The Day After Election Day . . .

March 8, 2009

What happens? Well, things have changed since the Creator made certain confident predictions about the forthcoming election. We all have to get used to the fact that “things have changed” is invariably a code phrase meaning “things have got worse, but you ain’t seen nuthin’ yet”, alas.
There are two interesting predictions arising out of contemporary polls. One is that CoPe is not going to do as well as it hoped to do. This is, of course, an ambiguous affair. How CoPe hoped to do is not really victory in the election, which they could not have hoped for. Notwithstanding, the polls are putting CoPe at about 10%, which is well below the level at which CoPe could realistically expect to ignite a firestorm of anti-Zuma rebellion in the ANC.
Politics is about patronage. If CoPe were to push the ANC out of office in the Eastern Cape, and if it and the DA were to push the ANC (potentially) out of office in the Western Cape and threaten the ANC’s majority in the Free State and Limpopo — well, that’s all a big if, but it did not seem altogether impossible when the party started out. That, together with pushing the ANC down well below 60% (the big gain would have been pushing it below 50%, but that would be rather desperate) would raise problems for the people who have supported Zuma because they expect him to give them jobs. If in one electoral cycle the arrival of Zuma throws a lot of people out of jobs, with the prospect of wholesale collapse in the next cycle, then the inclination to dump Zuma and restore more competent and able and — perhaps — honest people to power would be quite strong.
However, if this doesn’t happen, then CoPe becomes just a big United Democratic Movement, severely internally divided and with no cohesion. In fact, CoPe appears to lack internal cohesion already, hasn’t been particularly good at developing a message (let alone at getting it out) and has made a couple of potentially serious blunders, like appointing Alan Boesak. It is also short of money (which of course is no surprise given that it has only existed for four months and for much of that time ANC pressure prevented it from campaigning). If it has only 10% and no prospect of splitting the ANC, then it is, essentially, a waste of space on the election floor.
Of course, none of this may be true. The Creator would remind you that this is all dependent on right-wing propaganda being truthful. The polls are based on rich white people’s polls, which are inevitably skewed towards the wealthy. CoPe could be, and probably is, a more completely grassroots-based movement than most parties, in which case it does not show up clearly on white ruling-class radar. This was what gave the National Party such a salutary shock in the 1980s when they discovered that, because they had abandoned the Afrikaner working-class, they were completely unaware that the Afrikaner working-class had responded by abandoning them and going to the Konserwatiewe Party instead. If CoPe is the KP of the ANC, then it might still turn out to perform better than expected. Rich parties think in terms of posters on poles, mass meetings and TV advertising, whereas real political activists should think in terms of house meetings, taxi discussions, and clumps of people milling around in T-shirts.
Still, the dearth of CoPe media may be a bad sign — when the ANC was banned it still tried to get its pamphlets out. (Incidentally, the ANC has been campaigning feverishly in CoPe areas, using CoPe techniques like motorcades, apparently trying to create the illusion, which may not be an illusion, that they are also a grassroots party.) CoPe’s leadership have also done some extremely stupid things. Forwarding the names of ANC loyalists as their candidates was dumb. Lekota backing the FF+/DA campaign to have whites who have abandoned South Africa (because of their hatred for black rule) accepted as voters in South Africa is dumb squared.
Another prediction is more interesting, and actually more reassuring (although it also weakens CoPe’s position). The Democratic Alliance appears to be doing far worse than it thought it would. This may be due to extremely incompetent campaigning — yesterday the party’s leader, Helen Zille, announced at a mass rally that it was not true that the DA was planning to do away with social grants. Well, of course they are planning to do away with social grants — that must be the long-term goal of any reactionary, anti-poor party like the DA. The whole corpus of propaganda about “Mbeki babies”, girls getting pregnant in order to get child support, which is a mass of lies copied from American anti-poor corporate propaganda — that all comes ultimately from the DA. But equally obviously, it’s not something that you want attributed to you in an election. Zille, by officially denying it, gives the accusation the stamp of authority. Plainly she’s a lot less shrewd than she seems —
Unless the DA is throwing the election. The social grants thing does not have any effect on the DA’s core constituency of whites, anti-black coloureds and anti-black indians. Maybe Zille, like Leon, is afraid of expanding the constituency too widely, bringing in blacks who might want some representation on the Federal Council and might not be docile bootsuckers like Joe Seremane. Alternatively, maybe the DA is worried that if the ANC is weakened too much, that could benefit CoPe — in other words, the DA may have realised what CoPe’s strategy is, and recognises that Zuma secure in power is better for the white ruling class than Zuma having to go cap in hand to CoPe. CoPe will not be around in 2014; the DA, as the ultimate tool of the ruling class, can afford to think long-term. Or is the Creator being paranoid?
Perhaps. This could be quite interesting. In the Western Cape, for instance, the DA essentially announced that it was going to win. If it does not win — if the ANC either squeaks in or can arrange a coalition (one suspects that CoPe would dump Boesak and sign up with the ANC quite quickly — CoPe’s rank and file are not at all interested in the DA, whatever their leaders may say). If the DA does not win the Western Cape, it will have a problem — it has promised many people jobs who will not be happy about not getting them. Zille has explained that her party’s incompetence in running Cape Town is due to their not controlling the province as well (a bad excuse, but fools believe such things). Hence her failure to take the province will imply a continued inept management in Cape Town.
It could also raise a problem because her effort to take the Western Cape, while potentially sensible, is also a way of building her power-base in the DA. When Zille fails, the Gauteng leadership — particularly Bloom, who has no empathy or sympathy for anyone except reactionary white males — will argue with their customary fraudulence that they could have taken Gauteng but for Zille. It is plausible that there could be a power-play; anyway, there will be a degree of conflict which will keep Zille’s merry folk busy for months (especially with Sandra Botha out of the picture — it is remarkable how all attractive and intelligent people in the DA gradually depart, as if a hypnotic trance has worn off).
What this would then mean would be that the 2009 problems for the ANC could be plausibly presented as a hiccup rather than as a terminal crisis. With CoPe having failed, and the DA’s challenge beaten off, and both parties in turmoil, and no other opposition parties with any prospect of success, the ANC would be more entrenched than ever, and the Zuma faction would be able to spread its control throughout the ANC, as they have been doing since Polokwane, with virtually no successful organised resistance.
What would that mean?
The ANC’s policies appear not to have changed. What has changed is how they are applied; for instance, the ANC claims to continue to support the rule of law, yet it has facilitated extremely doubtful court cases and has effectively prevented the punishment of criminals in the case of Yengeni and Shaik. It claims to support democracy, yet it gerrymanders its own elections. The increased political violence in KwaZulu/Natal is worrying, although it is nothing like the violence that province went through in 1985-95. Some of the laws pushed through by Zuma’s government since the overthrow of Mbeki do look rather worrying in terms of matters such as freedom of speech.
By the looks of things, the ANC Cabinet is going to mostly contain mediocrities. The SACP wants to establish a centre of power outside government, but dominating government, which it can control. Zuma is partly sympathetic to that, it would appear, perhaps because it would enable him to escape criticism (it’s not me, it’s those guys over there) as he has always done. Ditto the notion of increasing the number of ministries while eliminating deputy ministers — it potentially leads to greater internecine conflict and confusion of responsibility, and to an overworked Cabinet which would then be easier to control. Control seems all-important to the new people, much more important than the implementation of policies. (Actually, making promises and then breaking them seems to be the core vision of Zuma’s future government.)
As a result of this, it seems that corruption is likely to flourish even more than incompetence — indeed, the two are closely related. Zuma’s and the SACP’s sympathy with big business is well known and quite extreme. We cannot, therefore, be sure that anything will be done about the big problems of the present — particularly economic inequality. Indications are that this inequality may rise sharply under Zuma.
Meanwhile, of course, the problems to be faced by Zuma are greater than the problems faced by Mbeki. The global economic depression, together with the calamitous consequences of global warming and the depletion of resources including food — these are things which cannot be wished away. One can pretend they don’t exist, and many do just that — but they do exist. Hence, we seem to be in extremely difficult straits, with a government which is prone to lie, which is likely to be unprincipled, which is in thrall to rich people who have no real interest in drastic responses to crises, and with a virtually destroyed opposition both within the Tripartite Alliance and in the wider community.
Maybe all this is wrong. Maybe in the end Zuma will turn out to be a better person than he seems. The Creator, however, is worried that Zuma will actually be considerably worse than he seems, and that as conditions deteriorate the Zumatics will continue to change for the worse. This was why the Creator wanted someone else — almost anyone else — in charge. Unfortunately, not even the Creator can overrule the white ruling class, who are behaving like runaway rogue white elephants and are about as useful to the human race . . .



March 8, 2009

So the Obama bubble has burst.
Not the political bubble — that would be too much to hope for. The economic bubble, the thing which created the illusion that, without much change in policy, the U.S. economy could be saved for fraud, greed and the pursuit of profits without productivity. The New York Securities Exchange averages are down to 6 600, from 8 500 when Obama took office — a fall of 22% in a month and a half. Most significantly, last November when the Bush bailout for banking banditry began taking effect, the averages briefly hit 6 900. So — this is almost where we came in. (Well, not “we”, for the Creator does not deal in such things, being opposed to them on principle.) Oh — and that means that the averages have also fallen by about 6 200 points since their 13 000 high under Bush — that’s a fall of about 48% if anyone is counting.
Who’s Bush again?
That’s an interesting thought. The stock market crash is not actually Bush’s fault, although the Democrats would like to pretend that it is. However, Bush certainly contributed to it by encouraging the inflation of the market. Bush also rendered the U.S. less capable of responding well to a stock market crash, both by making the economy more dependent on financial services (he only just failed to privatise the U.S. government’s pension and social security system, and if he had succeeded, the U.S. would be in a far worse state even than it is in now) and by running up gigantic deficits which make the fiscus less resilient.
Oh, dear, what does that mean again? We’ll come to that in a moment.
But nevertheless, all eyes are on Obama, who stupidly promised to sort things out. (He would probably not have been elected had he pledged to stagger around aimlessly pretending to do things in the hope that everything would come right on its own. On the other hand, honesty is sometimes the best policy — if he’s going to do this, he might as well have lost the election so that McCain could be confronted with the storm of shit coming down upon everyone’s heads.
One thing, though. Why did the stock market bounce like that? There was no objective reason for it. The amount of money being injected into the system by the so-called bailout was trivial in comparison with what had been lost. The economic indicators were declining, and continued to decline. A sane and sensible person would look at the market and sell. Some people were buying despite this. Why was that?
Interesting that just as public money was being handed over, with virtually no controls over its spending, to the most corrupt financiers in the country, the market started to rise and stayed up for the duration of the government which those financiers particularly liked. Then, once a new government which those financiers disliked was installed, the floor which appeared to have mysteriously constructed itself under the value of the market disappeared again. Mysterious. Like what’s happened to the bailout money, which appears missing without trace.
Or is it? Supposing that the money was mostly used, not so much on buying corporate jets and paying golden handshakes as we are currently told, but on something else. Supposing that there was organised share-purchasing. That would make a lot of sense. Nobody would use their own money on a falling market — if the bankers learned anything from 1929, it was that. But the bailout money wasn’t their own, it was free money from the government. The stock market is much more important than it was, for the U.S. economy, partly because financial services are a much bigger part of the gross domestic product than it has ever been, and partly because so many Americans have been obliged to invest their savings in the stock market, in order to keep its value up. So it’s likely that if the money was used to pump up shares, the Federal Reserve people would have winked, and so would Obama and his team who are all subject to unwarranted admiration for financial services.
Huh. That seems plausible. Of course, once the money was pumped in, others would have followed. Hence, for a little while, a bubble. Which might have pleased Obama, and perhaps also made him overconfident.
But let’s consider the political implications of this — if it happened, of course. What would it mean? Effectively, it means that for a couple of months, the last months of Bush, the stock market went up and stayed there. For investors it seemed that the worst was over. Things aren’t so bad. But then — bugger me, that darkie’s taken over. He’s a Democrat! We hate Democrats! Out upon them! So suddenly, the stock market ceases to be your friend. If it goes up, that means that the Democrats are looking good. Besides, Democrats don’t know anything about money, they’re all at best dilettantes and at worst Communistic enemies of the system. They will smash it, smash it! So smash it first, before they can!
So most investors were getting nervous around the glib, egregious orotundity of the 20th January. And maybe just about then the public money ran out anyway and so the floor fell away and things began to fall. Fall far and fast, even if not quite as fast as in October. (But with 40% of the market’s value already lost, there was less room to fall in.) So suddenly Obama looks like a loser. The market has fallen under him. Fallen even as he organised bailouts, even as he pledged not to nationalise banks, even as he promised that everything would be all right for the American ruling class. The American ruling class seems quite happy to blow out its brains provided that the blood spatters over Obama’s reputation.
This may not be exactly true. Herbert Hoover suspected that someone was rigging the market to drop whenever he delivered one of his asinine observations about how the market was bound to rise sooner or later. However, it seems at least plausible, especially since the Republicans have voted against the “stimulus packages” evolved by both Bush and Obama as if they do not really want the economy stimulated, at least not while Obama is in charge. Perhaps they don’t want it stimulated at all.
A large chunk of the country, including the majority of its richest people, are digging in their heels and refusing to accept that anything needs to be done to improve the financial and fiscal situation. This means, in its turn, that the Democrats, who are cowards to a person, will wonder whether as much needs to be done as Obama wants. Meanwhile, Obama must be dimly aware that what he has proposed is insignificant compared with what needs to be done. However, with the Democrats only tepidly supporting him and the Republicans rapidly opposing him, he is unlikely even to get that insignificant proposal sorted out.
Is this serious?
Well, probably. Some commentators, like Greg Palast in Armed Madhouse, have suggested that this is not really a problem for the American elite because they will just move their money out of the country, in the same way that they would in any other Third World country. In principle, that sounds fine. In practice it is less fine. The global economy depends, not on the globalisation of corporations, but on the survival of the national system. This is because the U.S. and Britain buy from abroad and provide financial services in return. If this system breaks down, the companies cannot themselves work the system — it depends on governments. If the governments break down, the companies will not receive the social support which they need to survive. Therefore, moving your wealth to Myanmar or Jamaica will become less useful because there will be very little to buy — and most probably your wealth will depreciate almost as rapidly as the Zimbabwe dollar. In consequence, the collapse of the U.S. economy will make a difference to the global ruling class.
But they probably do not properly realise this, because having been wrecking economies for so many decades and making money out of it, it is difficult for them to believe that sawing off the branch they are sitting on is no different from chopping down the Amazon forest. They are inoculated against understanding sound economic management and sensible policies, and so they refuse to have this happen to their own economy.
That is why they have promoted budget deficits over the last eight years, while the economy was growing. These deficits were not happening because the economy was being stimulated and hence was growing. The deficits were happening, predominantly, because vast amounts of money were going into an ever-weaker military, and because of tax cuts, which applied particularly to the wealthy. (This was also happening to the British, where the basic rate of income tax is now down to 20% for the upper middle-class — in order to keep the economy running, they zapped up the lowest rate of income tax for the working class to 10%. In the United States, the very poor don’t pay income tax at all, though they do pay sales tax.) This is important, because in 1929 the U.S. was a creditor power with a budget surplus and therefore could afford to spend-spend-spend under Roosevelt. Eighty years later the U.S. has a massive overall trade deficit, so it has no economic favours to call in from foreigners, and it has a huge budget deficit and therefore cannot afford to spend at all under Obama. (Indeed, Obama wants to balance the budget, which will finally destroy his own Presidency and hand power back to the Republicans.)
All this is, in fact, wonderful, if you are alarmed by U.S. power. U.S. power is economic power, and if Obama cannot persuade the American ruling class to help him save it, then that economic power will very speedily wane. Pouring real money into the bottomless pit of imaginary cash is a very good way of doing that.
But this, unfortunately, does not actually save the rest of us. The global economy is structured to serve the United States and its friends. If the United States and its friends go bottom up, then the global economy will come unglued. The consequences for small countries, which depend on manufacturing industries in China and Europe and Japan, which in turn depend on mining and mineral industries in Brazil and South Africa and Australia and India, are not good if those manufacturing industries disintegrate and drag the mining and mineral industries down with them. Then what will the rest of us live on? Especially those of the rest of us who are growing agricultural produce which the new bankrupt world can no longer affored to process or import? How to suddenly stop growing cotton and cut flowers and start planting mealies? The Zimbabwean example shows us that it isn’t just a case of issuing commands. It must be prepared for, and nobody is preparing for it. The classical theory, increasingly becoming conventional wisdom, is that the world is screwed.

La Folies Zimbabwienne

March 8, 2009

The Creator sometimes listens to the radio, for the same reason that the Creator reads newspapers or books. It is always worth knowing what the enemies of truth are up to. If you know what Lie the vile ones are peddling, you know what to expect, don’t you?
The recent establishment of a government of national unity in Zimbabwe did not make the Creator dance around with glee, because it was painfully obvious that almost nobody involved in that government knew what they were doing, and those who did know where the ones responsible for most of the problems in the country, so what was going to be achieved by it? The only reason to be happy was the fact that the people most opposed to anything good coming out of Zimbabwe were extremely unhappy about the government of national unity. That didn’t mean the government was good, but at least some bad guys were being pissed off.
The radio, however, revealed something which was quite interesting. The Zimbabwean Prime Minister, Morgan Tsvangirai, visited South Africa for a meeting with the South African Minister of Finance. Tsvangirai had previously pledged to solve the problem that the entire Zimbabwean civil service was on strike, by pledging to pay everybody in foreign currency. Unfortunately Zimbabwe does not possess that foreign currency. To compound matters the government pledged to print coupons which could be redeemed for the foreign currency which did not exist, and which would simply further promote inflation. Essentially, Tsvangirai’s visit was a confession that he had no answers and was having to come to Pretoria with a begging-bowl.
But then he came out of the meeting and announced that there would be no “randification” of the Zimbabwe dollar. He would not have gone to Pretoria if anyone else had been prepared to give him the money he needed. So, obviously, he needed the money from South Africa. But, on the other hand, he was not prepared to submit to the obvious suggestion — that the Zimbabwe dollar should be pegged to the rand in the way that, say, the Namibian dollar is. He had his pride.
But, of course, South Africa is not going to give Zimbabwe money for nothing. Obviously there has to be something in it for South Africa. It would appear that Tsvangirai was not prepared to provide that something. So what was he going to do? He did not say.
Therefore, the radio naturally went to seek someone who was prepared to say something. What was obvious was that Zimbabwe was in a catastrophic state and that its leaders were not prepared to do anything. So how was this to be put in a palatable way?
By changing the subject.
The task was handed to Dr. Jammine of Econometrix, and he handled it with his customary brilliance. Firstly, he explained why nothing could be done. The reason for this was that Mugabe was still President. Because Mugabe was still President, it was impossible for Tsvangirai to accept any aid from South Africa. Q.E.D.
That evasion is interesting, since it avoids the question of what Tsvangirai was doing in South Africa in the first place. If he had no reason to go there, why had he gone there? What was going on?
Jammine’s implication, naturally not spoken out loud, was that the South African government supported Mugabe. This has been a regular claim of the MDC, and also of the West, and also of the South African media. There is actually no evidence for it. There is a certain amount of evidence that the South African government, certainly under Mbeki and probably subsequently, does not approve of Mugabe’s policies or their consequences.
Of course, even if the South African government did support Mugabe, that is a poor reason for the Prime Minister of Zimbabwe to refuse to have anything to do with South African economic support. The Prime Minister’s objective should be to do what is right for the country; one of the primary criticisms of Mugabe has been that as President he has sought to serve party over nation. In addition, an astute politician (which Tsvangirai is not, admittedly) ought to be able to make political capital out of negotiating a loan, a grant or anything related to that.
Jammine’s statement, false and ludicrous as it was, nevertheless helped explain what was going on. Jammine undoubtedly knows what he is talking about. The EU and America are refusing to help Zimbabwe, referring all queries to SADC, which they say ought to help Zimbabwe. No SADC country other than South Africa can help Zimbabwe. However, South Africa was responsible for resolving Zimbabwe’s political crisis, against the wishes of the EU and America. Apparently, someone — presumably, the EU and/or America — does not want South Africa to help Zimbabwe out.
But Tsvangirai could hardly not go to South Africa. He had been referred to them by his former political backers, after all. So he came to the government which he had been abusing for the last few years as dishonest and corrupt and hateful (spending most of his time hanging out with its political enemies) and begged for assistance. Try imagining Hugo Chavez going to America and asking for economic aid and you are in the same sort of territory. But South Africa is not America; the South Africans seem to have made a proposal to Tsvangirai, which he immediately turned down as a terrible threat to Zimbabwe’s independence. Tellingly, ZANU (PF) agreed with Tsvangirai immediately, one spokesperson declaring that South African aid would turn Zimbabwe into a “South African supermarket”.
Perhaps many Zimbabweans would prefer a South African supermarket to what they have at the moment, but obviously neither ZANU (PF) nor the MDC is going to consult the public on what they want. In actual fact, the SADC country most like a South African supermarket is undoubtedly Botswana, whose pula is not pegged to the rand (although it has been falling against the rand for some time). Lesotho and Namibia, where the moloti and the N$ are pegged to the rand, are not conspicuously failing states.
Of course it is wise to be careful — you don’t want your economy to be exploited by someone with no interest in sustaining it. That was what happened to Ecuador and Argentina when they stupidly dollarised their economies. On the other hand, America is a long, long way from Ecuador and Argentina; South Africa is right next door. As a result, South Africa doesn’t view the failure of Zimbabwe with the equanimity with which America views the failure of Latin American countries. (Under the “shock doctrine” outlined a bit simplistically by Naomi Klein, Americans even hope that failure anywhere could bring them some profit.) Also, South Africa does have experience of not wrecking related economies in SADC. Finally, and most importantly, while Argentina and Ecuador were in bad economic states when they dollarised, Zimbabwe is in a totally different case. Tsvangirai’s behaviour is equivalent to a Jehovah’s Witness allowing her child to die rather than have a blood transfusion. It’s so dumb it’s no wonder ZANU (PF) supports it.
OK, but what else is there to do? Stare across the Limpopo at the black hole which now belongs to the MDC instead of ZANU (PF)? Apparently so, for Jammine went on to say what needed to be done. It deserves a paragraph on its own.
He. Said. Zimbabwe. Should. Slash. Public. Spending.
OK, think that one through. Zimbabwe is in crisis due to the collapse of its financial and fiscal system. Money is not moving around. Exchange is not happening. People are not getting paid and unemployment is at an all-time high. This is all happening, please note, against the background of a global situation in which, er, the financial and fiscal systems are collapsing, money is not moving, exchange is not happening, and unemployment is growing very rapidly indeed. So Zimbabwe is simply a miniature precursor and an extreme version of the global credit crunch. How did the Westerners cope — pretend to cope, to be precise — with their crunch, crunch, crunch? By borrowing vast amounts of money and spending it. Keynesianism, standard procedure, if they hadn’t given all the money to rich people who wasted it. (The Creator has a theory about that.)
But Zimbabwe is told that in a fiscal and financial crisis, the thing to do is to spend less. Which will exaggerate the problem. Which will also, of course, compel the government to close down social services, most particularly education and health care, the two jewels in the crown of Zimbabwean administration (though the strike in both spheres is rapidly turning both jewels into paste). No doubt the goal of this is to force Zimbabwe to do a lot of privatisation which will make someone very rich. In other words, Jammine’s response to the problem — and we should assume that it is a response which is more or less official to the ruling class — is the standard “shock doctrine” approach; how can I make money (for myself or for my class) out of the misery of these people?
Point is that if Zimbabwe does not find a white knight, it will have no option but to do exactly this. The only white knight available is South Africa, and South Africa also has the people who could be put in place in Zimbabwe to check that the money being spent is wisely spent. (One thing the Treasury is very good at is preventing provinces from wasting money.) South Africa does not really want the Zimbabwean education system to collapse (it’s the nearest thing to a functioning school system in Africa south of the Sahara) nor the health care system to collapse (the cholera epidemic did not stop short when it came to the Zimbabwean border).
Whereas foreign capital would be quite happy to see both systems destroyed, with the bulk of the staff sacked and the infrastructure privatised and in the hands of foreign owners. It’s worth remembering Tsvangirai’s great turnaround in the 1990s, when from campaigning against the Economic Structural Adjustment Programme when he was head of the ZCTU, he campaigned in support of an ESAP when he established the MDC (and took the ZCTU with him). Maybe this is just the latest in a decade-long programme of betrayal of the Zimbabwean people.
Nothing very new there, perhaps, but on the other hand, not massively cheery, is it?