By Roberto Savio
ROME, May 19 2015 (IPS)

The victory of the Conservative Party and the debacle of the Labour Party in the recent British general elections is yet another sign of the crisis facing left-wing forces today, leaving aside the question of how, under the British electoral system, the Labour Party actually increased the number of votes it won but saw a reduction in the number of seats it now holds in Parliament (24 seats less than the previous 256).

Roberto Savio

If the proportional rather than uninominal system had been used, the Conservative Party with its 11 million votes would have won 256 and not 331 seats in Parliament (far short of the absolute majority of 326 needed to govern), while at the other extreme the United Kingdom Independence Party with nearly four million votes would have landed 83 and not just the one seat it ended up with – results that would be hard to imagine anywhere else and a good example of insularity.

To an extent, the recent British general elections mirrored the U.S. presidential elections in 2000 when Democratic candidate Al Gore won around half a million more popular votes than Republican candidate George W. Bush but failed to win the majority of electoral college votes on which the U.S. system is based. The outcome was eight years of George W.  Bush administration, the war in Iraq, the crisis of multilateralism, and all the paraphernalia of “America’s exceptional destiny”.

Let us venture now into an analysis that will have the politologues among us cringing.“The left has tried to mimic the winners, instead of trying to be an alternative to the process of neoliberal globalisation and, since the beginning of the world financial crisis in 2008 … it has had no real answer to the crisis”

It is now generally recognised that the end of the Soviet Union has given free way to a kind of capitalism without control, marked by an unprecedented supremacy of finance which, in terms of volume of investments, overwhelmingly exceeds the real or productive economy.

In its wake, neoliberal thinking has found the left totally unprepared, because part of its function had been to provide a democratic alternative to Communism, which was suddenly no longer a threat.

The left therefore has tried to mimic the winners, instead of trying to be an alternative to the process of neoliberal globalisation and, since the beginning of the world financial crisis in 2008 (with its bail-out cost so far of over four trillion dollars), it has had no real answer to the crisis.

Ever since the industrial revolution, the identity of the left had been to press for social justice, equality of opportunities and redistribution, while the right placed the emphasis on individual efforts, less role for the state and success as motivation.

Continuing with this brutal simplification, we have to add that the left, from Marx to Keynes, always studied how to create economic growth and redistribution – Marx by abolishing private property, social democrats through just taxation.

But it never studied the creation of a progressive agenda in the event case of an economic crisis such as the one we are now facing, with structural unemployment, young people obliged  to accept any kind of contract, new technologies which are making the concept of classes disappear, and rendering trade unions – erstwhile powerful actors for social justice – irrelevant.

It is unprecedented that the top 25 hedge fund managers received a reward in 2014 of 11.62 billion dollars, yet neither U.S. President Barack Obama nor Ed Miliband, then still leader of the Labour Party at the recent British general elections (until he resigned after election defeat), saw it fit to denounce this obscene level of greed.

Meanwhile, Europe as a political project is clearly in disarray, and now faces a “Grexit” on its southern flank and a “Brexit” on its northern flank.

In the case of a “Grexit” (the possible abandonment of the European Union by Greece), Greece faces the prospects of having to make substantial concessions to Europe, thus reneging on the promises of Alexis Tsipras who was voted in as prime minister in rebellion against years of dismantlement of public and social structures imposed in the name of austerity.

What is at stake here is the very neoliberal model itself and not only is ordoliberal Germany supported by allies like Austria, Finland and the Netherlands erecting a wall against any form of leniency, but countries which accepted painful cuts and where conservatives are now in power, like Spain, Portugal and Ireland, see leniency as giving in to the left.

A “Brexit” (the possible abandonment of the European Union by Britain) is a different affair. It is a game being played by British Prime Minister David Cameron to negotiate a more favourable agreement for Britain with the European Union.

A referendum will be held before the end of 2017 and the four million people who voted for the UKIP in the recent elections, plus the country’s “Euro-sceptics”, threaten to push Britain out of the European Union, especially if Cameron does not manage to obtain some substantial concessions from Brussels.

Meanwhile, if Europe is in disarray, the United States has a serious problem of governance. Analyst Moisés Naím, who served as editor-in-chief of Foreign Policy magazine from 1996 to 2010, has pinpointed a few examples of how this has translated into self-inflicted damage.

One concerns China which, after waiting five years trying to get the Republican-dominated Congress to authorise and increase in its stake in the International Monetary Fund (IMF) from a ridiculous 3.8 percent to 6 percent (compared with the 16.5 percent of the United States), got fed up and established an alternative fund, the Asian Infrastructure Investment Bank (AIIB).

Washington tried unsuccessfully to kill the initiative by putting pressure on its allies but first the United Kingdom, then Italy, Germany and France announced their participation in the new bank, which now has 50 member countries and the United States is not one of them.

Another example was the attempt by the Republican-dominated Congress to kill the Export-Import Bank of the United States (Ex-Im Bank) which has provided support for U.S exporters to the tune of 570 billion dollars since it was set up by President Franklin D. Roosevelt in 1934.  In just the last two years, China has provided 670 billion dollars in support for its exporters. Moral of the story: U.S. companies will be at a clear disadvantage.

As Larry Summers, a great proponent of U.S. hegemony, put it, “the US will not be in a position to shape the global economic system”.

The latest snub to the U.S. role of world leader came from four Arab heads of state who snubbed a U.S.-Gulf States summit at Camp David on May 14. The summit had been called by Obama to reassure the Gulf states that the ongoing negotiations with Iran over a nuclear agreement would not diminish their relevance, but the rulers of Saudi Arabia, United Arab Emirates, Oman and Bahrain deserted the summit.

However, there is no more striking example of mistake-making than the joint effort by the United States and Europe to push Russian President Vladimir against the wall over his engagement in Ukraine by imposing heavy sanctions.

There was no apparent reflection on the wisdom of encircling a paranoid and autocratic leader, albeit one with strong popular support, by progressively also bringing in all Eastern and Central European countries. The result of this encirclement of Russia is that China has now come to the rescue of Russia, by injecting money into the country’s asphyxiated economy.

China will invest around six billion dollars in the construction of a high speed railway between Moscow and Kazan, is financing a 2,700 kilometre pipeline for the supply of 30 billion cubic metres of Russian gas over a period of 30 years, plus several other projects, including the establishment of a two billion dollar common fund for investments and a loan of 860 million dollars to the Russian Sberbank bank.

So, the net result is that Russia has been pushed out of Europe and into the arms of China, and the two are now starting joint naval and military manoeuvres.  Is this in the interest of Europe?

At the end of the day, the decline of Europe and the United States perhaps comes down to a decline of political vision, with democracy being substituted by partocracy, and the statesman of yesteryear being substituted by very much more modest and self-referential political leaders.

This is all taking place amid a growing disaffection with politics, which is now aimed basically at administrative choices, making corruption easy. At least this is what around one-third of electors now appear to believe when they are asked if they think that they can make a difference at elections … and this is why a rapidly growing number of people are deserting the ballot box. (END/COLUMNIST SERVICE)

Edited by Phil Harris   

The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, IPS – Inter Press Service. 

Excerpt:

Mauritians protest against the construction of a 100-megawatt (MW) coal power plant in Pointe-aux-Caves, on the west of the island. They say the project will cause irreparable damage to them and the environment of this Indian Ocean island nation. Credit: Nasseem Ackbarally/IPS

By Carey L. Biron
WASHINGTON, Jul 7 2014 (IPS)

Landmark new policies that have sharply curtailed U.S. financing for international coal projects may be rolled back, the result of a sudden, polarised fight over a little-known government agency here.

The debate revolves around an entity called the Export-Import Bank, which for much of the past century has made federal money available to promote U.S. exports.

In December, as part of President Barack Obama’s government-wide push to enact federal policies to counter global climate change, the bank voted to significantly limit its financing of overseas coal projects, unless they put in place expensive “carbon capture” technology to store emissions underground."To even have [the Ex-Im Bank] consider this coal project is an example of them going rogue – directly flouting restrictions they never supported in the first place.” -- Justin Guay

Multiple countries and international financial institutions have subsequently followed this model to put in place their own guidelines on energy-related funding.

“When it came to direct U.S. support, that policy change ended our ability to finance new coal plants, except in rare circumstances,” Justin Guay, a Washington representative for the Sierra Club, a conservation and advocacy group, told IPS.

“That was a historic step in curbing financing of the dirtiest and most outdated sources of energy. It was also one of the most significant pieces of progress we’ve had from this administration on fossil fuels.”

The agency did make exceptions for the poorest countries, however, allowing U.S. financing of coal projects in these countries if they use whatever is deemed the cleanest technology available. This loophole may now be significantly expanded to include many more countries, as part of a largely unrelated fight.

In recent months, conservative lawmakers here have seized on the institution, known as the Ex-Im Bank, as an example of government waste and corporate cronyism, given its role in subsidising certain U.S. businesses. The bank’s multi-year authorisation from the U.S. Congress needs to be renewed by the end of September, and in recent weeks a furious campaign has built around whether that approval should go forward.

On the chopping block may be the new coal policies, offered as a sweetener to draw back conservative lawmakers in favour of re-approving the Ex-Im Bank.

Coal compromise

Leading bipartisan compromise proposals in both the U.S. House and Senate would now see the bank’s authorisation extended for several more years but would also largely gut the coal policy, according to multiple reports.

“If we are truly committed to protecting our global environment, the U.S. should lead the world in clean coal technology and export that technology to the rest of the world,” Joe Manchin, a key lawmaker in charge of oversight for the Ex-Im Bank, said in a statement last week.

Manchin, a moderate Democrat from a coal-rich state, has reportedly proposed significantly expanding the number of poor countries that would be eligible for Ex-Im assistance around coal projects. Similar proposals are being worked on in the House of Representatives, though none of these have yet been made public.

Other lawmakers, too, have recently switched their views on the bank’s reauthorisation due to political pressures around coal. Presumably, a change on this issue could woo them to back the agency once again.

“[I]t is inappropriate to use the bank’s financing mechanisms to drive an ideological agenda rather than promote U.S. exports,” Shelley Moore Capito, a Republican in the House, said recently. “The administration’s policies come at a time when we should be ensuring the United States is leading the world in developing new coal plant technologies.”

Still, for some of the Ex-Im Bank’s most ardent critics, the attempt to link the agency’s re-authorisation to a weakening in its coal policies is not working.

“The Obama administration’s targeting of coal is absurd, but it is not important in the debate over the Export-Import Bank,” Dan Holler, communications director for Heritage Action for America, a conservative advocacy group, told IPS.

“While some lawmakers and special interest groups want to talk about coal, the real issue is whether the Bank’s charter deserves to be authorized at all. Heritage Action believes it should be allowed to expire.”

‘Rogue’ actions

The Ex-Im Bank’s new restrictions around coal would likely have a significant impact on overall U.S. support for such projects worldwide.

Of the agency’s massive budget – this year, 32 billion dollars – around a quarter consists of energy-related lending. And while assistance for coal projects has gone up and down over time, during some years the agency has offered some two billion dollars in financing for the industry.

That’s been seen by some as a misalignment of priorities: even as coal plants in the United States have been shutting down around tightened carbon regulation, the U.S. government has continued to finance more and more such projects overseas.

Perhaps unsurprisingly, the Ex-Im Bank’s new coal policy was controversial from the start – not only among some lawmakers but also, reportedly, among the agency’s management. Just weeks after the new requirements were voted in, lawmakers were able to pass a little-noticed legal provision that temporarily stayed the change through September.

The bank, meanwhile, has used this interlude to begin consideration of a massive and contentious coal-fired power plant in Jharkhand, in northeastern India. That development was announced at the beginning of this month.

“The Bank is in the process of conducting a full due diligence review of the financial, technical and environmental aspects of the project,” Stevan M. Horning, a spokesperson for the agency, told IPS. He confirmed that, because of the recent legal wrangling, “no analysis is being performed with respect to the … project’s compliance with” the new coal guidelines, though it will be reviewed for the agency’s pre-existing safeguards.

Horning noted that no decision would be forthcoming on the project, known as Tilaiya, until next month at the earliest.

Environmental advocates, meanwhile, say the Ex-Im Bank is operating on its own, disregarding President Obama’s climate priorities.

“President Obama pushed for this new rule over the agency’s objections, and now we’re seeing them openly defy the president’s actions,” the Sierra Club’s Guay says.

“The agency operates under the president’s administration and is part of the push to fulfil his agenda. So to even have them consider this coal project is an example of them going rogue – directly flouting restrictions they never supported in the first place.”

He continues: “The administration and Congress will have to actively rein them in.”

U.S. Big Business is going all out to protect a favoured government agency, the 80-year-old Export-Import Bank (Ex-Im), from a full-fledged assault by the populist “Tea Party” wing of the Republican Party.

At stake is Congressional re-authorisation of the Bank, which provides loans, guarantees, and credit insurance to foreign buyers of U.S. exports. Last year, it approved nearly 4,000 such transactions with a record estimated value of 37.4 billion dollars in exports.“I think the business community is getting a little bit of a wake-up call because they’ve been thinking that Republicans are their friends on everything, and it just turns out that ideology is trumping pragmatism.” -- Democratic Rep. Chris Van Hollen

While the re-authorisation should easily pass the Senate, where it is supported by the majority Democrats and many, if not most, Republicans, the problem lies in the Republican-led House of Representatives, which has increasingly become a Tea Party stronghold.

Business groups were stunned over the weekend when the incoming House Majority Leader, Kevin McCarthy, announced he would oppose re-authorisation despite his two-decade-long record of supporting it.

When House Speaker John Boehner declined to take a position either pro or con, top executives of the powerful U.S. Chamber of Commerce and the National Association of Manufacturers (NAM) went into overdrive on Capitol Hill.

“With Americans overwhelmingly focused on the need to create jobs and grow our economy, business owners are understandably perplexed by the inside-the-(Washington-)Beltway campaign against the Ex-Im Bank,” said Chamber president Thomas Donohue, in releasing a letter signed by more than 800 companies and industry associations in support of the re-authorisation.

Still, Tea Party advocates and lawmakers are not giving any ground. At a hearing on the Bank Wednesday, the chairman of the House Financial Services subcommittee, Texas Rep. Jeb Hensarling, charged that its programmes amounted to “corporate welfare” designed to benefit “some of the largest, richest, most politically connected corporations in the world.”

The battle has emerged as the latest focus of a persistent – and some say growing — split within the party between what is often referred to as “Wall Street” and “Main Street.”

Indeed, the Tea Party was born and energised by what its constituents viewed as the government’s giants “bail-outs” – under both Presidents George W. Bush and Barack Obama — of Wall Street banks and other huge corporations following the Sep 2008 financial crisis.

The more-establishment and populist wing of the Republican Party have also clashed over immigration, fiscal, trade, and education policies. Consisting of both social conservatives and anti-government libertarians, the Tea Party – to the degree it has maintained any ideological coherence — has generally tried to move the Republican leadership to the far right.

While its forces have suffered a number of setbacks this spring during Republican primary elections for Congress, the surprise defeat earlier this month of Majority Leader Eric Cantor, who favoured slightly more-mainstream immigration and fiscal policies – by an obscure and poorly financed Tea Party challenger shocked Washington insiders.

The insurgent candidate, a college economics professor named Dave Brat, campaigned on an anti-government platform that strongly opposed liberalising immigration laws and what he called “crony capitalist programmes that benefit the rich and powerful.”

So strengthened were Tea Party forces within the House Republican caucus by Brat’s victory that many Capitol Hill observers credited it with McCarthy’s surprising reversal on Ex-Im funding. His change of heart appears to have been a condition for his election by key caucus members to succeed Cantor as Majority Leader.

Created in the early days of Franklin Roosevelt’s “New Deal”, Ex-Im has survived and prospered under Republican and Democratic presidents alike. This, despite complaints from the right that its operations amounted to government interference in the free market and, from the left, that the Bank’s support for exporters amount to “corporate welfare”, a phrase ironically adopted by then-Sen. Barack Obama to describe the Bank when he ran for president in 2008.

As originally conceived, its mission has been to create jobs at home by financing sales of U.S. exports to buyers overseas. Over the years, it has become a model for similar institutions, called export credit agencies (ECAs), established by dozens of other major exporting nations.

In recent decades, its single biggest beneficiary by far has been the Boeing Co., the giant Chicago-based aerospace firm, which has long depended on Ex-Im’s support in its competition with Europe’s Aerobus Industries. Other major beneficiaries include Caterpillar, General Electric, and Bechtel.

While much of the Bank’s opposition in the past has come from Democrats who, like Obama in 2008, described it as a corporate giveaway, the party’s lawmakers voted for it unanimously two years ago and still support it, as does the Obama administration which has made boosting U.S. exports a top priority since taking office.

The country’s biggest labour union federation, the AFL-CIO, has also strongly supported re-authorisation.

While left-wing criticism is now virtually non-existent, the Bank has long been a target for Tea Party adherents, whose mobilisation played a critical role in giving Republicans their majority in the House since the 2010 Congressional elections.

In 2012, they tried, albeit unsuccessfully, to kill the agency, arguing that the subsidies and other help provided by the Bank to U.S. exporters makes them “less and less competitive in the global market,” as their then-champion in the Senate, Jim DeMint, contended at the time.

DeMint, now head of the far-right Heritage Foundation, has, along with the Club for Growth, spearheaded the current campaign against re-authorisation.

The campaign gained more traction this week with the revelation by the Wall Street Journal that four Bank staff members have been suspended or removed amidst investigations into reported kickbacks.

But the major business groups are fighting back hard, arguing that U.S. companies would be placed at a severe disadvantage in competing for business abroad if the re-authorisation wasn’t approved.

“Failure to reauthorize Ex-Im would amount to unilateral disarmament in the face of other governments’ far more aggressive export credit programs, which have provided their own exporters with an estimated one trillion dollars in financing support in recent years,” according to the letter signed by the business organisations.

“Export credit agencies in China, France, Germany, Brazil, and Korea have provided significantly more support for their exporters than Ex-Im has provided to U.S. exporters – in some cases, more than seven times what Ex-Im Bank has provided on an annual basis.”

Most observers here believe that the Bank will be eventually be re-authorised, as the Chamber and NAM mobilise endorsements from small and medium-sized companies which have benefited from its largesse. That could include reducing the amounts Ex-Im can lend to foreign companies and limiting its authority to aid companies owned by foreign governments.

Democrats, meanwhile, are clearly enjoying this latest battle between the Tea Party and the business community.

“This is a perfect example of ideology run amok,” noted Democratic Rep. Chris Van Hollen, a rising star in the party, said Wednesday of the Tea Party’s campaign against the Bank. “I think the business community is getting a little bit of a wake-up call because they’ve been thinking that Republicans are their friends on everything, and it just turns out that ideology is trumping pragmatism.”