Month: August 2020

The Choice Voters Will Make

After two weeks of back-to-back political conventions, the choices facing voters as defined by the two parties are clear. It is either, according to Donald Trump Jr., “church, work, and school versus rioting, looting and vandalism.” Or as the Democratic Party has framed the election’s choice, “decency, compassion, and fairness versus hatred of the ‘other’, fear, and greed”.

Issues are important, but underpinning them are the degree to which voters feel emotionally comfortable with a candidate, the message they are projecting, and confident that the candidate will “have their back”.

This is the reason why pollsters ask voters, “Which candidate would you rather have a beer with?” Or, “Who do you feel will fight for you?” In many ways, the answers to these questions can be more determinative of voting preferences than answers to questions about specific policies. They cut to the quick about how voters are feeling about themselves and their comfort level with those who are seeking to lead them.

I remember an Italian American dinner in 1984 where then-candidate Walter Mondale’s only applause lines were when he mentioned the name of his Italian American running mate. He then proceeded to lay out a litany of policies that were a perfect for his audience. But he never really established a connection with them.

When it was his turn at the podium, Reagan began by speaking about his grandmother, “who came to America with nothing but her hopes and dreams and worked her fingers to the bone…I stand before you the inheritor of her dreams and the beneficiary of her hard work”. Reagan won the Italian American vote.

And then there were the Bush-Gore and Bush-Kerry contests where the great-grandson of a robber baron, grandson of a senator, and son of a president was able to portray himself as a son of the Texas soil and who, despite having the same upbringing as his brother Jeb, had adopted the drawl of a country bumpkin and spoke simply and directly to voters. Bush connected in a way that Gore and Kerry did not.

Or Trump-Clinton in which a corrupt New York City billionaire adopted the role and demeanour of the angry outsider, the champion of the forgotten, running against the urban elites. He won because his opponent was a candidate who could not play the part of anything other than what she had become — an urban elite who was seen as having no feeling for the folks who were angry and felt left out. It didn’t help Clinton when she was caught on tape characterizing Trump’s working-class supporters as “deplorables”.

There is no question that policies of Mondale, Gore, Kerry and Clinton would have been far better for working-class voters of every race. They just were not seen as candidates who understood their plight and really cared for them.

In this year’s election, Democrat Joe Biden will not have the same problem that plagued Gore, Kerry, or Clinton. Despite his nearly five decades in Washington, he has maintained the persona of a compassionate “regular guy”, “working-class Joe from Scranton, Pennsylvania”.

I have long advocated that Democrats needed to expand their voter outreach to the white working, class and lamented that in some past elections their only strategy appeared to be to send Biden to Scranton to deliver a major address. Now, he’s the standard-bearer, which should serve the Democrats ability to expand their support base in November.

Biden, like the President under whom he served as vice president, is in a good position to win in November. In his corner, he has the Democratic Party establishment and most of the constituent groups who have, in recent elections, voted Democratic.

When Black voters shared misgivings over his Senate record, Biden apologised for some of his past policies. Now, Black voters have demonstrated their strong support for him. And while the progressive wing of the party is also struggling with Biden’s failure to embrace some of their signature issues (like Medicare for All, free public college, and the Green New Deal), he has worked to reach some level of accommodation with progressives, most of whom followed Bernie Sanders’ lead and endorsed the Democratic nominee.

Because of the empathy he projects and the personal story he tells, he also stands to win back a substantial number of White working-class voters who felt abandoned by Democrats. At this point, just looking at the demographics, it might seem safe to predict Biden as the winner. But there are still three months to go and much can change.

The COVID-19 pandemic and the erratic behaviour of the President, for example, are creating chaos in this contest. But these factors are cutting two ways. Biden has been helped by President Donald Trump’s miserable handling of this crisis. First, Trump pretended it wasn’t there. Next, he dismissed its danger and failed to act decisively to contain it. Then, he blamed everyone else for its spread, mainly focusing on Democrats and the Chinese government. As the economic crisis grew, fearing it would affect his electoral chances, he pressed states to quickly reopen. This, in turn, only resulted in a dramatic spike in the spread of the disease. And, even now, he is demanding that schools and the economy reopen in September.

While Trump’s manifest failures have no doubt helped Biden, the pandemic has also constrained Biden’s ability to do what he does best, meet people, demonstrate empathy and broaden his support. With Trump still dominating the evening news, albeit with bad news for him, Biden is having trouble breaking through.

There are, of course, unknowns that could weigh in before November: A new foreign or domestic crisis (whether real or manufactured), foreign meddling, or GOP efforts at voter suppression. With many voters fearful of becoming ill, some states have sought to expand the vote-by-mail option. This has been confronted by stiff Republican opposition. Further fueling concern are “cost-cutting” measures being taken by the newly appointed head of the Postal Service. These have resulted in delivery delays and fears that the White House is actively seeking to sabotage expanding the mail-in vote option.

At the same time, the president is using Twitter to repeatedly make the unfounded argument that a mail-in ballots are open to fraud, causing alarm that he is setting up a case for rejecting the outcome of the election, creating a constitutional crisis.

With the conventions over, the race to November begins in earnest. As I noted at the beginning, policy differences will play a role for some, but for many voters the answers to other considerations will influence their vote: with which candidate do they feel most comfortable; which candidate do they trust; and will they vote because of fear of “others” or a desire to turn the page on division?

President Trump is betting on the former, Joe Biden on the latter.

The Post-Capitalist Hit Of The Summer

Ever since COVID-19 collided with the enormous bubble governments have been using to re-float the financial sector since 2008, booming equity markets became compatible with wholesale economic implosion. That became clear on August 12 in London and New York.

On August 12, something extraordinary happened. The news broke that, in the first seven months of 2020, the United Kingdom’s economy had suffered its largest contraction ever (a drop in national income exceeding 20%). The London Stock Exchange reacted with a rise in the FTSE 100 by more than 2%. On the same day, when the United States was beginning to resemble a failed state, not merely a troubled economy, the S&P 500 hit a record high.

To be sure, financial markets have long rewarded misery-enhancing outcomes. Bad news for a firm’s workers – planned layoffs, for example – is often good news for its shareholders. But when the bad news engulfed most workers simultaneously, equity markets always fell, owing to the reasonable expectation that, as the population tightened its belt, all income, and thus average profits and dividends, would be squeezed. The logic of capitalism was not pretty, but it was comprehensible.

Not anymore. There is no capitalist logic to the developments that culminated on August 12. For the first time, a widespread expectation of diminished revenues and profits led to – or at least did not impede – a sustained buying frenzy in London and New York. And this is not because speculators are betting that the UK or the US economies have hit bottom, making this a great time to buy shares.

No, for the first time in history, financiers actually don’t give a damn about the real economy. They can see that COVID-19 has put capitalism in suspended animation. They can see the disappearing profit margins. They can see the tsunami of poverty and its long-term effects on aggregate demand. And they can see how the pandemic is revealing and reinforcing deep pre-existing class and racial divisions.

Speculators see all this but deem it irrelevant. And they are not wrong. Ever since COVID-19 collided with the enormous bubble governments have been using to re-float the financial sector since 2008, booming equity markets became compatible with wholesale economic implosion. It was a historically significant moment, marking a subtle but discernible transition from capitalism to a peculiar type of post-capitalism.

But let us begin at the beginning.

Before capitalism, debt appeared at the very end of the economic cycle. Under feudalism, production came first. Peasants toiled in the lord’s fields, and distribution followed the harvest, with the sheriff collecting the lord’s share. Part of this share was then monetized when the lord sold it. Only then did debt emerge, when the lord would lend money to borrowers (often including the king).

Capitalism reversed the order. Once labor and land had been commodified, debt was necessary before production even began. Landless capitalists had to borrow to lease land, workers, and machines. The terms of these leases determined income distribution. Only then could production begin, yielding revenues whose residual was the capitalists’ profit. Thus, debt powered capitalism’s early promise. But it was not until the Second Industrial Revolution that capitalism could re-shape the world in its image.

Electromagnetism gave rise to the first networked companies, producing everything from power generation stations and the electricity grid to light bulbs for every room. These companies’ gargantuan funding needs begat the megabank, along with a remarkable capacity to create money out of thin air. The agglomeration of megafirms and megabanks created a Technostructure that usurped markets, democratic institutions, and the mass media, leading first to the Roaring Twenties, and then to the crash of 1929.

From 1933 to 1971, global capitalism was centrally planned under different iterations of the New Deal governance framework, including the war economy and the Bretton Woods system. As that framework was swept away in the mid-1970s, the Technostructure, cloaked in neoliberalism, recovered its powers. A 1920s-like spate of “irrational exuberance” followed, culminating in the 2008 global financial crisis.

To re-float the financial system, central banks channeled waves of dirt-cheap liquidity to the financial sector, in exchange for universal fiscal austerity that limited spending by lower- and middle-income households. Unable to profit from austerity-hit consumers, investors became dependent on central banks’ constant liquidity injections – an addiction with serious side effects for capitalism itself.

Consider the following chain reaction: The European Central Bank extends new liquidity to Deutsche Bank at almost zero interest. To profit from it, Deutsche Bank must lend it on, though not to the “little people” whose diminished circumstances have weakened their repayment ability. So, it lends to, say, Volkswagen, which is already awash with savings because its executives, fearing insufficient demand for new, high-quality electric cars, postponed crucial investments in new technologies and well-paying jobs.

Even though Volkswagen’s bosses do not need the extra cash, Deutsche Bank offers them such a low interest rate that they take it and immediately use it to buy Volkswagen shares. Naturally, the share price skyrockets and, with it, the Volkswagen executives’ bonuses (which are linked to the company’s market capitalization).

From 2009 to 2020, such practices helped prize stock prices away from the real economy, resulting in widespread corporate zombification. This was the state capitalism was in when COVID-19 arrived. By hitting consumption and production simultaneously, the pandemic forced governments to replace incomes at a time when the real economy had the least capacity adequately to invest in the generation of non-financial wealth. As a result, central banks were called upon to boost even more magnificently the debt bubble that had already zombified the corporations.

The pandemic has reinforced that which has been undermining the foundation of capitalism since 2008: the link between profit and capital accumulation. The current crisis has revealed a post-capitalist economy in which the markets for real goods and services no longer coordinate economic decision-making, the current Technostructure (comprising Big Tech and Wall Street) manipulates behavior at an industrial scale, and the demos is ostracized from our democracies.

Nobody’s Lending. Nobody’s Borrowing. Here’s What To Do

Another lockdown will destroy the economy unless we change direction. It’s really that simple, and it is because the banking system no longer works as a distributor of capital in the country.

Our Government and ECB have approached the crisis in the same way: cutting interest rates to zero to coax businesses to borrow and to encourage banks to lend. As a result, banks are the critical intermediary between the Central Bank, the State and the economy.

However, because banks have a fear of bad debts, they are not lending, and because businesses have a fear of incurring too much debt, they are not borrowing. This is a classic “liquidity trap” as outlined by John Maynard Keynes during the Great Depression of the 1930s.

One of the best leading indicators for how people feel about the economy is consumer credit and loans for short maturities, such as a 12-month loan to do up a kitchen, buy a durable good or a short-term car loan.

Durable goods make up about 10 per cent of any Western economy. We are not talking about an insignificant sum here. Such loans are an accurate barometer of sentiment. They have completely collapsed in Ireland.

The reason is quite straightforward: the banks don’t know when the economy will recover, because we are experiencing a “pandession” not a recession. Exit from the pandession is determined by the pandemic, not by the typical economic cycle.

As a result, the banks can’t plug a recovery into their spreadsheets when assessing the credibility of any loan, collateral or borrower. So they don’t lend.

In addition, a new paper by the Bank of England released this week suggests there is a one-for-one relationship between unemployment and loan default. This means that banks are terrified about bad loans. In the UK, a one per cent rise in unemployment leads to a one per cent rise in loan defaults. Irish figures are bound to be similar.

The banks here expect unemployment to remain high and incomes to remain weak, and so they are not lending no matter how low the rate of interest.

In addition, small businesspeople have no idea what is coming down the tracks, so they are not going to take on any more debt now, again despite the fact that interest payments have never been lower on borrowed money. So we are stuck.

Pass-through

Unfortunately, the State and the ECB are behaving as if the pass-through from interest rates to the economy, via the banking system, still works. It doesn’t.

To make matters worse, the only people who will avail of very low interest rates are the already wealthy, who will take this opportunity of zero-cost money, leverage up, buy cheap assets and thereby amplify already alarming levels of wealth inequality.

Because rich people have the financial security to see beyond the pandemic, they can imagine the world in five years. Most people don’t have this luxury even if the banks would support them, which they won’t.

The way out of a liquidity trap is for the State to bypass the banking system and borrow directly from the ECB (via the secondary market) and actually put money into businesses’ accounts.

There is nothing radical about this idea at all. In fact, what is radical and dangerous is relying on banks to do governments’ handiwork. They’ve never done this and are not about to start now.

This is not a “bash the banks”“ article. It is not their job to feed money into the system, to maintain the balance sheet of small businesses and to effectively get money into people’s pockets. (Although it could be argued that as AIB is a nationalised bank and the State is the largest shareholder, it could be made an official ward of State to fight the pandession.)

Consider small companies that have managed to survive the past few months by juggling bills, deferring payments and doing deals with all sorts of creditors. They will not be able to conjure up the same trick twice, at least not with the present policies.

Let’s be clear: in a new lockdown, businesses will be ordered to cease trading. Capitalism as we understand it – buying and selling, opening your doors, selling your wares, paying your staff, paying your utilities and rent – has been suspended. If you suspend capitalism, you need to replace it with something that protects businesses until capitalism is recalled.

Business depends on income. If a business is told it cannot, by law, earn an income, then it is shuttered by decree. It is up to the State – if it feels its health service can’t cope – to explain to small businesspeople, who employ over 50 per cent of Irish workers, why they must bear the cost.

Entertainment

The recent guidelines on public gatherings mean the conditions of lockdown 2 have already been visited on the live entertainment sector, with catastrophic results.

Taken together, this sector sold 4.8 million tickets last year, generating income of €305 million, paid about €35 million in VAT and, based on an internal multiplier for the economy, drove about €1.8 billion extra spending.

(The multiplier captures the extra spending that goes along with the original ticket price and how it ripples through the economy. When you go to a concert/festival/gig you spend a lot more that night than just the ticket price.)

This huge part of the domestic economy is closed. If we go into lockdown 2, this calamity will be mirrored all over the economy.

So what can be done about it?

In a liquidity trap, the banks are out of the game. There is no point in the ECB saying that it is open for business, because the private sector will not borrow.

It’s time – as I have argued consistently – for helicopter money. It is time for the State to give money to small business to tide them over, as a gift. When the problem is no money, the solution is money.

This is not a long-term fix; it is an emergency treatment in the same way as the treatment applied in an ICU is very different from the treatment applied at your local GP clinic. Emergency economics is applied to avoid calamity.

In terms of macro-economic policy, helicopter money is exactly the same as a debt-financed budget deficit or a debt-financed tax cut – things we do all the time. The people who receive a tax cut are effectively given money they didn’t have yesterday by the State. Helicopter money is precisely the same, but it gets to people and businesses immediately without having to go through the palaver of tax credits, PAYE and the like.

The end result is more money, fewer defaults, less unemployment, less bankruptcies, less anxiety, and ultimately a smaller budget deficit than if the economy stalls, because spending and income will be maintained. The same will apply to debt-GDP ratios, because what caused the debt ratio to deteriorate in a world of low interest rates is the slow growth rate.

As we face lockdown 2 this winter, helicopter money might be our main bulwark against outbreaks of social disruption and political instability.

There Is A Vaccine To Immunise The Economy. It’s The Bond Market

During the first great agricultural revolution (10,000 BC to 5,000 BC), when humans moved from being hunter-gatherers to farmers, settling in small villages and ultimately towns, the world human population is estimated to have increased from four million to five million.

In the next 5,000 years, from 5,000 BC to the birth of Christ, the human population is thought to have increased from five million to 100 million. In this second 5,000-year period, the human population increased approximately 25 times whereas in the first 5,000-year period, the increase was marginal. The reason for this disparity is that the earlier five millennia of domestication were the most lethal years in human history.

When we started to domesticate animals – cows, chickens, sheep, goats and pigs – and began to cultivate plants – particularly wheat, barley and rice – disease killed us in huge numbers.

By domesticating animals, their diseases became our diseases. Most scientists today agree that Covid-19 crossed into humans from an animal, most likely a bat, and during the early first agricultural revolution, other diseases jumped from animals to humans at a time when humans had no immunity.

As our immune system had no memory of these new invaders and therefore no antibodies to call upon, epidemics from these domesticated animals killed us in huge numbers.

It took many centuries of epidemics for us to figure out how to fight them. The ancients knew all about these epidemics and contagion. In fact the Akkadian word for epidemics translates literally as “certain death”.

Akkadian was the language of the peoples of Mesopotamia, the first urbanised civilisation in the world, the people who gave us the first written documents, the first mathematics, accountancy and bureaucracy. These were the first city states, with their own codes, city walls and tax collectors.

They reacted to epidemics such as measles, influenza and smallpox, in the way we do today. They understood contagion and appreciated that the disease jumped from the sick to the healthy, so the sick needed to be confined. They knew that these were “crowd diseases”. Quarantines were common and travellers (usually soldiers or salesmen) were isolated.

Over thousands of years, we developed immunity to many diseases as survivors passed on the genetic information to the next generation. As a result, the human population started to increase as we adapted to our new diseased urban world.

Just like the Mesopotamians

It is extraordinary that the 21st-century reaction to pandemics mirrors that of ancient Mesopotamians, despite our technology, testing capacity, far superior health services and comprehension.

They locked down; we lock down. They quarantined; we quarantine. They suspected travellers; we suspect travellers. They had no vaccines; as yet, we have no vaccines. They lost tax revenue; we lose tax revenue. They stopped building temples, worrying about state revenue; we worry about government expenditure.

The major difference was that epidemics back then killed huge proportions of populations, emptying entire cities, destroying armies, ravaging entire communities.

Covid-19 kills only a small percentage of those infected. Nearly all people who contract it survive, meaning our immune system does its job in the vast majority of cases. It identifies the invader, marshals its antibodies and goes to work.

That was not the case for the ancients. Our immune system is an evolved version of their immune system, experienced and bolstered by many conflicts with these types of invaders over thousands of years, passing on genetic information. Yet the reactions of ancient Mesopotamia and modern Ireland are not dissimilar.

This disparity between the overwhelming survival rates and the bluntness of lockdowns, virtually ensuring mass economic carnage and bankruptcies, is fuelling scepticism about the latest lockdown moves.

Are we to do this for the next two years? Three years? Businesspeople, particularly those in retail, hospitality, transport, entertainment – what I like to call “the Craic Economy” – are entitled to ask this question.

The Craic Economy could be as big as 20 per cent of GDP, maybe more. It is highly labour-intensive and wonderfully creative, encompassing the visual arts, theatre and cinema, not to mention music, festivals and the entire production infrastructure that goes with performance art.

When does the entrepreneur behind a small retail business choose to throw in the towel and declare that she’s had enough? Or when does the restaurateur who is being asked, yet again, to close down, simply walk away? Once this happens, the rolling defaults on loans, rents, tax liabilities will become an avalanche.

Common sense, rather than economic modelling, tells you this is already happening. If a business has no income, that business is going out of business. When a business runs out of cash, it is no longer a business; it is a shell.

Therefore, if the State wants to deploy the lockdown approach to living with Covid-19, it must devise an economic strategy to protect the economy during this period. Alternatively, it can look to the Swedish alternative of testing, contact tracing and personal responsibility.

As of now, Ireland’s medical advice is to continue with the lockdown approach, so what should we do on the economic front?

The good news is that, while we may not be acting very differently from the ancients in terms of quarantine, isolation and social distancing, our economy is more sophisticated and the economic tools at our disposal are more effective, if we choose to use them.

The Future is Free

The key difference is money and our understanding of it. We now have something called the bond market which means we can borrow from the bright future to prop up the traumatised present. Please take that description in.

We also know that the future is free. The rate of interest, which is the price of money in the future, is officially zero. What this means is there is no cost to dipping into the future to bailout the present.

The State has an obligation to business in the same way as business has an obligation to the State. Businesses’ obligation to the State is best measured in tax. The State’s obligation to business is best measured in imagination.

Going into the winter, the real jeopardy for business is lack of cash, so there will be defaults, and a domino cascade of bankruptcies. If the problem is no cash, give them cash. It costs nothing. This is helicopter money for business. The State issues an IOU, goes to the European Central Bank, gets real cash at zero per cent, gives it to business (yes gives it for free) and the businesses reassure their creditors that they have money.

Their creditors’ fears are assuaged, and they chill out and stop demanding payment. Deals will be done in an atmosphere of calm, not angst. This column suggested we do this in March. It’s not too late. It’s just a matter of imagination.

Odd as it may seem, while we have made enormous leaps in medicine since Mesopotamia, we are still bedevilled by disease. Thankfully, we have made greater leaps in monetary economics – so much so that the bond market can provide the winter vaccine for business.

It just a pity the people at the top don’t seem to understand that.

 

 

Meet Ben Jealous – The Reformer Who’s Back To Lead A Second Premier Voting Rights Group

Few advocacy leaders can say they have led two of the more storied progressive organizations fighting for civil rights and voting rights. Ben Jealous now counts himself a member of that select cohort. The youngest person named to head the NAACP, in 2008 when he was just 35, he led that organization through the Trayvon Martin case, the fight over New York’s stop-and-frisk policies and other civil rights battles. He also formed the Democracy Initiative, a progressive coalition pushing campaign finance and voting rights reform. He left the NAACP in 2013 and was the Democratic nominee for governor of Maryland two years ago, losing to GOP incumbent Larry Hogan by 12 points. In June he was named president of People for the American Way, the progressive group founded by TV visionary Norman Lear. 

Note: His answers have been edited for clarity and length.


What’s democracy’s biggest challenge, in 10 words or less?
Money in politics.

Describe your very first civic engagement.
Hanging door knockers for a neighbor who was running for county council on California’s Monterey Peninsula when I was 5 years old.

What was your biggest professional triumph?
Playing leading roles, all in the same year of 2012, in abolishing the death penalty in Maryland, passing marriage equality for the state and and enacting its version of the Dream Act, which helps undocumented immigrants attend state colleges. This made us the first state south of the Mason-Dixon Line to do any of them — and the first state in the nation to do all of them.

And your most disappointing setback?
Getting the third highest vote total of any gubernatorial candidate in the history of Maryland — yet losing my race for want of $10 million, which would have allowed me to reach the 25 percent of voters who had no idea who I was.

How does some aspect of your identity influence the way you go about your work?
I come from a long line of freedom fighters, both Black and white. My parents raised me to understand that the American experiment is both ongoing and fragile. Every generation must work to make our nation more just, and every generation must be vigilant in protecting our democracy. I’ve dedicated my life to doing both.

What’s the best advice you’ve ever been given?
You can do everything you want, but not all at once. Create a new flavor for Ben & Jerry’s. Fully Baked. It would be the current Half-Baked flavor with CBD.

What’s your favorite political movie or TV show?
“Eyes on the Prize,” the 14-hour series documenting the history of the civil rights movement.

What’s the last thing you do on your phone at night?
Text with my daughter, whether she’s in my house or her mom’s.

What is your deepest, darkest secret?
I eat too much Ben and Jerry’s!

Jeffrey Sachs Says Geopolitical Cold War With China Would Be A Dreadful Mistake

Economist and bestselling author Jeffrey Sachs told CNBC a Cold War with China would be a “dreadful mistake.” Sachs said attacking China has become a bipartisan strategy for political gain. He urged global leaders to come together on issues like climate change as the economy undergoes a “remarkably choppy period of disruption and transition.”

 

 


American politicians risk making a “dreadful mistake” by escalating tensions with China, economist and bestselling author Jeffrey Sachs told CNBC.

Sachs, a Columbia University professor and director of the U.N. Sustainable Development Solutions Network, warned that a “geopolitical Cold War” with China would threaten global security in an already tumultuous period marked by the coronavirus pandemic.

“The last Cold War was dangerous enough,” he said. “This one would be even more dangerous. It’s completely misconceived and misguided, but a lot of Americans want to put it to China and think that we run the show, which is a very dangerous view of thinking.”

Tensions between the world’s two biggest economies have intensified during the pandemic, which originated in Wuhan, China. In July, the U.S. ordered China to close its consulate in Houston, citing risks to American intellectual property. China retaliated by revoking the license for the U.S. consulate generate in the Chinese city of Chengdu.

The U.S.-China relationship has been under strain for several years amid a trade war sparked by President Donald Trump and a race to develop key technologies such as 5G wireless networks.

Sachs said attacking China has become a bipartisan strategy for political gain.

“While politics is a game, and a pretty tough one in the U.S., it’s an incredibly dangerous sport also, and to play with the facts and the lies that we’re saying about China right now has consequences,” he said.

Some companies have said they will reevaluate their dependence on Chinese supply chains in the wake of the pandemic. Sachs, author of the new book “The Ages of Globalization: Geography, Technology and Institutions,” said a movement toward “manufacturing nationalism” was already underway as countries compete in new sectors of the economy such as electric vehicles and renewable energy.

He urged global leaders to come together on issues like climate change as the economy undergoes a “remarkably choppy period of disruption and transition.”

“If we face [these crises] together, cooperatively, with a sense of decency, we’ll have some pride that the waters were very high and very choppy but we made it through,” he said. “If we face it as each one is on your own, then we’re going to look back with a lot of regret.”

Conflicting Emotions About Lebanon

When I saw the scenes of French President Emmanuel Macron visiting the devastated areas of Beirut, I was filled with a number of conflicting emotions.

I was pleased that he went directly to the site of the explosions as a sign of deep respect for the suffering of the people and the city. I was furious that no one in the Lebanese government joined him. And I was amazed by the throngs of Lebanese who turned out thankful for his recognition of their pain and eager to demonstrate their contempt for their own failed leaders.

I was once again conflicted when Macron announced that France would be convening a donor conference to provide aid to Lebanon that would be conditioned on the implementation of real reforms. What he said was “I will propose a new political pact in Lebanon and I will be back September 1, and if they can’t do it, I’ll take my political responsibility.”

It made me both sad and angry that in the face of the massive corruption that has bilked billions of dollars from the country and the political dysfunction that has brought Lebanon to its knees, that it took this enormous tragedy and the French president to press hard on the reform issue. Hundreds of thousands of protesters in sustained demonstrations were not enough. COVID-19 was not able to do it. Neither was the economic crisis that has left many Lebanese impoverished and in despair.

Through all these crippling challenges, the government dithered, the elites remained unmoved, and the armed groups, Hizbollah included, stood defiant against reform, “self-policing” their individual communities with the threat of force against protesters. Lebanon continued its slow march to death.

It is, therefore, upsetting that it is the arrogance of the French, who created and saddled Lebanon with its sectarian feudal regime, that is now demanding to “fix” the country. At the same time, I will admit a bit of relief that at last someone put down their foot and said “you must reform, or else”. But it was embarrassed relief, coupled with annoyance, that the ultimatum was left to the French to deliver, especially since that had been the very demand of the massive prolonged protest movement of the fall of 2019.

Last year, in the midst of the country-wide protests against corruption, I was honoured by a Lebanese humanitarian organisation. I began my remarks paraphrasing Kahlil Gibran’s poem “You have your Lebanon, I have my Lebanon.” Like Gibran, I love the Lebanese people, their poetry, art, song and love of life. I love their generous and welcoming spirit. I also love what Lebanon has given to the world, especially its gifted people. And I love the sheer beauty of the country, its majestic snow-capped mountains and its pristine seascapes.

And, like Gibran, I do not love Lebanon’s petty bickering politicians who lead because of an accident of birth. Nor can I embrace the country’s system of sectarian privilege and the corruption that is endemic to the political-economic regime that has squeezed Lebanon dry to the benefit of their chosen ones. And I reject the armed militias, whether they be Christian, Muslim or secular that in the past and in the present continue to torment those who challenge their dominance.

I told the audience that the Lebanon I loved was in the streets making their voices heard demanding fundamental reform, an end to sectarianism, corrupt feudal elites, and rule by force of arms.

In the wake of the protests, the government fell, but was replaced by more of the same. The economy, already in shambles, went into free-fall. And still the leadership could not make needed reforms. “How could they,” one might ask, “when they were the problem.”

Over the past few decades, I have polled in Lebanon and the results are instructive. Lebanese, of all sects, want “one man one vote.” They reject sectarian governance and the tyranny of militias. And they are wary of US and Iranian meddling in their internal affairs. In other words, they want reform.

From everything I’ve heard since the explosions in the port, many Lebanese have crossed the line from frustration with their government to despair that change is possible. A collapsing economy, a loss of control over their domestic and foreign policies, a dysfunctional government that remains insensitive to their needs and aspirations, coupled with a pandemic and continuing refugee crisis that has strained limited resources, have left them still angry but despondent. I believe that was why they responded so hungrily to Macron’s presence at the scene of their newest hurt.

While France is an unlikely patron of change, Macron, therefore, was “singing to the choir”. But it should not be the French alone who should join the Lebanese people in demanding fundamental reform and restructuring of the system of governance. The planned donor conference should provide immediate assistance to aid those in need of support and combine it with a long-term package to rebuild — conditional on needed reforms. This will empower the popular movement in Lebanon and restore their hope that they have allies who will be by their side in the long road ahead to save, rebuild, and restore the country.

Make no mistake, the path forward won’t be easy. The sectarian elites will not just step aside, nor will Hizbollah simply agree to end their threat to use arms against those who demand change. But we’ve come to a crossroads. If the Lebanon we love is to be saved, then the Lebanon we do not love must be defeated. Either that or Lebanon may die.

Some Good, Some Bad In The Democrats’ Platform On Israel / Palestine

I have been engaged in Democratic Party platform debates for over three decades and am amazed at how the party consistently gets the section on Israel/Palestine wrong.

Wrong because the positions expressed are out of touch with political realities on the ground. And wrong because the language they adopt has been out of sync with the opinions of Democratic voters. Unfortunately, the same is true this year. Despite some marginal progress in the 2020 platform language, it’s still 20 years behind the times and out of touch with the views of Democratic voters.

Before I critique this year’s proposed platform plank on Israel/Palestine, let’s review a bit of history.

Back in 1988, representing Jesse Jackson, I introduced an amendment to the platform calling for “mutual recognition, territorial compromise, and self-determination for both Israelis and Palestinians”. The platform drafters not only rejected this mild formula, they also accused us of trying to destroy the Democratic Party. They were wrong.

At that time, Palestinians were in the midst of the first Intifada and US opinion was shifting in response to the disproportionate force being used by the Israelis to crush the revolt. A poll conducted by the Atlanta Constitution showed that 70 per cent of Democrats supported our position. But the party leadership was adamantly opposed to any changes.

Since the platform did call for implementation of the Camp David Accords, we offered compromise language simply spelling out the terms of Camp David. We suggested adding phrases like “land for peace” and “the legitimate rights of the Palestinian people”. I was told that if the “‘P’ word” were even mentioned in the platform “all hell would break loose”.

Because they wouldn’t give, I proceeded to introduce our plank from the convention podium and “all hell did break loose,” not because we raised it, but because they so disrespectfully tried to shut it down.

In 1996 in the early years of the Oslo Process, the party platform draft included a plank calling for “an undivided Jerusalem” as Israel’s capital. I found this troubling since at that very moment the Clinton Administration was cautioning both Israelis and Palestinians against taking “unilateral actions that might predetermine final status issues” (and Jerusalem was one of these). I called Sandy Berger, Clinton’s national security adviser, and expressed my concern that this would undercut the Administration’s position. He agreed and while he couldn’t intervene in the platform process, he dispatched the State Department spokesperson to read a statement to the platform committee clearly distancing the White House from the party’s position. It was an avoidable embarrassment.

In 2012, the party’s platform did not initially mention this language regarding Jerusalem and we were pleased. But on the day after the platform had already been approved by the convention, the chairman of the Platform Committee came to the podium to announce a last-minute amendment declaring “a united Jerusalem the undivided capital of Israel”. Three times, he called for a voice vote to approve the change. And all three times the “No” votes clearly won. Clearly unsettled, the chair decided to announce that the “Yes” votes had won in response, the convention erupted with booing.

That day and the next, I was interviewed by countless media outlets about how Democrats had, in fact, rejected the plank, despite the heavy-handedness of the chair. The party had committed another unforced error.

In 2016, I was involved in the platform drafting effort and found, once again, the party leadership to be out of touch with reality. When I asked to include opposition to settlements in the platform, I was told that the party didn’t want to decide final status issues. When I countered with then we shouldn’t mention Jerusalem, my objection was met with embarrassed silence. It was against this background that I approached the 2020 platform. It’s a mixed bag.

There is language that for the first time creates some degree of recognition for Palestinian rights and attempts to reflect a balanced concern for both Palestinians and Israelis. And the document (for the first time!) recognises the Palestinians right to a state and promises to undo the damage done by the Trump Administration. It calls for restoring US assistance programmes sorely needed by Palestinians, reopening the US Consulate in East Jerusalem that long served Palestinians in the occupied lands, and working to reopen the Palestinian Mission in Washington, DC. But calling for a state two decades too late or promising to return to the status quo ante just is not good enough.

There is one area where significant progress was made relating to the Boycott, Divestment, and Sanctions (BDS) movement for Palestinian rights. While this year’s platform keeps problematic language from 2016 stating opposition to “any effort to delegitimize Israel, including at the UN or through the BDS movement”, it also notably adds a commitment to “protect the constitutional right of our citizens to free speech”. Pro-Israel groups are trying to spin this as a victory, but it’s akin to a GOP platform reading, “We are opposed to abortion, but we support the right of citizens to make their own choice on this matter.”

Even with this advance, there are still significant areas where the platform falls far short of where it should be.

I am baffled why the platform committee once again drew a red line on including any mention of the word “occupation” in the document even though every Democratic leader (including president Obama, Hillary Clinton, and Joe Biden) has spoken about the need to end Israel’s military occupation over Palestinians.

And while it opposes “settlement expansion” (another belated first in our party’s platform), it fails to acknowledge that while successive Democratic administrations have opposed such expansion, the settler population has continued to grow. By refusing to accept our amendment to place conditions on US aid to Israel should Israel continue to build settlements or annex Palestinian lands, the platform only serves to foster Israel’s sense of impunity.

For decades prior to Trump, successive US administrations have called for an end to occupation and expressed opposition to settlements, but have taken little or no action to back up their words. Now, the overwhelming majority of Democratic members of Congress say they oppose annexation. But precisely because these same lawmakers have been reticent to say that there will be consequences if Israel annexes or continues to expand settlements, Israel has continued to ignore what the US says. When there are no consequences to bad behavior, bad behaviour continues.

There are, however, reasons to be hopeful about where this debate is headed. It’s reflected in the courage demonstrated by Bernie Sanders and newer members of Congress, like Alexandria Ocasio Cortez, who are speaking out for Palestinian rights, and in polls showing that a majority of Democrats support conditioning aid to Israel based on its human rights performance.

And so this fight isn’t over. Not by a long shot. We will continue to push Democrats to recognise reality and oppose Israel’s occupation. Instead of just expressions of opposition “settlement expansion” we will continue to press for conditioning US aid to Israel, making it absolutely clear that there will be consequences if Israel does annex Palestinian land or continues its settlement enterprise.

Polls show that these positions have the support of most Democrats and they reflect political imperatives on the ground. It is high time for our party’s platform to catch up with reality.

America’s Unholy Crusade Against China

Last month, Secretary of State Mike Pompeo delivered an anti-China speech that was extremist, simplistic, and dangerous. If biblical literalists like Pompeo remain in power past November, they could well bring the world to the brink of a war that they expect and perhaps even seek.

Many white Christian evangelicals in the United States have long believed that America has a God-given mission to save the world. Under the influence of this crusading mentality, US foreign policy has often swerved from diplomacy to war. It is in danger of doing so again.

Last month, Secretary of State Mike Pompeo launched yet another evangelical crusade, this time against China. His speech was extremist, simplistic, and dangerous – and may well put the US on a path to conflict with China.

According to Pompeo, Chinese President Xi Jinping and the Communist Party of China (CPC) harbor a “decades-long desire for global hegemony.” This is ironic. Only one country – the US – has a defense strategy calling for it to be the “preeminent military power in the world,” with “favorable regional balances of power in the Indo-Pacific, Europe, the Middle East, and the Western Hemisphere.” China’s defense white paper, by contrast, states that “China will never follow the beaten track of big powers in seeking hegemony,” and that, “As economic globalization, the information society, and cultural diversification develop in an increasingly multi-polar world, peace, development, and win-win cooperation remain the irreversible trends of the times.”

One is reminded of Jesus’s own admonition: “Thou hypocrite, first cast out the beam out of thine own eye; and then shalt thou see clearly to cast out the mote out of thy brother’s eye” (Matthew 7:5). US military spending totaled $732 billion in 2019, nearly three times the $261 billion China spent.

The US, moreover, has around 800 overseas military bases, while China has just one (a small naval base in Djibouti). The US has many military bases close to China, which has none anywhere near the US. The US has 5,800 nuclear warheads; China has roughly 320. The US has 11 aircraft carriers; China has one. The US has launched many overseas wars in the past 40 years; China has launched none (though it has been criticized for border skirmishes, most recently with India, that stop short of war).

The US has repeatedly rejected or withdrawn from United Nations treaties and UN organizations in recent years, including UNESCO, the Paris climate agreement, and, most recently, the World Health Organization, while China supports UN processes and agencies. US President Donald Trump recently threatened the staff of the International Criminal Court with sanctions. Pompeo rails against China’s clampdown on its mainly Muslim Uighur population, but Trump’s former national security adviser, John Bolton, claims that Trump privately gave China’s actions a pass, or even encouraged them.

The world took relatively little notice of Pompeo’s speech, which offered no evidence to back up his claims of China’s hegemonic ambition. China’s rejection of US hegemony does not mean that China itself seeks hegemony. Indeed, outside of the US, there is little belief that China aims for global dominance. China’s explicitly stated national goals are to be a “moderately prosperous society” by 2021 (the centenary of the CPC), and a “fully developed country” by 2049 (the centennial of the People’s Republic).

Moreover, at an estimated $10,098 in 2019, China’s GDP per capita was less than one-sixth that of the US ($65,112) – hardly the basis for global supremacy. China still has a lot of catching up to do to achieve even its basic economic development goals.

Assuming that Trump loses in November’s presidential election, Pompeo’s speech will likely receive no further notice. The Democrats will surely criticize China, but without Pompeo’s brazen exaggerations. Yet, if Trump wins, Pompeo’s speech could be a harbinger of chaos. Pompeo’s evangelism is real, and white evangelicals are the political base of today’s Republican Party.

Pompeo’s zealous excesses have deep roots in American history. As I recounted in my recent book A New Foreign Policy, English protestant settlers believed that they were founding a New Israel in the new promised land, with God’s providential blessings. In 1845, John O’Sullivan coined the phrase “Manifest Destiny” to justify and celebrate America’s violent annexation of North America. “All this will be our future history,” he wrote in 1839, “to establish on earth the moral dignity and salvation of man – the immutable truth and beneficence of God. For this blessed mission to the nations of the world, which are shut out from the life-giving light of truth, has America been chosen…”

On the basis of such exalted views of its own beneficence, the US engaged in mass enslavement until the Civil War and mass apartheid thereafter; slaughtered Native Americans throughout the nineteenth century and subjugated them thereafter; and, with the closure of the Western frontier, extended Manifest Destiny overseas. Later, with the onset of the Cold War, anti-communist fervor led the US to fight disastrous wars in Southeast Asia (Vietnam, Laos, and Cambodia) in the 1960s and 1970s, and brutal wars in Central America in the 1980s.

After the September 11, 2001, terrorist attacks, the evangelical ardor was directed against “radical Islam” or “Islamic fascism,” with four US wars of choice – in Afghanistan, Iraq, Syria, and Libya – all of which remain debacles to this day. Suddenly, the supposed existential threat of radical Islam has been forgotten, and the new crusade targets the CPC.

Pompeo himself is a biblical literalist who believes that the end time, the apocalyptic battle between good and evil, is imminent. Pompeo described his beliefs in a 2015 speech while a Congressman from Kansas: America is a Judeo-Christian nation, the greatest in history, whose task is to fight God’s battles until the Rapture, when Christ’s born-again followers, like Pompeo, will be swept to heaven at the Last Judgment.

White evangelicals represent only around 17% of the US adult population, but comprise around 26% of voters. They vote overwhelmingly Republican (an estimated 81% in 2016), making them the party’s single most important voting bloc. That gives them powerful influence on Republican policy, and in particular on foreign policy when Republicans control the White House and Senate (with its treaty-ratifying powers). Fully 99% of Republican congressmen are Christian, of whom around 70% are Protestant, including a significant though unknown proportion of evangelicals.

Of course, the Democrats also harbor some politicians who proclaim American exceptionalism and launch crusading wars (for example, President Barack Obama’s interventions in Syria and Libya). On the whole, however, the Democratic Party is less wedded to claims of US hegemony than is the Republican Party’s evangelical base.

Pompeo’s inflammatory anti-China rhetoric could become even more apocalyptic in the coming weeks, if only to fire up the Republican base ahead of the election. If Trump is defeated, as seems likely, the risk of a US confrontation with China will recede. But if he remains in power, whether by a true electoral victory, vote fraud, or even a coup (anything is possible), Pompeo’s crusade would probably proceed, and could well bring the world to the brink of a war that he expects and perhaps even seeks.

The Democratic Party Is Setting The Stage For A Letdown

During the week of August 17, thousands of Democrats elected to serve as delegates to their party’s national convention will log on to their computers to view the proceedings. They will cast electronic votes on the party platform and for their party’s nominee to challenge Donald Trump for the presidency.

About one-quarter of this year’s delegates are Bernie Sanders supporters. Most of them are progressive political activists—and many are first-time participants in a national convention. This virtual event will not be the experience they expected. And while all of those with whom I’ve spoken are supportive of the precautions being taken in this era of pandemic, most remain in the dark about the convention plans and whether their participation is valued.

Months ago, when the 2020 Summer Olympics and a host of professional sporting events were canceled, it should have been clear that we were going to have problems bringing tens of thousands of delegates, supporters, and press to Milwaukee. I fully recognize the political calculations that had to be made, the problems of disappointing the host city, the need to have an event that would serve as a launching pad for the presidential election season. And I have no doubt that the convention planning team and DNC staffers were working round the clock weighing all these problems and exploring options.

Nevertheless, what was missing was a recognition that the convention wasn’t just the concern of the planning staff or the Biden campaign. It was personal for the delegates—especially first-timers, many of whom worked hard to earn their posts, felt empowered when they won, and were looking forward to playing their part in this quadrennial drama.

Given this, it was troubling how little communication there was with prospective delegates and how little engagement there was with DNC members while deliberations were ongoing. I should be clear that I am not faulting the convention or DNC staff that delegates were left in the dark. This was a political call that should have come from the leadership of the party.

With this in mind, the Bernie Delegates Network (BDN) conducted a national survey of Sanders delegates. We wanted to get their assessment of the planning process, whether they felt respected as delegates, and ideas they might have shared had they been consulted.

Their responses should be seen as troubling both for the party and the Biden campaign. More than 80 percent of those who responded said they felt disrespected or ignored. And their comments made clear why.

Common refrains were that as delegates they “felt left out” and that the process was “lacking in transparency and input.” Some went further, cautioning that this year’s “organizing, like the 2016 DNC convention, seems to minimize participation by Sanders delegates.”

Two others summed up the views of many:

“It should have been anticipated much earlier that the convention would be online and things planned with that in mind ahead of time. [There were] a lot of missed opportunities…” And there was “too little communication with stakeholders, that is, delegates and DNC members. It has been a closed affair— not seeking input…”

Frequently, the Sanders delegates also complained that they had no idea how this convention will allow their voices to be heard. They expressed the desire to participate but said they “don’t know how.” And a number of first-time delegates were unsure whether their participation was even valued by the party.

Some may dismiss these complaints as coming from the disgruntled losing side, but there is a risk in doing so. Young and old progressives are an important constituency. They make up a respectable share of Democratic voters, and many are activists who represent communities Democrats will need to win. As Jesse Jackson famously noted at the 1988 Democratic convention, “It takes two wings to fly.”In party-building, there can be no victor/vanquished. The role of a successful convention is to heal internal divisions and create unity of purpose among the various component groups of the party. In 2016, too little attention was paid to this critical undertaking. Bernie Sanders, personally, tried to soothe the disappointment felt by his delegation. But the message they received from the establishment was “We won, and you lost.” They felt shut out of the proceedings and left the convention demoralized.

This year could have been different. So far, it has not been. There isn’t the same degree of rancor as there was four years ago; the Biden/Sanders task forces formed to create a unified approach to writing the platform, while producing a document not wholly satisfying to progressives, was still a good-faith effort to bridge differences.

But leaving grassroots delegates in the dark as to how the convention will work—and reducing their role to passive online viewers—runs the risk of producing a massive letdown that could leave hundreds of delegates alienated. What this may mean is that at the conclusion of the party confab, many first-time Sanders delegates (and some old-timers, as well), instead of being energized and engaged, may turn off their computers feeling deflated and dejected. The unity so necessary for victory will not have been achieved.

This can still be addressed. If there is a will, creative solutions can still be found to give us the “two wings” we need to fly. But time is running out.