Playing By The New Rules Of The Game.

The Auckland That Never Was: Preliminary architectural drawing, commissioned by Ministry of Works planners in 1946 for its proposed Tamaki Housing Area. The National Party's political survival in the twenty-first century may depend upon its willingness to not only adopt Labour's policies - but anticipate them.

AT SOME POINT, the National Party is going to realise that the rules of the game have changed. If the party’s history is any guide, such a realisation is likely to come later rather than sooner. That same history, however, suggests that National will get there in the end – and that, when it does, its lease on government is likely to be a long one.

The global rule-change, economically and politically, was precipitated by the Global Financial Crisis (GFC) of 2008-2009. Prior to the near collapse of the world’s financial system, the accepted wisdom was unequivocal that “market forces” were the best regulators of globalised capitalism. Better, certainly, than politicians and bureaucrats. As the GFC unfolded, however, it soon became clear that if the resolution of the crisis was left to “market forces”, then the global economic system would grind to a catastrophic halt – setting-off a second Great Depression.

Newsweek magazine celebrated the dramatic re-entry of the nation-state into the political-economic drama with a cover proclaiming: “We Are All Socialists Now”. This was very far from wry journalistic hyperbole. Not when the new US President, Barack Obama, had just nationalised General Motors. Banks, investment houses, insurance companies and automobile manufacturers, had all been designated (to employ the catch-phrase of the hour) “too big to fail”.

The rule-book had been re-written.

The problem was that acknowledging the eclipse of free-market capitalism was very difficult to do, without resurrecting all the social-democratic and socialist nostrums the free-market revolutionaries of the 1980s had worked so hard to extirpate. The upshot was that practically all of the economic dogmas discredited by the GFC continued to enjoy a kind of bizarre post-apocalyptic afterlife. Neoliberals had become the walking-dead; dull-eyed transmitters of “zombie economics”.

And then the Covid-19 Pandemic struck.

Now it was entire national economies that were being designated as too big to fail. If Keynesianism’s first appearance in history had been in response to the multiple tragedies of the 1930s; it second appearance has taken on the qualities of farce.

The US Congress has just passed a “rescue package” of $US1.9 trillion. Yes, that’s right “trillion” – twelve zeroes! And this latest money-gusher is only the latest in a succession of equally gigantic monetary geysers.

Government spending hasn’t so much spun out-of-control as it has taken on the quality of an out-of-body experience. The United States, and the rest of the big capitalist players, hover above themselves in the economic operating theatre, looking down at the pale, prone, patient on the operating table and wondering, with curious detachment, if they’re going to make it.

In this political-economic environment, allegiance to the old rulebook simply makes no sense. When the central banks of the major capitalist economies have more-or-less agreed to keep the global system functioning by taking in each other’s financial washing, a political party like National has absolutely nothing to gain by clinging-on for dear life to the moribund principles of fiscal rectitude.

If money really is no object, then the only sensible political strategy to adopt is the one which best fulfils the electorate’s most urgent needs. Such a strategy makes even more sense in the face of a government seemingly enslaved to the “zombie economics” of its neoliberal advisers. Labour is currently relying on men and women who do not appear to have had an alive-and-kicking idea since July 1984. The only thing that makes the Government’s behaviour look even slightly rational, is that National is, itself, beholden to the same zombies.

Why is there no one in the senior ranks of either of the two major parties with the cut-through intelligence of the young, conservative political commentator, Liam Hehir. He, at least, “gets” that the current housing crisis cannot be solved by tightening-up LVRs, further weaponising the “bright line test”, or, God save us, introducing a Capital Gains Tax. Such “marginal” measures are not for him. Responding to Jack Tame’s questions on TVNZ’s current affairs show, Q+A, Hehir ruthlessly dismissed the “Lost Generation” of aspiring home-owners as being beyond effective help. Better, he argued, to engage in a root-and-branch reform of New Zealand’s tenancy laws. What works so well in Western Europe and the Nordic countries, must be made to work here.

He’s right, of course. To house, within a politically acceptable time-frame, the tens-of-thousands of New Zealanders in need of well-designed, well-constructed, affordable and securely held accommodation, the Government and the private sector have to build apartment blocks – lots of apartment blocks. Not the “vertical slums” of the 1960s and 70s, but the progressively conceived and architecturally impressive projects presented to the First Labour Government in the late-1940s.

These plans, discovered over ten years ago by Dr Chris Harris (in the form of appendices to the 1946 Hansard) constituted the foundation of an Auckland that never was. As tragic as it is uncanny, this comprehensive effort by leading Ministry of Works planners, addressed nearly all of the problems which came to bedevil Auckland over succeeding decades. Everything from cycle-ways to light-rail; ring-roads to intensive public housing: all are there in those state-developed plans which National, beholden to property developers, roading contractors and the automobile lobby, could not abandon fast enough following its 1949 election victory.

Therein lies the true tragedy. After 14 years in power (six of which were years of war) the Labour team of 1949 was old and tired. Their failure to grasp the possibilities of the plans placed before them is, if viewed in a generous spirit, forgivable. Much harder to forgive, however, is a government peopled with young, idealistic and highly-educated politicians, well set up for their second term with a solid parliamentary majority.

Suitably updated, those radically social-democratic plans from the late-1940s could, with just a little political imagination, form the basis of a comprehensive response to New Zealand’s steadily worsening housing crisis. Of course Jacinda Ardern’s and Grant Robertson’s bureaucratic advisers are going to tell them that nothing like the old MoW’s plan is any longer desirable or doable – before eating what’s left of their brains.

It would be strangely fitting if National – albeit eight decades too late – embraced the MoW’s urban development blueprint. After all, it took them more than a decade to grasp the fact that the rules of the game – as understood in the 1920s – had changed. It was only when the party pledged to keep in place the core of Labour’s social reforms, that National became a viable electoral proposition. Its political survival in the twenty-first century could just as easily depend upon National not only adopting Labour’s policies – but anticipating them.

This essay was originally posted on the Interest.co.nz website on Monday, 15 March 2021.

Too Late To Change Capitalism’s Flightpath?

Collision Course? In conditions of ideological white-out, the international bankers’ “Woop-Woop! Pull Up!” warning may have come too late to save global capitalism.

WHAT DOES IT MEAN when international bankers are more willing to embrace radical solutions than our politicians and their electors? At both the International Monetary Fund and the World Bank, Keynesianism is back in fashion. The economic doctrine which underpinned the thirty golden years of rising prosperity and declining inequality between 1950 and 1980 has risen from the grave – much to the horror of its erstwhile undertaker, Monetarism.

The monetarists and their guru, Milton Friedman, insisted that the problem of inflation was always and everywhere a monetary problem. Deficits, they insisted, were evil. Expanding the money supply to kick-start the economy would only produce a further inflationary surge. Moreover, increased government spending, by crowding out the private sector, was inimical to capitalist profit. The inevitable upshot of John Maynard Keynes’ pernicious doctrines, Friedman’s followers predicted, would be an economy forever engaged in chasing its own tail.

Unfortunately for the monetarists, the experience of the past ten years has left their theory in tatters. Since the Global Financial Crisis of 2008-09, the global money supply has undergone an unprecedented expansion. In theory, innovations such as Quantitative Easing and negative interest rates should have generated runaway inflation. In reality, prices have stubbornly refused to spike. Monetarism has been weighed in the balance and found wanting. For the monetarists, the writing should be on the wall.

But it isn’t. At least, not on the walls that matter at Treasury and in the caucus-rooms of our parliamentary parties. In those places monetarism continues to be treated as Holy Writ. Regardless of whether the call for a major, state-led, fiscal stimulus comes from the IMF or New Zealand’s own Reserve Bank Governor, our political class remains unmoved. Deficits are for getting down. Surpluses are for building up. The Government must take great care not to crowd out the private sector by intervening too actively in the economy.

Never mind that it was massive state spending (necessitated by a succession of destructive earthquakes) that pulled New Zealand through the Great Recession with so little in the way of serious economic and social damage; the political class remains unconvinced. In their minds, the superiority of the free market as an allocator of scarce resources is indisputable. Large-scale state intervention is absolutely the wrong way to go.

Nor is it the political class, alone, which responds to social and economic need in this way. Four years ago, a senior lecturer at AUT, Peter Skilling, published an article in which he revealed the extraordinary tenacity of the idea that the “market” is best left to decide who gets what in our society.

In the focus groups he’d convened to study people’s attitudes towards inequality he found that:

“In keeping with survey results, most focus group participants – when asked individually – expressed a preference for a more equal distribution of incomes (better wages for the low-paid; restraint in executive compensation). In the subsequent group discussion, however, these preferences were marginalised by the view that, while a more equal distribution might sound nice, it was likely not feasible given the ‘realities of the market’.”

Even more interestingly, Skilling discovered that: “while this ‘market reality’ trope was typically advanced by only one person in each group, it seemed able to over-ride a majority preference for greater equality.”

Seldom has the Italian communist, Antonio Gramsci’s concept of “hegemony” – formulated in the 1920s – been vindicated so convincingly. Except in extremis, Gramsci argued, ruling classes maintain their position not by physical force, but by the force of ideas which the overwhelming majority of citizens have been persuaded to accept as “common sense”.

This is the extraordinary irony of the present situation. Forty years ago, the ruling classes of Western capitalist societies convinced their citizens that the Keynesianism which had so improved their lives was a flawed and deficient economic doctrine which needed to be abandoned in favour of a new doctrine that elevated and privileged the role of “market forces”. Forty years later, with a substantial portion of those same ruling elites now convinced that monetarism has failed, and that Keynesianism is, indeed, the doctrine which offers the best hope of economic, social and political stability, the political class – and we, the people – remain firmly wedded to our “common sense”.

In conditions of ideological white-out, the bankers’ “Woop-Woop! Pull Up!” warning may have come too late.

This essay was originally published in The Otago Daily Times and The Greymouth Star of Friday, 8 November 2019.

Waiting For The Market's Music To Stop.

Prophetess Of Economic Doom: Political Economist Ann Pettifor cannot say exactly what will trigger the next global crisis. A sharp uptick in interest rates – especially in the United States – could do it. Or, the outbreak of a full-scale trade war between China and the USA. More likely, however, the crash will be precipitated by pure fear. Terrified of their loans not being repaid, lenders will raise the cost of money beyond the borrowers’ capacity of to pay. That will be the signal.

IN THE MOVIE Margin Call, the enigmatic financier, John Tuld (played by Jeremy Irons) repeatedly compares the business of playing the markets to a game of musical chairs. When one of his employees, Peter Sullivan (played by Zachary Quinto) comes to him with alarming news about the financial viability of Tuld’s investment firm, the following exchange takes place:

JOHN TULD: So, what you’re telling me, is that the music is about to stop, and we’re going to be left holding the biggest bag of odorous excrement ever assembled in the history of capitalism.

PETER SULLIVAN: Sir, I not sure that I would put it that way, but let me clarify using your analogy. What this model shows is the music, so to speak, just slowing. If the music were to stop, as you put it, then this model wouldn’t even be close to that scenario. It would be considerably worse.

JOHN TULD: Let me tell you something, Mr. Sullivan. Do you care to know why I’m in this chair with you all? I mean, why I earn the big bucks.

PETER SULLIVAN: Yes.

JOHN TULD: I’m here for one reason and one reason alone. I’m here to guess what the music might do a week, a month, a year from now. That’s it. Nothing more. And standing here tonight, I’m afraid that I don’t hear - a - thing. Just ... silence.

That was the fictional exchange going through my head this morning (9/4/18) as I listened to Ann Pettifor give AUT’s Policy Observatory her all-too-factual analysis of the global economic situation. Seldom have I emerged from an academic gathering with such a feeling of dread. The British political economist’s words shook me to the core. Like John Tuld in Margin Call, Ann Pettifor is also convinced that the music is about to stop.

The supposed worldwide economic “recovery” from the Global Financial Crisis of 2007-2009 has been fuelled, almost exclusively, by debt. Debt on an unimaginably large scale. Debt so big that it would require the value of all the goods and services created in the world for the next four years to pay it back.

Theoretically, all of this debt is secured by the assets against whose value it has been issued. But, as Pettifor (Fellow of the New Economics Foundation, Honorary Research Fellow at London’s City University, and economic advisor to Jeremy Corbyn) reminded her listeners, so was the debt issued by the banks in the run-up to the GFC.

On 9 August 2007, however, the global banking fraternity – no longer convinced they could accurately value the financial instruments being offered as collateral for their loans – simply stopped lending to one another. This was “Detonation Day”: the moment when the GFC became both inevitable and unstoppable.

Everything now points to another such detonation being imminent. Pumped-up by the steady expansion of global liquidity the world’s stockmarkets have climbed to giddy and unprecedented heights. Over the last few weeks, however, the value of the stocks and shares traded on the world’s exchanges has fluctuated wildly. Such volatility, warns Pettifor, almost always precedes a catastrophic market crash.

Exactly what will trigger the next global crisis is impossible to predict. A sharp uptick in interest rates – especially in the United States – could do it. Or, the outbreak of a full-scale trade war between China and the USA. More likely, however, the crash will be precipitated by pure fear. Terrified of their loans not being repaid, lenders will raise the cost of money beyond the borrowers’ capacity of to pay. That will be the signal. The moment when one or more of the real John Tulds out there will strain his ears to catch even the faintest echo of the market’s music, but will not hear – a – thing.

Just … silence.

This essay was originally posted on The Daily Blog of Tuesday, 10 April 2018.

How Economists Are Failing Society: Professor Robert Wade At The Ika Seafood Bar & Grill.

Heterodox And Proud Of It: Professor Robert Wade is an economist who refuses to toe the accepted line. Someone with the courage to point out that the neoliberal economic emperor isn’t wearing any clothes.

 

LAILA HARRE saved the very best for last. The “Salon” lunch with economist, Professor Robert Wade, provided one of those clarifying political moments when, at last, the veil falls away and you are shown the real state of affairs in all its terrifying clarity.

 

Wade is what his orthodox colleagues at the London School of Economics would loftily dismiss as a “heterodox” economist. Someone who refuses to toe the accepted line. Someone with the courage to point out that the economic emperor isn’t wearing any clothes.

 

More than this, however, Wade exposes orthodox neoliberal economics as a failure. Presenting itself as a scientific discipline, fully capable of pronouncing definitively on the true nature of reality – the profession was, nevertheless, unable to produce a single accurate prediction of the Global Financial Crisis (GFC).

 

There was a very good reason for this. As Wade explained to his mostly academic audience, the Dynamic, Stochastic, General Equilibrium (DSGE) model used by orthodox economists all over the world – including the OECD, the IMF, the World Bank and the Bank of England – does not factor-in the influence of the financial sector on the economy, and flatly denies that economies conforming to the DSGE model are susceptible to crises generated endogenously (i.e. from within themselves).

 

Just think about that for a moment. An economic model that makes no allowance for the most powerful force in the modern international economy – finance capital. A model which, for that very reason, simply could not see the Global Financial Crisis coming.

 

Now, you might think that a profession which had exposed its shortcomings so dramatically might be feeling just a little bit chastened; might be looking for a new economic model; might even be ready to admit that it had got just about everything horribly wrong and apologise to the world for all the extraordinary suffering its failure to read reality correctly has produced.

 

You would, however, be wrong.

 

Orthodox economists pride themselves on their positivism. They are not swayed by their emotions, nor do they make value judgements. The language of ethics and social responsibility is foreign to them. Their language is mathematics. Numbers don’t lie – and they certainly don’t apologise!

 

But if Orthodox Economics pays no heed to the real world and cannot predict an event as devastating as the GFC; if it scorns all those who posit a different interpretation of the economic data; if it guards the tenets of its economic faith as jealously as any member of the Roman curia, and punishes heretics with equal severity; then what, exactly, is the orthodox economics profession?

 

The answer lies in the word “faith”. Wade himself said that there is a religious quality to the thinking of the men and women in economic institutions like the NZ Treasury. And this, of course, is exactly what the orthodox economics profession has become – a modern priesthood.

 

In terms of the social and political function it serves, Orthodox Economics is no different from the Medieval Catholic Church. It exists for one reason and one reason only: to justify the ways of the rich to the poor, and to convince them there is no alternative to the inequality and injustice of the existing order. As it was in the beginning, is now, and ever more will be, world without end.

 

This brief review hardly does justice to Wade’s lecture. There is much more that I wish I could recall: astonishing quotations from these naked economic emperors that left his audience shaking their heads in disbelief.

 

The vote of thanks was given by Laila’s dad, who first met Wade when he was a young student of anthropology back in 1960s Auckland. Indeed, he was able to produce a wonderful photograph of the young Robert Wade, taken during an expedition to the islands of the South Pacific.

 

There he was, one of many rowers, hauling manfully on his oar, in the midst of a vast and troubled sea.

 

Somehow, it seemed appropriate.

 

This essay was posted on The Daily Blog and Bowalley Road on Wednesday, 2 December 2015.

Learning From Cyprus

A Prophetic Voice: It is difficult to imagine a more profound breach of trust between the State and its citizens than for it to reach into their bank accounts and steal their savings. The political and financial crisis gripping Cyprus, precipitated by the IMF and the European Central Bank, will have a profound effect on ordinary peoples' political expectations all around the world.

THE CYPRIOT MATRIARCH who hid her life savings under the mattress doesn’t look quite so silly now – does she?

 

It’s difficult to conceive of a bigger betrayal of trust than the one unfolding before our eyes on the Mediterranean island of Cyprus.

 

We are told as children that the safest place for our money is in the bank. More than that, the building up of personal savings is encouraged by politicians and bankers as the mature and responsible course that all good citizens should follow.

 

Imagine the consternation, then, when the Cypriot Government announced that it was about to reach into the savings accounts of its citizens and commandeer a portion of them to meet the demands of the International Monetary Fund and the European Central Bank.

 

Failure to oblige these all-powerful financial institutions will see the multi-billion-Euro loan Cyprus so desperately needs to stave off bankruptcy withheld.

 

Upon hearing this incredible news, Cypriots immediately rushed to the nearest ATM to empty their accounts – only to discover that the banks had shut the machines down.

 

The Cypriot Government then poured even more fuel onto its citizens already blazing fury by announcing a “bank holiday” until the Cypriot Parliament – called into emergency session – was ready to pass legislation legitimising the IMF/ECB-sponsored bank heist.

 

Astoundingly, the European Union Summit, held in Brussels just days before the crisis broke, was so sanguine about the outcome of the Cyprus bail-out negotiations that it hadn’t even included them on the main agenda. According to a Bloomberg report, they would be dealt with “at a separate meeting of euro-area Finance Ministers.”

 

As news of the Cyprus bank raid spread across other debt-stricken European nations, and stock markets around the world registered the shock, the arrogant unwisdom of assuming innocent citizens would supinely acquiesce in their government’s garnishing of their life savings quickly became evident.

 

Apparently not one of the European leaders gathered at Brussels had thought to review the last occasion that ATMs were switched off and a government informed the world that it was messing with its citizens own money.

 

Argentina in 2001 experienced a similar debt and banking crisis. The outcome was the largest default ($US132 billion) on a sovereign debt in modern history – the very nightmare that European Union leaders most fear.

 

Not that Cyprus is large enough, in either political or economic terms, to bring the EU to its knees all by itself. But what those Finance Ministers apparently did not consider was the demonstration effect of the IMF/ECB-sanctioned Cypriot raid on the citizens of those EU nations also facing debt and banking difficulties.

 

A Spaniard, or an Italian, or a Portuguese, with his or her life savings deposited one of their country’s leading banks will now be asking themselves: “What if the situation turns critical here? What if the IMF and the ECB demand something similar from our own government? Doesn’t it make more sense for me to put my money somewhere else? Somewhere safe? Somewhere my government can’t get its hands on it?

 

The Cypriot bail-out “deal” was as ill-considered as it was high-handed. God knows what the “end-game” is.

 

And, just before you mentally congratulate yourself on being born a New Zealander, take a look at what Finance Minister, Bill English, and the Reserve Bank Governor, Graeme Wheeler, are cooking-up.

 

It’s something called Open Bank Resolution (OPR) and the National-led Government reckons it’s the best solution on offer to a major bank failure.

 

Under OPR, if a bank fails, all its depositors will have their savings reduced to fund the institution’s financial recovery. In other words, if the men and women who run the major New Zealand banks decide to follow the example set by American and European financial institutions, and sail themselves into waters they can’t sail out of, you and I will be on the hook to bail them out.

 

And, according to Bill English, we’ll have nobody to blame but ourselves. Apparently, it’s up to us to scrutinise the performance of the banks in which we have money deposited – and act accordingly. Never mind that, as the Greens’ Russel Norman objected in his press release: “Not even sophisticated investors like Merrill Lynch saw the global financial crisis coming.”

 

That’s true. But the world has seen what’s coming to the people of Cyprus.

 

We have been warned.

 

This essay was originally published in The Waikato Times, The Taranaki Daily News, The Timaru Herald, The Otago Daily Times and The Greymouth Star of Friday, 22 March 2013.

The Iron Bed Of Procrustean Economics

Made To Order: Like the mythical monster, Procrustes, neoliberal economists are offended by the real world's inability to fit into the iron bed of their assumptions. No matter. Reality can always be "struturally adjusted" to conform to neoliberalism's Procrustean specifications.

 

PROCRUSTES was an exacting host. Travellers offered a night’s rest on his iron bed never fulfilled his expectations. Inevitably, they were a head too short or a foot too tall. No matter. Procrustes had a simple remedy. If his guests proved too short he stretched their bodies until they measured up. If they were too tall, he just lopped off the bits that stuck out. Unsurprisingly, the Athens to Eleusis Road, which passed by Procrustes’ forge, acquired a grim reputation.

 

The Greek hero, Theseus, put an end to Procrustes’ reign of terror by forcing him to lie on his own beds. That’s beds, plural, because, of course, there had always been two: a long bed for the short guests and a short bed for the tall ones. And since not even the monstrous blacksmith, Procrustes, could be both short and tall at the same time, Theseus was obliged to serve him as he had served others. He did not survive the process.

 

His infamous bed, though, has endured – at least in the English language. Whenever we are obliged to conform to someone else’s undifferentiated and unyielding expectations, we say they are fitting us to a “Procrustean Bed”.

 

Never has the term been more appropriately applied than as a metaphor for contemporary economics. Like the unfortunate travellers along the Athens-Eleusis Road, the nations of the world are invited to measure themselves upon the iron bed of Procrustean Economics and, just like the ogre’s victims, they inevitably find themselves being “structurally adjusted”.

 

It was not always so. As the Norwegian economic historian, Erik Reinert, persuasively argues in a paper presented to the New York-based Social Sciences Research Council, there was a time when not only economists, but ordinary members of the public, could choose between a range of radically different and fiercely competing economic theories.

 

Not any more: “Today we are in the extraordinary situation that these economic theories – covering the whole political spectrum – have virtually disappeared from practical use.”

 

What we are confronted with now, Reinert says, is an “academic monoculture” – with all the risk of catastrophic failure that the term implies.

 

Nor can we rely upon the democratic process to rescue us from the consequences of such failure. Unlike the economic crises of the past, when competing economic prescriptions recruited political champions from within the major political parties, the present crisis has generated an astonishingly uniform political response. Between the parties of the Left and those of the Right minor differences of sequencing and emphasis certainly do exist, but there are no politicians of any stature within the world’s significant economic powers willing to identify themselves with a fundamental challenge to the neoliberal paradigm.

 

Barack Obama may have campaigned in the poetry of “Hope” and “Change”, but as President he has governed according to the very same, prosaic, rules as the Bush Administration, and with the assistance of many of the same personnel.

 

The contrast with Franklin Roosevelt could hardly be more striking. Confronted with a financial system in near collapse, Roosevelt called down the wrath of heaven upon the money-changers of Wall Street and embarked on a “New Deal” that both confronted and confounded the conventional economic wisdom of his day. But President Obama, far from driving the money-changers from the Temple, calmly set about reappointing them to the positions from which they had overseen the gravest financial catastrophe since the Great Depression.

 

The situation in New Zealand is little better. Labour makes a great virtue of the fact that it has signed-up to many of the neoliberal Treasury mandarins’ pivotal recommendations. Where Prime Minister Key refuses to touch National Superannuation, David Shearer promises to lift the age of entitlement and sever its relationship to the average wage. Where Bill English rules out a Capital Gains Tax, David Parker promises to introduce one. Unlike its hard-pressed wage and salary earners, the economically orthodox business leaders of this country have little to fear from a change of government.

 

If Procrustes had two iron beds upon which to stretch or truncate his victims, the current neoliberal establishment possesses two political parties to fend off any genuine ideological challenge. Both parties insist that New Zealand measures-up to the financial markets, and if it’s found wanting, both are ready to lop off a billion or two.

 

Where is Theseus when you need him?

 

This essay was originally published in The Waikato Times, The Taranaki Daily News, The Timaru Herald, The Otago Daily Times and The Greymouth Star of Friday, 7 September 2012.

In Praise Of Heresy

The Arch-Heretic of Twentieth Century Economics: John Maynard Keynes was one of those rare heretics whose ideas worked so well in practice that they became (for thirty extraordinary years) the new orthodoxy. His radical economic thinking inspired everyone from Adolf Hitler to Mickey Savage.

IS IT POSSIBLE to be both a politician and a heretic? With the times so out of joint it’s a question more and more voters around the world are asking. Observing the peculiar unanimity with which the international political class has responded to the global financial crisis, this voter scepticism appears entirely justified. In only a handful of countries (the most obvious being Greece) have politicians either voluntarily, or by the sheer force of public opinion, promoted policies unsanctioned by the global guardians of economic and political orthodoxy.

This was certainly not the case the last time the world was mired in economic catastrophe. One of the most intriguing historical aspects of the Great Depression of the 1930s is the willingness of contemporary political leaders to challenge the economic orthodoxy of their day.

On the Right, in Germany, Hitler tackled his country’s massive unemployment and stagnant industry by embarking on a programme of comprehensive rearmament – what later came to be known as “militarised Keynesianism”. On the Left, in the Soviet Union, Joseph Stalin’s “Five Year Plans” mobilised the entire population behind a crash programme of industrialisation. Somewhere between these two extremes, Franklin D. Roosevelt’s “New Deal” put hundreds-of-thousands of Americans to work on bold public infrastructure projects such as the Tennessee Valley Authority and the Grand Coulee Dam.

Spend, FDR, Spend! The Grand Coulee Dam became one of the enduring symbols of the New Deal's massive investment in US infrastructure. When everyone else is broke, the state is both practically and morally obliged to stimulate the economy out of trouble.

What made these programmes so unorthodox was the way they were paid for. Herr Doktor Hjalmar Schacht, Hitler’s Minister of Economics, deployed his infamous “Mefo Bills” to pump-up the German arms industry. This financial device was somewhat akin to our first Labour government’s use of “Reserve Bank credit” to fund its state housing programme – only bigger. FDR was similarly persuaded to pay for his public works schemes by sending the United States’ budget into the red. By contrast, Stalin’s economic success was based on the super-exploitation of his own unfortunate people – especially the unpaid labour of the millions of political prisoners his secret police had poured into the “gulags” (Soviet concentration camps).

While Stalin followed the brutal methods adopted by Western capitalists in the early stages of the industrial revolution, and then throughout the wretched territories of their sprawling colonial empires during the late-nineteenth and early-twentieth centuries (check out the history of the “Belgian” Congo for the most gruesome example of pre-Soviet super-exploitation) both Roosevelt and Hitler were inspired (either directly or indirectly) by the thinking of the greatest economic heretic of the twentieth century, John Maynard Keynes.

Defying his orthodox colleagues’ advocacy of austerity measures to bring their respective governments’ books into balance, Keynes argued that politicians must counter the “paradox of thrift” by borrowing and spending their way back to prosperity: “For Government borrowing of one kind or another is nature’s remedy, so to speak, for preventing business losses from being, in so severe a slump as the present one, so great as to bring production altogether to a standstill.” His 1933 book, The Means to Prosperity, was read with great enthusiasm by FDR’s “Brains Trust” of economic advisers. German economists read it too.

So effective were Keynes’ heretical ideas at relieving the misery of the Great Depression and financing the Allies’ victory in World War II that, by 1946, they had become the new economic orthodoxy. And, if the proof of his theoretical pudding was in the eating, then the extraordinary longevity of the post-war boom (1945-1975) provides ample evidence for the efficacy of Lord Keynes’ economic recipes. Indeed, one could argue that the concerted (and unfortunately successful) campaign by corporate capitalism’s intellectual apologists to convince the world that the classical economists’ 1930s critique of the Keynesian “heresy” was correct, lies at the root of all our present evils.

It is tempting to say that what the world needs is “another Keynes” to lead it out of its present economic woes. But that would be wrong and foolish. Keynes’ ideas are there on the bookshelves: just waiting for a politician with the will to use them. Our world’s predicament lies precisely in the fact that its self-serving and morally compromised political class is simply too gutless and too heartless to risk the accusation of heresy.

As Keynes himself observed, these peddlers of neo-classical orthodoxy “resemble Euclidean geometers in a non-Euclidean world who, discovering that in experience straight lines apparently parallel often meet, rebuke the lines for not keeping straight”.

This essay was originally published in The Otago Daily Times, The Waikato Times, The Taranaki Daily News, The Timaru Herald and The Greymouth Star of Friday, 15 June 2012.

Lengthening Shadows

The Sons of Cain: Youthful members of the Greek fascist party, The Golden Dawn, celebrate the news that their party has won 21 seats in the Greek Parliament. The frantic efforts of neoliberal European financiers and politicians to shore up the Eurozone is opening the door to extremist political parties not seen since the 1930s. The promoters of austerity have sown dragons teeth.

FRANCE has a new, socialist, president. Greece, no government at all. The world’s stock markets oscillate between greed and fear. Only the world’s editorialists seem content to reassure us that, in spite of appearances, very little has – or will – change.

But, if they’re right, then we are all imperilled.

Because all those reassuring editorials are based on one, chilling, assumption: that democratic politics no longer has the power to countermand the world’s bond dealers and currency traders. That, in any showdown between the power of the people, and the power of global financial markets: it’s the people who will lose.

Except they won’t – not in the long run. Because, if the weapons of democracy fail them, the people won’t stop fighting, they’ll simply reach for new, undemocratic, weapons.

The editorial writers of The Economist, The Wall Street Journal, and even our own New Zealand Herald, in their rush to shore up the crumbling intellectual edifice of neoliberalism, and downplay the significance of the French and Greek elections, have failed to digest all of the news emerging from those contests.

In their eagerness to paint Monsieur François Hollande as some sort of professional, weak-kneed, say-one-thing-on-the-hustings-but-do-another-in-the-Elyseé-Palace French politico, they have forgotten who helped him across the line in the crucial run-off ballot. It was the Front National, the supporters of Marine Le Pen, who, either by abstention or active rejection, sealed the fate of President Nicolas Sarkozy.

If the global financial markets make it impossible for Monsieur Hollande to keep faith with the French electorate. If the overweening power of German capital is permitted to humiliate and “discipline” France’s leader – to the profound dismay of his countrymen, then to whom, exactly, do you think they will turn? Certainly not to the Socialist Party, nor to the equally discredited Gaullists. No, they will turn in their hundreds of thousands to the party of the Far Right. The Party that would tear up the treaties binding France to the European Union. The party that would close the borders of France, not simply to immigrants, but to the exports of France’s neighbours. The party that would bring the Eurozone, and the dream which inspired its creation, crashing down in the name of economic nationalism and “France pour les français!”

Those editorial writers also appear to have missed the ominous success of The Golden Dawn. These Greek fascists, with their Nazi-style salutes and their Hellenic version of the Swastika, won 21 seats in the Greek Parliament last Sunday. Their nostalgia for the days when the Colonels ran Greece, and the jails were filled with leftist intellectuals and trade union activists, casts a grim shadow not only over Greek politics, but over the whole of Europe.

The neoliberals’ hatred of history blinds them to the fact that the world has stood before where it stands today. In the 1930s: in the midst of the Great Depression; with millions unemployed; and the political leaders of the “civilised world” unable to conceptualise any way out of the deepening economic crisis except to cut and cut and cut; the way was cleared for the extremist demagogues of Right and Left. Men who preached the primacy of politics over economics: politicians who specialised in identifying scapegoats; butchers who slew them in their thousands.

President Franklin D. Roosevelt. His stimulus package, known as the New Deal, rescued American capitalism from its enemies to the Left and the Right, and made Keynesian economics the default setting of Western governments for nearly fifty years.

The one great exception to the economic folly of deflation and austerity was the administration of President Franklin Roosevelt. His “New Deal” offered a “third way” between the Scylla of Italian and German fascism and the Charybdis of Soviet communism. In faraway Sweden, and here in New Zealand, social-democratic governments followed Roosevelt’s lead – constructing societies that became the envy of the world.

Too many nations did not. Inevitably, the world was rescued from economic failure by that most terrible and irresistible of “stimulus packages”. Those who had declined the peaceful path to economic success were subjected to the awful audit of war.

There are worse things than fiscal deficits.

How does one account for millions of human losses?

This essay was originally published in The Dominion Post, The Otago Daily Times, The Waikato Times, The Taranaki Daily News, The Timaru Herald and The Greymouth Star of Friday, 11 May 2012.

After The Ball Is Over

And Then What?: Only the criminally ill-informed and/or the hopelessly romantic believe that anyone but John Key will be prime-minister after the General Election. The more important question is: What happens then? After the ball is over - and the global recession finally hits New Zealand?

WITH MORE AND MORE voters regarding a National Party election victory as inevitable, the question arises: “What happens after the ball is over?”

When all the hoardings have been taken down, and all the ballot papers counted – what then? What challenges lie in wait for New Zealand’s government a few miles down the track?

While a fitful sun still bathes large parts of New Zealand in a golden light, many communities already lie in the shadow of storm-clouds blown-in from northern climes.

Farmers and their support networks in rural and provincial New Zealand may find it hard to comprehend the difficulties being experienced by metropolitan New Zealand. This is because record export prices have cushioned them from all but the first few recessionary blows.

Even so, the nation’s cockies – being a cautious and responsible breed – are furiously paying down their debt and eliminating all unnecessary expenditure. It seems axiomatic to them that their government should be doing the same. If the National Party was to run the country the same way they run their farms, say the farmers, all would be well.

But, I wonder if they’d still say that if, as many economists now predict, the Chinese economy experiences a sudden contraction? If China’s apparently insatiable appetite for New Zealand milk powder disappeared overnight – along with her equally insatiable appetite for unprocessed Pinus Radiata and Australian minerals – would our farmers still model their economic expectations on a simple set of household accounts?

For the sake of argument, let’s assume they would. What would be the result?

That’s easy. The farming sector’s huge debts to Australia’s banks would very soon precipitate a major financial crisis. If Chinese demand dried up – on both sides of the Tasman – the Australasian banking sector would be in serious trouble. Farmers unable to pay their mortgages would be foreclosed. Rural properties would flood the real-estate market and land prices would collapse. Farming families’ equity in their properties would evaporate, and the ownership of New Zealand farmland would pass into fewer and fewer hands – many of them foreign.

Very rapidly, the farmers’ pain would be transmitted to everyone else in rural and provincial New Zealand. With the demand for agricultural goods and services in free-fall, small to medium businesses throughout the “heartland” would falter and/or fail. Thousands would find themselves without an income. (Being self-employed, these folk would quickly discover the meaning of bureaucratic delay: how much longer it takes to access the unemployment benefit when you’re not a laid-off employee from a major city.)

To make things worse, the Government (still assuming the country is being run according to the household accounts model) would be searching around frantically for ways to reduce ballooning public expenditure.

A collapse in export prices couldn’t help but have a massive impact on the entire economy – sending the indices of unemployment, spousal abandonment, mental illness and sickness through the roof. Welfare spending would soon constitute an insupportable burden on the State. Benefits would have to be cut and eligibility tightened. Working For Families tax credits would be abolished. The age of eligibility for New Zealand Superannuation would be lifted from 65 to 67 and then to 70. The quantum of the pension would fall from two-thirds to half the average wage.

New Zealand’s misery index would rise sharply.

Of course the cutting wouldn’t stop at the Welfare Budget. Spending on health and education would also fall. The interest-free student loan concession would be removed. Major capital projects, such as hospital, school, state-highway and light-rail construction, would be put on hold. Eventually, the wages and salaries of public servants would face the chop – possibly by as much as 10-20 percent.

This is what “austerity” looks like.

What if the Government adopted a different economic model? A model based on something other than a simple set of household accounts? A model which called for the maintenance of a strong and consistent demand for goods and services? A model which held that price deflation, reduced incomes, and the corresponding reduction in the demand for goods and services thus created, only make the economic situation worse – not better. In short, the model put forward by the British economist, John Maynard Keynes, back in the 1930s?

Well, that model would require the Government to do a great many things.

First and foremost it would have to bring the financial sector under strict public control (yes, that does imply a large, state-dominated banking and insurance industry). Then, in order to equip itself with the resources to maintain employment and demand, it would need to institute a radically redistributive fiscal programme. Finally, it would require policies calculated to sustain the viability of New Zealand’s export and import substitution sectors.

Unfortunately, none of these measures are even remotely compatible with the current policy settings of the National Party.

This essay was originally published in The Press of Tuesday, 11 October 2011.

Social Cohesion In A Second Term?

The Road Not Taken: Simply for bringing the Maori Party into his government, and sparing us the complete breakdown of social cohesion that would undoubtedly have followed if National's promise to abolish of the Maori Seats had been kept, John Key deserves a second term. The question is: will he be able to keep the peace for another three years?

NEARLY THREE YEARS AGO, Rob Campbell, who (by processes we haven’t the space to go into here) had undergone the remarkable transformation from Trades Hall brawler to capitalist investor, told me something I have not forgotten.

We were seated, very comfortably, at Auckland’s Cin-Cin restaurant, discussing what was already quite clearly a financial crisis of global significance. As I recall, the proportion of the world’s wealth which finance capital’s croupiers had just raked off the table amounted to about one-third.

Rob’s diagnosis of the situation was brutally clear. It would take upwards of a generation for the global economy to make good such colossal losses. The world, he said, was about to go through some very hard times.

I asked him what that meant in political terms.

“The greatest challenge we face,” said Rob, “as we go through this, will be maintaining social cohesion.”

IT IS, PERHAPS, the greatest achievement of John Key’s first term in government that the breakdown in social cohesion which Rob Campbell feared – and which we have just witnessed on the streets of the United Kingdom – has not taken place on our own.

For this the Prime Minister merits high praise.

What kept us together was his inspired decision to bring the Maori Party into his government. Had he not done so: had he simply relied upon National’s natural allies in Act; things could have been very different.

The Maori Seats, for example, would’ve been slated for abolition. This move, alone, threatening as it did the very existence of the Maori Party (and leaving them with dangerously little to lose) would have tested New Zealand’s social cohesion to breaking-point. Serious political disturbances – up to and including terrorist violence – could very easily have torn this country apart.

Simply for sparing us that terrible scenario, John Key deserves a second term.

THE BIG QUESTION,  I guess, is whether – having won a second term – John Key will be able to preserve this country’s social cohesion for another three years? Will the Prime Minister be strong enough to stare down the far-right of his own caucus (along with their clones in the Act Party) and pursue a policy agenda which, rather than driving New Zealanders apart, is designed to bring them together?

I have to say that, as things now stand, I am far from confident that the Prime Minister will be able to hold the line against a full-scale onslaught by the Right.

After three years of holding their noses against the cologne of compromise, they are ready to throw open the doors and let the winds of change blow through the House.

Mr Key, to his credit, is doing his best to win a comprehensive electoral mandate for the changes his colleagues are so desperate to make. In pursuing this objective, however, the Prime Minister is presupposing that the opinion polls are correct, and that National, for the first time since 1951, will secure more than half the votes cast on 26 November.

My gut tells me that, barring an extremely low turnout, such an outcome is highly unlikely. And, if the turnout is low, then National’s mandate will be next to useless. Dramatically falling levels of electoral participation is one of the surest signs that social cohesion is weak – and getting weaker.

THE OTHER FACTOR militating against Mr Key joining the great “coherers” of the past: men like Franklin Delano Roosevelt and Michael Joseph Savage; is that in 2011 – unlike the 1930s – global capitalism is not threatened by either a communist Russia or a fascist Germany.

Hedged-in by such existential threats, the intelligent capitalists of the Great Depression threw their support behind the “stimulus packages” of their day.

In 2011, however, unconstrained by the prospect of being supplanted by either the far-left or the far-right, global capitalism is demanding austerity measures of the most socially-destructive kind.

If National, in a second term, bows to those demands, then my old comrade’s, Rob Campbell’s, worst fears will be realised.

This essay was originally published in The Dominion Post, The Timaru Herald, The Taranaki Daily News, The Otago Daily Times and The Greymouth Star of Friday, 19 August 2011.

The Braying Of The Dames

Necessary Sacrifice?: The European Union - appropriately portrayed as a vengeful harradin - shatters the Greek nation in an attempt to cement what remains of Europe's arranged financial marriage. Workers the world over must understand that Greece is but the first of many sacrifices that will be offered up to appease the gods of  global finance.

IS THERE ANYTHING WORSE than the braying of the upper classes? That awful, asinine, he-haw-ing expelled from the noses of the privileged whenever the lower orders are suspected of enjoying benefits above their station.

That braying was clearly audible on Thursday morning’s Nine To Noon programme. Dame Anne Leslie: oil company executive’s daughter; raised in the twilight of the British Raj; famed foreign correspondent for The Daily Mail; was supposed to be talking to Radio New Zealand’s Kathryn Ryan about events in the UK, but she simply couldn’t forbear putting the boot into the unfortunate Greeks.

What really got her agitated was the idea of Greek pastry-chefs and hairdressers enjoying early retirement, on generous pensions, in recognition of the arduous and/or dangerous nature of their jobs.

Honoured for her services to journalism, and hailed for her “common touch” with “ordinary people”, Dame Anne nevertheless found the whole idea of recognising the contribution of hairdressers and pastry-chefs absurd.

Never mind the hazardous chemicals hairdressers and their staff handle every working-day. Never mind the pastry-chef’s never-ending wrestling-match with fifty different varieties of dough. Early retirement on generous pensions isn’t for the likes of them; it’s for lawyers, doctors, business tycoons: real people who’ve earned it.

This is why the Greeks have to be punished – don’t you know? For voting themselves a living way beyond their means. For demanding an undeserved tribute from the hard-working peoples of the European Union so that they can lounge like Lotus Eaters in the Mediterranean sun.

Undeserved?

I wonder if Dame Anne recalls who it was that, by arming the Greek Right against the left-wing resistance fighters who’d fought so heroically against the Nazis, plunged the Greek nation into bloody civil strife at the end of the Second World War?

Who it was that, when the Greek Left showed signs of electoral recovery in the late-1960s, stood back and refused to intervene as a junta of fascist colonels imprisoned Greek democracy without trial?

Who it was that bank-rolled the expansion of the Greek state-sector as the only viable guarantor of civil peace in a land from which it has been conspicuously absent since the same Germans who now pour scorn on the Greek people came a-calling with their tanks and dive-bombers in 1940?

Undeserved!

Dame Anne may bray in ignorance against the “absurd” generosity of the Greek welfare state and take vicarious pleasure at the sight of the Greek riot police dishing out an EU, ECB and IMF-endorsed lesson in neo-liberal economic orthodoxy on the streets of Athens, but I suspect that even she might recoil in alarm from the deadly hissing of the Bank of International Settlements.

The BIS, sometimes known as “the central bankers’ bank”, is responsible for keeping the global financial system in good working order. For these, the High Priests of Capitalism, nothing – not even the genocidal destruction of World War II – has ever been permitted to divert the BIS from its oversight and management of the world’s money.

But now, from its lofty Swiss eerie, the BIS finds itself looking down upon a global financial system teetering on the brink of collapse. Not since the darkest days of the Great Depression have the world’s banks confronted such an all-encompassing and potentially devastating economic crisis.

“We should make no mistake here:”, intones the BIS’s Annual Report, “the market turbulence surrounding the fiscal crises in Greece, Ireland and Portugal would pale beside the devastation that would follow a loss of investor confidence in the sovereign debt of a major economy.”

As the left-wing journalist, Nick Beams, writing for the World Socialist Web Site on 28 June, puts it:

“The BIS has called on governments to take ‘swift and credible action’ to bring down debt levels. But this does not mean a return to the pre-crisis situation. So-called ‘structural tasks’ have to be addressed. ‘In many countries … [this] involves facing up to the fact that, with their populations ageing, promised pension schemes and social benefits are simply too costly to sustain.’

“That is, large portions of the social welfare measures enacted in the post-war period must be wiped out to pay off the government debts incurred as a result of the bailout of the banks.”

And it gets worse. According to the BIS Report, the global financial system is so fragile that simply paying off government debt will not be sufficient to restore stability. To underwrite the security of international financial transactions, governments will be required to build up large fiscal surpluses “as buffers that can be used for stabilisation in the future.”

“In other words,” says Beams, “the working class must be made to pay not only for the past crises created by the banks but for future ones as well.”

The bitter struggles taking place on the streets of Athens are, therefore, just the beginning of “a [global] counter-revolution to return social conditions to the level of the 1930s.”

The braying of a ruling class determined to strip hairdressers and pastry-chefs (along with every other kind of worker) of benefits and protections they don’t “deserve” is about to grow much louder.

And how should we respond? Let the poet, Shelly, be our guide:

Rise like Lions after slumber

In unvanquishable number,

Shake your chains to earth like dew

Which in sleep had fallen on you-

Ye are many — they are few.

This essay is exclusive to the Bowalley Road blog site.

In Perilous Times

In No Hurry To Change Horses: No more than in 2002, when, in the perilous times ushered in by 9/11, New Zealand voters opted to stick with the diplomatically savvy Helen Clark; the voters of 2011 are in no mood to abandon their commercially savvy Prime Minister, John Key.

SIX OUT OF TEN New Zealanders say they’re willing to back John Key’s bid for a second term. Four out of ten say they’d prefer some other combination of parties and politicians running the country.

We haven’t seen a gap that wide since 2002.

Back then, of course, the ideological boot was on the other foot. In the early months of 2002, just before the Alliance began the serious business of tearing itself into bloody little chunks, and well before Nicky Hager’s book, Seeds of Distrust, spawned the word “Corngate”, the Centre-Left gave every appearance of having taken out a mortgage on the treasury benches.

Could it be that Mr Key’s soaring popularity is being driven by forces very similar to those that persuaded Kiwis to again repose their political trust and confidence in Helen Clark? The forces erupting out of the tragic events of 9/11.

What happened on that fateful September morning changed everything.

It transformed an unpopular American president, shoe-horned into office by the US Supreme Court, into the symbolic leader of an embattled West. And behind George Bush, their briefcases bulging with geopolitical prescriptions of the most radical kind, crept a shadowy cabal of neo-conservative ideologues determined to pitch America into a state of permanent war.

New Zealand’s leader was also transformed by the events of 9/11. In a suddenly perilous world: where countries were either with the United States – or they were with the terrorists; New Zealanders quietly rejoiced in the fact that their Prime Minister was a woman whose whole adult life had been devoted to the study of international politics.

If anybody could bring New Zealand safely through the turmoil and travail of the “War on Terror” – it was Helen Clark.

Fast-forward six years to the general election of 2008.

Once again the world was convulsed. Not, this time, by Islamic terrorists, but by a collossal financial collapse that threatened to plunge the global economy into a second Great Depression.

And, once again, the New Zealand electorate counted its lucky stars that history had raised up an alternative prime-minister whose whole adult life had been devoted to mastering the ebb and flow of global financial markets.

John Key: raised in a state-house by his widowed mum; currency trader extraordinaire; self-made millionaire; married to his high-school sweetheart; father of two teenage children.

In the dangerously leveraged suburbs, where the governments of developed nations are made and broken, it was hard to imagine a politician better suited to the temper of his times. Truly, John Key was, as one waggish journalist noted, “the candidate from Central Casting”.

And he was lucky.

Though he and his party received scant thanks from the voters, Labour’s Minister of Finance, Dr Michael Cullen, had bequeathed the incoming National Government one of the healthiest sets of government accounts in the Western World. Dr Cullen’s surpluses enabled Mr Key and his Finance Minister, Bill English, to cushion New Zealanders from the worst effects of the global financial crisis.

Mr Key’s success cannot, however, be entirely attributed to extraneous influences and events. Politicians tend to be judged by their choices, and like his predecessor, Mr Key has chosen well.

Helen Clark faced the choice of joining, or staying out of, the Anglo-American invasion of Iraq. By fearing to tread where George Bush and Tony Blair rushed in, she amply confirmed the New Zealand voters’ faith in her political and moral judgement. Watching the unfolding nightmare of Iraq on the news, they quietly congratulated themselves for sticking with Labour.

The strategic choice which has defined Mr Key’s first term as prime minister is whether to embrace the radical neo-liberal policies urged upon him by his Far Right critics in 2009 and 2010; or, to hold fast to the policies of political and economic moderation which have secured his 2008 election victory. To his credit, Mr Key has steadfastly refused to abandon his moderate stance. Stratospheric poll results have been his reward.

In schweren Zeiten – in perilous times – the political trajectory of electorates is almost always towards the safety of the known and the reassurance of proven competence. Riders only change horses in mid-stream when they’re terrified their present mount will pitch them into the torrent.

In the perilous year of 2002, the voters were happy to let Helen Clark guide them safely out of the geopolitical flood. But, in the equally perilous year of 2008 they were only too happy to exchange Ms Clark’s tired red mare for Mr Key’s fresh blue stallion.

Much can happen in six months, but all the polls suggest that New Zealanders retain sufficient confidence in their National steed to dig in their heels and urge it forward to the farther shore.

It may cost them a few treasured possessions, but they’re not yet ready to mount anyone else’s.

This essay was originally published in The Press of Tuesday, 31 May 2011.