I’ve mainly been ignoring the Clinton-Obama soap opera, at least since the other horses dropped out of the race (and even before then, the only one to really interest me, Denis Kucinich, never stood a chance), but now that it’s over I’m not really surprised by its conclusion. For several months now, Clinton’s been playing for a 2012 presidential victory; she’s stayed in the race for as long as possible so as to avoid fading from memory, so that she will be the default to replace John McCain after his terrifying single term.
This video is very funny in its skewering of Clinton’s venality, and I think we all appreciate how scary she is, but it’s let Obama off a bit too easily. Is he really being hesitant to play the race card, or is he just playing it very astutely? When Obama has a go at Jeremiah Wright for obsessing over the racism “of the past”, he is trivialising the racism of the present, and making it so much easier to dismiss all the uppity niggers who still claim to be oppressed in some way. That’s how you play the race-card; if you just suggest that everyone who doesn’t vote for you is a racist then people will say that they voted you. Doesn’t work with a secret ballot.
The big Obama story doing the rounds on the left at the moment is that of his capitulation to the Israel lobby. In a speech to AIPAC this week, he promised Israel a load of money for guns and advocated a Jerusalem undivided – and not in the good way. But this is less shocking than you might suppose as well; for all his “progressive” allure, Obama has spent most of his campaign jumping for the Zionist lobby and waiting for them to tell him “high enough”. The annexation of East Jerusalem should just about do it, putting him to the right of Clinton, Bush or even McCain.
This, from the candidate supposedly in opposition to the lobbyists. In fact, I think Obama might have missed a trick going for an AIPAC endorsement. At a time when a whole generation of American Jews are starting to turn away from Israel, with the emergence of the progressive Jewish lobby J-Street, which might never rival AIPAC financially but then again might quickly sap the latter of its legitimacy, it seems foolish for a candidate like Obama to tie himself to its mast. But what do I know?
Well I know that Obama is far too keen on war and imperialism, but that he is widely seen as the antiwar candidate. I know that he will do no more to challenge racism than Margaret Thatcher and Queen Victoria did for women’s liberation, but that getting a Black Man into the White House would be a nice symbolic victory. I know that he is basically going to be yet another president for the ruling class and the empire, but that he has captured the popular imagination as a break from the establishment.
And so, to generalise Lenin’s advice to the British Communists, I think we should support him “like a noose supports a hanging man”. If there’s a progressive reformist with mass support, then even if we don’t think he will even make meaningful progressive reforms, he will show up all the contradictions and shortcomings of the reformist approach. When the Labour Party betrays the labouring classes, people think a bit harder about why this always happens. When the Tory Party acts like the Tory Party, people just hate the Tory Party a bit more.
McCain’s still going to win though.
Lenin’s Tomb points out that Hilary’s popularity among white working class voters doesn’t just come from pandering to racism, but also from the fact that she managed to place herself to the left of Obama economically, a bit less dependence upon Wall Street and a bit more economic nationalism: http://leninology.blogspot.com/2008/06/whats-matter-with-west-virginia.html
While we’re at the economics, I don’t for a moment believe that the jump in oil prices is because of the latest Israeli belligerence towards Iran. Some Israeli or American minister says something scary about Iran on more or less a weekly basis, and relatives of mine in the technocratic rentier class have shown me evidence of the markets taking this seriously well over a year ago. What changed?
Well the price of oil we talk about is measured in dollars, and this changes with both the real price in oil and the real price of the dollar. The latter has been falling and the former rising for some time now, and for various reasons, but the big jump has been in the exchange rate. The European Central Bank is obsessing over low inflation, while the US Federal Reserve is trying to stem the recession, and these contradictory priorities lead to disparate interest rates and a drop in the exchange rate.
The effect of financial alchemy on the oil price are overstated. The reality is that many of the oil fields are now entering decline – and doing so a pretty rapid rate because of the aggressive approaches used to wring as much oil as possible out of them as quickly as possible* – and new discoveries will, at best, keep supply stagnant as they come online. Barring the discovery of more Saudi Arabia-level monster fields, which is pretty bloody unlikely, or some technological miracle that makes currently unviable sources viable (oil shale and the like), we’re pretty much knackered. Geology is not impressed by the power of the invisible hand and demand will only die down when people start dying, barring a deeply unlikely technological revolution.
As you may be able to tell I have very little optimism about the future, especially given that our own oil fields here in Britain are among the rapidly declining and that we are not, and cannot ever be realistically, capable of feeding our population without large-scale imports that are going to become ridiculously expensive as fuel costs skyrocket along with the cost of little things like fertiliser. I don’t think I need to draw you a diagram to describe how bad a situation that has the potential to be when our governments are chronically incapable of anything remotely resembling sound long-term planning.
Oh, and that’s why I’m a supporter of high fuel taxes. If we don’t wean ourelves off the oil teat as much as possible as soon as possible, geology is going to do it for us in a most brutal fashion. The environment is a concern, certainly, but it falls behind Peak Oil in my reckoning. Technological society is a wondeful thing but it is fragile in the face of an energy supply squeeze.
*Our own oil fields are knackered, this is very well known now, but there are plenty of others. The entire set of North Sea fields are heading in the same way. Indonesia has been in the media recently as well and Mexico is facing a pretty much total collapse in oil extraction. Mind you, part of the Mexico situation is down to investment and the lack of it, so it could turn around sooner or later but I wouldn’t hold my breath in anticipation.
Certainly, the increase in oil prices generally is due to Peak Oil and to the American interventions in the Middle East. But the immediate leap this week has been widely linked with this Israel thing, and as far as alternative explanations go I don’t see any sudden collapse in the real oil economy, whereas the announcement of a more anti-inflationist than predicted interest rate on the Euro fits the bill better. But anyway, it’s not alchemy to say that the falling value of the dollar leads to an increase in prices of commodities measured in dollars.
And if by financial alchemy you mean speculation, you’re dead wrong there as well, real commodity prices do respond to speculation and this is one of the main drivers of the current food price crisis.
As for high fuel taxes, surely you’re aware that they affect the poor much more intensely than the rich. This is socially unjust, but also incoherent in terms of altering aggregate consumption patterns; it is the consumption of those who consume the most that needs to be reduced. The idea of rationing-with-a-bit-of-trading that even the government is tentatively looking into* is more progressive and has more potential for efficacity.
*They’re not actually about to implement it in any real way, though. Their policies on transport show that they’re more committed to expanding the oil-driven, polluting side of the economy than to avert oil squeeze and environmental chaos.
The dollar fall doesn’t help, but oil production has been overall stagnant – even taking into account alternates like biofuels – for years while the demand has increased considerably. Price explosion was and remains inevitable and market magic won’t do much more than speed things up a bit. Hence, overstated. You say there hasn’t been any collapse in the real oil economy but that’s only because there’s been enough slack in First World budgets to mostly cope with the increases so far. That won’t last. Give it a couple of years and we’ll all be feeling it.
Food and oil prices are strongly related. Fertilise, fuel for harvesters and what have you, & shipping. Combine that with crap harvests in places like Australia, biofuels, and general crapness in places like Zimbabwe and the picture is grim. Speculation doesn’t help, obviously, but the fundamentals all point to high prices.
And yes rich people will deal easier with the high fuel taxes than the poor. Short of stripping them of their assets that isn’t going to change. Bring in rationing and a black market will follow – it always does. That’s life. Humans are selfish and the best you can do is mitigate it as best as possible. What we really need, and what government seems utterly incapable of, is high fuel taxes combined with revitalised public transport. The carrot and the stick – only way to achieve any real success. But I’ll take what I can get till then.
Okay, I agree that the overall trend for oil prices to increase can be explained entirely by the fundamentals: Peak Oil, Iraq, etc. – but the sudden jump this week does, I think, have more to do with ECB interest announcements than anything else.
Likewise, food price inflation is happening partly for concrete reasons – oil price inflation, biofuels, poor harvests – and partly because of investors fleeing other suddenly noxious investments, such as dollars and dodgy mortgages. The price was was then intensified by more speculation. How much of an effect would have been had by a subset of these factors in the absence of the others is very hard to say, but even the World Bank places a good deal of the blame upon speculation.
You may as well say: introduce laws and you get criminals. People are just scum.
We have had rationing in the past, and the kind of pollution-and-oil-intensive (let’s just say energy-intensive) things we’d be rationing – flights, petrol, electricity and heating – rely on an infrastructure and can be controlled by whoever controls that infrastructure. Yeah, you might get a bit of a black market, but I think the petrol stations, airports and electricity companies could be made to play ball.
If you increase, through taxes, the cost of fuel, you’re gonna get a lot of people struggling to cope. Old people freezing in their flats and all. And to advocate such a socially regressive policy just because you reckon if you tried to constrain the consumption of the rich, they’d only cheat… well it doesn’t really add up to me.
Obviously a massive investment in public transport and social housing would be needed too.
“Win” an election, it would make a nice change.
Oh Dave, like you I was so expecting the another Clinton administration and am rather shocked at the result, my money was on her, as was the money of many corporations. Now, I think I follow your line again.
Regarding the Peak Oil/Speculation/Futures shenanigans, I’m certainly feeling the pinch here in Iran, my salary went up 5% and inflation was officially set at 25% – yet it feels like more. Those of lower income saw a 20% increase as stipulated by the government. Rent hikes and house price increases around Tehran are crippling, food prices are souring and the government are finding ever more elaborate ways of weaning us away from a heavily subsidised fuel. I do wonder though, with the oil price increase, the nation must surely be enjoying the adjustment on income from oil and the expenditure on refined imports (whereby Iran only refines 1/3 of what is extracted and the rest needs to be imported).
I read a recent article on the adjusted method of figuring a nation’s Consumer Price Index, in this case America. Supposedly the published figures neglect to include food, fuel and housing costs and thus America, using methods from the Carter days, currently has inflation of around 12%. The snitch here being that salary increases, among other things, increase in accordance to the CPI and thus I guess many of us get poorer without quite seeing it. This method is apparently the case here in Iran to a degree and thus who knows how much higher than 25% we are running at and how much I’ve lost in only a 5% increase.
Good times!
Hi David, your commentary is always appreciated.
Hahahaha yes, I’d forgotten about all that. I wonder if we’ll see a repeat of 2000 on that score. I kinda think not, to be honest, I think McCain will win without cheating. But we’ll see.
There’s always a bit of a polemic around how you measure inflation. In Britain, the government uses the CPI, which excludes housing costs, rather than the RPI. And it does make me laugh when I hear of something being excluded from the index on the grounds of being too price-volatile; we’ll measure price changes except for the things whose prices are changing faster than we like, very scientific!
But no matter what commodities are included and which are excluded, the way in which the indices are constructed means that they systematically model the consumption of richer households more than the poorer ones – and there is no reason for the two to see the same rate of increase in the cost of living. Basically we use plutocratic indices, taking the average amount a family spends on each commodity (thus overrepresenting those families who spend more, generally), rather than democratic ones, where we take the average proportion of their budget a family spends on each commodity (thus giving equal weighting to each family).
I went into this a bit more on this thread, if you’re interested. The reason for which plutocratic indices are used is that governments measure inflation mainly to settle the national accounts; the cost of living of ordinary people is a secondary concern, and if they were really interested there are much more appropriate ways of looking at this.
Yeah it’s confusing, what effect does the oil squeeze have on a country like ran, net exporter of crude and net importer of the refined stuff? I would guess that since the bottleneck in the supply chain is getting enough oil out of the ground, not getting enough of that oil through the refinery, the price of refined oil is going down relative to the price of unrefined oil, so Iran should be laughing. Although obviously a resource boon like this is only as good as the way it is managed, I gather the Iranian ruling class are divided between “economic populism” and neoliberalism so it’s hard to say which way it’ll go.
The oil market is ridiculously volatile at the moment. But that really doesn’t matter. The minor pits and troughs that come from momentary fads can’t disguise the true trend. I wish it could be dealt with by slapping banks down but we’d be so lucky. The next decade or two are going to be very difficult unless something changes, such as fusion energy research bearing some nice fruit. Perhaps fortunately, there are promising noises coming out of the people working on the WB7 Polywell reactor, but I will remain skeptical till there’re proper studies and confirmation and all that jazz.
It’s came to my attention recently that the food market is much more easily influenced than the oil by investors. Oil has always had heavy investment, has many powerful players keeping things buttoned down, and so on. You can’t as easily manipulate a market that has so many massive beasts like BP and so on involved. Food hasn’t and the amount of money invested in that market has grown by at least an order of magnitude in the last couple of years. It’s a very dodgy situation and apparently at least partially to blame on American deregulation.
Oh, and the recent floods in the US are likely to have vicious knock-on effects. They’re looking at 50% crop failures in a breadbasket state now. Bad news for everyone at the best of times, truly atrocious news now.
The only one of those that can’t be dodged would be the flights. Fuel can be smuggled, already is to some extent, and having your own diesel generator or what have you is hardly outside the realms of possibility for the rich. With that you can pretty much do what you please so long as you have the cash, unless the government’s going to start taking pretty repressive measures to make sure no-one’s flouting the system – things that are seen as unacceptable now for people on the dole.
I have great skepticism for the old people freezing in their flats stories. The winter fuel payment is several hundred pounds and I have a VERY hard time seeing how that wouldn’t cover heating bills unless you were trying to use central heating to give some great, old place toasty throughout. My grandmother gets by just fine, and she’s hardly rich, and fuel bills hardly differ that wildly across the country, so I think there’s more at play than simple lack of affordability. Some pyschological factor, perhaps. Keeping a gas fire or two running is hardly *that* expensive, even now.
And I see some logic in the way things are done now. The system is simple – a huge benefit when it comes to government-ran schemes, it makes it hard for them to bollock it up – and taxes based on how fuel you actually use. No, it doesn’t redistribute wealth or anything like that, but it does tax you based on what you actually use, and there is a sort of fairness to that. Anything more complex just gives you government cock-ups. Look at the tax credit system. It’s abysmal.
I know. I’m not sure you’ve read my original comment through, or the clarifications that came after. I agree. The trend is down to Peak Oil, and I make no bones about it. It was precisely one of the more dramatic deviations from the trend that I was suggesting an explanation for, as an alternative to the idea that it was down to a renewed threat on Iran. I don’t believe that the threat towards Iran has increased enough to explain the price jump, and I believe that the difference between ECB and US interests is a more plausible explanation. But yeah, that’s a question of the “pits and troughs”, nothing to do with the overall trend in oil prices. You’re also right that food prices are more affected by speculation than oil prices.
As to the rest, a lot of old people can afford to look after themselves, yes. But it is the more well-off people who consume the most energy, and any tax on energy would have to hit these people hard if it was to have any influence on aggregate consumption. And since this kind of tax is regressive – ie it hits poorer people harder – hitting the wealthy hard would involve hitting the poor very very hard indeed. To the point where freezing to death becomes a very real danger. So, if you had any conception of social justice, you’d have to implement some kind of scheme to give poor people a certain amount for free, or near enough. And suddenly you’re not far from the kind of thing I was talking about.
Yikes, that was meant to be peaks and troughs. Well, anyway. Not important. Just embarassing.
I tend to be pessimistic about what comes after Peak Oil – the technology to mitigate it exists, but it can’t be brought online quickly, so we’re screwed because of short-sighted profit-seeking (and, oh boy, are we screwed; this island is in a very precarious position should our wealth evaporate) – and so I’m not sure how much will really be doable to alleviate the suffering caused by widespread energy shortages (and in our system, those are and will be expressed as outrageous prices).
The government could step in now. It has more than sufficient funds (there’s so much fat that could be trimmed it’s unreal) and there’s nothing to stop it, really, but that may not be the case ten or twenty years years from now. In fact, I rather suspect it won’t be. The sheer depths of pessimism I feel regarding this nation’s future are not something I can easily or eloquently express in words. We cannot feed ourselves, we cannot fuel ourselves, we cannot build a great deal of anything useful, and our scientific capabilities have been slowly dwindling away for decades. Our only saving grace is that we are better at moving money from A to B and somehow making it a greater amount of money through some bizare alchemy than almost any other nation on Earth, and that’s not really something to be terribly proud of, and it won’t count for diddly squat if Peak Oil is as disastrous as it has the potential to be. That and the discovery of the North Sea oil; that bounty is pretty much the only thing that kept Thatcher from really ruining this country, and it’s a double-edged sword at best.
In short, if I were to be cold-hearted, and states ARE cold-hearted in their reasoning, I’d say the money would be better invested in long-term infrastructure projects that will be worth their weight in gold bullion, but it won’t be; it never is in this country, or we wouldn’t have WASTED the last twenty years on stupid, STUPID ideas like the dash to gas or the inexplicable slow strangling of our scientific research capabilities. So, yeah, might as well spend it on alleviating some current misery instead of creating public service McJobs and what have you.
Pfft. As if I haven’t made typo after typo after typau. Don’t worry about it.
I too go a bit mad with the pessimism of it sometimes, or at least I did before I came politically active. I now aim for the “optimism of the will, pessimism of the intellect” that Gramsci talked about, and look at the future in terms of Rosa Luxembourg’s “coice between barbarism and socialism”. I strongly suspect that the 21st century will see a new swing towards horrible horrible barbarism, but I stay sane by doing what I can to try and send it the other way.
Anyway, when talking about what this nation can and cannot do, you’re missing out one vital competency: it can wage war. Not particularly effectively, you might argue, but then again if Afghanistan and Iraq had been invaded by, say, Pakistan and Saudia Arabia instead of us I don’t think they’d be having any more luck. The point is, you can’t think about competition between nations simply in terms of competitivity in the free market. When it gets really intense, you get to see military competition – ie, war.
Can’t wage war without resources. Armies, especially modern armies, consume vast amounts of energy in their work. Attempting to alleviate an energy crunch by going to war is so utterly stupid that it defies belief and will, inevitably, fail miserably. That and modern society just doesn’t have the stomach for what it takes to mount a successful occupation, which is hardly a bad thing. Probably won’t stop them but, Christ on a crutch, it’s just such an awful idea.
Maybe the EU will cushion the mess. A large state with a larger resource pool (and France’s nuclear expertise will be VERY useful, whether you like the nuclear stuff or not, because every joule of energy will count) might have a better chance. God, it galls me to say that. The EU is a wretched joke in so many ways but it might just come in very handy here.
Certainly the capitalist classes of Europe are right to stick together – for all that they find it difficult to trust each other, and to merit each other’s trust – but that’s just the same principle on a larger scale. Anyway, “can’t stomach a successful occupation”? Mate, what do you think we’ve been doing since 2001? Okay, the success is still missing, but all the nastiest sides of occupation have already manifested themselves in Iraq, Afghanistan and Somalia. We’ve seen record-breaking protests, but not the kind of action that could defeat a war; by and large we’re stomaching it appallingly well. Of course I would hope that an intensification of imperialist aggression from our rulers would see an intensification of resistance on the streets, but fuck knows that it’s hardly a given.
Anyway, we live in a world whose very functioning is predicated on competition for artificially scarce resources. As the scarcity becomes more real, we can only expect to see the competition intensify, and yes at its most intense that does mean war. Is it an absolutely fucking stupid idea in the bigger picture? Yes. But since when did that stop them? Call it the tragedy of the commons if you like (I’ll be calling it imperialism), but it’s definitely happening.