which eventually happened in 2000. While the National Party was a national party, the Progs were based, in essence, in two places: Joburg and Cape Town, with the Joburg section being dominant because it controlled the money and hence controlled the debate. (Most of the purged “lefties” were from the Cape.) Interestingly, exactly the same was true of the National Party, except that in its case the right-wing dominant centre was Pretoria, and the liberal weak centre was Stellenbosch — and there, too, the “oorbeligtes” were purged.

Well, what this means is that the DA has to pretend that it has a powerful position in Gauteng even though it doesn’t, because this is the only way for the Joburg faction to regain control. At the moment, it still commands the money, but Helen Zille (Cape) and Susan Botha (Free State) command patronage and votes. In the 2000 election it actually thought it would take Johannesburg, and when it failed, its handmaiden Tony Leon set in motion the calamity which lost it control of the Cape. Having learned nothing (read Leon’s autobiography; it is quite surreal to see how he continues to live in a bubble of 1975 consciousness without even realising it) it will want a lot of money ploughed into Gauteng electoral politics. That is lucky for Zuma.

The Northern Cape is an interesting place; it is the only place where the Democratic Alliance has ever collaborated with the ANC, something which surely could never happen nowadays. It is enormous and almost uninhabited. Control of the province would obviously be better than nothing, but it is not very much. It would also require a lot of work, not just money, slogging all over the place. The big centre of ANC authority is Kimberley, which went solidly for Zuma at Polokwane. However, there is clearly a lot of resentment at the continuing rule of Zuma’s boy John Block, especially from africans who feel they deserve more patronage.

The province is divided between africans and coloureds (whites are a small minority as usual); in 1994 the divide was fairly even, and came out electorally as between ANC and NP. Subsequently, however, the ANC’s coloured vote has climbed and the NP’s coloured vote dipped, partly because the province had a fairly honest leader (he even stayed in a township instead of a white suburb) and partly because of the decline of the NP nationally. As a result, the ANC has got into a strong position, and the Zuma disruption has not been so great; no leadership changes, despite the resentment of the schlentering in the recent election (rumour has it that the ANC secretary-general Mantashe declared anti-Block branches not in good standing, then quietly allowed pro-Block members from those branches to show up to vote at the provincial conference, thus ensuring Block’s safety). The DA could undoubtedly do better, but it would take an enormous amount of work to win, and there is no sign that the DA considers the province worth the prize. After all, there is no national newspaper coverage coming out of the province.

In this sense they are not being altogether stupid; a genuinely progressive party would want to take over a province to show the country that it can do better than the central government. But this is not the case; the DA does not have any new ideas to offer. It just wants power, to better serve the interests of its capitalist bosses, trample on the workers and oppress the blacks, apart from the rich ones who are actually members of the party. (Oh, it probably wants to rob the defenceless widows and orphans too; forgot that for a moment.) Sigh.

So that takes us to the Western Cape, the only place in South Africa where the ANC could conceivably lose out. The DA’s victory in Cape Town has gone to its head a little, compelling it to fail to notice its smashing defeat in the Western Cape in 2004, where previously the DP and NNP (the lacklustre remarketing of the NP) had a solid majority, and also to fail to notice that in the 2006 municipal elections the DA’s share of the vote fell and the ANC’s rose. Therefore, the DA thinks it can win the Western Cape. Is it smoking something it shouldn’t, or is there really a chance?

Before Zuma came along it was a no-brainer. The DA in the Western Cape would have been lucky to get anywhere, especially with its Cape Town Mayor apparently in bed with apartheid spooks and organised racketeering (not only truck-hijackers but also vigilantes). Luckily the Western Cape Premier appears to have handled things badly (unless the Cape High Court, which found for the Mayor, was just bought off; the Western Cape judiciary is strikingly corrupt even if Justice Hlope is left out of the equation). The ANC should have walked the 2009 election.

But kicking Premier Rasool out on trumped-up grounds has posed a problem. Rasool’s issue was always that he was a coloured Premier in a province where the majority of the ANC’s vote is african, but where they need the coloured minority of the ANC’s vote to win. The african majority doesn’t like the coloureds, who return the compliment, so the only glue holding them together is leftist party solidarity, which, together with ten rand, might get you a small cup of coffee in a cheap Cape restaurant. Nevertheless people liked Rasool and voted for him; now that he’s been replaced by Brown, who despite her name is almost colourless, there should be a smaller turnout. On the other hand, people from the Eastern Cape continue to flood West in search of jobs, and, not finding any, will probably blame the Cape Town DA government and therefore vote ANC.

While the Zuma disruption has done more damage in the Western Cape than anywhere else, and the DA has a better chance there than anywhere else, the fact is that the DA has not done anything to promote any confidence. As usual, it is campaigning entirely on the fact that it hates the ANC (and, although this is delivered in coded terms, that it hates blacks and thinks that the whole country is doomed). The politics of resentment does build solidarity, but it doesn’t build dynamism; people are often inclined to sink into apathy, or vain searches for unrealistic solutions. (This is why the obviously fraudulent “Independent Democrats” did well in the 2006 elections; now that they are more obviously a front for the DA they will do less well.)

As a result it is perfectly possible that, starved of money by the Gauteng elite and disrupted by being pulled in too many directions at once (including the fact that the Party’s leader was once an anti-apartheid activist and probably still feels a dim, submerged guilt at leading a party largely consisting of the fruits of apartheid), the DA will lose the Western Cape. It might even manage to do worse than it did in 2004. That’s scary, of course, because it would put Zuma in a wonderfully strong position.

However, since Zuma’s backers are also the backers of the DA, if you track the financial chains of command back far enough, perhaps that doesn’t really mean much of a change.


Making Connections.

September 4, 2008

Sometimes conspiracy theories can be useful.

This week [this post has been somewhat delayed], the Sunday Times published an extract from the autobiography of Tony Leon. Leon was the gutless reactionary blowhard parachuted into the Progressive Federal Party by Anglo-American; a vapid corporate lawyer and apartheid propagandist who worked for the corrupt Johannesburg City Council before being installed, against the will of the local constituency, as Member of Parliament for Houghton. Leon rose without a trace — he accomplished literally nothing, but he was so obviously more right-wing than anyone who did accomplish anything that he was the logical successor to flabby Anglo-American corporate bureaucrat Zach de Beer to take over the “Democratic Party” (the ultra-right cabal which stole the PR of the PFP after it disintegrated under its own contradictions) after its dismal electoral defeat in 1994. By doing absolutely nothing positive, and by consistently adopting the principles of the apartheid National Party, Leon was able to lead the Democratic Party into becoming the National Party’s successor, the Democratic Alliance in 2000.

Perhaps the Creator is being too kind to Leon in this. He was always loathed by everyone who knew him, and as a result, when the DA reached its ceiling, Leon was the victim of the palace coup he had feared for so long and was replaced by Helen Zille, equally right-wing but slightly more intelligent. So now he has written an autobiography. It illustrates all he has learned in his life, which is nothing.

The Sunday Times extract was a repeat of what Leon has been saying since 1993; namely, that everything has gone wrong since the National Party betrayed the country by letting the blacks take over. If only they had fought harder and not let the blacks take over, if only justice, peace and democracy had not prevailed, everything would have been better for the whites whose interests Leon has been paid to serve. Note that Leon is, like his counterparts on the far left, saying that someone else should have done the fighting. As in his military career, where he sat in a Pretoria office writing propaganda articles while other people died to defend the toxic principles he promulgated, Leon believes firmly in the suffering of others on his behalf. He is, obviously, talking bullshit. If the National Party had not given in to the inevitable the result would have been catastrophic, most particularly for the whites who got the best deal possible. However, self-delusion is wired into the brain of the average white South African, especially those whose self-delusion leads them to call themselves liberals when they are reactionaries.

This is interesting, but as some light-minded people complain, so what? Who cares what some deadbeat failed politician thinks? What difference does it make that some people are today still firmly standing up for the virtues of the apartheid state? Haven’t we moved on, inexorably, from those horrible times, and aren’t those people just fossil dinosaurs?

The Creator thinks otherwise.

For one thing, why Leon? Obviously, someone at the Sunday Times thinks that he deserves to be hyped. Also, why select the most egregiously anti-democratic part of Leon’s whole discourse, which should remind anyone reading it that Leon is an enemy of everything good about South Africa or the world? Presumably, someone at the Sunday Times thinks that this is what needs to be promoted. It’s not the man, it’s the message, and the message is that blacks shouldn’t have been allowed the vote. Implicitly, the message is that since they have the vote, something needs to be done to ensure that their vote doesn’t mean anything. Given that this must have been approved by Sunday Times editor Mondli Makhanya, this suggests what Makhanya’s real agenda is.

Makhanya, remember, was trained and groomed for stardom at the Mail and Guardian back when the neoliberal, serial liar and possible British secret agent Howard Barrell was running it. Interestingly, the Mail and Guardian‘s awful weblog, Thoughtleader, carried a puff-piece on Leon written by Charlene Smith. Smith is interesting; she’s a self-promoter of Leonine status who was skyrocketed to stardom when her ex-boyfriend raped her and thus made her an expert on gender issues. In customary South African fashion, she was immediately pronounced an authority on antiretrovirals, proving this by her enthusiasm for the poisonous rubbish nevirapine, especially when given to victims of rape in order to immunise them against HIV (which it does not do, by the way). As a result, Smith was given the contract to write a book propagandising serial liar, media darling and corporate puppet Patricia de Lille after the latter set up a political party attempting to draw coloureds away from the ANC in the Western Cape and thus pave the way for a Democratic Alliance victory there. The book bombed, but made headlines when Smith illegally outed two women as HIV+; of course South African “journalists” despise the law almost as much as their corporate masters do.

Hmmm. Interesting connections there. Smith’s cooing propaganda on behalf of Leon had no more substance than anything else which Smith writes, but it was notable that she once again focussed on Leon’s hatred of the South African Constitution. It gets so in the way of what rich people want to do (sometimes, anyway). Again, someone must have thought that the Constitution needed trashing and that promoting Leon was the man to do it.

Another contemporary writer on the same weblog, Sentletse Diakanyo, wondered why the Zuma cabal was using so much revolutionary rhetoric when it was so obvious that they were none of them revolutionaries and had no revolutionary agenda. The question is so obvious that a more interesting question would be why nobody has asked it before, and especially not in the press, in connection with much-publicised figures such as the preposterous Julius Malema, President of the laughable ANC Youth League. After all, the Zuma cabal use “revolutionary” to mean “anything which serves our scramble to wealth and power”, and “counter-revolutionary” to mean “anyone who challenges our right to wealth and power”. Is Diakanyo the only South African to find this a little bit odd?

Some of the comments gave a large part of the game away. White South Africans, being well aware that their affluence rests on thin ice, are violently hostile to any favourable discussion of any kind of redistribution of power or wealth away from themselves. Hence, someone like Tony Leon is desirable because he wishes to see the potential redistribution of power implicit in the 1994 settlement annulled (even though he knows it is impossible). Diakanyo was criticised for discussing the possibility of revolutionary change as conceivably positive. The commentators wished to see it as necessarily negative; Diakanyo’s suggestion, that Zuma’s cabal were debasing the concept of revolution, antagonised people who want to see the concept of revolution dead and buried, and who presumably see debasing the concept as a big step in the right direction. In the same vein, attacks on the Constitution and on the democratic settlement of 1994 are important because those are widely seen as “steps in the right direction”, and if these steps can be discredited, it might be possible to seal off the whole pathway to justice, peace and democracy, which seems to be the agenda not just of the Democratic Alliance but of the white South African corporate community.

The extent to which the black South African corporate community endorses this inhuman agenda is anyone’s guess, but it’s quite clear that they don’t oppose it — and therefore, that Zuma’s cabal is working towards much the same goal (even if unconsciously) as that of the white right wing. Which means that the white right wing is implicitly more important than it seems.

Paranoia? Perhaps. But consider a seemingly different matter, the Zimbabwean negotiations. The Creator knows perfectly well that Zimbabwe’s problems will only be beginning when ZANU (PF) steps aside. On the other hand, it seems impossible that anything useful can be done with the present bankrupt leadership, or to find any alternative other than the MDC. Hence, the situation is very like the situation in South Africa in 1993, when it was necessary to get rid of the apartheid government and the only possible replacement for them was the ANC. This is a simple point, made in the Daily Dispatch (though not by a journalist) a couple of weeks ago.

The interesting thing is, however, that the official media line is very different. The media line is that there should be no negotiations; to be precise, they are all hoping that the negotiations will fail. (Tsvangirai’s obstructionism, almost as great as ZANU (PF)’s obstructionism, suggests that the Western powers share this hope.) This is widely endorsed by white respondents to the articles, some of whom are denouncing Tsvangirai for talking to his opponents. No doubt some of the fear is that ZANU (PF) will somehow pull its chestnuts out of the inferno and leave the MDC dangling. No doubt some is also due to the psychotic hatred for Mbeki felt by most journalists and pundits, leading them to feel that Zimbabwe’s crisis should not be resolved if such a resolution makes Mbeki look good. (This is probably why COSATU and the SACP are trying to disrupt the talks by antagonising Mugabe at the impending SADC summit.) However, the Creator wonders if there is not something deeper.

Of course, many white South Africans hate Mugabe for the simple reason that he overthrew a white racist regime and played a modest role in the overthrow of apartheid. Racism lies in the background of a great deal of anti-Mugabe rhetoric, not only in South Africa. That certainly helps explain why such people do not want a negotiated settlement. For such people, negotiations mean compromise, and like Tony Leon, they want everything their own way, all the time.

On another level, however, Mugabe is a very convenient permanent scapegoat. He redistributed borrowed wealth to the poor, and drove his country to the verge of bankruptcy. He sent troops to defend African states against apartheid and Western aggression, but wasted lives and money to no profit for his own country. Eventually he tried to rob the affluent in his own country, supposedly to help the poor, and failed at that, too. He is a splendid stick with which to beat the people who support justice, peace, and democracy. Just as people like Malema are splendid sticks with which to beat every kind of idealism — and particularly revolutionary idealism.

Eventually, it would seem, people like Zuma and Mugabe will be cast aside. For now, though, there are people who find them useful as tools to crush idealism. What a wonderful world!

 


Calling It For Obama.

September 3, 2008

It is written that the future is written but that none can read the handwriting in which it is written. However, it is clear that barring the usual miracle (Joe Biden being revealed as a member of the Socialist Workers’ Party, John McCain flying to Caracas to arrange shipments of free oil to all Americans), Barack Obama will, this coming November, be elected President of the United States by the minority of Americans who bother to heed the orders of the American ruling class.

Why say that?

There are certain signs. Firstly, Obama is way ahead in the propaganda stakes. This is a dead giveaway of who the ruling class likes. The propaganda always favoured George W Bush, just as they favoured Margaret Thatcher and Tony Blair, that two-headed British efreet. So, the ruling class does not dislike McCain — he has not been smeared in any way — but it obviously feels that for its own purposes, Obama is preferable.

This is not obviously related to anything special in Obama’s policy proposals, because Obama’s policy proposals are nothing special. Get out of Iraq at some stage, stoke up the wars in Afghanistan and Pakistan and continue alienating a large chunk of the world while gently schmoozing with Europe — that’s about it. What makes it more attractive than McCain’s plan to stoke up all the wars, start some new ones, and alienate absolutely everybody? Nothing much; a dime’s worth of difference, as Ralph Nader would say. On domestic policy there isn’t even that much. Admittedly Obama has announced his intention to raise taxes for the rich, which sounds great until you remember that a) he won’t do it, and b) the rich don’t pay their taxes anyway, raised or lowered.

So why is Obama going to win so undeservedly?

The problem is that while the ruling class got approximately what they wanted from George W Bush, they did so at a tremendous price. The greed and corruption which accompanied the massive transfers of wealth from poor to rich, and the gigantic expansion of the aggressive military-police complex enabled by 9/11 which did away with all that ridiculous bumf about freedom and democracy, was a bit of an embarrassment. There has been no mass public protest — the most catastrophic thing about the George W Bush years has been the failure of the American left to make any capital out of it — but some have noticed just how bad things are getting, and in turn have noticed how much this badness was founded on the badness of precious regimes, especially Clinton’s.

This means that at the moment there is the possibility that the left could become resurgent — not a great likelihood, but a possibility. The dismal performance of the Democratic Party might lead some to turn their backs on it and consider establishing an actual opposition party — and the ruling class doesn’t want that. There is plenty of scope for that, with the dismal state of affairs, the unpopularity of the current government and the feeble but still existing nit-picking of a few semi-intellectuals like Naomi Klein and Thomas Frank.

So, in short, what is needed is to throw the Democrats a bone to enliven them and encourage people to support them in lieu of a real opposition, and also to allow gullible people (nearly everybody) to think that they have driven the bad guys out and brought change and blah blah blah. After all, since there is no real sign that Obama will actually change anything important, the illusion of change is no threat to anybody. On the contrary, the absence of real change will disillusion any observant person who gullibly voted for Obama; meanwhile, the illusion of change, and the reality of losing some important posts for a few years, will serve to revitalise the Republican Party, the actual party supported most strongly by the American ruling class.

Arthur Silber wrote an interesting essay, “It’s Called The Ruling Class Because It Rules”, a declaration of Papal Catholicity which was important because many Americans believe that the people rule America, and also believe that those chocolate eggs in the living-room were left by a cute bunny, and the fifty cents under the pillow was left by a fairy. However, Silber is wrong. The ruling class, in America as elsewhere, does not rule. The ruling class is much too fragmented to rule. The ruling class does not get together in a formerly smoke-filled but now probably eco-friendly room, in order to decide how they will dominate the country. They don’t get together at all; as individuals, they dislike each other and betray each other when they can. The ruling class is in charge, as a class, but it sustains itself in power by being a gigantic amoeba, like the movie The Blob, which flobbers and billows more or less in the direction it thinks it wants to go (though directed by more primitive factors than brains), devouring what it can eat and smashing what it cannot and scaring the bejeesus out of the hero and heroine. The amazing thing is that anything is left standing. This is the irresistible force which has chosen Obama.

Of course there is more to it than the political matter of heading off the possibility of an alternative to themselves arising. The United States is in a hell of a mess. It is difficult to judge how bad it is, but Americans are more unpopular throughout the world, among everybody except the ruling classes, than they have been since the end of the Cold War, and probably before then. That in itself is not very good, but the Americans have also alienated one of the three minor world powers — Russia — and don’t enjoy brilliant relations with the two others — Brazil and India. Meanwhile, all three powers enjoy excellent relations with China, which the Americans rightly see as their competitor for global domination and which is virtually the anti-America, having built itself up by its own efforts in much the way America did before it decided to become an international gangster instead. In short, global politics look trickier than they have for decades, and unlike the situation during the Cold War, the general public in America’s NATO allies dislike the Americans intensely; their governments’ toadying to America is one of the most unpopular things about them.

That wouldn’t be so bad, if it weren’t that America’s two big sticks, the military and the economy, are both failing her.

This is the problem which Americans are aware of and yet not aware of. They are proud of their military, which in the 1960s and 1970s fought North and South Vietnam to a standstill while simultaneously building up enormous might in Europe and promoting massive satellite states like Israel and Iran. In the 1980s they decided to fight tiny states like Grenada and Panama, which went down like ninepins, and then Iraq, which they defeated (well, they mostly shot its military in the back after it surrendered and retreated under the impression that America would respect the armistice, but still, power is power).

But things have not been so good lately. They started a war in Afghanistan which they have no idea how to finish. They have managed to turn the anti-American war in Iraq into a civil war by stirring up religious and ethnic hostility, but that hasn’t made the country any more governable. Poor old Ethiopia, which occupied Somalia under the impression that American support would make the conquest easy and free up troops to threaten Eritrea, has been sitting in Somalia for two years in a steadily weakening position. The military coup in Venezuela and the more ludicrous one in Equatorial Guinea failed. Even satellites like Israel and Georgia are getting bloody noses when they flounder into Lebanon or South Ossetia. All the rubbish about the “revolution in military affairs” has turned out to be just that; America needs troops on the ground and friends it can trust, and it has precious few of either, partly because it spends so much money on high-tech equipment which either doesn’t work at all or isn’t suited for the jobs which need to be done.

The trouble is, all this stuff costs a lot, and building bases costs a lot, especially when you outsource the building to companies who are chums of the government and therefore can charge what they like — and America doesn’t have the money any more.

It used to have. In a sense, it still does have. It’s the biggest economy in the world and nobody should forget that. But it did away with its manufacturing industry assuming that it didn’t need one because its service industries would pay for everything. Manufacturing was supposed to go to easily controllable countries like Mexico, but instead it went mostly to Asia. Now America runs a massive trade deficit. Admittedly it pays for its imports in dollars, which keeps the currency stable (which is also why it is nervous of the Euro and the Chinese currencies. You might ask where it gets those dollars from; the answer is portfolio investment, mostly by the Asian countries; hence the Asians are paying America to buy their products. That will work well so long as the Asians do not run short of money and call in their loans to America. If they do that, America will not be able to pay for its imports, and unfortunately, since America does not manufacture the goods that it needs, it will then be in trouble. (Since Asia has been hit hard by the recent banking crisis, this may be on the horizon.)

A trade deficit is a problem because if you default people won’t sell to you, but it’s one which many poor countries have had to live with. What is remarkable is that America has also been facing a gigantic budget deficit. It ran up huge deficits for no obvious reason in the 1980s (well, the reason was to keep the rich happy) and then the President who tried to do something about this, George H W Bush, was run out of office because he modestly raised taxes. Clinton raised them some more, and actually reduced the deficits considerably (to nominal surpluses, although there was some smoke and mirrors in that) but almost the moment Bush’s son came into power, back things went into deficit and the national debt skyrocketed. “Reagan proved deficits don’t matter”, said one of Bush II’s advisers.

The trouble is that deficits matter under some circumstances. Bush II has kept interest rates low, so servicing the national debt is easy even though it is alarmingly high. However, interest rates are starting to rise in an attempt to protect the currency (the weaker the dollar is, relative to other currencies, the greater the danger that some of America’s foreign spending might end up costed in euroes or whatever). Also, with increasing commodity costs, inflation is up, and the traditional remedy for that is increasing interest rates (it doesn’t work very well). If there is ever a problem with America’s foreign portfolio investment, there will be a need to increase the interest rates even more, in a desperate attempt to attract investment for the sake of the interest earned on it. But the higher the interest rates go, the higher the cost of servicing the interest on the national debt.

Eventually America would have to start slashing public spending. Unfortunately, they have been doing that for the last decade, and their social and physical infrastructure is in a bad way, so they actually need to spend more money, which they haven’t got. And there is the cost of trying to make themselves independent of foreign oil (fat chance, boys) and the ever-growing cost of the bad weather arising from the global warming which America has done so much to promote — the hurricanes in the Gulf, the tornadoes in the Midwest, the wildfires and, perhaps, the melting Alaskan permafrost.

All this is what awaits lucky little Barack. A good thing he probably doesn’t know it. But the American ruling class does, and is gambling on the strong likelihood that he will fail to solve any of the problems. A 60% chance that he will be a one-term President; 30% chance that he will get out of his first term unscathed, and 10% that he is deposed before completing his first term. Write those odds down. It will be interesting to see how far it comes true.