by Jerome a Paris
Sat Dec 8th, 2007 at 04:22:38 PM EST
The optimists argued that profits could stay high because the balance of power had moved in favour of capital and away from labour, thanks to the globalisation of the workforce. But perhaps profits had been boosted by accommodating monetary policy, a credit boom and the associated surge in asset prices. In other words, financial services may have dragged the rest of corporate America up. If the credit crunch has a long-lasting effect, the banks may end up dragging corporate America back down again.
European officials have reacted with dismay to this week's US announcement that Iran halted its nuclear weapons programme in 2003, arguing that the findings give a misleading impression of the country's progress towards the bomb and weaken international leverage on Tehran.
The Europeans' disappointment is particularly acute because, until the report's main conclusions were published this week, the US and European Union had appeared to be making headway in their goal of persuading Russia and China to sign up this month to a new wave of UN sanctions on Tehran.
So, from the first link (in this week-end's Economist), we learn that the optimists see a future with no wage increases, because that's the easiest way to increase profits.
And from the second (from today's Financial Times), one can note that "Europeans" (unnamed) are unhappy because Iran has not broken rules like the neocons had claimed it had, and the "Europeans" cannot go on with their macho posturing and Bush asskissing.
And these are brought to us as statements of fact, not as ideologically loaded opinions. Just like this other one, also from today's Financial Times:
Merkel blamed for Berlin's drift to left
Berlin's creation of a minimum wage for postal services is the government's worst policy mistake and Chancellor Angela Merkel is alone to blame for a "populist" drift in German politics, according to the leader of the country's largest opposition party.
The "biggest danger is that this measure will destroy jobs", Guido Westerwelle, chairman of the pro-market Free Democratic party, told the FT in an interview. But it would have political consequences too, he said, forcing politicians seeking re-election to campaign for higher wages.
"From now on, the level of minimum wages will infect every electoral campaign, every political discussion. One economic sector after another will be dragged into election campaigns."
For the neutral MSM, a "shift to the left" is, naturally, a bad thing that someone can be blamed for. Oh, it's a neolib politicians saying this, but the headline has no quotes in it, reflecting the FT's fundamental agreement with that assertion. The Financial Times is a business paper, for sure, but it prides itself in also being the main European quality paper, a forum for the continent's political debate, and it claims to be providing even-handed coverage. Its news coverage is usually pretty good, but its headlines and the underlying narrative is, sadly, atrocious.
The last sentence is the last paragraph is quite representative of the today's "common wisdom" (the Narrative): wages should not be a political topic - they should certainly not be discussed around elections. God forbid that politicians come and tell businesses how much they should pay their workers! Because the only thing that can tell us if something is good and efficient (or not) is the profit it generates - ideally the growing profits - which can then be monetised via the stock market or via leveraged buy-outs and the value captured right now in the financial world.
This is the world we live in - where wages are a problem to be minimized, where the global elites have the same sole value - the shareholder kind - and the same vision of the world as the Bush junta: we're the bosses, we get to tell everybody else what they should do and like, and we demonize them if they don't. In Europe, you can add the deep sense of fealty to the White House, current or future - that's where the top dog is, and he's always right. (If a Democrat is elected in 2008, that fealty will be there - but remember that it will be directed towards the boss, not towards the reasonable Democrat, and will expect the same corporate-centered vision).
A new European Elites Survey by the University of Siena and the Compagnia di San Paolo, made available to guests at the European Trilateral Commission's annual meeting in Turin, indicates an enormous and ominous discrepancy between popular European attitudes towards American international leadership and those of Europe's elites.
Ordinary Europeans are far less approving of close relations with Washington than are members of the European Parliament and the European Commission, still heavily committed to the American alliance. (...) Only 39% of the general public in Europe thinks American leadership in world affairs desirable, as against 75% support for American leadership from EU officials and 73% from European parliamentarians. Only 29% of the public wants closer EU-U.S. relations, and only 19% approves of President Bush. (...) Only 59% of the public thinks NATO is essential to European security, as against 85% of the EU officials.
Europeans have no alternative right now - all their leaders toe the corporate line. And just like Blair's Labour was considered as not-left-wing (no "drift" he was blamed for, oh no), the next Democrat's presidency will start under expectations that it will not rock the (Wall Street/City dominated) economic boat, or else.
Which brings us back to the first quote, from the Economist. Willingly or not, they acknowledge that our current apparent economic prosperity is an economic mirage, driven by financial profits accrued from the combination of a huge monetary bubble and the massive accompanying looting of the real economy by financial raiders backed by virtual, but huge, financial assets. As these are finally found to be worth much less than revealed by earlier market prices, the soufflé is crumbling. The looting has stopped - but only very partly, as that applies only to the future. Those claims on the future profits of the real economy that were made earlier by financiers are still in existence, and will be enforced with even more alacrity that they cannot count on more pretty bubble to be bought out at a profit as before.
The problem is that the looters now provide such a big chunk of recent "growth" that the end of their racket will have - and indeed has - consequences in the real world. The other problem is that the repartition of current value creation has been decisively tipped towards profits over wages, and it is unclear at this point whether the coming economic downturn will change that in any way, given that today's sharing arrangements are still considered unfair by the profit-capturers, and that the whole Narrative of our times is to support them. Wages are to go down, it's efficient, successful and inevitable (and if you oppose it you are a reactionary, over-pampered, and of course communist).
The interlude about Europeans in the middle of this diary was to point out that the West's leadership of the "international community" is closely related to the above point on wages and efficiency, as is the USA's leadership of the West itself: presented as inevitable, deserved, efficient and good for the masses-even-if-they-don't-know-it, hiding selfishness, greed and righteousness, profoundly hypocritical, and built on very shaky foundations.
I have increasing doubts that one can be brought down without the other, something that makes our tasks, as the left in Europe and the USA, all the more complicated.
Previous "Anglo Disease" content:
- Anglo Disease: LQD - the Economist is worried by Jerome a Paris on December 1st, 2007
- Anglo Disease - early signs of hangover generate denial by Jerome a Paris on November 22nd, 2007
- Anglo Disease: Dollar Dump & Boom-n-Bust by Jerome a Paris on October 30th, 2007
- Anglo Disease: hangover in Manhattan by Migeru on October 15th, 2007
- Anglo Disease fever by Jerome a Paris on August 28th, 2007
- Anglo Disease - Fools and Bourses by ChrisCook on July 9th, 2007
- Anglo Disease watch (5) - just break the thermometer and all is well by Jerome a Paris on July 5th, 2007
- Anglo Disease watch (4) - No industry is vital - except finance by Jerome a Paris on July 4th, 2007
- The Anglo Disease (3) - an introduction for non-economists by Jerome a Paris on June 24th, 2007
- Anglo-Disease Sidelights (1): UK = Tax Haven by afew on June 22nd, 2007
- Anglo Disease (2) - Martin Wolf's take by Jerome a Paris on June 19th, 2007
- The Anglo Disease - Financiers worried about end of great bull run by Jerome a Paris on June 18th, 2007