By Kumar David –
That you are reading this is proof that we survived the Winter Solstice two days ago and that those Mayan chaps got their sums a bit wrong; but only a bit as the state of the planet is pretty lousy. It is astonishing how right the Maya’s were about galactic conjugations more than a thousand years into the future, and, coincidentally, I would like to think, put their finger on a troubled period of world history. Had they forecast the end of capitalism as we have known it and not the whole world, they would have been spot on. As befits a piece by a survivor of 11.11am GMT on 21 December 2012 (this year’s solstice) I offer you a potpourri of short accounts of the state of the world in selected quarters, including our troubled Isle, and sign off with a few knickknacks about galactic alignments.
Three big ones
If you count the EU in, the four largest economies in the world are the EU, the US,China and Japan in that order; three of them capitalist,China still an amorphous neither here nor there creature. The economic woes of the EU and Japan deteriorated markedly in 2012 and the signs are 2013 will be worse. The grand old Liberal Democratic Party (LDP) returned with a resounding 300 seats in the 480 member Japanese Diet having lost just as massively to the Democratic Party just three years ago. The caveat is that in a first past this post system the LDP polled only 30% and the polling rate was only 60% – meaning the LDP secured approval from a mere 18% of eligible voters. There is economic, social and political despondency inJapan, and rightly so. There is little Shinzo Abe in his second try as premier, or the LDP, or moribund Japanese capitalism can do to pull the greying country out of the quagmire of systemic decline.
The LDP’s economic programme is weird; as though it were crafted before Weimar induced hyperinflation propelled the Nazis to power. Hard to take seriously is the demented pledge of monetary stimulation to the point of unlimited yen-printing, and negative nominal interest rates (we pay the bank for keeping our money). Desperation Japanese capitalism aims to compel consumers to spend, launch humongous public works, again, (Japanis replete with “bridges to nowhere”) and let state borrowing rise above its current 235% of GDP. It will all end in tears; there is no way out for Japanese capitalism, but an abyss of irreversible decline.
Economic morbidity is steering Abe, LDP, and a many Japanese into right wing nationalism. It is likely that Chinese provocation in the seas near the disputed islands will be resisted and the 1% GDP cap on defence spending lifted. Abe is likely to engineer a turn around on the admission of guilt by the Imperial Army during the war, turn-on jingoism, visit the Yasukuni Shrine, and try to repeal the pacifist articles in the constitution. If China and Japan have a go at each other in their littoral waters, it will muddy the surrounding oceans for all Asia.
What is fascinating about the Eurozone is the unabashed mix of money printing and severe austerity. A cacophony of Keynes and Hayek simultaneously on steroids! The prescriptions forced down the throat of individual countries are agonizing austerity and severe market discipline. But at Eurozone level, supranational state-capitalism prevails on a scale that would have taken Keynes’s breath away. Policies for Greece and nearly all for Spain are made in Brussels by the European Central Bank, EU institutions and German and French leaders; trans-national state-capitalism on a grand scale. Europeis confused, pointing this way and that; year 2013 will be more pain and recession.
Interestingly, the one portion of the greater capitalist world where 2013 may allow a ray of sunlight to flicker in is the USA. I do not take the so-called fiscal-cliff seriously. In a piece after Obama’s victory I exhorted him to drive the nail deep into the Republican coffin and confront them at every opportunity. The Republicans are in disarray and on the run; they can see that suckling the ultra rich, the Bible-belters and the reactionary old white working class in the rust belt, is a dead end. This is why House Speaker John Boeher has caved in on tax increases for the above $1 million income earners. Democrats have been asking for a lower ceiling of $250, 000 and resisting expenditure cuts in entitlement (medical assistance and social security payments) that the Republicans demand as quid pro quo. A last minute deal will be struck; forget the cliff, it won’t bury American capitalism.
The medicine engineering growth (say 2%) and decline in nominal unemployment (say 6.5%), is supra-Keynesianism. Monetary infusion into the economy since the late 2007 collapse is already in excess of $2 trillion. QE3, the next stage, was held in abeyance by Fed Chairman Bernanke earlier this year, but last month the Fed started injecting $40 billion a month into the economy buying mortgage backed securities. This will have an effect next year, and now that the electoral scuffle is over, consumer spending may rise and business confidence may improve. Disengagement in Afghanistan, the awaited overthrow of Syria’s Assad, and relative quietude in banking and financial sectors, may promote respite from the prevailing gloom, albeit temporary.
Temporary because the big questions have not been addressed. US standard of living, the footprint Americans leaves on the globe, has not been brought into alignment with what Americans contribute to the world. In economic speak: Consumption is disproportionately above productivity. America continues to feed off the rest of world and its living standards have to fall till correspondence is achieved – a monumental rise in comparative productivity is impossible. This cannot be resolved short of global restructuring; hence America’s comparative decline, its debt problems and on a shorter timescale, an inflationary spiral spurred by monetary expansion, will all catch up.
Egypt’s constitutional imbroglio alarms me. About the draft itself, I am agnostic; it is far from perfect, it concedes too much and can be strained in implementation to concede more to Shariah. The Muslim Brotherhood could have tried to reconcile with and win opposition, if not support, at least acceptance. Having said this, the draft can pass off as anodyne in that no dreadful concessions to Islamic extremism have been made. Its implementation will depend on interpretation, which is another way of saying that it will depend on the balance of power in the streets and in the chambers. Fortunately the balance of power in Egypt is pretty even. Though the written words are far from perfect, given the balance of real power, I can live with it.
Danger lurks not in words but in events. The outcome of first half of the referendum last Saturday is known; 56.5% Yes and 43.5% No. This is a troubling in respect of the ratification of a supreme national law, very troubling. To sustain lasting credibility a constitution must be ratified by a resounding majority. The other half of Egypt went to the polls yesterday and this is the more rural population, and it will be influenced by the voting so far; still, eventually forty percent or more may reject the draft. I see no end in sight for strife, and though both sides share the blame, it is largely the fault of the Brotherhood for foisting its archaic ethos on a modern nation.
Come December crystal ball gazing is a vocational hazard of the Lankan political analyst. I see recent events as validating the view I have been pushing since September that the downhill twist in the road, the turn in the river from stream to cataract, the beginning of the end, or however you word it, has started for the Rajapakse regime. Never in the annals of Lanka, have so few, buggered up so much, for so many, in such a short time. I am not suggesting that the regents will be driven from office in year 2013; constitutionality is on their side for a few more years and the lackeys in cabinet and parliament will hang on till death do them apart because there is nowhere to go. (For many, what’s the option? The prison or the gallows!) What I do say is that from now it is a knock-kneed, lame and limping government, whose incumbents have been reduced to objects of public ridicule and derision. The day when hoots and jeers befall MPs and “great leaders” in public is not far off.
For the people of Lanka, 2013 has to be a year of mobilisation. Build opposition, build a mass movement; excessive haste is counterproductive. Give the regime rope to hang itself, rope but not room; the opposition, I mean an all sided socio-political opposition, not Ranil and his coots alone, must tighten the screws on every occasion and watch the rats squeal till its time to put them out of their agony. See how the CJ fracas is playing out; watch how MR squirms; we need more.
There is work to do with the Sinhala-Buddhist petty bourgeoisie to ready it for the coming day. Nor must we forget the regime’s gimmicks and threats; the obvious gimmick is stirring up racism with a ‘Repeal 13A’ slogan; the most dangerous threat is trying to turn the military against the masses. Hence the task of 2013 is creating consciousness and preparedness to meet all challenges and grasp all opportunities. The regime will have no compunction in what it does to hang on to power.
There is no major planetary alignment on 21 December, or anytime in year 2012. What is interesting is that had you watched sunrise on 21 December, and if you could have blocked out the sunlight and observed the Milky Way behind, it would have appeared the sun was rising straight into the super-massive black hole at the rotational centre of the galaxy. Secondly, it would have appeared that the sun, as observed from earth, appeared to make contact with (appeared to touch) the great Dark Rift that spreads through the centre of one half of the galaxy. The Dark Rift was revered by Maya astrologer-astronomers and this year’s solstice was set more than five thousand years ago as the completion of their thirteenth aeon, or the resetting of the Mayan Clock.
One more interesting coincidence is that the last time the sun appeared to touch the Dark Rift was 26,000 years ago, which marks the start of the most recent Ice Age which lasted for 13,000 years. Lady luck is fickle in her favours; she has made global warming our current hazard!