Robert Fisk and the coming dollar panic

In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar. Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars. The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years. Robert Fisk - Independent

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Iranian Finance Minister Shamseddin Hosseini said on Tuesday he has in the past discussed with other countries the possibility of shifting oil trade away from the dollar, but such a step would require broad agreement. Hosseini, speaking to reporters on the sidelines of the semiannual meetings of the International Monetary Fund and World Bank, said he had not held any such discussions in recent days. "Some of the countries right now accept this idea," Hosseini said of a possible shift away from the dollar for oil. "But this is one of the subjects that needs more discussion and (to be) agreed on by everyone," he said through an interpreter. Hosseini said Iran agrees with the idea of shifting oil trade to a basket of currencies due to dollar weakness. "Generally we believe that the dominance of the dollar to the economy of the world is to the detriment of everybody," he said. "We are not alone in this belief."Hosseini said Iran has reaped billions of dollars of profits and averted losses by shifting reserves to the euro and other currencies from the dollar. Reuters

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The problem that both China and the oil exporters have is that they're holding gigantic stashes of dollars that would suddenly be worth a lot less if they started trying to sell them off. So we've got this impasse, where lots of people complain about the dollar's supremacy but nobody seems willing to do anything about it. Justin Fox - Time

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Robert Fisk has put is fox among the chickens with his scoop on the dollar.  According to Fisk the Gulf Sheiks along with China, Russia, Japan and France are all holding talks aimed at no longer pricing oil in US dollars.

Of course all of the above rushed to deny it. However Fisk insists in his story and if I have to choose between the word of Robert Fisk and word of a group of diplomats, I'll take Fisk every time.

What explanation could fit both versions?

Well, if these people have huge dollar reserves they are primarily concerned about the value represented by those reserves. They don't want to do anything to create a panicky run on the dollar which would drain the value from their reserves. That would explain the denials.

At the same time, if they believe that it is quite possible that the dollar might collapse in a foreseeable future, they would like to have a plan B to avoid being wiped out. That would explain the conversations.

The important thing for them would be, in case of a panic, not to trample each other to death running for the exits like in a theater of discotheque fire. They would have to have a commonly agreed on vehicle to transfer the value of the dollars to something else in an instant. They might only have a few hours to act before markets opened after some traumatic event that set off the panic. There would be no time to improvise, it would have to all go like clockwork or their economies would be ruined.

In other words, Fisk has observed them running a fire drill.

Why are they so worried?

Why have they so little confidence in America's ability to come through all this with flying colors?

What has happened?

I have my own little theory which I will share with you.

A while back I wrote this:

This particular crisis is about a vacuum in credibility. It isn't exactly America's "fall of the wall" moment... yet, but it is moving in that direction. Think what it means when a whole ideology crashes.

When I was a young fellow many people truly believed, and had made huge personal sacrifices all their long lives in the belief that history's inevitable march was toward socialism and that the Soviet Union was the genuine vanguard in that march. Many were still believing it right up till the moment when Gorbachev pulled down the Red Flag on the Kremlin.

It is impossible to exaggerate what an intellectual and political hole that left... a hole big enough for people like Alan Greenspan and George W. Bush to walk through.

Now that ideology has been trashed too.

The vacuum it leaves is of even greater proportions and those proportions are only beginning to sink in.

There is a curious wrinkle here. This is not just about dry figures, there is a grotesque, intensely human story that sums it all up: Madoff.

For me the Madoff story is the poster boy of the whole credibility collapse and the collapse of the American myth.

Huh?

Let me explain.

When I first came to Europe, many years ago, I was amazed -- shocked at first -- at how so many Europeans of both the left and right, would affirm with a totally straight face that America was run by  its Jewish citizens. I thought that it was simple antisemitism at first, but it was and is much more complicated than that.

It is really the only explanation they can find for our success.

Most Europeans think that the average, white bread, boy and girl next door, all-American type, is just too spontaneous, too innocent, too narrow minded or just too plain dumb if you will, to have ever put together anything like our good ol' evil empire. 

Since the only Americans that Europeans find "European", which for most Europeans -- no matter how dumb they are -- means intelligent, educated, subtle and sophisticated, are the American Jews, Europeans just naturally assume the Jews are behind America's success. 

That is why the Madoff scandal embodies the damage this crisis has done to US credibility: American Jews have turned out to be just as dumb as American goyim.  

The Madoff scandal is the quintessential caricature of the whole moment. The idea that people had around the world had was that American Jewish people were the only people intelligent enough to really understand advanced financial products and it turns out that America's richest, therefore smartest, Jewish people were as stupid as it was possible to be, and even Madoff himself was, dumb to ever think he could get away with it, all this has destroyed centuries of malignant stereotypes of the Jews preternatural craftiness at the worst possible and inopportune moment.  The bottom line is: If America's richest Jews are just as stupid as the rest of the world's goyim, then... who is minding the store?

So, the world is waiting for the other shoe to drop.

They hope it wont come too soon, but they have to be prepared for when it does otherwise they too will be pulled down to ruin. DS

Globalization and some home truths for Bernard Avishai

Globalization: Chinese underwear on sale in Madrid, Spain

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A couple of days ago  Canadian-American-Israeli, professor, author and businessman, Bernard Avishai, blogged an article, "Unemployment Or Unemployability? A Story", which he posted to his blog and cross posted to Talking Points Memo Café. This snippet will give you an idea of the content and the tone of his piece

But here is the sad reality impinging on unemployment. For there was greater social risk to the compact, too, and it was not hard to imagine what became of car mechanics who, unlike Dave, were not prepared to hold up their end of the deal. You ran into many such people in rural New Hampshire: not-quite-enough schooling, too much beer, too much TV.It was precisely because direct labor used to be so simple, mechanical and yet critical to value creation that labor unions made sense. The logic behind unions may still apply to some kinds of work—fast-food servers, apparel assemblers, hospital orderlies. But any job that is simple and repetitive, that requires so little individual creativity that an employee would rather join a union than negotiate an individual career path, has become a prime target for the computer-integrative technologies. All of this has meant that tens of millions of people—people with children, people hobbled by dullness and self-doubt, people who played by rules that simply evaporated from the time they were 15 to the time they were 35—are hard pressed to see a future. Bernard Avishai

Aviashai's is a fairly accurate, if uncritical vision of the new "knowledge economy", but his posting caused a firestorm of comment at Talking Points Memo. It was if he had broken a dam of pent up anger and frustration.

What impressed me most is that the anger wasn't from "people hobbled by dullness and self-doubt" or people with, "not-quite-enough schooling, too much beer, too much TV". No, it came from precisely the people that the system had prepared  --  using Avishai's phrase -- to "negotiate an individual career path", even people with post-graduate degrees.

The system is failing them and believe me these are the dangerous ones for a system to fail.

If you have read a bit about revolutions you'll remember that they are not put into motion by the uneducated, those who consume "too much beer and too much TV" -- no matter how oppressed they are -- but by the dissatisfied intellectuals of the middle class, those who have the necessary skills, knowlege and tools to first understand and then to subvert the system.

From time to time the uneducated, the sans cullote rise up in their blind desperation, but if there is not a group of intellectuals who are prepared to channel that anger it soon blows over and fades. It is the intellectuals that turn rebellions into revolutions. 

I don't remember ever seeing this type of third world intellectual's anger in educated Americans before. During the sixties,  American university students rebeled against the war, the draft, racial segregation and so forth, but the anger I sense in the comments to Avishai's post is traditional class anger. This is the anger of people, who  as Avishai says, "played by rules that simply evaporated from the time they were 15 to the time they were 35", and despite their education, "are hard pressed to see a future".

Here is a small sample of the abuse he received. I recommend reading it all as the quality of some of the comments is superb:

Bernard Avishai, that condescending, anti-union, globalist jerk, has a summer-house near Wilmot, New Hampshire. He thinks anybody who isn't very, very smart should be very, very poor, or, better still, just fucking die.
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Tell me about the high level of "risk" in the life or the real owners of our "ownership society," you know, the Goldman Sachs fraternity, the Paris Hiltons, the George Bushs, the Robert Rubins, the Tom Friedmans, the Warren Buffets? How come nobody re-engineers Tom Friedman's job so it can be done more intelligently? What "risk" means for the top dogs at Lehman Brothers or AIG? If owning the "means of production" means so little these days, why can't we have it?
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The picture one gets from this anecdote is that the contemporary world is just so inherently fraught with dynamic change and ceaseless creative destruction that no one can survive any more on average, stolid intelligence and workaday responsibility. Everyone in America now has to become a "creative thinker" and an entrepreneur, and spend their brief moment on Earth restlessly "negotiating an individual career path" to keep up with the torrent of change. To me, that sounds like a very annoying, stressful, spiritually lonely and unsettled way to live.(...) I am appalled by the amount of intellectual talent that is drawn to edgy, decadent and expensive outposts of human desire and craving, while the fundamentals of human life are neglected and taken for granted. Our lives seem deeply out of balance.
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I am really glad you live in the rarefied world of successful entrepreneurs and innovators. The rest of us have to exist too. We have to buy that stuff. Your disdainful conceit is nauseating. I know a lot of great hardworking smart people and this economy is utterly failing them. My whole life has been watching our middle class struggle to stay in place. (...)  I am relatively young (early 30's), and this is the experience of my generation. I have friends who have already gone through 3 career changes already- mimicking the economy at large (dot.com, real estate, service, etc.). I know engineers that have spent their last employed months training overseas replacements. One was just laid off from a good printer company (the one that gave Carly 20mil plus) and now works a late night fish taco stand. He has a masters from UC Berkeley. He has only one other 'good' job prospect- going to Tianjian to train. On contract. MASTERS. Reminds me of when I would travel in third world countries and used to be shocked that a doctor would be a taxi-driver. I get it now. I know so many older smart hard working people who are now permanently underemployed it, or worse. They have been screwed, and they are not the 'too many beer folks'... Fucking Prick.
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One thing that is ludicrous is how 1980s this blog is. Security for college grads is, in fact, so very 1980s. These days kids graduate with a ton of debt, to a job market that has six applicants for every opening. That's why we recently witnessed a talented recent grad -- double major -- die from lack of health insurance when she came down with H1N1. People who graduated in the 1980s and 1990s have no security either, since there is an army of ready replacements. But hey if it makes you feel good we'll give you a PhD in asshattery.

Of course in all fairness, some places have got it worse than the USA.

Mr Avishai's other country, Israel, for example.

Noemi Klein in her seminal book, "The Shock Doctrine", devotes an entire chapter to Israel, entitled "Israel a Warning", where she describes how Israel has been transformed from a labor intensive agricultural exporter to a high tech super power, selling security and weapons technology for the "war on terrorism". This transformation combined simultaneously with a Friedmanesque  (Milton) reduction of the previously generous welfare state has been disastrous for a great many Israelis. Few countries have ever changed as drastically as Israel has in such a short time.

These first quotes are from the Israeli mass circulation Yediot Aharonot and the Jewish Journal:

Once idealized as a socialist paradise, the Jewish state is increasingly becoming a country of two classes -- those who have soared in the increasingly capitalist economy and those who have stumbled in its wake.

Despite its much-mythologized egalitarian image, Israel has always experienced economic gaps. But now the divide between haves and have-nots has grown to alarming proportions. If economic policies and other factors have spawned a privileged class, they also have produced a deeply entrenched underclass populated by the elderly, Holocaust survivors, Arabs, immigrants, ultra-Orthodox Jews, single parents -- even two-income families. JewishJournal.com

Israel has bypassed the United States and now leads Western countries when it comes to child poverty figures, according to a grim National Insurance Institute report released Monday.

According to the report, child poverty grew by about 50 percent since 1988, with about a third of all children living below the poverty line. Meanwhile, 28,000 additional families dropped below the poverty line in 2004, comprising 107,000 Israelis, 61,000 of them children. YNet

And this next is from the Bnai Brith; founded in 1843, it is the oldest continually-operating Jewish service organization in the world. (It should be noted that this article was published before the "great recession". Things are obviously worse now).

The reality of poverty in Israel is relatively new to the Israeli consciousness. Hundreds of thousands of Israelis face serious financial hardship-even as Israel has developed into a fledgling economic power, posting impressive gains in gross domestic product (GDP) and achieving dizzying growth on the Tel Aviv stock exchange.

Throughout the 1990s, the poverty rate in Israel climbed steadily. The number of poor Israeli families grew by 4.4 percent of the total population-the sharpest rise in the developed world. Public assistance increased to meet the need; from 1990 to 2001, welfare payments in Israel more than doubled, from about $5 billion annually to more than $10 billion. Nevertheless, the ranks of those living in poverty continued to swell and the socioeconomic gap in Israel between rich and poor rose sharply.

Between 1998 and 2005, child poverty rose 50 percent, to 35 percent of the child population, according to the National Insurance Institute (NII) and Israel's Central Bureau of Statistics. There was a sharp spike in poverty overall between 2002 and 2004, when Israel's then-finance minister, Benjamin Netanyahu, instituted drastic cuts in welfare services. This coincided with the peak years of the Intifada, when the economy flagged as Israel coped with that ongoing crisis.

Although poverty rates in the Jewish state leveled off in 2005, they still remain higher than in any other industrialized country except the United States. "We have had stabilization, but it's not good enough, because we have stabilized at a very high level of poverty," says Miri Endeweld, head of the economic research department at the NII, which manages Israel's welfare system. "When you get to a high level, of course you're going to stabilize. How high can you go?"

And it is not just that poverty has risen. In 2004, Israel also had the second-largest gap between rich and poor among industrialized countries; only Taiwan's was larger. Israel's income gap was twice as large as that of the United States. To wit: While luxury homes with two-car garages are built in the beach town of Caesarea, residents in the next town on the other side of Israel's coastal highway use food stamps at local supermarkets in Or Akiva. Bnai Brith

And in Israel, "the light unto the Nations" nearly 30 percent of the population goes hungry: this from the Israel News Agency:

Over 400,000 families in Israel suffer from "nutritional insecurity," a euphemistic term for "hunger." 28% of Israeli citizens, or 1,600,000 people are living in poverty. Among them are more than 600,000 hungry children. Those experiencing "nutritional insecurity" eat smaller portions, skip meals and, in extreme cases, don't eat for a whole day. Diets may be high in carbohydrates and lacking or almost devoid of meat, dairy products, vegetables and fruit. In Israel, 22% of families are deemed moderately insecure and 8% suffer from severe insecurity. A family's situation is considered moderately insecure when the parents deprive themselves of food to ensure their children get what they need. In families whose situation is severe, the children are deprived as well. 60% of nutritionally insecure are Jewish, 20% are Arab, and 20% new immigrants. 80% of nutritionally insecure people reported a deterioration in their situation in the last 22 years, as Israel economic conditions have deteriorated. About 24% of Israelis are forced to make choices between food and other expenses such as mortgage, rent, medicine, heating and electricity. About half choose to get along with less food. The 'poverty line' in Israel in 2002 was NIS 4,500 a month ($937.50) for the average Israeli family of four - mother, father and two children. Signs of how severe the problem is are all too apparent on the streets of Israel. In Jerusalem, for example, nearly 1,000 people a day come to four soup kitchens at which hot meals are served. It is also commonplace to see older men and women picking through the garbage at outdoor markets in Israel's cities. The collapse of the economy has taken a great toll on the lives of Israel's poorest families, and many children from middle-class families are now joining their ranks. Unemployment in Israel is around 20%, and the difficult economic situation has taken its toll on huge numbers of Israelis. Israel News Agency

And to finally drive home the point further, this piece from America's foremost Jewish newspaper, The Forward:

Economists are bracing for an early warning about what toll the world economic crisis may be taking on Israel’s population. Popular wisdom is that Israel is weathering the current world financial storm, with the economy faring well given the circumstances. Last August, the Bank of Israel revised its forecasts of growth in 2009 to one of stability from a reduction of 1.5% in GDP. But this offers little comfort for many ordinary Israeli householders. Figures set for release later in October by the government’s Central Bureau of Statistics show that even when the economy was at its very strongest, in 2007, more and more Israelis had difficulties putting food on the table. That year, the country’s economy grew by 5.4% — faster than the United States, Europe, the United Kingdom and Japan. But the percentage of Israelis who went without food for economic reasons at some point during 2007 stood at 21%, up significantly from 14% in 2003. “I am afraid that the figures for 2009 will not be better, but rather even worse,” said Yosef Katan, an expert on poverty in Israel from Tel Aviv University’s School of Social Work.(...) The universal measurement of inequality in a society is a complex mathematical calculation called the Gini coefficient. The lower the number- — between 0 and 100 — the more equal income distribution is in a society. Israel’s score in the latest UN-published table is 39.2. This is higher than all other western industrialized nations but for the United States at 40.8. Most European countries have scores in the high twenties or low thirties. Back in the 1950s, Israel boasted some of the lowest scores in the world. The Forward

It seems to me that an economic system -- one which supposedly favors intelligence -- where even Jewish people starve, is a simply a fraud.

Israel was a country specifically created to keep the Jewish people safe from harm. An economic system which fails miserably to fulfill the founding "mission statement" of such a state, can certainly not be expected to produce results in any country, especially in one which like the United States has repeatedly shown that it has no such protective view of its citizens.

The anger and frustration of the educated and the skillful will surely find an outlet in action. What form that action will take I do not know.

Certainly I think the progressive community of the United States deserves a better home than the Democratic party. Things have to get done, people have to get organized, strikes and demonstrations have to be called and the Democrats are never going to do any of that... They exist so that those things wont ever happen. DS

How I learned to love the bomb

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The dirty secret of the atom bomb is that it is a "peace maker", as in "blessed be the peacemakers". 

The "inconvenient truth" is that the only one to have ever used the atomic bomb on human beings (twice) is the USA. 

The atomic bomb, like "the sound of a clod of earth falling on a coffin, is something perfect in its seriousness" (hat to A. Machado).

The bomb concentrates people's minds totally and suddenly they act rationally when contemplating war. 

How do I know that?

From direct personal experience, that's how...

I owe my life to the atomic bomb and I'm certainly not alone.

I think my whole (boomer) generation owe our lives to the atomic bomb... 

Without the bomb we would have gone to war with the USSR for sure.

My whole generation would have been drafted in both countries and the ensuing "conventional" war would have been even more brutal than WWII.

More brutal, why?

Because if we compare the conventional weapons that the Americans used in Vietnam and the Soviets used in Afghanistan with what both sides used in WWII (compare the M1 to the M16), millions of us on both sides would have died (probably me included).

So, I for one think that I owe my long and heretofore happy life directly to the proliferation of the atomic bomb.

It should be underlined that Iran's having the bomb does not mean they will ever use it. Persians are very sensible folk. A people like the Persians don't exist for thousands of years because of lemming tendencies.

What an Iranian bomb will mean is that the Israelis, for example, will not be able to periodically destroy half of Lebanon or massacre Palestinians in Gaza with impunity, as is their wont.

In an "bi" or "multi" lateral atomic Middle East something that brutal could spin out of control.

I remember with what care and caution the Soviet Union and the USA regarded each other.

What do you call an 800 pound gorilla?

"Sir".

When you stop and think about it, MAD (mutually assured destruction) is a rather beautiful thing.

It remains to be seen if the Israelis can lay down their "white man's burden" and deal with their neighbors without "gunboat diplomacy"... that is really what this issue is all about. That is what all the urgency is really about.

Proliferation means the end of colonialism: Sitting Bull gets the Gatling Gun. DS

With Iran, the USA is playing into the hands of China and Russia

The Three Musketeers

In the final analysis, the new UN Security Council resolution passed on Thursday calling for an end to nuclear proliferation did not name Iran - despite robust canvassing by the US and Britain - and that was because Russia and China wouldn't allow that to happen. Also, the resolution stopped well short of authorizing forced inspections of countries believed to be developing weapons. M K Bhadrakumar - Asia Times

(Brazilian VP) Jose Alencar, who also served as defense minister from 2004 to 2006, said in an interview with journalists from several Brazilian news media that his country does not have a program to develop nuclear weapons, but should: "We have to advance on that."  "The nuclear weapon, used as an instrument of deterrence, is of great importance for a country that has 15,000 kilometers of border to the west and a territorial sea" where oil reserves have been found, Alencar said.  Associated Press

Venezuela's science and technology minister said his country is working with Russia to detect deposits of uranium but withdrew an earlier denial that the country was also working with Iran. Associated Press

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Let me cut directly to the chase, right to the bottom line:

In the "third world" -- which is a nice way of saying "former European (read "white") colonies", -- Britain, France and the USA have always been considered the great imperialist powers. And during the Cold War Soviet Russia and Communist China were considered the "anti-imperialist" powers.

With the collapse of "really existing socialism" and the advent of globalization it is interesting to note that this description remains valid.

During the Cold War this anti imperialist reputation gained much influence for China and Russia and many leaders and intellectuals of third world or "non-aligned" countries, with no desire to import the Soviet or Mao Tse Tung's version of socialism into their countries, found both countries useful counterweights to the USA, Britain and France in their struggle to maintain some semblance of their national sovereignty.

What was least attractive about Communism (especially in the Soviet case) for the former "western" colonies, bent on defending their newly won sovereignty, was the idea that "really existing socialism" was a "global" movement, international, and which subordinated its allies, like colonies, to "The Motherland of Socialism", with its capital in Moscow.

These former "western" colonies, with their history of exploitation and subordination, tend to be equally suspicious of a global movement, which we could call "Really Existing Globalization", that subordinates its allies, like colonies, to "The Motherland of Capitalism"... with its capital in Washington.

The end of the Cold War brought China and Russia into the world economic system... which means they can play both games simultaneously: they can buy and sell advanced weapon systems, cars, electronics and assorted bric-a-brac all over the world and at the same time refresh their Cold War street cred as defenders of the national sovereignty of the west's (read white people's) former colonies, where most of the world's natural resources are, (that's why they were colonies in the first place).

America's invasion of Iraq, while it simultaneously pussyfoots around the much more tyrannical and grotesque, but atomic bomb armed, North Korea, has made it clear to everyone that the only reliable guarantor of national sovereignty is the atomic bomb.

The atom bomb means the end of gunboat diplomacy.

Naturally, many citizens of the third world see that the "west's" urgency in keeping Iran from having an atomic weapon, like Israel's, Pakistan's and India's, is simply in order to dominate Iran more comfortably. The United States, Britain and France, from this point of view, have a lot to lose if more countries get the atomic bomb, it would mean the end of globalization as a western controlled power system, as it would no longer be possible for the "western" powers to continue to bend the former colonies to their will. using military force... or at least many of these countries might have reason to believe or to hope so.

So finally, just by dragging their feet on sanctioning Iran and continuing to sell that country weapons and to buy their oil,  Russia and China are building up much good will and influence in the countries who produce the commodities that the developed world transforms.

I can imagine some readers saying, "Oh it's all different now, because Barack Obama's father came from Kenya and he's black". To those readers I would say that the president of the United States is the president of the United States, no matter if he is black, white, yellow or green. If anyone in the third world ever thought that President Obama would not behave as his office  and the economy of his country, or the interests of those who paid for his campaign oblige him to, they will soon learn differently. DS

Political Paralysis: what would Jesus do?

Christ Carrying the Cross

Hieronymous Bosch

1485-1490
Oil on panel
76.7 x 83.5 cm
Musee des Beaux-Arts, Ghent

Obama, budget director Peter Orszag and health czar Nancy-Ann DeParle grasp the intricacies of the health-care system as well as any three humans, and they could write a law to make it far more efficient. But now it is in the hands of legislators and lobbyists who care much less about the rationality of the system than they do about the way the bill will affect their particular part of it. Everyone has a parochial agenda. Senate Majority Leader Harry Reid, for example, wants to be sure a new cancer treatment center in Nevada has favored status. Democracy and representative government are a lot messier than the progressives and their heirs, including Obama, want to admit. No wonder they are so often frustrated.
David S. Broder - Washington Post

Given the slow progress of cap and trade legislation in the Senate, Europeans are beginning to understand why the UN might be an easier forum for Mr Obama than Capitol Hill. In this, Mr Obama is accused of not trying hard enough, rather than trying to do the wrong things. “Europeans no longer see President Obama as merely an innocent victim of what they regard as rightwing nuttiness in the American political wars,” says Strobe Talbott, president of the Brookings Institution. “They are beginning to worry that the president has contributed to the paralysis of the system by playing too much defence.”
Edward Luce - Financial Times

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Wingnuts are always framing any question that comes into their heads with a  "what would Jesus do", so I thought I would approach the subject of America's political paralysis in the same terms.

What would Jesus do it he were elected president of the USA? 

Well of course, if the right wanted to actually run Jesus for president they would have to procure him an American birth certificate, but I suppose if they took the part where it says "place of birth: Bethlehem, Palestine" and rubbed out the (shudder) "Palestine" and substituted "Pennsylvania" that would do the trick. Of course the only president ever born in Pennsylvania was James Buchanan, considered to be in the running with George W. Bush as the worst president in US history. But what the heck, wouldbe birthers would have to be satisfied with Pennsylvania.

American politics being what it is Jesus would have to get a shave and a blowdry haircut and learn to drink beer and boilermakers and eat hotdogs and tacos and bagels and be a regular guy so as not to look effete and elitist... and to read what his handlers wrote for him off a teleprompter, but I suppose if John Edwards could manage all that, God could too.

Of course the wingnuts would have to be crazy to run Jesus for president, it's obvious to me that they have never really studied his programs and policies in any detail; with  his love for the poor and driving money lenders from the Temple and encouraging his followers to pay taxes and all of that. And who is going to be First Lady? His mom? 

Well, so suppose he finally got elected, he would for sure run into trouble from day one.

Imagine that at the inaugural ball he changed water into wine: he's in trouble right then and there with special interest groups like the Winegrape Growers of America. You don't think California's Nancy Pelosi would let something like that pass, do you? Not with her state going broke.

Now, of course, a salient part of Jesus's program was always healing the sick, for which he never charged a shekel, but if he continued to do that while in office the American Medical Association would be all over him and the big pharma lobbies too... You can imagine the smear campaigns... I prefer not to.

And of course then there is the Holy Land, "Terra Sancta" as old Yasser Arafat used to call it. You can imagine how much slack AIPAC is going to cut Jesus, of all people, on that one, can't you?

Finally, I think that one day, after his morning run on the Potomac, he might just up and drown both houses of congress and all of K-street in the reflecting pool of the Washington monument like he did with the Gaderene Swine... to general applause both in America and beyond her shores. 

The moral of the story of course is that the problem is systemic and not really about personalities. As the Spanish say, "esto no lo arregla ni Díos", not even God can fix this paralysis. DS

Naomi Klein trumps the doomsters

"(Neo-conservatism is) not some new invention but capitalism stripped of its Keynesian appendages, capitalism in its monopoly phase, a system that has let itself go -- that no longer has to work to keep its customers, that can be as antisocial, antidemocratic and boorish as it wants." Naomi Klein, "The Shock Doctrine"

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I'm a great fan of James Kunstler's, "Clusterfuck Nation" blog. The prophet Jeremiah has nothing on Jimmy Kunstler's "Lamentations".

Probably the most prolific and apocalyptic of the "doomsters", Kunstler is always entertaining and thought provoking and though seen by many as extremist, in my opinion his diagnosis falls far short of being pessimistic enough.

Maybe it's because I've just been reading what is probably the most important political agitprop text of the XXI century, Naomi Klein's Polaroid of evil, "The Shock Doctrine", but I wonder how someone as justifiably alarmed and dramatically pessimistic about America's statu quo as James Kunstler is, can, at the same time, be such a starry-eyed optimist about human nature and the way, and for whose benefit, the world is run.

Kunstler sees our present wasteful system collapsing and being replaced by a healthy return to the soil, where the far flung suburbs are abandoned in favor of small cities populated by craftsmen surrounded by small, labor intensive farms that will supply them with food. Rather like the Middle Ages, but with Internet.

Here is a typical sample of his work:

American perestroika really boils down to this: we have to rescale the activities of daily life to a level consistent with the mandates of the future, especially the ones having to do with available energy and capital. We have to dismantle things that have no future and rebuild things that will allow daily life to function. We have to say goodbye to big box shopping and rebuild Main Street. More people will be needed to work in farming and fewer in tourism, public relations, gambling, and party planning. We have to make some basic useful products in this country again. We have to systematically decommission suburbia and reactivate our small towns and small cities. We have to prepare for the contraction of our large cities. We have to let the sun set on Happy Motoring and rebuild our trains, transit systems, harbors, and inland waterways. We have to reorganize schooling at a much more modest level. We have to close down most of the overseas military bases we're operating and conclude our wars in Asia. Mostly, we have to recover a national sense of common purpose and common decency. September 14, 2009

Everything he says above makes sense to me as I'm sure it does to many people. The problem is that the public affairs of America have become a pantomime run for the benefit of special interest groups and what is worse a great percentage of the population are perfectly aware of this but impotent to change it.

To cut to the chase, Milton Friedman and his "Chicago Boys", Ronald Reagan, Alan Greenspan, Dick Cheney and George Bush, at the head (or the tail) of a legion of think tanks and lobbies have hollowed out America's institutional infrastructure, while filling their pockets and the pockets of those who sail in them and have impoverished millions of people all over the world in the process.

This is how the Nobel Prize winning economist, Joseph Stiglitz reviewing Naomi Klein's, "The Shock Doctrine" in the New York Times puts it:

Market fundamentalists never really appreciated the institutions required to make an economy function well, let alone the broader social fabric that civilizations require to prosper and flourish.

How does this democratic dysfunction work in America's daily life? In this case Arianna Huffington channels the "dark side" better than Stiglitz:

Listening to President Obama's heartfelt, well-intentioned, but ultimately naïve speech on financial reform today, my mind kept flashing on a story I heard the last time Washington, in the wake of the Enron scandal, promised to reform Wall Street. The story came from a friend who took a family trip on a cruise ship. Her 10-year-old son kept pestering the crew, begging for a chance to drive the massive ocean liner. The captain finally invited the family up to the bridge, whereupon the boy grabbed hold of the wheel and began vigorously turning it. My friend panicked -- until the captain leaned over and told her not to worry, that the ship was on autopilot, and that her son's maneuvers would have no effect. And that's the way it is with our leaders. They stand on the bridge making theatrical gestures they claim will steer us in a new direction while, down in the control room, the autopilot, programmed by politicians in the pocket of special interests, continues to guide the ship of state along its predetermined course.

These groups have no concern for the general welfare and as long as their itches get scratched, they could care less if the rest of the population lives in rags... countries like this abound in the world. Why should Kuntsler think that the USA would be any different?

Often formerly prosperous countries have slid of the graphs when their money ceased to have value. Imagine the dollar collapsing. Here is what it might look like:

The dollar dropped to the lowest level in a year versus the euro as Federal Reserve Chairman Ben S. Bernanke’s declaration that the recession is likely over led investors to sell the U.S. currency and buy riskier assets. Bloomberg

Move over Japan. Investors spent a decade borrowing in zero-interest-rate yen and putting the funds in higher-yielding assets overseas. It’s the U.S.’s turn to flood the world with cheap funding and the risks of this going wrong are huge.(...) imagine what might happen if the world’s reserve currency became its most shorted. Carry trades are, after all, bets that the funding currency will weaken further or stay down for an extended period of time. It’s also a wager that a central bank is trapped into keeping borrowing costs low indefinitely.(...) The dollar-carry trade says nothing good about confidence in the U.S. economy. It’s also a reminder that the side effects of this crisis may be setting us up for a bigger one. William Pesek - Bloomberg

The possibility of the dollar collapsing is the leitmotif of much of today's international economic commentary. This would cause great hardship world wide, but I imagine that the Chinese and the EU are already preparing themselves for that eventuality. It is a chilling possibility that only a war or a plague might be enough to move the dollar back up in value as a momentary "refuge".

If the dollar so fell in value that it ceased to be the world's reserve currency, then the USA would need to export massively to gain hard currency. The USA hardly manufactures anything anymore, so what to sell?

We often forget that the United States is the world's greatest exporter of agricultural commodities: wheat, rice, corn, soybeans and yes, if we needed the cash badly enough, oil. This is one of the great differences between America and the developing world's other former empires: America itself can be pillaged.

I remember that the late Peter Drucker was worried, way back during the "Japan is number one" panic, that the USA would simply end up supplying grain to the Japanese.

If the dollar goes blooey the Chinese will be happy to buy our commodities, on the cheap, just as they are happy to buy oil from Sudan or soybeans from Argentina.

I think the most likely model for America's future, on much more massive scale of course, would be that of Argentina and Uruguay -- Brazil seems to be more sensibly run -- once they were wealthy countries with highly educated middle classes and strong social nets, which now find themselves prostrated by Chicago Boys induced debt and corruption, at the mercy of the world's commodity markets.

So what I envisage is not the disappearance of America's great cities, as Jim Kuntsler does, but their conversion into the South American mixture of a tiny group of wealthy owners of the natural resources, their foreign currency safely stashed offshore, who live in well guarded communities, protected by bodyguards, who fly in private helicopters over the squalor of immense, sprawling, sordid, miserable trailer park like slums, where desperate people live by their wits, selling drugs, or their bodies, where gamines scavenge in garbage heaps, where in order to feed the rest, parents sell their prettier children into prostitution, so the rich of the world can come to America for sex tourism, like they do in Cambodia or Thailand.

I can imagine, because I have seen it happen in other places, that this could lead to the rise of fascist populism, antisemitism, military coups, martial law and much desperate violence.

It really doesn't take much imagination, just studying what happens when resource-rich countries that once had a prosperous middle class take this path.

So, having read Naomi Klein, I'm afraid I don't see Jim Kunstler's Arcadia coming, not with the political and economic leaders that control America today and in any foreseeable future. DS

The "conversation" about race begins

"I think an overwhelming portion of the intensely demonstrated animosity toward President Barack Obama is based on the fact that he is a black man, that he's African American," former president, Jimmy Carter told NBC in an interview. Washington Post

When Bertold Brecht got cynical or angry at Communist regimes, he told them that, if the people were rebelling against their wisdom, they should "change the people." Perhaps that's what Obama needs to do -- change the people, his people. Or maybe, in time, the people will change themselves. Immanuel Wallerstein

David Seaton's News Links
Color in the United States is just a "warning signal" that history has walked into the room. But even history doesn't explain it all. Our history of slavery is pretty horrible, but slavery was horrible in Cuba and Brazil too. However, Cubans and Brazilians are much more relaxed about color. Americans, though, are not really relaxed about much of anything.

Our culture is Calvinist: brittle and inflexible even in its hedonism, where, with predestination, the devil literally takes the hindmost.

Although in many parts of Europe, for example, losing, being maudit, is considered romantic, the worst put down in American English is to call someone a "loser".

Therefore, Americans are obsessed with "winning" and "losing".

This makes American racial tension different... I think America's racism has something to do with America's puritanical streak, with its hatred of vulnerability and the vulnerable slaves were "losers" par excellence.

The vulnerability of the "other", whomever that other might be is the origin of the sickest of fantasies.

This role has been passed onto the slave's descendants.

Probably the most valuable service that slaves provided even, or especially, for those who didn't own them was there being someone even the most miserable white person could feel superior to, and God knows that America is full of desperately miserable white people. Not all of them are poor, not by long shot.

For losing and feeling miserable in America is not just economic, a study of marketing messages will give you an idea of the infinite ways that an American can be a "loser".

The entire American consumer economy, which is 70% of the total, is based on making people feel bad about themselves, making them feel poor, ugly, sick, helpless, stupid, inadequate and then offering to sell them something to relieve the pain of rejection and failure.

Those whites who fear they might be "losers" themselves, and if we look at the economic and psychological facts of life that might include most American whites, desperately need someone to look down upon as insurance against being losers and of course, since time immemorial African-Americans, even the lightest skinned among them, have served that purpose. Their status as loser was even pleasing to the abolitionists that wanted to "uplift" them.

For literally hundreds of years, besides this role as the loser, no other role beyond entertaining or lifting heavy loads was permitted them.

In 1952 an African-American author, Ralph Ellison published a ground breaking novel, “The Invisible Man”, whose title many critics feel defined the experience of people of African descent in America: that of being invisible and voiceless. In the years that followed, the people of color in the United States raised their voices and became visible, to the great and continuing discomfort of many whites. The white people of the US south who once voted solidly Democratic have punished that party’s leadership of the civil rights movement by voting solidly Republican ever since… the key to the victories of Nixon, Reagan and Bush. The “Conservative Revolution”, that only favors the rich, is based on the resentment of poor whites.

I wrote this a while back:

Making equal citizens of the descendants of slavery: descendants of both master and slave, was the inescapable duty, dharma, of American progressives. This situation made and still makes a mockery of the Declaration of Independence, which was written by a slaveholder and seconded by slaveholders... This injustice could not be allowed to stand

Lyndon Johnson, perhaps the closest thing to a man of the left that has ever sat in the White House, knew that this was his duty and although a southerner carried out that duty unflinchingly.

Master politician that he was, I'm sure he knew what was to follow: Nixon's "Southern Strategy", that opened the door to Reagan, Bush-I and Bush-II, a movement that strove mightily to undo all that Johnson tried to achieve with his "Great Society"... and largely succeeded in destroying it and gave a political base to all those whose philosophy has deprived generations of Americans of decent public health care and decent public schools.

With Barack Obama this resentment is coming to head.

Up till now, American "identity" politics was always played with surrogates: WASP men wearing masks.

Thus Bill Clinton was "America's first black president". The whatever WASP whose turn it was to woo Latinos, would eat tacos and say "juntos podemos" with an atrocious accent etc, etc. Candidates would attempt to show that they were "sensitive" to the feminist agenda and so on. Absolutely de rigueur for all white, male and protestant presidentiables was a photo at Yad Vashem sporting a yomulka. This all came with the turf like kissing babies. It was all a game.

The problems start when the Democrats decided to use "originals" instead of the traditional, "ballo in maschera". The whole charade begins to fall apart without the WASP surrogates.

All of this resntful white anger has been directed heretofore against surrogates: the Jimmy Carters, the Ted Kennedys, the Walter Mondales, the Dukakises, the Gores and the Kerrys; and all the racism was disguised in euphemisms like "state's rights" or "liberal" or "elitist" or "un-American".

Now for the first time the American white ultra-right have got the chance to actually organize and march against a real black man who incarnates all the euphemisms, instead of a surrogate.

Even a "JFK meets Sydney Poitier" figure like president Barack Obama, or especially like Obama, is an unbearable provocation -- a lifetime membership card in the "loser" club -- for millions of American white people.

The real problem in America is not racism in itself, the problem is a society or a culture that divides human beings into "winners" and "losers" and punishes the losers so mercilessly. These unfortunates simply cannot survive psychologically without their "whipping boy". DS

September Song

9-11 - El Roto

The Obama administration has proposed regulatory changes, but even their backers say they face a difficult road in Congress. For now, banks still sell and trade unregulated derivatives, despite their role in last fall’s chaos. Radical changes like pay caps or restrictions on bank size face overwhelming resistance. Even minor changes, like requiring banks to disclose more about the derivatives they own, are far from certain. New York Times

(H)ealth care reform, while an overdue imperative, still is overshadowed in existential urgency by the legacies of the two devastating cataclysms of the Bush years, 9/11 and 9/15, both of whose anniversaries we now mark. The crucial matters left unresolved in the wake of New York’s two demolished capitalist icons, the World Trade Center and Lehman Brothers, are most likely to determine both this president’s and our country’s fate in the next few years. Both have been left to smolder in the silly summer of ’09. Frank Rich - New York Times

(T)here is still a mammoth, gaping hole at Ground Zero. Bureaucratic gridlock, partisan bickering, old-fashioned greed and failed leadership have all been blended together perfectly in one big pot to create a colossal, historic stew of inaction. Paul Rieckhoff - Huffington Post

President Obama made clear during last year's presidential campaign that Afghanistan would be his war if he was elected. Since being sworn in, true to his word, he has made the Afghan war a national security imperative because that's where al Qaeda is. At least, that's where Mr. Obama thinks it is. But nothing is less certain. Arnaud de Borchgrave - Washington Times

He has decided to expand the current system, not fix it. David Brooks - NYT

David Seaton's News Links
I have have held off commenting on the president's health care speech to congress in order to read the opinions of better qualified analysts: the general opinion seems to be that it was a very fine speech, but that no one is really that sure what he said. By now it seems pretty clear that whatever comes out of it this process will resemble what other developed western countries consider universal health coverage to the degree that a spavined camel resembles a racehorse.

As important as health care is (and what in a "serious" country could be more important?) the real story today is paralysis and this paralysis is, if nothing else, bipartisan. And it is bipartisan because it is systemic, something that has been brewing since the end of the Second World War and which now is coming to a head. Neither party has either the ideas nor the power to fix it and I am of the opinion that even if they fell into each other's arms and took a blood oath of mutual fealty; that even together, they wouldn't have either the ideas nor the power to fix it.

That is the reason why I was quite lukewarm about a Democrat -- any Democrat -- taking the White House at this moment. I have a very strong feeling that this president -- any president -- is set to preside over what many will see as the collapse of America's "empire" and whichever party is in the White House when this happens will take the blame for it... I would have preferred -- call me sentimental -- that the Republicans had taken the historic hit... I was hoping (not really believing) that the Democrats would be the ones to try to put Humpty Dumpty together again... it was not to be.

What will this collapse of "America's empire" look like?

It will look very similar to the collapse of Spain's empire and will feature some of the same players.

South America is going south... again.

The United States is so deeply entangled in and obsessed by the Middle East and Af-Pak that it has taken its eyes and energies off its proverbial back yard, Latin America. Because of its dependence on oil and the power of the Israel lobby it will find it impossible to refocus in time. There are simply not enough resources to control the Middle East and Southwest Asia and project power in South America at the same time. As professor Andrew Bacevich puts it, "we haven't got the money and we haven't got the troops".

Latin America gained its "first" independence at the beginning of the 19th century, when a prostrate Spain, exhausted from the Napoleonic wars, relaxed its grip. And now with a distracted and overburdened America relaxing its grip, Latin America is poised to gain its "second" and perhaps definitive independence.

Latin America and the United States have much in common, it is the proportions of the components that differ the most. All of us are great producers of raw materials and commodities, where not too much is manufactured (anymore). To understand the political mix of most of Latin America excluding lily white Argentina, Uruguay and Chile, known as the "Southern Cone," the USA will serve as a good model.

Imagine that instead of 12% and 1.5% of the population respectively, African and Native- Americans represented in varying proportions, 70 to 80+ percentage of the US population. Imagine that the distribution of wealth was similar to what it is right now. Here is how the sociology department of the University of Southern California, Santa Cruz describes it:

In the United States, wealth is highly concentrated in a relatively few hands. As of 2004, the top 1% of households (the upper class) owned 34.3% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 50.3%, which means that just 20% of the people owned a remarkable 85%, leaving only 15% of the wealth for the bottom 80% (wage and salary workers). In terms of financial wealth (total net worth minus the value of one's home), the top 1% of households had an even greater share: 42.2%.

Now imagine that all the people with the money were of European descent and all the people without money were of color (not too difficult, is it?) now imagine that a series of political figures that combined the qualities of Doctor Martin Luther King and Sitting Bull appeared... That is what is happening in Latin America right now, while the United States faces the wars of Iraq and Afghanistan and quite probably Iran and has no marines left over to send.

President Barack Obama -- it could have (sigh) been McCain -- will have the dubious privilege of sitting by helplessly while the United States of America gets ridden out of Latin America on a rail. DS

We find our comfort where we can

David Seaton's News Links
Somebody who signs 'synchronicity' wrote me the following about my last post:

As ugly as things are I would really just like to rip the band-aid off and get the entire ugly truth out in front of us right now so we can at least know what we are up against.

When I read that something jumped inside me.

"Of course, that's it!"

I suddenly got the feeling that "tearing the band-aid off" is what this global economic crisis is really about.

The encouraging thing about the period that began with Bush-II is the viral raising of consciousness that is occurring. This is bound to lead to change, sooner than later.

Without the threat of the Soviet Union hanging over us like the bogeyman, more people are willing to openly criticize the evils of capitalism itself without fear of being blacklisted or having to register as agents of some foreign power.

The most naturally revolutionary place on earth, Latin America, is finally moving back to the left where they were before Milton Friedman and his Pinochets got hold of them... A magnet for all.

This, hopefully will revive their literature and poetry, which was so powerful and free before the milicos started disappearing the poets (I will say this for Latin American military dictators, they have at least enough respect for art to take the trouble to kill poets) and the juices of the future Pablo Nerudas and the Victor Jaras will start flowing once again and put the words and music to all our marching feet.

Actually, I'm such in such a good mood today, that I even see a very positive side to the enormous power of Jewish people in America’s alienating and idiotizing infotainment industry and the Israel Lobby’s power to neutralize congress and terrorize dissidents, even their ability to convince the ignorant and unwashed Christian peasants of America, nature's antisemites, to fanatically support Israel so as to be able to rent Jesus enough space to hold the Apocalypse.

I find this positive, because, normally, all through history up till now, a deep recession-depression, like we are experiencing, one with massive unemployment and home foreclosures in the midst of two losing wars -- and more to come -- would be something that the powers that be would simply blame on the Jews as an element of distraction, then a pogrom would ensue, and after letting some blood to satisfy the mob, it would all be back to business as usual.

This ploy has worked for ages... Christian rulers have sworn by it as a fool proof gambit for centuries.

Since the Jewish people are not really responsible for all the ills of this world, but only use the system, — like skillful sailors use the wind — this would mean that the root cause (the system itself) would never stand revealed.

Keeping this from happening is why persecuting Jews has always been so popular.

However, today’s Jewish power means that the simple expedient of blaming everything on the Jews is not available, so we may actually finally get to the bottom of who and what are really responsible for all of this misery.

I have long thought that the real revolution, when it comes, will finally happen in what Cuban poet and revolutionary, José Martí called "the belly of the beast", the United States of America itself.

And it will surprise us with the same loose jointed speed as Internet or sagging trousers

The moral of the story is that there are days when it does pay to get out of bed... you just never know which ones they are going to be beforehand. DS

The American right is world famous....

David Seaton's News Links
Here is something from The Guardian that I thought readers would enjoy. It's written by Simon Hoggart and it titled, "Why the American right make me sick".
Enjoy!

There are few tribes more loathsome than the American right, and their vicious use of the shortcomings in the NHS to attack Barack Obama's attempts at health reform are a useful reminder.

I was thinking of this during a visit to my 91-year-old dad who is still in an NHS hospital after three weeks, recovering from a broken hip. He has had fantastic care, including a new metal hip, blood transfusions, different antibiotics to match every aspect of his condition; all administered by nurses who remain cheerful even when asked to perform tasks on men - the lethal combination of pain and old age makes some in the ward exceedingly grumpy - that I would not want to do for £1,000 a time. If he was in an American hospital he'd be using up half his life savings to get that standard of care, and few ordinary Americans could afford the insurance that would provide it. (This is because health insurers spend a large part of their income on PR against the "socialised medicine" and on sending pro forma letters explaining why your policy doesn't cover actual illness.) All over the US there are people whose lives are being destroyed for lack of proper health care provision, and there is no sight more odious than the rich, powerful and arrogant trying to keep it that way.

Nice, huh?

When "yes we can" could become "we thought we could".

Reaching out

“If the president says, ‘Here is what I need in the bill,’ and it doesn’t include the public option, there will be no other way to interpret it than it was a retreat,” added Weiner. “I speak for a lot of members who are allies of the president. We are prepared to take our lumps to get this important policy done. But I don’t like this sense of us charging up the hill, and not only is the president not leading us, but he is not on the hill with us.” Politico

There was a lot of talk last year about how Barack Obama would be a “transformational” president — but true transformation, it turns out, requires a lot more than electing one telegenic leader. Actually turning this country around is going to take years of siege warfare against deeply entrenched interests, defending a deeply dysfunctional political system. Paul Krugman

David Seaton's News Links

As readers of my blog know, I've often been mercilessly skeptical of Barack Obama.

I have long feared that he was merely taking progressives for a ride in order to further his private agenda, in much the same way that Bush took the evangelicals for a ride, simply redirecting their energy and discipline in order to lower taxes for the rich.

Back in November I wrote:

The left is about ideas, about facing reality bravely with full unblinking consciousness. An opportunity for the left to rebuild itself arose in the unlikely shape of George W. Bush and now it is about to be wasted.

Now after lengthy labor pains, with much moaning and groaning, the mountain has given birth to a mouse.

What makes me sad and angry is that the consciousness that has been raised during the Bush years is going to be sanitized and neutered as we tell ourselves another soothing bedtime story about ourselves to ourselves.

When Obama addresses congress next week on public health I'll definitely know if I was right or wrong.

If he comes out strongly for a public option, which is as close as the USA could probably come to a real "national health" program, I will happily eat plate after plate of humble pie with a generous side order of crow.

If he dumps the public option -- which at this moment seems very likely -- I will feel that all my skepticism has been amply vindicated.

Eliminating the public option would be a tragic prevarication; a travesty and a betrayal of all those who have placed their faith in this man and who worked tirelessly to get him elected. They will know they have been used and discarded like a Kleenex in the futile search for a moderate center that no longer exists.

Because, one of the keys to understanding contemporary US politics is that, after Ronald Reagan's revolution (I put no quotes around the word "revolution"), the American center has been destroyed.

As Paul Krugman recently pointed out:

Moderate Republicans, the sort of people with whom one might have been able to negotiate a health care deal, have either been driven out of the party or intimidated into silence. Whom are Democrats supposed to reach out to, when Senator Chuck Grassley of Iowa, who was supposed to be the linchpin of any deal, helped feed the “death panel” lies?

To use a favorite simile of the right, Obama is acting the part of Neville Chamberlain, thinking that he can cut deals with people who take no prisoners...

Obama has often been compared to Ronald Reagan, but except for their phenomenal communication skills, they have little or nothing in common.

Ronald Reagan was first and foremost an ideologue. Behind his amiable, folksy and slightly goofy exterior he was in his own way every bit as firmly entrenched in his extremist ideology as, say, Cambodia's Pol-Pot was in his... and as far removed from reality too.

Ronald Reagan was totally focused on moving the United States politics much farther to the right than its people actually were then, or are even today.

Reagan was able to redefine the parameters of American politics.

Barack Obama gives no sign of such focus or ambition of moving American back to where it was, much less of moving it to the left.

If Obama or anyone else really thinks that a Democratic president can "reach out" to the right and "unite", them behind him on anything, they are somewhere south of naive.

This a time to fight and this is good ground to fight on.

The chance to change American politics on a Reaganesque scale, to become the anti-Reagan, exists in the health care issue. Weakness here will cripple the Obama presidency: For all those that oppose him now or in the future will see the clear discontinuity between the hat and the cattle...

And make no mistake, Barack Obama's deadliest enemies are not in Tehran, the mountains of Afghanistan or Pakistan, much less in Beijing or Moscow, they are right there is Washington with him and they will show him no mercy if they are not brought to heel. DS