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Really too big to fail.

Market responses to the US debt crisis and financial downgrade have been like king tides as of late, and inevitably speculation centers on the possibility of a “double dip” global recession (this speculation is more than rhetorical. Gold and other precious metal prices have spiked overt the last three weeks as investors flee the stock, bond, commodity and currency markets). There is much talk, some fearful and some hopeful, of a global meltdown of epic proportions. The argument goes that downgrading the US credit rating devalues US Treasury bonds and the dollar, which slows US private investment at home and abroad, decreases domestic consumption, increases unemployment and generally prolongs the recession begun in 2008. This ripples negatively across the globe given the interconnectivity of commodity chains and the central role of the US in them. Be it on the Left or the Right, the belief in state bankruptcy is taken as an article of faith.

The reality is different. What is happening is a fiscal crisis of the Western State rooted in a cyclic crisis of capitalism. Arguments about the blown-out US public debt obscure the fact that it is the result of the same conditions that produced the 2008 recession and which are at root the cause of the next one. For the last thirty years the ‘bubble” of private debt was replicated by the US Government, in the last decade under the strain of simultaneously fighting two prolonged low intensity conflicts. In Europe public debt was in part procured in order to compensate for private debt (via the provision of subsidized entitlements). Capital was lent on looser and looser terms as interest payment calculations came to rival returns on productive investment as the dominant macroeconomic logic. The market in financial derivatives boomed, then busted, bringing with it a crisis in small scale property ownership at the same time that major manufacturers were being bailed out by the US government.

There is a difference, however, between the private sector and the State when it comes to fiscal crises. The analogy between States and firms is overdrawn. Firms go bankrupt; States do not. States may default on loans and suffer the indignities of downgrading by financial institutions, but they do not go out of business. The reason is simple. States  with a presence in the global economy may fail but they do not cease to exist.

Modern states are political entities with other measures of power beyond economic resources, are rooted in historical and cultural ties within more or less fixed borders, have distinct political systems and political regimes that govern them, and are therefore sheltered from the hard realities that beset wayward market agents in a globalised system of production, service and exchange. More importantly with regard to the social and political relations of production, the modern nation-state supercedes the market at any specific moment even while being generally subject to its rhythms and dictates. It is, after all, a capitalist type of state that is not reducible to the productive apparatus.

Imagine even if the US defaulted on its current obligations. Its credit rating would fall further in parallel with the value of its currency, but how long will that last? Even if the US fails its financial obligations, it would be the markets that push for a debt restructuring favourable to it.  As the core of the global economy, the US is simply too big to fail because its financial collapse would reverberate widely and deeply through the world. In fact, with the exception of undeveloped failed states and microstates with minimal economic resources to promote, virtually all modern states can survive a fiscal crisis and default.

 Take Argentina, which in 2000 defaulted on its foreign loans, uncoupled its currency from the US dollar and then renegotiated the terms of its obligations. Since most of the outstanding balance was interest rather than principal, foreign creditors were eventually forced to settle on terms favourable to the Argentines (about 60 cents on the dollar lent). The weakened Argentine peso stimulated commodity exports and attracted foreign investment in resources and primary goods. In spite of endemic corruption, political interference and a multitude of market inefficiencies, over the last five years Argentina has averaged growth rates in excess of six percent and attracted the highest levels of foreign investment ever even while maintaining a large public deficit.

 Greece, the poster child of all that is supposedly wrong with governments and societies that do not couple entitlements with production, is another such case. What would happen if Greece defaulted on its recently rescheduled loans? Will it cease to be? what it could do is drop out of the Eurozone, replace the Euro with the much less expensive drachma, and print money to fund its domestic obligations. Somee foreign investors may flee, but local capitalists will continue to engage the domestic market, people will continue to consume, albeit at lower rates with regards to imported goods, tourists will still flock to see the historical sites and visit the islands, and the country will continue to exist. In fact, should it be successful at restructuring its economy on more internally-focused terms out from under the straitjacket of Eurozone obligations (say, by making its tax collection system more rational and efficient), it could serve as a model for the other “PIGS” nations—Portugal, Ireland and Spain—as well as Italy.

It was Northern European, mostly German capital, directly and channeled through the European Central Bank, which sought to recycle in the European periphery the super-profits accrued during the last two decades of derivative market expansion. These are the creditors who took the risk in the PIGS and who now demand debt repayment schedules rooted in austerity measures and privatization programs. They are also the beneficiaries of a strong Euro, unlike the weaker Southern European economies now under siege. Should debtor countries in Europe decide to reconfigure their economies around a devalued national currency a la Argentina, the European Union will be finished as a currency regulator. Here the sub-regional ripple or contagion effect makes each of the PIGS too big to fail, something that is magnified in the case of the US. Loss of credit rating and a high debt to GDP ratio, in others words, does not translate into State bankruptcy.

 The larger point is that states can default but they cannot be bankrupted because they are not solely economic agents but instead sovereign political actors with interests that transcend a financial bottom line. They can be upgraded and downgraded as financial risks, but even if investment falls and inflation rises, they will not disappear. Think of Brazil and Argentina in the late 1980s when inflation ran at over 1000 percent per year. Did they disappear? Did all foreign investment dry up? Did local markets crash?

Truth be told, capitalism, led by finance capital, was on overheated overdrive for the two decades before 2008, only slowing down briefly after events such as 9/11, even when objective conditions advised against the maintenance of the macroeconomic policies private agents used to calculate the speed of their returns. Western States emulated private agent logics, whereas Asian banks and sovereign wealth funds  were less keen to adopt derivatives-led financial approaches backed by increasingly unsecured loans (although some of that did creep into Asian markets as regional economies attracted Western investment).

Here is where global networks come in. Rather than wage war on States with economies in default, other States that are debt free or less indebted work to cover their investments, and those of their private agents, in the debtor States. This means that even if private agents in the debtor States fail as a result of their market excesses or miscalculation, and State treasuries do n not have enough reserves to cover their debts, States remain open for business, perhaps even on more favourable terms depending on the nature of sovereign debt restructuring agreements (public debt for equity swaps are one measure that can improve State efficiencies as a result of restructuring). Inefficient producers are expelled from the market; inefficient States muddle along.

The entire Western capitalist combine was due for a retrenchment given the downward slope it has been on since spending, both public and private, exceeded productive output in material goods and services. So long as money could be made off of lending money and risks were passed on to increasingly lower-level actors, early 21st century capitalism saw States tax and spend without coherent productive purpose (which mirrored the approach of the financial markets). This was a good political calculation but not a sound economic grounding for future productive growth within current capitalist parameters. Thus the turn towards private sector retrenchment in 2008, with public sector retrenchment now following.

We hear about the demise of various States because they can no longer afford to repay what they have borrowed in order to maintain whatever it is that is considered precious to national identity and political stability–public goods and entitlements in Europe, a war machine in the US. Retrenching Western States may not be able to provide these services in the measure they used to, but thy remain (however diminished) as linchpins of an international system that has its origins in the Treaty of Westphalia rather than Bretton Woods or the Washington Consensus. States are the ties that bind that global system of exchange, and Western States continue to have a central role in it even as the system moves towards increased multipolarity.

Markets and politicians alike need to be cognizant of this fact, because as Keynes pointed out, it is political conditions, not economic conditions, that are the best guarantors of long-term investment. Rather than the economic particularities of a given investment climate at a specific moment in time, political stability offers better conditions for secure future private return. A stable national polity is the best guarantee of profit even if the public books are not balanced. That is the political cost for the social peace that is the basis for economic stability.

Ironically, it was the short-term focus of the macroeconomic logics that propelled the “bubble” that led first to the financial crisis of 2008 and now to the current conditions of political impasse and social instability in many liberal democracies. That is where the convergence of the fiscal crisis of the Western State and the cyclic crisis of capitalism can lead to liberal democratic State failure: when it produces a crisis of legitimacy of the political elite, often confused with regime crisis, that once rooted in and superimposed on the economic downturn and social unrest constitutes an organic crisis of the State. The UK evidences these type of pre-conditions.

Rather than demand zero-sum tax cuts and a diminished State role in guaranteeing the social relations of production,  the priority of the market during a State fiscal crisis should be to to express confidence in the State because delegitimisation of the latter is an absolute guarantee of disasterous market consequences for the private actors involved with them in the event that they are overthrown or fragment. That is where market ideologues have failed in their basic obligation: to help foster the political and socio-economic conditions in which stable rates of private return are generated. Instead, they are exacerbating the crisis with their jitters, demands and panic trading. This will not lead to an organic crisis in most liberal democratic states (which will muddle along), but it could produce legitimacy crises in newly democratic states or those with significant social cleavages. Even then the prospect of State, as opposed to regime or private sector failure, is unlikely.

All of which is to say that when it comes to the fiscal crises of modern Western States, this too shall pass.

 

 

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Rioting Poms.

A short while ago we were treated to the spectacle of a Royal Westminster wedding, a royal tour of Canada and the US, then another lesser royal wedding. The UK and colonial media went crazy with 24/7 coverage of the fairy tale personae involved, and the image conveyed was of stability and continuity in British foundational politics.  All was well in the Realm.

In the months since the first royal celebration things have grown dimmer. There is the hacking scandal in which politicians and the police appear to be complicit in the illegal tapping of private information by media corporations (primarily but not exclusively Murdoch-owned assets). Added to this sign of elite criminal coziness, now there is a police shooting followed by wildcat riots that represent criminal opportunism rather than outrage about the death itself. The UK media are swamped with reporters, police spokespersons and politicians all chanting in unison about the “mindless thuggery” and criminality of the youth who are widening the scope of violence beyond Tottenham and London itself.

The official emphasis on criminality cannot hide a number of things that depict a reality that s a far cry from royal bliss. The youth involved, while criminally opportunistic in their looting and vandalism, are a mix of ethnicities, but all seeming of working class or unemployed status (On TV I actually saw some young Hassidic Jews amongst the rioters in Tottenham). Some may have participated in earlier demonstrations and rioting about restrictions on access to higher education and the cost of basic services. They appear to be coordinated–in yet another tweeter and smart phone fashion–enough to stay a step ahead of the thinly stretched British Police. The fire service is not attending to full alarm fires because of fears for their security and the Police cannot predict when the next smash, burn and grab will happen. The mob is ahead of the Man, and the mob is angry.

So far the British government has declined to send in the army even though suggestions have been made that they have very robust anti-riot capabilities in Northern Ireland. The language used to justify that non-action is precious: the government states that it does not deploy such hard assets on British soil. So the riot police in London chase rioters using shields, helmets, horses and batons while the British Army uses armoured personnel carriers, water cannon trucks and live ammunition to keep the peace in Belfast and beyond. Some Imperial habits are hard to break, even though the Empire is long gone and its post-colonial consequences have come home to roost in the capital itself.

The hard fact is that the criminality of the rioters is a political act whether or not those involved or the government and corporate media would like to admit it. At a time when the PM, Police Commissioner, Mayor of London, and assorted other leading officials were on vacation in places like Ibiza, Tuscany and Milos, the youth now on riotous display swelter in the housing estates where unemployment, racial separatism, ethnic conflict and everyday economic insecurity are rife. Like their counterparts in any number of less developed countries, they can see up close the material lifestyles and commodity consumption of the royals, celebrities, sportsmen and corporate elites, but do not have (and likely will never have) the means of access to them. Worse yet, they live in a world where the institutional framework is stacked against them, leading to the violent turn inwards when the opportunity presents itself. The Police response is to ask parents to lock up their children.

Be it Marx, Luxemburg, Lenin, Guevara, Marighella, Ayman al-Zawahari, or Muqtada al-Sadr, revolutionaries understand the potential of the criminal mass engaged in collective violence. Lumpenproletarians are the street vanguard who, however unconsciously, help to bring social contradictions to a head and expose the weakness of the elite response and the inherent fragility (sclerosis?) of the status quo as a whole. Where instigated or abetted by politically conscious cadres (and there is some evidence of this at play here), their actions are designed to accelerate the organic crisis of the State, in which economic, social and political cleavages overlap and congeal into compound fractures not resolvable by force, reform-mongering or after-the-fact piecemeal pacification. Given the ongoing repercussions of the 2008 recession and the increasingly global debt crisis, and no matter how they are disguised by ethnic and religious division, the structural foundations for a larger class war in the UK may be fixing in place.

This does not mean that the British government will not be able to quell the disturbances this time around. But what these riots may be is a dress rehearsal for more to come, perhaps in conjunction with the Olympics next year, where militant planners accelerate the pace, focus and intensity of mass collective violence at a time when the British elite are exposed to global scrutiny and their security resources are already working at full capacity. That raises the issue of whether the official approach to rioters will shift to the more lethal Northern Irish “solution” set, and whether those charged with adopting a more lethal approach will have the ideological conviction to respond in such a way to the actions of fellow citizens rather than foreigners (I note that it will be possible for the official narrative  to scapegoat “outsiders” drawn from minority ethnic communities that hold non-Western beliefs, but even that may fail to overcome foot soldier or beat police reluctance to turn their weapons on their own).

In any event, we should see the riots for what they really are: an expression of mass subordinate discontent and disaffection, the product of profound alienation, expressed through collective criminal violence operating in seemingly opportunistic and decentralised fashion in the face of official incompetence or lack of will. That, by most reasoning, is a good sign of a pre-revolutionary situation, one that has the potential to become more of an existential threat to the status quo should tactical guidance and coherent ideological justification be given to it. After all, if what we are experiencing is a crisis of capitalism in the liberal democratic world, then it was only a matter of time before superstructural conditions and precipitating events would combine into a violent rejection of the system as given in countries in which the societal contradictions were most apparent. Be it in Greece, in France, in Spain or now in the UK, should these contradictions continue to fester and combine, it will not be Tea Party-type clones that will lead the insurrectionary charge, nor will they be as polite.

 

PS: Before Red Dave and other ideologically militant readers opine that I am belatedly joining their ranks, let me state that I do not see this as the beginning of a global revolution or necessarily of one in the UK. It is a pre-revolutionary moment, which means that the UK government still has the ability to engage in divide-and-conquer, selective application of force and reform-mongering tactics (along the lines I mentioned with regard to the Arab uprisings in an earlier  post dedicated to them). There is a fair bit of ground to cover before the Arab Spring gives way to a Red European summer.

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Suspecting the Spies.

Claims by Phil Goff that he was not briefed by Warren Tucker on the SIS Israeli backpacker investigation are remarkable because of what they imply. Not only is he suggesting that Tucker violated his statutory mandate to keep him, as Leader of the Opposition, fully informed of ongoing intelligence matters. His comments also raise the possibility that the SIS filters the information it provides to the Opposition Leader in a way that differs from that given to the government (and in this case provided incomplete information or none at all on a matter of importance). If true, the latter suggests that the SIS serves the government of the day rather than the national security interest at large, and that it “spins” the way it reports on intelligence matters in ways that cater to the government’s political necessities rather than based on objective assessments of the security and threat environment at any given moment. This is a violation of democratic principle.

The current National government would not be the first one to prefer that the SIS “spin” its reporting according to political necessity rather than fact. After all, the SIS did exactly that for the Fifth Labour government in the Zaoui case. Thus Goff’s indignation is a bit rich, although he may have a valid concern that the extent of spin and filtration in his briefs has exceeded the previous norm (recall that Don Brash, then Opposition Leader, said on radio that the case against Zaoui was thin, which suggests that he was getting honest briefings from the SIS at that time).

This is very troubling. If the SIS is, in fact, playing loose with its statutory obligations vis a vis intelligence briefings for the Opposition leader, it raises serious issues about its organisational accountability and transparency when answering to the elected officials (and public) to which it is responsible and to whom it ostensibly serves. This might not be unexpected in an authoritarian regime but it is absolutely anathema to democratic governance.

It is hard to see what political gain Phil Goff would achieve by attacking the credibility of a senior public servant such as Warren Tucker. Being an experienced politician, Goff would know that such a move would generate a backlash against him, including from quarters normally sympathetic to his views. Moreover, Goff has a considerable experience with intelligence flows given his previous roles as Minister of Defense and Minister of Foreign Affairs, and a fairly extensive professional history with Tucker himself. So, why did Goff do this? With no electoral advantage to be gained and plenty of downside to consider, why did he feel the need to turn what should have been the subject of a quiet discussion into a public fracas?

I suspect–without any inside knowledge–that his version of events is closer to the truth than that provided by Tucker. I suspect that when Tucker briefed Goff on March 14 as part of their regular monthly briefings he calculated it best not to bring up the Israeli case. The reasons were that Tucker would have noted that Goff was mired in the Darren Hughes affair and given Labour’s reaction to the previous Israeli spy scandal involving passport fraud in 2004, he might use the suspicion of more Israeli skullduggery as a diversion from the Hughes matter (and his handling of it). Since the SIS investigation of the Israelis was concluded by March 6, there was nothing to report other than that suspicions had been raised by the hasty departure of the three surviving Israeli tourists and that these suspicions were unfounded (I shall leave aside for the moment a number of questions that could indicate that there is more to the story than a mistaken suspicion).

Thus, it is possible that Mr. Tucker felt it wise, given National’s commitment to strengthen bilateral ties with Israel (including security ties), to gloss over or omit mention of the investigation during the March 14 meeting. That is not a cardinal sin and does not suggest impropriety so long as Mr. Goff was provided a full intelligence brief in writing. Goff claims that he was not provided such documentation. The SIS admits that there is no transcript of record of the meeting other than Tucker’s briefing notes (that is, the notes prepared before the meeting), something that not only violates standard bureaucratic procedure but also quite possibly the Public Records Act (I find it quite astonishing that the intelligence briefs are done on a one-on-one basis between the Director of Intelligence and the Opposition Leader without a third party transcriber of record, be it a secretary or someone nominated for that role by both parties). I could be wrong of course, but there are enough discrepancies in the SIS version of events to open room for such speculation.

The story gets weirder because the SIS maintains that Mr. Goff was also briefed on the matter on April 6, and then again on July 25 after the story about the Israelis broke in the press. Why the SIS would brief Mr. Goff on the matter on July 25 when it claims it had already briefed him twice is hard to understand unless Goff demanded a “please explain” meeting with Tucker after the revelations. Also hard to understand is why the SIS, under Tucker’s signature, would rapidly declassify its records of the March and April briefings as well as the summary of the investigation in order to provide them to a notorious right wing blogger who is, in fact, criminally convicted of breaching judicial orders regarding matters of privacy (in other words, the big fella is not known for his discretion or diplomacy when it comes to dealing with secrets). Not only is the rapidity with which the Official Information Act request from the blogger was answered quite astounding (5 working days from the request to the answer from Mr. Tucker, with the documents in question declassified the same day as the blogger’s OIA request), but it now seems that other outlets were denied or delayed in having their OIAs on the same matter answered, and that the SIS selectively requested that OIAs be sent to it on the subject couched in very specific language.

If we recall that the leak to the press of the Israeli investigation came from within or close to the SIS itself, and we add to it the normal reticence of spies to engage in public arguments with politicians about their business, and then factor in the selective provision of OIA data to sympathetic outlets, all on top of Mr. Goff’s claims, then we cannot but begin to suspect that the SIS is heavily politicised in what it does, does not operate as a neutral and apolitical source of intelligence flows, and in fact is behaving in ways that are inimical to democratic oversight and control over the national security apparatus. If true, the politicisation of the SIS (or at least its leadership) is a sign of institutional atrophy as well as bias, and worse yet, is a stain on the professionalism and integrity of those who work in the clandestine services. This is kiss of death type of stuff because foreign governments and New Zealand’s intelligence partners will have noted the deeper implications of the row between Goff and Tucker, something that will influence the way in which they approach matters of intelligence sharing with the New Zealand government.

There is much more to the story but let’s just say that this controversy once again raises serious issues about the SIS role, its integrity, and its ability to serve the public in a neutral and objective fashion without political influence or bias. Whatever Mr. Goff’s motivations, his outcry has raised fundamental questions that will not easily be swept away or silenced, and have the potential to drag Prime Minister Key into the fray (because Mr. Key is Minister for Intelligence and Security and thus Mr. Tucker’s nominal “boss,” and if it turns out the SIS has massaged its briefs or played with its documentation after the fact, then Mr. Tucker’s position becomes untenable–and perhaps criminally liable).

I tried to cover some of these points in an interview on TVNZ’s “Breakfast” show, which if nothing else shows that amid the celebrity sightings, gossip-mongering and general inanity of morning television there is still some room for the occasional serious discussion: http://tvnz.co.nz/breakfast-news/paul-buchanan-warns-sis-stoush-5-59-video-4339934/video

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Conservative Party of New Zealand

I’m 8/19ths conservative, according to Colin Craig’s Conservative Test, on the website of the Conservative Party of New Zealand that was launched today. This might come as a surprise to some readers, which is fair enough. The questions asked in the quiz are quite poorly-written, complex, contradictory, question-begging, and the colour-coding on the answers marks it out pretty clearly as a polemic exercise; but I simply answered them at face value. There was a brief but pretty worthwhile discussion on twitter about the meanings embedded in the questions, but I decided to just answer them naively: to pick a side based on gut response.

That said, I think I probably am more conservative than many of my liberal brethren. Although I disagree very strongly with old-fashioned (‘paleo’) conservatives on many, if not most, policy and philosophical topics, I generally find them easier to understand than either libertarians or neoconservatives, for one major reason: they still believe in society, and especially in its central role in civic and political life. I can have a reasoned debate with someone who accepts that there is such a thing as society — and that it has a meaningful role to play in government, and vice-versa. It’s much harder to do so with those who (like Thatcher) simply deny its existence, or those who (like Norquist) having grudgingly admitted that society is not simply a figment of the collective socialist imagination, would prefer to drown it in the bathtub.

Several years ago, Anita addressed the place of the Christian right in a progressive society, and her words are similarly applicable to conservatism in general:

Perhaps the role of the Christian Right is a necessary one; it does not prevent change but it slows it and makes sure there’s enough discussion that the more conservative members of our society don’t get left behind and alienated from a society that moves too quickly and doesn’t take the time to persuade them and bring them along.

While I campaign for more liberal and progressive progress, I’m not sure I would be willing to pay the price of a divided antagonistic society. Perhaps I should thank the Christian Right for slowing us down enough that we can move together as a community.

Anita’s argument is very dear to me. I want the sort of society I want, of course, but I don’t want a society where whoever holds 51% of the power at present can enact swift, revolutionary changes that alienate the other 49% — or at least that they cannot do so with impunity. This is at root a very conservative view, although not in the polemic sense of that word. So, although I disagree of most of what it stands for, inasmuch as New Zealand conservatives are presently served pretty poorly, I think a conservative party could be a useful addition to the political canon.

I expect Colin Craig’s endeavour will fail, however. His quiz, as noted, does not suggest that very deep philosophical or political consideration has been given to the issues at hand. His previous forays into politics have been reactionary and underwhelming, and so expensive as to be unsustainable even in the medium term. It’s way too close to the election to make a meaningful impact. Also suggesting a slapdash approach, the iconography and branding of the Conservative Party (based on its website) is terrible:

The blue they’ve chosen is a middling sort of shade, neither ACT’s teal or National’s royal blue, similar to the shade I criticised previously when used in anti-MMP ads by Peter Shirtcliffe. There’s no good reason not to have chosen a deep flag-coloured navy blue here. The typefaces, far from being the solid, dependable sort we expect, are incongruous — one is cartoonish, the other is frightfully modern. If there was ever a decent time to deploy a newspaper font, this was surely it. In this regard, however, the effort isn’t quite as bad as Reform NZ, whose designers, in their wisdom, chose a font very similar to that used by LOLcat images. Even his New Zealand flag is cartoonish — the opposite of the dignified, patriotic image they should be pitching for. They could have done a lot worse than emulating the masthead of Trevor Loudon’s old blog, which was one of the most striking in NZ — though now replaced by a dull white banner (the image at right salvaged from google image thumbnails).

There is also the perverse ideological incentive noted by Cactus Kate, that he seeks to disrupt ACT’s success in Epsom and thereby puts at risk the re-election of the Key government; if this happens, Labour’s proposed capital gains tax will likely be enacted, which would substantially disadvantage both himself personally (as a property investor) and many of his voters.

But in the final analysis, the biggest obstacle to the Conservative Party’s success is conservatism itself. By definition, conservative voters are reluctant to switch their support from one political vehicle to another. They require very good reasons to switch, and there is nothing to indicate that the Conservative Party will provide them.

L

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By their works ye shall know them

We are presently being treated to the rather undignified and unedifying spectacle of the political right — particularly the authoritarians and liberthoritarians — crying foul because people are drawing cautious, well-documented linkages between their own rantings and those of the Norwegian killer Anders Behring Breivik. We had a dry-run of this following the Tucson massacre. Russell Brown has NZ’s most thorough treatment of this argument, and Peter Cresswell has NZ’s most succinct whine about it, with links to more examples.

One such piece bears particular mention: by Merv Bendle, it was published in Quadrant, and questioned whether Breivik’s attacks were “a covert, ‘false-flag’ operation, carried out to give just this impression that it was conducted by anti-Muslim, right-wing extremists, but actually conceived and directed by other forces?” Quadrant is edited by Keith Windschuttle, whose statements at a seminar given in New Zealand in 2006 (and chaired by Matthew Hooton) were quoted by Breivik in way that Windschuttle states is “not inaccurate or misleading. I made every one of these statements and I still stand by them.” The argument is essentially that “civilisation” is under threat from “the perverse anti-Westernism of the cultural elite”. There are many, many more such cases in overseas forums and I trust readers will have no difficulty finding them.

But Pascal’s Bookie, in comments at the Dim-Post, has found the nub:

They either need to disown the claim of existential threat, or explain why an existential threat does not justify violence.

This is exactly it. The right-wing commonplace that “Western civilisation is under threat” is at the heart of all the rhetoric being compared to Breivik’s nominal casus belli, and in many cases the similarities are more than merely cosmetic. This general line of argument has been popularised in its modern form by Samuel Huntington, but is much older in its essence (and I must note that Huntington’s theory is considerably more robust than the arguments I’m talking about here.) The problem for the wingnuts presently whining about these comparisons is that their bluff has been called. They’ve been squawking about the existential threat posed by “others”, much as Breivik has, but he has gone one better and actually done something about it. And so they must pick a side: either “Muslims” (or “Māori”, “socialists”, “teacher unions” or the “cultural elite” or whoever “Western civilisation” is at war with this week) actually are the existential threat the wingnuts claim they are, or they are not. If the former case is true, by their own logic the wingnuts would not only be justified in taking up arms in defence of their civilisation, they would be practically required to do so, as Breivik did. If the existential threat is real, they must hail Breivik as a hero. If they don’t, we can assume there is no existential threat, and that they’ve merely been spouting melodramatic masturbatory fantasy this whole time.

By their works ye shall know them. If there really is an existential threat, as they claim, then surely we can expect the rallying cry “wingnuts of the world, unite!” to go up from the towers where they reside, and their legions pour forth with tacticool assault rifles, iPods full of Wagner and Muse and Mario Lanza, and neoprene bodysuits with faux unit patches on them. And if they do not, then surely by their own admission, there is no threat, and there never was.

I know which I’m picking.

L

Update: ‘Nemesis’ at Crusader Rabbit has answered the clarion call to action with …. yet more words. But they are fighting words:

Continue reading “By their works ye shall know them”

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Reputation and precedent in the construction of the “spy” story.

This post started as a comment over at DPF’s place.

Reputation and precedent are important referents in the international security business. Israel has a reputation for using sayanim (“helpers” who are Jewish citizens of other states or Israeli travelers who provide information and do tasks for the Mossad in foreign countries out of loyalty to Israel), and are known to send young intelligence officers, often posing as male/female couples, on foreign training missions where they act like travelers. Israel also has a precedent for engaging in covert operations in NZ in the form of the 2004 attempted passport fraud in which there was at least one local “helper” facilitated the Australian-based sayanim’s procurement of a false NZ identity. It has a reputation for using “cloned” foreign passports when undertaking foreign intelligence missions (to include assassinations), and the NZ passport is known to be very valuable on the black market and intelligence circles because of its perceived neutrality. Thus, when 3 surviving Israelis left the country with unusual speed after the Feb 22 Christchurch earthquake, facilitated by the Israeli embassy, warning flags went up at the SIS.

The issue of multiple passports for one victim hinges on the number and the identities and nationalities on them. If there were just two (as the government maintains) for the deceased driver that would be understandable given that Israeli passports are refused in many places and dual citizens routinely use more than one travel document. Even a third passport in the same name is not unusual for someone who has been raised and lived in several countries. But if there was indeed five or six passports as has been alleged in the original Southland Times story, and these had multiple identities as well as nationalities, then things get suspicious. We may never learn the truth of the matter in this regard, but if there were in fact different names and the same photo on more than two passports, then their counter-intelligence value is significant.

The issue of the unauthorised USAR team has to do with the victims’ families desperate attempts to get a focused search going for their loved ones at a time when local SAR was stretched thin and things were chaotic in the quake zone. The families hired a private Israeli USAR team that had the last known locations of the victims as their search target, and this team did not obey diplomatic niceties in securing permission because they were on a very time sensitive private mission. The fact that at least one of the Israeli USAR crew had past military and intelligence ties is no surprise given Israeli conscription and its network of helpers, but means little in this context. As for the Israeli forensic team helping with victim ID–they would have had access to police and other public records as part of their assigned duties with regard to identifying the dead and wounded. If Netenyahu and Key spoke more than once about the quake that would be unusual, but more likely that was due to genuine Israeli concerns with quickly recovering the 3 deceased compatriots for proper burial (since Jews bury their dead quickly).

In any event, given precedent and reputation, the SIS launched an investigation triggered by the hasty exit of the three survivors while the cops did a forensic accounting of their data banks given the access of the Israeli forensic team. The unauthorised USAR team was made to leave, Israeli cultural sensitivities regarding their dead compatriots notwithstanding. The govt says nothing untoward was found by both investigations, and we have to take its word for it unless further revelations come out that contradict the official story. If the Israelis are innocent of any wrong-doing as the survivors claim, then they are just another reminder of how innocents can get caught up in international disputes due to the actions of their governments. They are, in other words, victims of reputation and precedent, not prejudice.

It was unfortunate that PM Key’s original statement on the matter was defensive and obfuscatory, since as Minister of Security and Intelligence he signed off on the SIS investigation and would/should have known the results prior to the story breaking. Had he just fronted on the facts as outlined above rather than clumsily dissemble, the story would have died quickly. But his comments just fueled the speculative fires for several hours until a crafted press release was issued, but by that time the conspiracy theorists and Israel-haters were in full flight.

I think that on this matter, the SIS is to be commended for flagging the hasty exit and moving to investigate the activities of the 6 Israelis leading up to their being in Christchurch on Feb 22, as well as coordinating with he Police with regards to the SAR and forensic teams. That is simply good counter-intelligence tradescraft. But let it also be clear that if the Israelis were on any sort of intelligence mission they would not have left evidence of such on their personal laptops and cell phones. Moreover, since they were unfamiliar with Christchruch, they would have had a local handler to facilitate their mission  much as was the case with the Auckland passport fraudsters. So even if the official response has put the story to rest, there remains enough in the way of reputation and precedent to keep alive in some circles the idea that perhaps there was more to the Israeli’s NZ visit than has been revealed.

On a tangental note, I was bemused by how the media treated my remarks on the story. In every interview I did on the day the story broke (about a dozen), I began by qualifying my remarks with the caveat “IF the story is true, then…”. Several reporters asked me to speculate on what the Israelis would be doing IF they were indeed on an intelligence mission, which is where I brought up the identify theft angle as the most likely possibility. At no time did I assert that I had concluded that they were spies, given that I could only go on the published news reports on the matter. Yet when I reviewed the coverage of the story in the following days, I saw that I had been repeatedly quoted as saying that the israelis “were probably on an identity theft mission” without any qualifiers or caveats attached to the statement. That is simply dishonest or lazy reporting, and led to some commentators claiming that I had jumped the gun with my remarks (including one regular KP commentator who made some silly remark elsewhere that I have a tendency to talk first before thinking. That says more about him then me). So, for the record, let it be clear that all of my comments on the matter were prefaced with the qualifier rather than made as bald assertions of fact.

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Competing electoral insurgencies, in Epsom and beyond

In this post I argue that ACT’s apparent willingness to undermine the MMP system that has kept them alive isn’t so much a death wish as a wish to be welcomed back into the National party as a faction, rather than a stand-alone party; to ensure influence from within rather than relying on influence without. I wrote most of this late at night and cobbled it together from several pieces I’ve had banging around a while with some more recent stuff appended, so you have my apologies if it’s a bit disjointed.

Fairfax political journalists Andrea Vance & John Hartevelt have a pretty sharp piece up, calling the ACT-National deal in Epsom a shameless power grab. I wrote about this topic a few days ago. Their analysis is pretty good, particularly the argument that National may have difficulty compartmentalising future ACT scandals away from National, having taken such direct responsibility for shielding ACT from the rigours of electoral democracy. They also make the point that I and many others have made about the dual exploitation-illustration of MMP’s flaws:

Double dealing and horse-trading are nothing new in the battle for political survival. Perversely, as we head towards a referendum, this naked and shameless power grab undermines the very system ACT relies on for survival. The ultimate irony is that Brash wants it replaced with the supplementary member system that would probably vanquish his party.

MMP, and particularly exploitation of the free-rider rule, is what has kept ACT alive since the 2005 election, when the party’s support dipped to its record low of 1.5%. Supplementary Member is the system that Brash personally supports, and although there is no official preference, this is widely regarded as being the system most preferable to most National party members and the wider ACT party also. SM, as proposed with a 90-30 electorate-list split, would indeed be worse for ACT as an independent party, requiring it to get something like 3% 2% of the party vote to gain a list seat, even if it continued to win an electorate. Leaving aside for a moment whether this is likely or not (ACT did, in its heyday, poll well), that’s a considerable disadvantage because National would no longer have such a good reason to throw ACT an electorate seat lifeline. National’s doing so is apparently only tolerated by Epsom voters on the basis of the overall positive-sum value proposition made by John Banks: “vote for me, and I’ll bring five MPs with me on current polling”. You’d be a fool to turn that offer down. Reduce the premium to one MP and it suddenly becomes rather less appealing.

So on paper ACT supporting a non-MMP system looks like a turkey voting for an early Christmas. But I think the game goes deeper than that. ACT has in recent years abandoned its claims to being a classical liberal party, and is now basically a more hardline version of National’s dry petit-authoritarian conservatism, with a few casual nods to “freedom”, such as in alcohol policy. In recent months it has been colonised by the former right of the National party (Brash and Banks, most notably; also “National in Gumboots” Federated Farmers former president Don Nicolson). Both the former were until very recently long-standing National members whose tribal loyalty undoubtedly lies with that party. They see it as having strayed from its roots, and while they undoubtedly appreciate its newfound popularity with voters, they have repeatedly expressed strong concerns that the party has lost its way, and an intention to bring it back around by putting “reinforcing steel” into its governments (in the words of John Banks). Both, I think, would join National again in a heartbeat if National would have them, and would permit them any influence. An electoral system switch to SM makes that a more viable possibility, and brazenly exploiting both the two major flaws to which most people object in MMP — the threshold free-rider rule and the “back door” rule that lets a rejected candidate such as Don Brash back in on the list — sets up a reasonably strong case against MMP.

Supplementary Member has the worst features of both FPP and MMP. It has high noise (the variance between the makeup of the electorate’s votes and the makeup of the resultant parliament), delivers huge incumbency advantages to parties that hold many electorate seats (because there are more of them), severely marginalises smaller parties by reducing proportionality, and despite all this does not meaningfully solve the symbolic split between “legitimate” electorate-based MPs and those who ‘only’ come in on the list, nor the threshold, “back door” or “horse-trading” objections that most critics name as MMP’s worst flaws. (BK Drinkwater modeled FPP, MMP and SM against each other using election data since 1996, although bear in mind that for SM, these figures assume a 70-50 electorate-list split, which is considerably more proportionate than the 90-30 proposed).

National holds many more electorate seats than Labour, and has nearly always done so, even when its popular vote has been lower because its base of support is less concentrated in inner-city and suburban electorates. Any system of reapportioning electorates on the basis of population will continue to entrench this advantage. Under MMP, it is not a very significant advantage; under FPP and SM, however, it is. ACT’s electoral support, both in electorates and nationally, is very weak, largely because their policies are purposefully divisive, with the intent of galvanising a small proportion of “right thinking” voters against the mainstream. National’s strategy since 2006 has been to occupy the centre-ground and cannibalise Labour’s votes in a zero-sum fashion. This has been a strategy of necessity — the 2005 election demonstrated pretty categorically that divisive politics, no matter how much money you could throw at it, no matter how favourable the cultural terrain, or how good the propaganda, was not a winner for National in an MMP environment. The incumbency and electorate edvantage delivered by SM, however, would cushion them against voter discontent and permit a more hardline approach: one that included ACT as a faction within the National party, as it previously was. So under SM, ACT doesn’t need National to throw it a bone, and National doesn’t need to rort the system to extract electoral advantage: National under SM will enjoy sufficient advantage to simply absorb ACT and its policy programme, and its governments will be emboldened to enact divisive or unpopular aspects of that programme without the same fear of electoral blowback that now constrains it. ACT’s strategy is therefore an insurgency against National; one that may be permitted by National, contingent upon the adoption of a more beneficial electoral system.

A further comment on Labour’s response in Epsom is also warranted. Arthur (in comments to my post linked above) suggested that the best way to nix ACT in the 2011 election is for all Labour and Green voters to cast electorate votes for the National candidate, Paul Goldsmith, in the hope that this will send a signal to National voters who are unhappy with the horse-trading between ACT and National that it might be worth defecting. This is, in principle, a strong strategy, and it has been picked up by some Green supporters as well. But I think it’s the wrong strategy in this case, for five reasons. First, it’s a complex and counterintuitive strategy, and it’s extremely hard to get so many people (on both sides) to act against their own instincts like that. Second, the value proposition made by ACT (six for the price of one) is simply too good for a meaningful number of National voters to pass up. Third, it would require Labour to publicly endorse a National candidate, which would permit John Key to proclaim that “even the opposition supports the National party”. Fourth, the electorate demographics for Epsom don’t stack up: this electorate bleeds blue and even if a fair proportion of disgruntled Nat voters defected, I don’t think there would be enough Green and Labour voters to prevail. Fifth, it would require Labour to buy into the electoral-system rorting, making them no better than the National and ACT parties.

Labour looks like it will mount an ‘economic dry’ insurgency by standing David Parker in Epsom. This is a better strategy because it is vulnerable only to the objections two and four above (the positive-sum value proposition, and demographics). These will probably still mean that it is unsuccessful in terms of winning Labour the electorate and denying ACT parliamentary representation, but it also has the advantages of fighting the national and ACT parties on their own turf — economic responsibility — and in demonstrating that even when they’re down, Labour fights fair and respects the integrity of the electoral system. Most crucially, however, whatever strategy is adopted by the left in Epsom must be coordinated. The two proposed strategies (vote Goldsmith and vote Parker) are contradictory: one must be abandoned, and soon, in favour of the other. Because if the Green faction goes into Epsom with one strategy and the Labour faction goes in with another, there’s only one winner: ACT.

L

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If you’re looking to get silly, you’d better go back to from where you came

Dear Martin Warriner,

In objecting to the addition of macrons to Māori place names on the Kāpiti coast, you are quoted as saying that you “emigrated to New Zealand, not to “Māoriland”.” For your information, this is New Zealand, this is how we do. I understand you feel as if your colonial superiority is under siege, but how’s this: we won’t tell you how to represent your culture, and you don’t tell us how to do ours. Fair enough?

If not, it isn’t too late to piss off back home if you don’t like it. Perhaps you could take John Ansell with you.

L

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Rotten borough

This evening Paul Goldsmith won the Epsom candidacy for the National party. Goldsmith is was until 2010 a Citizens & Ratepayers Auckland city councillor, and has a long-standing National party affiliation.

He will be standing against ACT candidate John Banks, who is the subject of a hagiography by Goldsmith titled “John Banks: A Biography” and published a few years before Banks stood for his first term as Auckland mayor, which he won in 2001.

ACT is led by Don Brash, who is the subject of a similar tome — I haven’t read this one, so I will refrain from calling it a hagiography in such specific terms — titled “Brash: A Biography”, also by Goldsmith and published as Brash was whipping up race hatred as leader of the National party in order to win the 2005 general election, which he did not.

So unless someone can explain to me again how National is going to contest Epsom strongly by standing the hagiographer against his subjects, this is simply a renewal of the Hide-Worth electoral rort, where a nod and a wink permits National to elect Banks and exploit the free-rider loophole in MMP; all the while campaigning against MMP due to flaws such as the free-rider rule, and the ‘back door’ rule which will in all likelihood get Don Brash back into parliament despite his having been rejected in 2005 — not only by an electorate, but by the whole nation as leader of a failed National party bid for government.

And fair play to them. If the electorate won’t punish them for doing so they’d be rude not to.

L

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Katerina Mataira, moe mai ra

Dame Katerina Te Heikoko Mataira has died. Dame Katerina’s contribution to the survival of te reo Māori was enormous. She was one of the driving forces behind the renewal of the reo following generations during which its use in the education system was officially punished, causing matua and kaumatua to become reluctant to teach it to their tamariki mokopuna. She did this largely by what are essentially traditional methods; by promulgating the Te Ataarangi immersion-teaching method. Most simply and perhaps most crucially, she used the reo, illustrating that it is a living language, coining terms in reo which previously existed only as loanwords or bare transliterations; the most famous is probably ‘rorohiko’ (literally ‘lightning brain’; computer). She was also one of few authors to write prose novels in te reo, among her other works.

Her passing made me think of what is probably the greatest recent achievement of Māori — the Kōhanga Reo and Kura Kaupapa Māori immersion schooling systems, which have probably done more for Māori cultural wellbeing than any other set of initiatives. Beyond a simple mode of communication, a language represents a store of knowledge which cannot be losslessly translated; it has encoded within it māori (in the pre-Williams sense of ‘normal’ or ‘ordinary’ rather than referring to a race) cultural and historical meaning; and its use enables its users to tap into that baseline culture, granting them access to a resource they cannot find elsewhere. Sir James Henare described te reo as “the core of our Māori culture and mana” and asked, “if the language dies, as some predict, what do we have left to us?” and further, “the language is like a cloak which clothes, envelopes, and adorns the myriad of one’s thoughts.” Sir Mason Durie, who quoted Henare, also argues that the struggle for te reo “typifies Māori determination to assert a positive cultural identity in a contemporary world” (in Te Mana, Te Kawanatanga, p59). Many others have described the importance of te reo to Māori; these are just examples close to hand.

Dame Katerina’s death brought kōhanga and kura to my mind not only for these reasons, but because they are exemplars of effective public policy delivered through and mostly by the communities they target. They are what, if we are very fortunate and work very hard, Whānau Ora could be like. Looking at their success and looking at the potential for similar achievements in other fields, it is disappointing that the left so dogmatically opposes more initiatives along these lines, deriding them as “privatisation of welfare”, or as “pork and puha politics for Tariana’s mates” before they’ve even gotten started.

L