Category Archives: Politics

Getting to Denmark

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I’m writing this in one of my favourite haunts, the Paludan Cafe in Copenhagen, which is both a lovely cafe and an enchanting bookshop — the only bookshop in which I’ve seen university seminars conducted at 8am. It’s a beautiful Autumn day — sunny and mild — and I’ve walked through the city centre from a meeting in the University’s Law Faculty, marvelling as I went at how attractive this town is. It has a quiet spaciousness and a slower pace of life than London. And of course it has wonderful cafes.

In his book The Origins of Social Order the political theorist Francis Fukuyama argued that the messy, centuries-long groping of societies towards liberal democracy could be interpreted as the inchoate pursuit of a common (though unstated) goal: getting to Denmark. In other words, attempting to replicate the particular kind of liberal democracy that the Danes have been able to achieve: a prosperous, democratic, liberal, tolerant state in which, by international metrics, people are happier than they are anywhere else on the planet.

I never come here without thinking of that. This is indeed a seductively attractive polity. Copenhagen — which is the bit of the country I know best — is the most civilised city I know. And yet, even in this liberal democratic paradise, all is not well. The country’s parliament has just passed a law which permits the state to seize the assets of asylum-seekers to help pay for their stay while their claims are being assessed. The new law will also delay family reunions by increasing the waiting time from one to three years. 81 of the 109 MPs in the Parliament voted in support of the new legislation. Responding to public outrage, Parliament clarified that jewellery, including wedding rings, and other sentimental possessions would not be taken. But the UN and human rights organisations have condemned the legislation, saying it breaks international laws on refugees.

Yesterday, when I was walking to my hotel from the railway station, I crossed the square in front of the ornate City Hall, and noticed a large group of non-white people milling around. A guy was haranguing them with a megaphone, in a language I couldn’t understand. Some people were writing slogans on banners. Eventually, the group formed itself into a long file of marchers and set off downtown, shouting slogans (and holding up smartphones to get the obligatory video footage for subsequent uploading to Facebook). Finally, I found a banner that was written in English: “we want jobs, not charity” it read. These were refugees, and they were clearly unhappy with their experience of Mr Fukuyama’s nirvana.

How the Internet is changing our politics

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My longish opinion piece on the US election in today’s Observer. (Hint: it’s not all good news.)

Ever since the internet went mainstream in the 1990s people wondered about how it would affect democratic politics. In seeking an answer to the question, we made the mistake that people have traditionally made when thinking about new communications technology: we overestimated the short-term impacts while grievously underestimating the longer-term ones.

The first-order effects appeared in 2004 when Howard Dean, then governor of Vermont, entered the Democratic primaries to seek the party’s nomination for president. What made his campaign distinctive was that he used the internet for fundraising. Instead of the traditional method of tapping wealthy donors, Dean and his online guru, Larry Biddle, turned to the internet and raised about $50m, mostly in the form of small individual donations from 350,000 supporters. By the standards of the time, it was an eye-opening achievement.

In the event, Dean’s campaign imploded when he made an over-excited speech after coming third in the Iowa caucuses – the so-called “Dean scream” which, according to the conventional wisdom of the day, showed that he was too unstable a character to be commander-in-chief. Looked at in the light of the Trump campaign, this is truly weird, for compared with the current Republican candidate, Dean looks like a combination of Spinoza and St Francis of Assisi…

Read on

How traditional political parties are disintegrating

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The Republican Party is now a coalition of globalization-loving business executives and globalization-hating white workers. That’s untenable. At its molten core, the Republican Party has become the party of the dispossessed, not the party of cosmopolitan business. The blunderers at the Chamber of Commerce and the Business Roundtable bet all their chips on the G.O.P. at the exact instant it stopped being their party.

David Brooks writing in today’s New York Times

Apple, Ireland and neoliberal delusions

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Imagine this scenario: an International authority decides that a transnational company has deprived a sovereign state of anything up to €19B in back taxes plus interest over 25 years. The company, naturally enough, screams blue murder and declares its intention to appeal the judgment. The ruling, says its CEO, is “total political crap”. So what does the sovereign state decide to do? Why, it’s going to appeal the ruling and stand shoulder-to-shoulder with the transnational company. If you wanted a case study in how power has shifted from states to corporations, then this, surely is it.

The country in question is the Republic of Ireland, and the company is Apple. The ruling that so enrages both comes from the European Commission, which has decided that that Ireland must recoup the sum of up to €13 billion in unpaid taxes (plus interest, which could bring it closer to €19B) from Apple because the deal the country struck with the company 25 years ago amounts to illegal state aid to a corporation. The commission said the deal allowed Apple to pay a maximum tax rate of just 1%. In 2014, the firm paid tax at just 0.005%. The usual rate of corporation tax in Ireland is 12.5%.

Now Ireland is a small country which, despite the hype to the contrary, is not in great economic shape. There has been a much-vaunted ‘recovery’ from the devastation caused by the collapse of its major banks and the bursting on an insane property bubble, but that recovery is largely an illusion, and confined mainly to Dublin, the capital city. Last year, the Fine Gael government called a general election and campaigned under the slogan “Keep the Recovery Going”. Outside of Dublin the electorate replied “er, what recovery?”, with the result that neither of the two main political parties was able to form a government, and now an uneasy coalition rules with the assistance of five independent members of Parliament.

Ireland’s health service, for example, is in very poor shape. Likewise its social services. So €19B is a very significant sum for a country in such conditions. It would, for example, be enough to run the health service for an whole year. You’d have thought, therefore, that the European Commission’s ruling would be seen as manna from heaven. But that is not how the country’s benighted government views it.

To understand why, you need to know a bit of modern Irish history. The Republic gained its independence from British rule in 1923, and for the first 50 years of its independence it was a poor, backward, inward-looking, priest-ridden country dominated by Eamon de Valera and his Fianna Fail party. Its main industry was agriculture and its biggest export was its young people, who left in their hundreds of thousands to seek better lives in the UK, the US and Australia. At one stage in the 1930s, ‘Dev’ waged an “economic war” with Britain under slogans like “Burn everything British except their coal”. But eventually, in 1959, Dev stood down from the premiership and became the (non-executive) President, and was replaced by his son-in-law, Sean Lemass, a technocrat who realised that the country had to become outward-looking in order to survive. Along with a visionary senior civil servant, Dr T.K. ‘Ken’ Whitaker, Lemass concluded that the country’s salvation — given that it had no natural resources, lay in attracting inward investment from foreign — mainly American — companies. The vehicle Lemass charged with making this happen was the country’s only truly dynamic government agency — the Industrial Development Authority — which had the mission of attracting overseas investment to Ireland.

In this, the IDA was spectacularly successful. Foreign corporations came to Ireland in droves, and in the process began the transformation of the country, creating jobs and bringing wealth on an unprecedented scale. The companies were lured with all kinds of incentives, including planning and infrastructure provision and exceedingly generous tax holidays. The resulting turnaround was then given a spectacular boost in 1973, when Ireland joined the European Community (as it then was), which led to a massive infusion of development funds from Brussels, much of which were sensibly spent on infrastructure and reviving the moribund rural economy.

The deal which brought Apple to Ireland conformed exactly to the IDA template. The company set up a manufacturing plant in Cork, Ireland’s second city, and eventually located its European HQ in Ireland. The taxation deal which so exercises the European Commission dates from this period. And it explains the strange reluctance of the current government to refuse the windfall that the Commission has now bestowed upon it.

As the Irish Times columnist, Fintan O’Toole, puts it,

Since the Whitaker/Lemass revolution, the unspoken rule of all Irish policy has been – don’t do anything that in any way threatens to upset the huge, mostly US-based corporations whose investments shape both the economy and a remarkably enduring political consensus. This is not mere cravenness. If Ireland has sold its soul to the corporations, it has arguably got a very good price for it – not just jobs and tax revenues but a relatively peaceful transition from conservative nationalism to global modernity. It is not surprising that the entire Establishment is of one mind on the Apple ruling – there must not be the width of an ultra-thin sheet of silicon between Apple and Ireland on this. The tricolour has an Apple logo in the centre and we will all rally behind it to ensure that the tax bite out of the apple is as tiny as the corporation wants it to be.

O’Toole, who is Ireland’s most perceptive and trenchant columnist, is strongly of the opinion that the government should take the windfall and put it to imaginative use. It could be used, for example, to

  • Build 50 new hospitals
  • Build an extension to Dublin’s Luas rapid transit system that is needed to ease the traffic congestion that is choking the capital’s social and economic life
  • Boost the supply of sorely-needed social housing
  • Fast-track the construction of a metro system in the capital
  • Abolish the country’s crippling property taxes
  • Provide a break from the additional Universal Service Charge levied to pay for the bail-out of the country’s zombie banks
  • And encourage the formation of a sovereign wealth fund.

The decision to ignore these necessary measures and appeal the European Commission’s ruling therefore represents a clear strategic decision by the government. Or, more precisely, it suggests that the country’s ruling elites are not interested in funding the measures needed to reduce inequality and improve the country’s provision of social services. This mindset believes, O’Toole argues, that

even this vast windfall might in fact be a booby prize. If we take this money from Apple, we will make the corporations angry. When the government talks of ‘reputational damage’ it ostensibly means damage to Ireland’s reputation from the EU ruling’s implication that the State was being used as a tax haven. But the reputational damage it actually fears is quite the opposite – damage to our well-earned reputation among corporations for facilitating tax avoidance on a global scale.

He’s right. Ireland has become the world centre for corporate tax avoidance. The decision to appeal the ruling suggests that neoliberal ideology rules OK in the Emerald Isle. And it shows that the Irish state has actually given up on the idea of sovereignty. It ignores the fact that

amid a longterm crisis in global capitalism, massive corporate tax avoidance is becoming politically unsustainable. And a vision of Ireland that places the facilitation of that tax avoidance at its heart is therefore not sustainable either.

In that sense, the Irish government has deliberately chosen to put the country on the wrong side of history. Or, as Yeats might have said, my countrymen have disgraced themselves — again.

Trump’s win-win scenario

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Further to John Cassidy’s musings about what Trump is up to, this NYT OpEd by Neal Gabler is interesting:

People run for the presidency for all sorts of reasons. But Donald J. Trump may be the first to run because he sees a presidential campaign as the best way to attract attention to himself. There seems to be no other driving passion in him, certainly not the passion to govern.

He isn’t an ideologue like Ted Cruz, an opportunist like Marco Rubio, a movement builder like Bernie Sanders, a political legatee like Jeb Bush or a policy wonk like Hillary Clinton. For all of them — for any serious candidate — attention is a byproduct of a campaign, not its engine. For Mr. Trump, attention is the whole shebang.

That may be the lesson of his campaign “shake up” earlier this week. The shift is from politics to grabbing attention, and, quite possibly, from winning the election to winning the defeat, which is how he has spent practically his entire career…

Fascinating. Might mean that those of us who are watching the campaign as though it’s about ‘politics’ might be being naive!

If you think the US Presidential election is over, think again

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If, like me, you consult Nate Silver’s prediction page (which is updated every two hours) then you may have relaxed a bit. I’ve just looked at it and it’s currently showing a 78.4% to 21.6% margin for Clinton in its ‘polls+forecast’ estimate, and a 89.5% to 10.5% margin if the election were held today. So the prospects for a Trump win look dim.

But something happened yesterday that might change things. Trump appointed a guy called Steve Bannon, the brains behind Breibart News, as his new campaign chief. The mainstream media are largely unimpressed by this move – just another right-wing nutter hooking up with Trump. (Roger Ailes, ex Fox News, is also aboard, apparently.)

I’m not so sanguine. Bannon may be very right-wing, but he’s not a nutter. See this long 2015 Bloomberg profile for a good impression of how he operates. Most importantly, he probably knows more about the strange finances of the Clinton Foundation than any man living. My hunch is that Hillary is in for a rougher ride than most people expected. Stay tuned.

LATER Interesting New Yorker piece by John Cassidy touting a conspiracy theory that I hadn’t heard before. The gist of it is that Trump knows that he’s bound to lose, and that that’s of little concern to him, because what he’s after is the creation of a new media empire focussed on the segment of the population that he’s identified as being under-served by mainstream media — even Fox News.

Here’s the relevant extract:

The appointment of Bannon isn’t merely another affront to establishment Republicans, such as Paul Ryan, whom Breitbart News has lately been targeting. It is an acknowledgment by Trump that he no longer has any interest in modifying his strategy to appeal to college-educated voters in places like the suburbs of Philadelphia and Milwaukee, where he is running miles behind where Mitt Romney was in 2012. Instead, he has decided to retreat to his base, which is a surefire recipe for political failure. But not necessarily business failure.

Back in June, Vanity Fair’s Sarah Ellison reported that Trump was “considering creating his own media business, built on the audience that has supported him thus far in his bid to become the next president of the United States.” A person briefed on Trump’s thinking told Ellison that it went like this: “Win or lose, we are onto something here. We’ve triggered a base of the population that hasn’t had a voice in a long time.” One of Ellison’s sources also reported that Trump resents the fact that he has helped raise the ratings of certain news organizations, such as CNN, without getting a cut of the additional revenues. Trump has “gotten the bug,” the source said, “so now he wants to figure out if he can monetize it.”

Bannon, a former investment banker who took over Breitbart News in 2012, after the sudden death of its eponymous founder, also has large ambitions, and they involve taking on the mighty Fox News…

Interesting, eh?

Foreign interference in voting systems is a national security issue

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Good WashPo OpEd piece by Bruce Schneier on the implications of (i) Russian hacking of the DNC computer systems and (ii) the revelations about the insecurity if US voting machines:

Over the years, more and more states have moved to electronic voting machines and have flirted with Internet voting. These systems are insecure and vulnerable to attack.

But while computer security experts like me have sounded the alarm for many years, states have largely ignored the threat, and the machine manufacturers have thrown up enough obfuscating babble that election officials are largely mollified.

We no longer have time for that. We must ignore the machine manufacturers’ spurious claims of security, create tiger teams to test the machines’ and systems’ resistance to attack, drastically increase their cyber-defenses and take them offline if we can’t guarantee their security online.

Longer term, we need to return to election systems that are secure from manipulation. This means voting machines with voter-verified paper audit trails, and no Internet voting. I know it’s slower and less convenient to stick to the old-fashioned way, but the security risks are simply too great.