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Elections 2017 – Cambodia, UK, France

On June 4 Cambodia held a general election for commune leaders and councilors. Cambodia holds elections on two levels only, communes and the national legislature, which will take place next year. Everything in between; province and city leaders are all appointed by the ruling party.

The entire country is divided into 1646 communes, both urban and rural. In America we’d call them neighborhoods except here they have a lot more responsibility. That’s where people go to get ID cards and official papers stamped, for instance, so they do have an impact on people close to home. However, they don’t have a lot of power and over the commune leader’s head is a representative of the ruling party. They also don’t have much in the way of funding, being dependent on the central government for any public project.

In the election just passed the ruling CPP Cambodian People’s Party won 1158 communes, the opposition CNRP Cambodian National Rescue Party won 487. One commune was captured by a minor party. This was a loss for the ruling party from the last commune election when they won all but about 30 communes.

The actual vote in Cambodia was much closer with the CPP getting 51% and the CNRP getting 44%, the rest going to minor parties. The opposition does better in Phnom Penh where communes have more people than in rural areas. Those vote totals aren’t much different than the last general election in 2013, still it marks a real challenge to the ruling party’s control. Also some of the contests ran on local issues so might not reflect exactly on the people’s mood as a whole.

Several points stand out, the most remarkable being an astounding turnout of 86%. This is all the more exceptional considering that registration closed last October and many people had to return to their home towns to vote. And since the government created a new voter list for this election, everybody had to register anew. It was also the first time people were allowed to vote where they work, but not everybody was able to change their place of registration.

In contrast Oregon has one of the best turnouts in America. They make it very easy to vote. All voting is by mail, there’s no waiting in line to vote. You can register the day of the election. Every time you go to the Dept of Motor Vehicles they ask you if you want to register. With all that they still can’t beat Cambodia at 86%. The Cambodian people are committed to and passionate about the democratic system.

With some few exceptions the election was considered free and fair, for Cambodia a real achievement. However, while the election itself went off smoothly and peacefully, election observers consider the election to be tainted by pre-election media control and threats of violence on the part of the CPP. The PM went off into his usual threats of civil war and chaos if he doesn’t get reelected. Some of it is pure politics, the scare factor. Teresa May’s approach in the UKs election was similar… You must stay with us for stability and strength or else you’ll get a dangerous man like Jeremy Corbyn.

Some of it you have to take at face value. He has threatened to ‘eliminate’ 100 or 200 people if they try to run a revolution on him. His Defense Minister threatened to ‘smash the teeth’ of anybody who doesn’t accept the result in next year’s general election.

Okay, I got that, but what if he actually loses in a free and fair election? He and his crew actually believe that mayhem will follow the loss of the CPP. After 30 years in power would he graciously accept defeat?

He wants the legitimacy of elections and risks economic chaos if he stages a coup against a duly elected government. At least for a while, there would be sanctions, international pressure and general opprobrium. He’d wreck the very stability he runs on. The CPP has greatly increased prosperity over their long reign and people see great improvement in infrastructure and other facets of government, but displacement, land-grabbing, and widespread impunity and corruption are rankling to the masses.

Sometimes no matter how good a political situation might be, after 30 years people get tired and want to try something new. Also there are storm clouds on the economic horizon. Overbuilding of structures tailored for the upper classes in the capital will cause a general crash in property values, at least in the short term. Cambodians are heavily indebted to microfinance institutions, some 88% of rural Cambodians have borrowed from them. With interest rates so high many can only afford to pay interest and never pay the loans off. Any economic slowdown would cause many to default. I also think dependency on loans from China for many projects puts the country in a tenuous position.

The opposition on the other hand stuck to the issues, corruption, decentralization, money for communes. They have to be nice, otherwise the courts will come after them with a vengeance. But what about the people? There were some for sure who heard the CPPs message and felt pressured to vote for ‘stability’, but clearly most people said, meh, I’ll vote for who I want. A lot of people, in this case 44%, weren’t going to be cowed no matter how serious the threat. When popular activist Kem Lay was gunned down last year in suspicious circumstances mourners were told there could be no march. People defied the authorities and 200,000 showed up. They take their rights seriously.

The big election next year will be the test of how far democracy is allowed to go. Jailing and harassment of the opposition might achieve its goals in the short run but will only strengthen the people’s resolve and resentment of the ruling party’s ham-handed tendencies. It’ll be fascinating to watch.

Meanwhile, elections in the UK have created a miasmic morass of uncertainty and confusion. First there was PM David Cameron pandering to his right wing by holding a referendum on the UK leaving or remaining in the EU. It was a vote he was sure was going to be for staying, but instead went for Brexit. Personally, I think it’s dangerous to base such a momentous decision on a single plebiscite: it should’ve required two votes, especially since the vote was close, 52-48.

A lot of people on all sides of the political spectrum are angry at the status quo. Neoliberal policies born in the Thatcher/Reagan era have transferred wealth and power from the 99% to the 1%. The last time inequality was as extreme in the US was in 1929 and we all know how that turned out.

The same goes for the UK. Cosmopolitans and youth in the cities, as well as Scotland and N Ireland voted to stay. It was small town and rural voters who carried the referendum, people nostalgic for a long past past.

Teresa May who took over as Conservative PM when Cameron resigned after the Brexit vote saw an opportunity a couple months back when polls showed her riding high and called for a special election. She had said she wouldn’t call an election ahead of the one scheduled in the regular sequence of things, but couldn’t resist when polls showed her gaining 100 seats in Parliament.

Jeremy Corbyn her opponent was widely derided in the press and by his own Labour MPs who, being staunchly centrist and pro-business, wanted nothing to do with his leftist populist message. However rank and file Labour party members voted for him as leader by an overwhelming majority: this was seen by the establishment as a death knell for the party’s chances in the next election.

Then a funny thing happened on the way to the vote. The more people saw of May, the less they liked her, for Corbyn the exact opposite happened. Instead of a blowout in favor of the Tories, they lost seats and their parliamentary majority. It was a disaster for the party and a big dose of uncertainty going forward for the nation. The electorate was much less divided this time compared to the last election and both major parties gained a lot of votes. Conservatives went from 37% to 44%, Labour went from 30% to 41%.

As in the Brexit vote, young voters were extremely one side in their preference for Labour. All May could offer was her ‘Strong’ leadership along with austerity, hardship and feed-the-rich tax policies, whereas Corbyn talked about free college tuition, taxing the wealthy, nationalization of the railways and more national holidays. As to the last, the UK has only 5 national holidays, less than any other EU country. More time off to enjoy life was his message… imagine that.

Free tuition was also one of Bernie Sanders’ campaign planks. As in the US his opponents talked about that as if it were some impossible pie-in-the-sky populism, so lets look at that more closely.

I don’t know the details regarding the UK, so I’ll stick to US as an example. Bernie’s free tuition proposal for all public higher education would cost $69 billion per year based on the current number of students. American corporations have more than 2 trillion dollars stashed overseas to avoid paying taxes on it. If they were good corporate citizens (bwahahahaha, have you ever heard such a thing?) brought the money back and paid the 35% corporate income tax rate, that would amount to about $700 billion or enough to pay for the program for 10 years. Wealthy Americans have $20 trillion dollars in assets, if you tax that wealth at 1% you’d raise almost 3 times as much as the annual cost of the program. Just the 10 richest Americans could pay for the program for 5 years and each still have tens of billions to play with.

The program would actually cost more since a lot more people would be able to afford an education, but it would still be a pittance compared to the excessive wealth strewn about in the elite. And really, is it better for society to have the superwealthy wallow in their riches or educate everyone who wants? Cost is not the problem, our priorities are.

Corbyn represented a clash with the establishment and spoke to simple truths. He’s the real thing and youth especially knew it and responded.

Meanwhile May having lost her parliamentary majority has got a hell of a problem on her hands. She gets first crack at forming a new government, but she needs the help of a smaller party. Unfortunately, the only potential partner is a far right party in N. Ireland, but it’s not a good match. She may not be able to form a stable government, which job would then fall to Corbyn.

The other great point of confusion brought about by her loss is the beginning of Brexit negotiations. She campaigned on the idea of a hard Brexit, a complete break with the EU, but many Brits, maybe a majority would prefer a soft Brexit. If they had the option to vote again they might even decide to stay.

I think the Brexit vote will ultimately turn out for the best. The UK has always tried to stymie European cooperation and integration and frequently tried to exempt itself from EU wide policies. Brexit will be a grand experiment. It’s all in flux now, but if the exit goes through, I predict within 5 or 10 years they’ll be asking to join again. With more humility and respect for the whole project the next time.

Finally, France has a new president. Emmanuel Macron came from nowhere one year ago with a new party to sweep the presidential field and elect a majority in parliament. Once again the old-guard centrist parties were vanquished in favor of a totally new voice. In this case he’s decidedly centrist, but with a youthful twist. Not only that Macron himself, at 39, is the youngest French president in modern times, but the youth vote carried him to victory. And even in his very short time in office he’s shown himself to be a strong forceful leader.

His major goal is the reform of labor laws that discourage hiring and firing. In past attempts unions came out in force to thwart that goal but with a new mandate and control of government there’s nothing to stop change now. I have great sympathy for the working class but in this case it protects people who are already working while discriminating against those who aren’t. It also protects underperformers while leaving the young out in the dust. The only mitigating factor in today’s cutthroat world would be a generous safety net to cushion job losses and insecurity.

It is heartening that in all three contests mentioned it was the youth who were forward looking and progressive, the voice and direction of the future, giving hope that politics can change.

As a final note I’d like to bring up a voting system variously called preference, ranked choice or instant runoff, a system currently used in Ireland and Australia. France just held 4 votes in one month. Both the presidential and legislative elections required runoffs for contests in which no candidate achieved a majority. By the fourth vote, voter fatigue pushed turnout down to 40%.

Instant runoff guarantees a majority on the first ballot. The voter chooses candidates by ranking their preference, first, second, third. If there’s no majority winner, the candidate with the least votes is eliminated and their second choice votes are divided up among the remaining candidates. This happens until a candidate gets a majority. For instance, if I were voting in the UK under that system, I’d always vote Green first. It doesn’t matter that I know the Green candidate has no chance of winning because my second choice would be Labour. If the Conservative (or another party candidate) won a majority in the first round, then it didn’t matter who I voted for. If another party didn’t win there’s still a chance my second choice might win.

Instant runoff eliminates the spoiler role minor party candidates play in electing the voter’s worst choice, like the way that votes for Green Party candidate Ralph Nader in 2000 helped elect GW Bush. There are lots of reasons why Gore lost the presidency, but the Green party vote for Nader was undoubtedly one of them. With preference voting the Dems and Greens would work together instead of slamming each other.

 

 

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Abenomics

Feed the Rich

The American economy is booming, so according to Mr O it’s time to share a little bit of those good times with the people; that is, the bottom 90% who’ve seen none of those oodles of cash that’ve been floating around. The bottom layers of society have not gained a bit since the 2007 crash. Nearly all those great numbers about American growth have actually gone to the top 1% and most of that to the .1% and .01%.
It wasn’t by accident. The trillions of dollars of QE, aka, Quantitative Easing, aka, printing money, have gone directly to the banksters to cover for the bad bets, aka, fraud, that they engaged in that brought on the crash. Finally, after 7 years of free money – in addition to buying up the banksters’ near worthless toxic securities at face value the Fed has been loaning them money at close to zero percent – just enough has trickled down to the real economy for it to start making jobs. The new jobs don’t pay anywhere near what the lost jobs paid and don’t come with the same benefits, but at least it’s work and the commoners have been beaten down so much they’re happy to take anything.
So now, after the debacle of the last election and being a lame duck, Obama has gotten religion and is making very modest proposals to correct the unfairness, inequality and imbalance in the economy. His conversion has come a little late since the loss of congress means it’s all rhetoric, there’s nil chance of anything he’s proposing actually being approved by a Repug congress. And since his friends the banksters know it’s all empty words, it won’t effect the Dumbocrats fundraising capabilities.
Lest you think I’m being totally cynical, his latest nominee for an important post at the Treasury Dept., Antonio Weiss, has just come off of a job helping the big corpses avoid US taxes by relocating to foreign countries. Elizabeth Warren and a very few other senators screamed so loudly about Weiss that Obama has been forced to look for another rotten bankster to sneak into the office. Certainly his biggest betrayal by far is his strong support for these new trade deals which place the profits of corporations over the ability of sovereign countries to implement environmental and social legislation.
On the other hand he’s not all bad: if it doesn’t impact bankster profits and hegemony, like his immigration changes, he’s capable of being on the right side. And for what it’s worth he’s a cool guy even if his politics suck.

The Deflation Bugaboo
The big fear today in international economic consensus is the specter of deflation in wealthy countries. If you are part of the rentier class; i.e., those who own things, especially if they were purchased through borrowing, then falling prices both reduces the value of your possessions and makes it harder to pay them off, like the 25% of Americans whose homes are worth less than what they owe on them. If you are a saver, then the opposite is true, your money can buy more when prices fall. And if you’re one of the lucky ones who are working earning a steady income then the same is true, your income is worth more.
Countries who are deeply in debt also face the same dilemma, falling prices make the debt harder to pay off. The ownership class, including obviously the people who formulate international economic policy, are deathly afraid of deflation and it’s true that if you can maintain a moderate rate of inflation, say in property values, then you are constantly creating wealth, you know, same as printing money. The intrinsic value of the property isn’t changing but the nominal value is.
But what if prices are too high to begin with? What if they are way out of line and cause hardship to the lower classes? Like for instance rents in New York or San Francisco? Wouldn’t it benefit the vast majority of residents of those cities if they could rent a 1 bedroom apartment for $1500 per month instead of the current $3000? Sure, but they don’t count. The important thing, seemingly, is to flood the economy with money; i.e. throw it at the 1%, so the value of their holdings increases. Thus the all-time highs in the stock markets.
Back in the 50s and 60s in America the top income tax rate was 91%. I know, seems ludicrous today, but at the same time, a working person could afford to buy a small family house and every few years a new car. And one way the wealthy could reduce their tax burden was to buy tax-free state and municipal bonds, which meant local governments had access to money for infrastructure at very low interest rates. It was the heyday of the American economy, a time when it was working for everyone.
Now with corporate and income tax rates so low (actually corporate rates are not low, but there are so many loopholes that corporations like GE get refunds every year in spite of very large profits) and so much money flowing towards the top, the 1% are bidding the prices of property far beyond the average person’s ability to compete and everybody but the elite suffers.

Japan
Japan has been trying since about 1990 when its economy crashed to prime the pump and get the economy moving again to no avail; it’s either been holding stead or declining. The original cause of the crash was unsustainably high real estate values; as I remember, the value of the few hectares of land around the royal palace in Tokyo was worth as much as all the real estate in Canada. In that situation the only thing that makes sense is deflation, you know, get prices back where they belong.
But that goes against the conventional wisdom, so they’ve gone fabulously in debt to buy totally superfluous infrastructure: like multimillion dollar bridges to islands with a few dozen people living on them; just anything to spend money. Their debt to GDP ration is 220%, the highest in the world. That has only been sustainable because the Japanese people have been willing to loan their government money at close to 0% interest. Taxes take money out of an economy, borrowing puts it in, so governments would much rather borrow and the people would much rather not pay taxes, but at a certain point it no longer computes and Japan could fall off the precipice into a total crash at any time.
For decades now Japan has been slowly deflating, no matter how hard they try in inflate and the economy is still in the doldrums. In the latest try, dubbed Abenomics after the current prime minister Shinzo Abe, large doses of money printing has worked to reduce the value of the Yen by a substantial amount, but the economy is still in recession.
No matter what the individual country’s situation is, growth is the only thing that counts so everybody bemoans Japan’s fate. But growth for Japan is idiocy; it’s already a wealthy country and the population is declining by about 1% a year. It’s also aging very fast and oldsters don’t spend as much as young people. It’s a very crowded country, at least in terms of arable land, and declining population therefore is a good thing, at least in theory. Declining population means they have a surplus of schools, housing, everything that a society needs to function, they don’t need to build more except to make improvements. They desperately need immigration to pry open a very ingrown and xenophobic culture and could use new people to boost the economy, but that’s another story. Economically it makes total sense for their economy to contract.

Greece and Germany
One very important reason why Germany is so insistent on Greece paying its debt is that large amounts of it are owned by German banks so if Greece doesn’t cough up, the German government will have to bail out its big banks. Almost all the bailout money given to Greece has gone to pay debt. Germany is very intent on Greece coughing up as the right thing to do but has completely forgotten how Germany’s debt was forgiven after WWII. Even after all the terrible mess they made of Europe and the national sadism they inflicted on so many people, they were relieved of their debt for the good of Europe.
The other reasons for being hardasses, more legitimate in a sense, is Germany’s history with runaway inflation combined with the awful mess the Greeks have made of their economy with corruption and inefficiency and massive tax avoidance by the wealthy. Still with Greece’s economy declining by 25% since 2010, the national debt growing to the point where it’s impossible to pay back in spite of bailouts and crushing austerity, unemployment at 25% with youth suffering with more than 50% unemployment, is it really fair to punish the people for their government’s incompetence? If Europe truly is a union, then first priority should be a jobs program for youth and the long term unemployed of all countries. If the European Central Bank can print a trillion Euro to boost the banksters, why not do the same to finance a jobs program that would put people to work and give them hope for the future?
That’s not the way it worked in the US so according to the consensus of the 1% it can’t be that way in Europe either. Literally trillions of dollars were given away to America’s banksters to the point where they’ve never been more profitable, and stock markets are at all time highs, while the little people were left to fend for themselves: you know it builds character to be foreclosed on and driven into bankruptcy and despair. The only way the common people are allowed to benefit is if the public largesse trickles down from high above. And a trickle it is, since the elite think it’s their god-given right to be filthy rich and grossly greedy.
The election in Greece which has just taken place was won by Syriza, a left wing party dedicated to renegotiating its debt and ending austerity. Let’s hope that brings a new day to Europe.

Ireland – Boom and Bust
Ireland is a classic case of Race to the Bottom run amok. Race to the bottom refers to subsidies that political entities provide to greedy money-grubbing corporations to entice them to locate in their area. In Ireland’s case it was very low corporate taxes. Those very low taxes combined with an educated English speaking workforce created an economic boom. According to the prevailing economic wisdom, faster, greater growth is always the goal. There’s never a thought that a reasonable rate of growth, say 2% or 3%, could be preferable to 5 or 10%, it’s always more, more, more. No matter how rich a country is or how well taken care of its people are, more is the only goal.
Race to the bottom worked great; multinationals like Microsoft opened big factories there and the country’s economy was on a roll. They were doing so ‘great’ that large numbers of foreign workers poured in, each needing housing and infrastructure. This created pressure on the housing stock and prices soared to the point where an average flat in Dublin was worth as much as a villa in France. People who owned property, the rentier class, made tons of money. Everything was hunky dory until the crash came, which caused a precipitous drop in property prices and busted the Irish banks who financed the housing boom. It was all Ireland’s fault, so to speak, and so the international finance fat cats insisted that the Irish people bail out their banks, which resulted in the government spending $40,000 per person to rescue the banks. The banksters were bailed out, the common people are still hurting.
One further factor not considered when booms are created from corporate subsidies, is that the tax revenue to service booms aren’t up to the task. For instance, in a steady state economy, infrastructure, schools, etc., require only maintenance and an occasional upgrade, whereas a booming economy requires large expenditures to keep up. Lets say a school system’s structures are sufficient for ten thousand students. When you add an additional one thousand, your costs rise by far more than ten percent since you have to build new structures to accommodate them. In other words, a marginal increase in students of 10% might lead to a 50% or 100% increase in costs. If the corporations aren’t paying for those additional students then the population at large has to cover the cost.

Sustainable/Rational Growth
The elite who create these boom-bust cycles will tell you that’s the way of the world, all part of life, can’t be changed. Bullshit. If a country were to pursue a steady-state economy based on its own unique conditions, rather than go all out for booms, there’d still be ups and downs but not booms and busts. Ireland and all developed economies today have stable or declining native populations, the only factor that changes that dynamic is immigration. Those economies, therefore, only need to grow to correct imbalances in incomes, upgrade and replace facilities when necessary, and build infrastructure for the 21st century; i.e., renewable energy, fast railroads, and protect and enhance the environment. Any more than that is fueling climate change and waste of one-time resources.
Since none of that rational growth is happening while Japan, Europe, US are all desperately printing money to create their illusions of prosperity and growth, the only logical outcome is a crash, a bust, a replay of 1929. The US is especially vulnerable since its income inequality is higher than anytime since the ’29 crash. Don’t make fun of me if it doesn’t happen this year or next, but it’s inevitable. Massive printing of money has only delayed the economic abyss, not changed the outcome.

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