the populism of Mr Trump

February 23rd, 2017

FT columnist Philip Stephens writes that the populism of Donald Trump is more than a protest against declining living standards or increasing income inequality. It is also (more, in my opinion) about protecting “the privileges of the native, white, Christian majority”.

Mr Trump, spurred by his White House strategic adviser Stephen Bannon, imagines an … order … that is robustly nationalist and protectionist and guards the privileges of the native, white, Christian majority. The values of the old order — human dignity, pluralism, the role of law, protection for minorities — have no place in this identity politics. Nor do the institutions of democracy. Judges, media and the rest are “enemies of the people”.

An “America first” foreign policy is part of the same construct. Mr Bannon, the ideologue who informs Mr Trump’s impulses, anticipates a civilisational clash with Islam and a war with China. The flirtation with Mr Putin is about confessional and cultural solidarity against an imagined barbarian threat. ….

[I]n Orwell’s words, “human beings don’t only want comfort, safety, short working hours, hygiene, birth control and, in general, common sense; they also, at least intermittently, want struggle and self-sacrifice, not to mention drums, flags and loyalty-parades”. ….

Nazism and Fascism, Orwell was saying, had caught a psychological current. Emotions elbowed aside economic calculation. Something similar is happening today if not, thankfully, on the same level of evil delusion.

Philip Stephens, “What George Orwell would have made of Donald Trump“, Financial Times, 23 February 2017 (gated paywall).

There are already 179 comments on Mr Stephens’ column, which is a “must read” for me.  Is it an accurate description of Donald Trump’s movement? I think so. Many disagree. Read the full column, if possible, and decide for yourself.

crony capitalism in Washington

February 22nd, 2017

I have seen this movie before … many times. Regardless of country, the ending is very sad.

A few hours after Rex Tillerson was confirmed as US secretary of state this month, he received some excellent news. The House of Representatives voted to nullify a rule that, as head of ExxonMobil, he had vigorously opposed. Known informally as the “publish what you pay” rule, it obliges oil and mining companies to disclose payments they make to foreign states. Scrapping it is a big victory for Big Oil. It is another sign that a Donald Trump presidency means not so much draining the swamp as handing over the swamp to the crocodiles. ….

If ExxonMobil bags a big project in Mozambique or, better yet, Russia, people will ask what it paid and whether Mr Tillerson smoothed the way — despite his pledge to recuse himself from such issues. As Jeffrey Sachs, an economist and author of Building the New American Economy, argues, Mr Trump is putting lobbyists out of business. “He’s just handing finance over to Goldman Sachs,” he says of Gary Cohn’s appointment as director of the National Economic Council. “And he’s just handing State over to ExxonMobil.”

David Pilling, “Trump, Tillerson and the resource curse“, Financial Times, 23 February 2017 (gated paywall).

The nullified rule was signed into law in 2010, but never come into effect because of industry lobbying by the American Petroleum Institute.

As the sponsors of the bill – Republican Senator Richard Lugar and Democratic Senator Ben Cardin – point out, Canada and European countries have enacted similar laws, so lobbyist arguments that the rule would place US oil companies at a competitive disadvantage are not valid.

how long will Trump last?

February 20th, 2017

Edward Luce, chief US columnist for the Financial Times, writes that either the US political system will bring Trump down, or Trump will destroy the system.

There is no alternative. Or is there?  My fear is that something equivalent to 9/11 might happen, and Trump would suddenly become a popular leader. The system could continue, with an authoritarian in charge. Read the rest of this entry »

toward universal pensions in the Philippines

February 19th, 2017

There are signs of movement, but the pace is very slow.

[Philippine] President Rodrigo Duterte, last January, granted the P1,000 [US$100] pension hike for Social Security System (SSS) beneficiaries. The Department of Social Welfare and Development (DSWD) also has a larger budget for social pension for indigent seniors, effectively doubling the target coverage from 1.3 million elderly in 2016 to 2.8 million this year.

Despite these, a study by the Coalition of Services of the Elderly (COSE), in partnership with HelpAge International, showed that 38% of senior citizens will still not be provided with social pension. It also said 34% of SSS members receive less than P2,000 every month. ….

Using data from the Annual Poverty Indicators Survey (APIS) released in 2013, the study did a simulation that shows the poverty rate would be reduced [by 3 million] from 25.4% to 22.3% if a P2,000 universal social pension is provided. ….

The study said the government, realistically, could increase the amount of social pension to P1,500 monthly. This would cost P143.97 billion or 0.97% of the country’s gross domestic product (GDP) and 4.80% of its [total government] expenditures.

Patty Pasion, “Pension for all seniors to lift 3 million out of poverty – study“, Rappler, 19 February 2017.

The study’s recommendation is an improvement, but still leaves about 23 million persons – 22.9% of the population of older persons – in poverty. The Philippines’ latest poverty line for 2014 is a per capita income of 100,534 pesos a year, equivalent to 8,378 pesos a month. Providing all older people with a pension this size would eliminate elder poverty. Is it worth doing? Would it be money well spent? This is a political question that must be decided by the taxpayers of the country.

One way to reduce costs is to provide a universal pension half this size for the ‘younger old’, aged 60-64, who can continue to participate in the paid labour force. In addition, benefits should be taxed as regular income, so that older persons of any age who are continue to work contribute also to the budget of the country.

marching in the streets of the USA

February 17th, 2017

FT contributing editor Simon Schama writes that President Donald Trump inspires people … to take to the streets in protest.

Trump’s aides are given to boasting that he has already accomplished the impossible. In one respect this is true: he has given the kiss of life to the Democratic party. Campaigning, Trump posed as the enemy of Wall Street; he now has a cabinet stuffed with billionaires, about to gift the ultra-rich with a stupendous tax cut, even as he refuses to disconnect fully from his businesses or make his tax returns public.

The next mass march has been cannily planned for April 15, the day on which Americans file their tax returns. Expect uproar.

Why we march: Simon Schama on mass dissent in America“, Financial Times Weekend Magazine, 18 February 2017. (gated paywall)

Mr Schama’s longish essay is illustrated with photos selected by Emma Bowkett, FT Weekend Magazine‘s director of photography.

some things never change

February 15th, 2017

Wall Street continues to have enormous influence in Washington, DC. The only difference is that now the influence is more open.

When Robert Rubin resigned as co-head of Goldman Sachs to join Bill Clinton’s White House in 1993, he found “a sort of rugby scrum to get up close to the president” in the Oval Office. Mr Rubin sat at a discreet distance: “I always liked to be away from the centre,” he wrote in his autobiography.

Gary Cohn, who has made the same move from Goldman to become director of Donald Trump’s National Economic Council, has no such reticence. He stood at Mr Trump’s shoulder as the president declared his determination to scythe back financial regulation and stimulate more lending by banks. ….

Mr Trump exploited Goldman as a target for populist resentment in his campaign, railing that Hillary Clinton’s speeches for the bank showed the need to “drain the swamp” in Washington. He forgot it when elected, but the complaint worked and his conduct since lends it even sharper potential.

John Gapper, “Gary Cohn is embarrassing Goldman Sachs“, Financial Times, 15 February 2017 (gated paywall).

surviving post-capitalism

February 13th, 2017

I often listen to the podcast “Ideas, with Paul Kennedy”. Last night I heard a long episode – nearly two hours – that was particularly impressive. German sociologist Wolfgang Streeck (born 1946) argues that capitalism is imploding.

In 2014 he wrote an article for the British journal New Left Review in which he discusses how and why capitalism might come to an end. He expanded on this theme in a recent book How Will Capitalism End? (Verso, 2016). Streeck is certainly not the first intellectual to predict the death of capitalism (Marx comes immediately to mind), but he is still worth listening to, particularly given the unsettled times that we are now experiencing.

The signs are troubling: the ever-widening chasm between the ultra-rich and everyone else. Mass protests. Political upheaval and social division. It looks as though the rocky marriage between capitalism and democracy is doomed, at least according to Wolfgang Streeck …. In conversation with Paul Kennedy about his book How Will Capitalism End?, he makes the unnerving case that capitalism is now at a point where it cannot survive itself.

According to Streeck, capitalist societies are entering an interregnum — a pause or suspension of normal governance — as the system of capitalism collapses in on itself. In the absence of countervailing forces to keep it afloat, capitalism has essentially devoured itself. …. Streeck points to Italy, Greece and Spain, countries where young people can’t get find jobs; where fewer people can live on their own; and where marriage and birth rates are declining. People everywhere are now trying to protect what little they have left.

Wolfgang Streeck sees day-to-day life in the interregnum in stark terms: coping, hoping, doping, and shopping. He says that when it comes to the harsh realities of the interregnum, those who cope well will wear their stress as a kind of badge of honour. Those who cope poorly will mask their inability with drugs and mindless consumerism.

Paul Kennedy, “Surviving Post-Capitalism: Coping, hoping, doping & shopping“, Ideas, a CBC Radio Podcast, 9 February 2017.

You can download or listen to the podcast at the link above, or at iTunes and other online stores, free of charge. I subscribe to the series, and recommend it very much. CBC is Canada’s answer to the BBC, funded largely by Canadian taxpayers.

Donald Trump’s character and presidency

February 10th, 2017

An FT reader from La Jolla, California, has written the following comment on Trump’s revolution.

Donald Trump’s election campaign and presidency is frequently described as a revolution, but where will it lead? Perhaps history will serve as a guide.

The French and Russian revolutionaries were not polite or even thoughtful people. Their initial goal was to damage or destroy the establishment. After that was achieved, both revolutions turned to terror on a massive scale.

Or maybe President Trump’s is the American version. which was led by people of high moral character such as George Washington. ….

Phillip Hawley, “Trump is more like a French revolutionary“, letter to the editor, Financial Times, 10 February 2017.

Mr Hawley thinks that Trump’s version is closer to the French/Russian version than to the American. He finds this “very scary”. I agree. Even though the American revolution was not without terror, it pales in comparison to the French or Russian versions.

Breitbart News

February 5th, 2017

I promised to read opinion pieces written by those whose views differ sharply from mine, beginning with Breitbart News. Well, this is a beginning. I confess it is the first time that I have ever read Breitbart News, and it was an interesting experience. Much of it seems, to me, to be satire, except that it isn’t. Read the rest of this entry »

deregulating sale of financial products

February 5th, 2017

Here is a follow-up to an earlier post.

President Trump and his team are moving quickly to kill the “Fiduciary rule” intended to protect consumers from financial advisers who look after their own interest (commissions on sales) rather than the interest of their clients.

President Donald Trump has begun killing off an Obama-era retirement-savings rule unpopular with Republicans and some financial-industry executives who say it would harm consumers more than help…“We think it is a bad rule. It is a bad rule for consumers,” said White House National Economic Council Director Gary Cohn in an interview with The Wall Street Journal on Thursday. “This is like putting only healthy food on the menu, because unhealthy food tastes good but you still shouldn’t eat it because you might die younger.”

Lisa Beilfuss and Michael Wursthorn, “Trump Moves to Kill Off Obama’s Landmark Retirement Rule“, Wall Street Journal, 3 February 2017 (gated paywall).

This is NOT fake news, folks; nor is it satire.