ENDURING ISSUES: Pay Back the Money Borrowed From Social Security

Sen. Don RiegleLori Hansen Riegle

[Originally Posted: 04/05/11 ]

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Throughout its 75 year history, Social Security has provided critical economic security to millions of retirees, families, children and the disabled. Social Security is paid for by the dedicated contributions of workers and their employers, has administrative costs of less than one percent, and since it cannot borrow to fund its operations, Social Security does not contribute to the deficit. No wonder that Americans from all walks of life consistently and overwhelmingly support our nation’s most successful social insurance program — a level of support that is not achieved by other governmental programs.

Social Security currently has a $2.6 trillion surplus which has been building up since the 1983 amendments and is intended to help absorb the retirement of the baby boomers. This surplus is invested in US Treasury securities that are backed by the full faith and credit of the US government. According to the Social Security Trustees 2010 report, Social Security can pay full benefits until 2037, at which time, if nothing were done to strengthen its financing, Social Security would still be able to pay about 78 percent of benefits. This quarter of a century means there is time to strengthen its financing without cutting benefits for future beneficiaries. The American people will insist that Congress do what is needed for the program to pay full benefits and protect these benefits they were promised and have earned.

Social Security Opponents Use Fear to Manipulate Debate

Opponents of Social Security have been working for many years to tell a much different story about Social Security in order to influence how the media and Washington decision makers view it. One example of this is Wall Street insider Pete Peterson who has dedicated $1 billion of his Wall Street fortune to the destruction of Social Security as we know it. Peterson is joined in his efforts by other wealthy special interests that have much to gain if Social Security is cut or eliminated.

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[Enemies of the people like the corrupt] House Republican Majority Leader Eric Cantor (R-VA) provided some insight to their Social Security views in a recent NPR interview when he was talking about Social Security and said, “We are going to have to come to grips with the fact that these programs cannot exist if we want America to be what we want it to be.”  [/pullquote] 

Despite the overwhelming public support for Social Security and the critical retirement, survivors and disability insurance it provides to millions of Americans, Peterson and his Wall Street friends want to reduce Social Security’s protections and force average working Americans to put their future retirement, life and disability security in the hands of Wall Street — the same crowd that nearly caused a collapse of our economy and pushed the country into the Great Recession.

It would be very unpopular for the opponents to simply state that their goal is to reduce or eliminate Social Security, requiring politicians to eat from a poison apple. Instead, the opponents try to create false fear about the future of Social Security by making it seem as if the program contributes to the nation’s budget deficit and debt. The same Wall Street firms that needed the taxpayers to bail them out — and individuals like Peterson who took advantage of a tax loophole that enabled him to pay taxes on his Wall Street profits at the same rate as a janitor cleaning his office — are conducting a massive lobbying campaign to reduce Social Security protections for working Americans and their families by claiming it is a way to lower the federal budget deficit.

The opponents’ tactic of setting up Social Security as a false culprit in the deficit problem diverts attention away from the real causes of the deficit — two wars not paid for, the Bush tax cuts for the wealthy, and the costs associated with the economic crisis, such as the Wall Street bailout. If the opponents of Social Security are able to cut Social Security’s benefits, they will accomplish two objectives: (1) reducing Social Security protections while driving retirees into the hands of Wall Street; and (2) hiding the real causes of the deficit and the debt from honest budgetary scrutiny. A look at their claims about Social Security and the budget reveals the falsehoods they continue to promote.

Social Security — the most fiscally responsible program

Social Security is self-financed, cannot borrow, spends less than one percent on its administrative costs, has a $2.6 trillion surplus which will continue to grow for a number of years, and is off-budget. It does not contribute to the federal deficit or the debt. The Social Security surplus is invested in US Treasuries which enables the federal government to borrow less from other sources. The government borrows these Social Security funds to pay for other government spending — but is obligated to pay interest on these borrowings — and pay back the borrowed funds in full when they are needed by Social Security for benefit payments.

Opponents of Social Security obscure the real facts, but they are easy to see in the graph below. The planned build-up of the Social Security Trust Funds since 1983 makes it clear that Social Security has a $2.6 trillion surplus today that will continue to grow:

2011-04-05-Untitled2.jpgThe Federal Budget — Red Ink

A look at the federal budget over the same time frame reveals a starkly different picture — many years of deficits, with only a few years of surplus — a surplus that disappeared during the G.W. Bush Administration. In 1993, a Democratic Congress and President Clinton, without a single Republican vote in either the House or Senate, enacted a budget plan that put it on a path to elimination of the deficits –and brought the budget into balance, and then later into surplus. In his 1999 State of the Union address, with the budget then in balance, Clinton called for the Social Security surplus investments to be held in a special reserve and not used for other government spending.

As a candidate for president, Vice President Gore made a central part of his campaign a plan to put Social Security’s surplus in a “lockbox” to keep its assets from being used for other government spending. When the Supreme Court decided the 2000 election in favor of Bush, however, a very different view of the Social Security surplus became operative.

During the same time period in which Social Security was building a surplus the federal budget was more often in deficit than not, as shown below:

2011-04-05-Untitled3.jpg
The federal budget surplus of 2000 quickly disappeared when Bush took office, turning into a sea of red ink. Bush borrowed heavily from the Social Security surplus to help obscure the fact that federal taxes were not bringing in enough revenue to pay for the wars and his tax cuts.

Given this history and the fact that Social Security has not and does not contribute to the deficit, Social Security should not be “on the table” for deficit reduction now. In fact, it should not be part of the deficit debate at all.

The Costs Imposed on Social Security by Wall Street’s Failures

In a recent paper on deficit reduction for the Roosevelt Institute, Nobel prize-winner and Columbia University Professor, Economist Joseph Stiglitz noted about the Wall Street banks: “Even if the banks were to pay back every dime that they received, they would not have come close to compensating the country for the full costs (now in the trillions of dollars) that they have imposed on others. ”

These costs were imposed on Social Security as well — Wall Street’s failures have increased Social Security costs while also reducing revenues to Social Security. Social Security revenues were reduced by 1.13 percent of payroll from its annual balance in 2010 — more than $60 billion in one year — from what the Trustees projected last year “due to a deeper recession and slower recovery than had been expected.” This does not reflect the costs to Social Security in 2008-09, nor does it reflect future costs of continued high unemployment, which reduces revenue, and higher benefit payments to beneficiaries forced to take benefits sooner than they otherwise had planned.

As a result of the Great Recession triggered by the economic bubble Wall Street created, Social Security revenues were less in 2010 than benefits paid out. This required Social Security to use a portion of its interest earnings on the surplus to pay benefits — an event that would have happened several years in the future were it not for the recent economic downturn.

Opponents have used the negative impact of the economy on Social Security to make it seem as if Social Security was failing, as if it had fallen into a deficit of its own. These claims are false. The interest the government owes to the Social Security Trust Fund for the funds it has borrowed from Social Security represents a legal obligation of the government. Interest earned on Social Security investments has always been used to pay Social Security benefits.

But opponents pretend the interest should not be counted as savings that add to Social Security’s annual balance. This makes no sense. When Social Security claims the interest it has earned to pay benefits, the government is required to pay back the interest it owes to Social Security. This is what the opponents don’t like. Social Security did not create the economic problem or the budget deficit. Wall Street and other government spending did. But the opponents of Social Security don’t want to pay back all the money that was borrowed from Social Security, including the interest earned. Instead, they want to cut Social Security benefits.

The taxpayers of America bailed out the banks — wouldn’t it be fair now to ask the banks to pay back what they have cost Social Security? A tax on financial transactions and a tax on Wall Street bonuses, with revenues dedicated to Social Security, would pay back to Social Security and its contributors what has been taken from them.

Pay Back Social Security — The Government Has Borrowed More from Social Security than any Other Entity or Foreign Government

Another argument made by Social Security opponents to raise fear about the national debt is how much our government has borrowed from China. They never mention how much our government has borrowed from Social Security. In fact, the government has borrowed more from the Social Security surplus than it has from any other source in the world, including China. As a result, Social Security now “owns” nearly 18 percent of the federal debt, making it the largest single holder of US debt. The government owes almost twice as much to Social Security as it does to China and Hong Kong.

Why aren’t the opponents worried about paying back Social Security — why aren’t they talking about repaying this debt to the American people?

According to the U.S. Treasury Department’s “Monthly Statement of the Public Debt of the United States” (9.30.10), the total debt was $13.562 trillion and was held as follows:

US Holders of Debt
42.1 % — US Individuals and Institutions
17.9 % — Social Security Trust Fund
6.0 % — US Civil Service Retirement Fund
2.1 % — US Military Retirement Fund

Foreign Holders of Debt
11.7 % — Oil Exporting Countries
9.5 % — China and Hong Kong
6.3 % — Japan
1.4 % — United Kingdom
1.3 % — Brazil
1.6 % — All other foreign countries

House Republican Majority Leader Eric Cantor (R-VA) provided some insight to their Social Security views in a recent NPR interview when he was talking about Social Security and said, “We are going to have to come to grips with the fact that these programs cannot exist if we want America to be what we want it to be.”

If the American public were asked about what priority should be placed on the debt owed to Social Security, we have no doubt that they would resoundingly say: “Pay Us Back — pay back the money borrowed from Social Security!”

Former Senator Donald W. Riegle, Democrat, represented Michigan for 18 years in the US Senate and 10 years in the House of Representatives. Lori Hansen served on the Social Security Advisory Board and was a Technical Assistant to Robert M. Ball, former Commissioner of Social Security, in his capacity as a member of the 1982-83 Social Security Commission. 




The Rise of the New, New Left

By Peter Beinart, The Daily Beast
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socialist-occupyWallSt

[Originally 15 September 13]

Bill de Blasio’s win in New York’s Democratic primary isn’t a local story. It’s part of a vast shift that could upend three decades of American political thinking. By Peter Beinart.

aybe Bill de Blasio got lucky. Maybe he only won because he cut a sweet ad featuring his biracial son. Or because his rivals were either spectacularly boring, spectacularly pathological, or running for Michael Bloomberg’s fourth term. But I don’t think so. The deeper you look, the stronger the evidence that de Blasio’s victory is an omen of what may become the defining story of America’s next political era: the challenge, to both parties, from the left. It’s a challenge Hillary Clinton should start worrying about now.

To understand why that challenge may prove so destabilizing, start with this core truth: For the past two decades, American politics has been largely a contest between Reaganism and Clintonism. In 1981, Ronald Reagan shattered decades of New Deal consensus by seeking to radically scale back government’s role in the economy. In 1993, Bill Clinton brought the Democrats back to power by accepting that they must live in the world Reagan had made. Located somewhere between Reagan’s anti-government conservatism and the pro-government liberalism that preceded it, Clinton articulated an ideological “third way”: Inclined toward market solutions, not government bureaucracy, focused on economic growth, not economic redistribution, and dedicated to equality of opportunity, not equality of outcome. By the end of Clinton’s presidency, government spending as a percentage of Gross Domestic Product was lower than it had been when Reagan left office.

Cory Booker: Rising scum, it never ends. Another charlatan designed to pseudo-lead the masses. A cynical Obama spinoff.

Cory Booker: Rising scum, it never ends. Another charlatan designed to pseudo-lead the masses. A cynical Obama spinoff.

For a time, small flocks of pre-Reagan Republicans and pre-Clinton Democrats endured, unaware that their species were marked for extinction. Hard as they tried, George H.W. Bush and Bob Dole could never muster much rage against the welfare state. Ted Kennedy never understood why Democrats should declare the era of big government over. But over time, the older generation in both parties passed from the scene and the younger politicians who took their place could scarcely conceive of a Republican Party that did not bear Reagan’s stamp or a Democratic Party that did not bear Clinton’s. These Republican children of Reagan and Democratic children of Clinton comprise America’s reigning political generation.

By “political generation,” I mean something particular. Pollsters slice Americans into generations at roughly 20-year intervals: Baby Boomers (born mid-1940s to mid-1960s); Generation X (mid-1960s to early 1980s); Millennials (early 1980s to 2000). But politically, these distinctions are arbitrary. To understand what constitutes a political generation, it makes more sense to follow the definition laid out by the early-20th-century sociologist Karl Mannheim. For Mannheim, generations were born from historical disruption. As he argued-and later scholars have confirmed-people are disproportionately influenced by events that occur between their late teens and mid-twenties. During that period-between the time they leave their parents’ home and the time they create a stable home of their own-individuals are most prone to change cities, religions, political parties, brands of toothpaste. After that, lifestyles and attitudes calcify. For Mannheim, what defined a generation was the particular slice of history people experienced during those plastic years. A generation had no set length. A new one could emerge “every year, every thirty, every hundred.” What mattered was whether the events people experienced while at their most malleable were sufficiently different from those experienced by people older or younger than themselves.

Mannheim didn’t believe that everyone who experienced the same formative events would interpret them the same way. Germans who came of age in the early 1800s, he argued, were shaped by the Napoleonic wars. Some responded by becoming romantic-conservatives, others by becomingliberal-rationalists. What they shared was a distinct generational experience, which became the basis for a distinct intra-generational argument.

Warren

Warren

If Mannheim’s Germans constituted a political generation because in their plastic years they experienced the Napoleonic Wars, the men and women who today dominate American politics constitute a political generation because during their plastic years they experienced some part of the Reagan-Clinton era. That era lasted a long time. If you are in your late 50s, you are probably too young to remember the high tide of Kennedy-Johnson big government liberalism. You came of age during its collapse, a collapse that culminated with the defeat of Jimmy Carter. Then you watched Reagan rewrite America’s political rules. If you are in your early ’40s, you may have caught the tail end of Reagan. But even if you didn’t, you were shaped by Clinton, who maneuvered within the constraints Reagan had built. To pollsters, a late 50-something is a Baby Boomer and an early 40-something is a Gen-Xer. But in Mannheim’s terms, they constitute a single generation because no great disruption in American politics divides them. They came of age as Reagan defined a new political era and Clinton ratified it. And as a rule, they play out their political struggles between the ideological poles that Reagan and Clinton set out.

To understand how this plays out in practice, look at the rising, younger politicians in both parties. Start with the GOP. If you look at the political biographies of nationally prominent 40-something Republicans-Bobby Jindal, Scott Walker, Paul Ryan, Marco Rubio, Ted Cruz-what they all have in common is Reagan. Jindal has said about growing up in Louisiana, “I grew up in a time when there weren’t a whole lot of Republicans in this state. But I identified with President Reagan.” At age 17, Scott Walker was chosen to represent his home state of Colorado in a Boys Nation trip to Washington. There he met “his hero, Ronald Reagan,” who “played a big role in inspiring me.” At age 21, Paul Ryan interned for Robert Kasten, who had ridden into the Senate in 1980 on Reagan’s coattails. Two years later he took a job with Jack Kemp, whose 1981 Kemp-Roth tax cut had helped usher in Reaganomics. Growing up in a fiercely anti-communist Cuban exile family in Miami, Marco Rubio writes in his autobiography that “Reagan’s election and my grandfather’s allegiance to him were defining influences on me politically.” Ted Cruz is most explicit of all. “I was 10 when Reagan became president,” he told a conservative group earlier this year. “I was 18 when he left the White House … I’ll go to my grave with Ronald Wilson Reagan defining what it means to be president … and when I look at this new generation of [Republican] leaders I see leaders that are all echoing Reagan.”

Younger Democratic politicians are less worshipful of Clinton. Yet his influence on their worldview is no less profound. Start with the most famous, still-youngish Democrat, a man who although a decade older than Rubio, Jindal, and Cruz, hails from the same Reagan-Clinton generation: Barack Obama. Because he opposed the Iraq War, and sometimes critiqued the Clintons as too cautious when running against Hillary in 2008, some commentators depicted Obama’s victory as a rejection of Clintonism. But to read The Audacity of Hope-Obama’s most detailed exposition of his political outlook-is to be reminded how much of a Clintonian Obama actually is. At Clintonism’s core was the conviction that to revive their party, Democrats must first acknowledge what Reagan got right.

Obama, in describing his own political evolution, does that again and again: “as disturbed as I might have been by Ronald Reagan’s election … I understood his appeal” (page 31). “Reagan’s central insight … contained a good deal of truth” (page 157). “In arguments with some of my friends on the left, I would find myself in the curious position of defending aspects of Reagan’s worldview” (page 289). Having given Reagan his due, Obama then sketches out a worldview in between the Reaganite right and unreconstructed, pre-Reagan left. “The explanations of both the right and the left have become mirror images of each other” (page 24), he declares in a chapter in which he derides “either/or thinking” (page 40). “It was Bill Clinton’s singular contribution that he tried to transcend this ideological deadlock” (page 34). Had the term not already been taken, Obama might well have called his intermediary path the “third way.”

hillary-clinton-hmed-5p.photoblog600The nationally visible Democrats rising behind Obama generally share his pro-capitalist, anti-bureaucratic, Reaganized liberalism. The most prominent is 43-year-old Cory Booker, who is famously close to Wall Street and supports introducing market competition into education via government-funded vouchers for private schools. In the words of New York magazine, “Booker is essentially a Clinton Democrat.” Gavin Newsom, the 45-year-old lieutenant governor of California, has embraced Silicon Valley in the same way Booker has embraced Wall Street. His book, Citizenville,calls for Americans to “reinvent government,” a phrase cribbed from Al Gore’s effort to strip away government bureaucracy in the 1990s. “In the private sector,” he told Time, “leaders are willing to take risks and find innovative solutions. In the public sector, politicians are risk-averse.” Julian Castro, the 39-year-old mayor of San Antonio and 2012 Democratic convention keynote speaker, is a fiscal conservative who supports NAFTA.

The argument between the children of Reagan and the children of Clinton is fierce, but ideologically, it tilts toward the right. Even after the financial crisis, the Clinton Democrats who lead their party don’t want to nationalize the banks, institute a single-payer health-care system, raise the top tax rate back to its pre-Reagan high, stop negotiating free-trade deals, launch a war on poverty, or appoint labor leaders rather than Wall Streeters to top economic posts. They want to regulate capitalism modestly. Their Reaganite Republican adversaries, by contrast, want to deregulate it radically. By pre-Reagan standards, the economic debate is taking place on the conservative side of the field. But-and this is the key point–there’s reason to believe that America’s next political generation will challenge those limits in ways that cause the leaders of both parties fits.

America’s youngest adults are called “Millennials” because the 21st century was dawning as they entered their plastic years. Coming of age in the 21st century is of no inherent political significance. But this calendric shift has coincided with a genuine historical disruption. Compared to their Reagan-Clinton generation elders, Millennials are entering adulthood in an America where government provides much less economic security. And their economic experience in this newly deregulated America has been horrendous. This experience has not produced a common generational outlook. No such thing ever exists. But it is producing a distinct intragenerational argument, one that does not respect the ideological boundaries to which Americans have become accustomed. The Millennials are unlikely to play out their political conflicts between the yard lines Reagan and Clinton set out.

In 2001, just as the first Millennials were entering the workforce, the United States fell into recession. By 2007 the unemployment rate had still not returned to its pre-recession level. Then the financial crisis hit. By 2012, data showed how economically bleak the Millennials’ first decade of adulthood had been. Between 1989 and 2000, when younger members of the Reagan-Clinton generation were entering the job market, inflation-adjusted wages for recent college graduates rose almost 11 percent, and wages for recent high school graduates rose 12 percent. Between 2000 and 2012, it was the reverse. Inflation-adjusted wages dropped 13 percent among recent high school graduates and 8 percent among recent graduates of college.

But it was worse than that. If Millennials were victims of a 21st-century downward slide in wages, they were also victims of a longer-term downward slide in benefits. The percentage of recent college graduates with employer-provided health care, for instance, dropped by half between 1989 and 2011.

The Great Recession hurt older Americans, too. But because they were more likely to already have secured some foothold in the job market, they were more cushioned from the blow. By 2009, the net worth of households headed by someone over 65 was 47 times the net worth of households headed by someone under 35, almost five times the margin that existed in 1984.

One reason is that in addition to coming of age in a terrible economy, Millennials have come of age at a time when the government safety net is far more threadbare for the young than for the middle-aged and old. As the Economic Policy Institute has pointed out, younger Americans are less likely than their elders to qualify for unemployment insurance, food stamps, Temporary Assistance for Needy Families, or the Earned Income Tax Credit. (Not to mention Medicare and Social Security.)

Millennials have also borne the brunt of declines in government spending on higher education. In 2012, according to The New York Times, state and local spending per college student hit a 25-year low. As government has cut back, universities have passed on the (ever-increasing) costs of college to students. Nationally, the share of households owing student debt doubled between 1989 and 2010, and the average amount of debt per household tripled, to $26,000.

Economic hardship has not always pushed Americans to the left. In the Clinton-Reagan era, for instance, the right often used culture and foreign policy to convince economically struggling Americans to vote against bigger government. But a mountain of survey data-plus the heavily Democratic tilt of Millennials in every national election in which they have voted-suggests that they are less susceptible to these right-wing populist appeals. For one thing, right-wing populism generally requires rousing white, Christian, straight, native-born Americans against Americans who are not all those things. But among Millennials, there are fewer white, Christian non-immigrants to rouse. Forty percent of Millennials are racial or ethnic minorities. Less than half say religion is “very important” to their lives.

And even those Millennials who are white, Christian, straight, and native-born are less resentful of people who are not. According to a 2010 Pew survey, whites under the age of 30 were more than 50 points more likely than whites over 65 to say they were comfortable with someone in their familymarrying someone of another ethnicity or race. A 2011 poll by the Public Religion Research Institute found that almost 50 percent of evangelicals under the age of 30 back gay marriage.

Of course, new racial, ethnic, and sexual fault lines could emerge. But today, a Republican seeking to divert Millennial frustrations in a conservative cultural direction must reckon with the fact that Millennials are dramatically more liberal than the elderly and substantially more liberal than theReagan-Clinton generation on every major culture war issue except abortion (where there is no significant generational divide).

They are also more dovish on foreign policy. According to the Pew Research Center, Millennials are close to half as likely as the Reagan-Clinton generation to accept sacrificing civil liberties in the fight against terrorism and much less likely to say the best way to fight terrorism is through military force.

It is these two factors-their economic hardship in an age of limited government protection and their resistance to right-wing cultural populism-that best explain why on economic issues, Millennials lean so far left. In 2010, Pew found that two-thirds of Millennials favored a bigger government with more services over a cheaper one with fewer services, a margin 25 points above the rest of the population. While large majorities of older and middle-aged Americans favored repealing Obamacare in late 2012, Millennials favored expanding it, by 17 points. Millennials are substantially more pro-labor union than the population at large.

The only economic issue on which Millennials show much libertarian instinct is the privatization of Social Security, which they disproportionately favor. But this may be less significant than it first appears. Historically, younger voters have long been more pro-Social Security privatization than older ones, with support dropping as they near retirement age. In fact, when asked if the government should spend more money on Social Security, Millennials are significantly more likely than past cohorts of young people to say yes.

Most striking of all, Millennials are more willing than their elders to challenge cherished American myths about capitalism and class. According to a 2011 Pew study, Americans under 30 are the only segment of the population to describe themselves as “have nots” rather than “haves.” They are far more likely than older Americans to say that business enjoys more control over their lives than government. And unlike older Americans, who favor capitalism over socialism by roughly 25 points, Millennials, narrowly, favor socialism.

There is more reason to believe these attitudes will persist as Millennials age than to believe they will change. For starters, the liberalism of Millennials cannot be explained merely by the fact that they are young, because young Americans have not always been liberal. In recent years, polls have shown young Americans to be the segment of the population most supportive of government-run health care. But in 1978, they were the least supportive. In the last two elections, young Americans voted heavily for Obama. But in 1984 and 1988, Americans under 30 voted Republican for president.

Nor is it true that Americans necessarily grow more conservative as they age. Sometimes they do. But academic studies suggest that party identification, once forged in young adulthood, is more likely to persist than to change. There’s also strong evidence from a 2009 National Bureau of Economic Research paper that people who experience a recession in their plastic years support a larger state role in the economy throughout their lives.

The economic circumstances that have pushed Millennials left are also unlikely to change dramatically anytime soon. A 2010 study by Yale economist Lisa Kahn found that even 17 years later, people who had entered the workforce during a recession still earned 10 percent less than those whoentered when the economy was strong. In other words, even if the economy booms tomorrow, Millennials will still be suffering the Great Recession’s aftershocks for decades.

And the economy is not likely to boom. Federal Reserve Chairman Ben Bernanke doesn’t believe the unemployment rate will reach 6 percent until 2016, and even that will be higher than the 1990s average. Nor are the government protections Millennials crave likely to appear anytime soon. To the contrary, as a result of the spending cuts signed into law in 2010 and the sequester that began this year, non-defense discretionary spending is set to decline by decade’s end to its lowest level in 50 years.

If Millennials remain on the left, the consequences for American politics over the next two decades could be profound. In the 2008 presidential election, Millennials constituted one-fifth of America’s voters. In 2012, they were one-quarter. In 2016, according to predictions by political demographer Ruy Teixeira, they will be one-third. And they will go on constituting between one-third and two-fifths of America’s voters through at least 2028.

This rise will challenge each party, but in different ways. In the runup to 2016, the media will likely feature stories about how 40-something Republicans like Marco Rubio, who blasts Snoop Dog from his car, or Paul Ryan, who enjoys Rage Against the Machine, may appeal to Millennials in ways that geezers like McCain and Romney did not. Don’t believe it. According to a 2012 Harvard survey, young Americans were more than twice as likely to say Mitt Romney’s selection of Ryan made them feel more negative about the ticket than more positive. In his 2010 Senate race, Rubio fared worse among young voters than any other age group. The same goes for Rand Paul in his Senate race that year in Kentucky, and Scott Walker in his 2010 race for governor of Wisconsin and his recall battle in 2012.

Pre-election polls in Ted Cruz’s 2012 senate race in Texas (there were no exit polls) also showed him faring worst among the young.

The likeliest explanation for this is that while younger Republican candidates may have a greater cultural connection to young voters, the ideological gulf is vast. Even if they are only a decade older than Millennials, politicians like Cruz, Rubio, and Walker hail from a different political generation both because they came of age at a time of relative prosperity and because they were shaped by Reagan, whom Millennials don’t remember. In fact, the militantly anti-government vision espoused by ultra-Reaganites like Cruz, Rubio, and Walker isn’t even that popular among MillennialRepublicans. As a July Pew survey notes, Republicans under 30 are more hostile to the Tea Party thanany other Republican age group. By double digits, they’re also more likely than other Republicans to support increasing the minimum wage.

Republicans may modestly increase their standing among young voters by becoming more tolerant on cultural issues and less hawkish on foreign policy, but it’s unlikely they will become truly competitive unless they follow the counsel of conservative commentators Ross Douthat and Reihan Salam and “adapt to a new reality-namely, that today, Americans are increasingly worried about their economic security.” If there’s hope for the GOP, it’s that Millennials, while hungry for government to provide them that economic security, are also distrustful of its capacity to do so. As a result of growing up in what Chris Hayes’ has called the “fail decade” -the decade of the Iraq War, Hurricane Katrina and the financial crisis-Millennials are even more cynical about government than the past generations of young Americans who wanted less from it. If a Republican presidential candidate could match his Democratic opponent as a champion of economic security and yet do so in a way that required less faith in Washington’s competence and benevolence, he might boost the GOP with young voters in a way no number of pop-culture references ever could.

If the Millennials challenge Reaganite orthodoxy, they will likely challenge Clintonian orthodoxy, too. Over the past three decades, Democratic politicians have grown accustomed to campaigning and governing in the absence of a mobilized left. This absence has weakened them: Unlike Franklin Roosevelt or Lyndon Johnson, Bill Clinton and Barack Obama could never credibly threaten American conservatives that if they didn’t pass liberal reforms, left-wing radicals might disrupt social order. But Democrats of the Reagan-Clinton generation have also grown comfortable with that absence. From Tony Coelho, who during the Reagan years taught House Democrats to raise money from corporate lobbyists to Bill Clinton, who made Goldman Sachs co-chairman Robert Rubin his chief economic adviser, to Barack Obama, who gave the job to Rubin’s former deputy and alter ego, Larry Summers, Democrats have found it easier to forge relationships with the conservative worlds of big business and high finance because they have not faced much countervailing pressure from an independent movement of the left.

But that may be changing. Look at the forces that created Occupy Wall Street. The men and women who assembled in September 2011 in Zuccotti Park bore three key characteristics. First, they were young. According to a survey published by City University of New York’s Murphy Institute for Worker Education and Labor, 40 percent of the core activists involved taking over the park were under 30 years old. Second, they were highly educated. Eighty percent possessed at least a bachelors’ degree, more than twice the percentage of New Yorkers overall. Third, they were frustrated economically. According to the CUNY study, more than half the Occupy activists under 30 owed at least $1,000 in student debt. More than a one-third had lost a job or been laid off in the previous five years. In the words of David Graeber, the man widely credited with coining the slogan “We are the 99 percent,” the Occupy activists were “forward-looking people who had been stopped dead in their tracks” by bad economic times.

For a moment, Occupy shook the country. At one point in December 2011, Todd Gitlin points out in Occupy Nation, the movement had branches in one-third of the cities and towns in California. Then it collapsed. But as the political scientist Frances Fox Piven has argued, “The great protest movements of history … did not expand in the shape of a simple rising arc of popular defiance. Rather, they began in a particular place, sputtered and subsided, only to re-emerge elsewhere in perhaps a different form, influenced by local particularities of circumstance and culture.”

It’s impossible to know whether the protest against inequality will be such a movement. But the forces that drove it are unlikely to subside. Many young Americans feel that economic unfairness is costing them a shot at a decent life. Such sentiments have long been widespread among the poor. What’s new is their prevalence among people who saw their parents achieve-and expected for themselves-some measure of prosperity, the people Chris Hayes calls the “newly radicalized upper-middle class.”

If history is any guide, the sentiments behind Occupy will find their way into the political process, just as the anti-Vietnam movement helped create Eugene McCarthy’s presidential bid in 1968, and the civil-rights movement bred politicians like Andrew Young, Tom Bradley, and Jesse Jackson. That’s especially likely because Occupy’s message enjoys significant support among the young. A November 2011 Public Policy Polling survey found that while Americans over 30 opposed Occupy’s goals by close to 20 points, Millennials supported them by 12.

Bill de Blasio’s mayoral campaign offers a glimpse into what an Occupy-inspired challenge to Clintonism might look like. In important ways, New York politics has mirrored national politics in the Reagan-Clinton era. Since 1978, the mayoralty has been dominated by three men-Ed Koch, Rudy Giuliani, and Michael Bloomberg-who although liberal on many cultural issues have closely identified Wall Street’s interests with the city’s. During their time in office, New York has become far safer, cleaner, more expensive, and more unequal. In Bloomberg’s words, New York is now a “high-end product.

City Council Speaker Christine Quinn, despite her roots on the left as a housing and LGBT activist, became Bloomberg’s heir apparent by stymieing bills that would have required businesses to give their employees paid sick leave and mandated a higher minimum wage for companies that receive government subsidies. Early in the campaign, many commentators considered this a wise strategy and anticipated that as New York’s first lesbian mayor, Quinn would symbolize the city’s unprecedented cultural tolerance while continuing its Clintonian economic policies.

Then strange things happened. First, Anthony Weiner entered the race and snatched support from Quinn before exploding in a blaze of late-night comedy. But when Weiner crashed, his support went not back to Quinn but to de Blasio, the candidate who most bluntly challenged Bloomberg’s economic philosophy. Calling it “an act of equalization in a city that is desperately falling into the habit of disparity,” de Blasio made his central proposal a tax on people making over $500,000 to funduniversal childcare. He also called for requiring developers to build more affordable housing and ending the New York Police Department’s “stop and frisk” policies that had angered many African-Americans and Latinos. Bloomberg’s deputy mayor Howard Wolfson tweeted that de Blasio’s “agenda is clear: higher taxes, bigger govt, more biz mandates. A u-turn back to the 70s.”

But in truth, it was Wolfson who was out of date: Fewer and fewer New Yorkers remember the 1970s, when economic stagnation, rising crime, and bloated government helped elect both Ed Koch and Ronald Reagan. What concerns them more today is that, as The New Yorker recently noted, “If the borough of Manhattan were a country, the income gap between the richest twenty per cent and the poorest twenty per cent would be on par with countries like Sierra Leone, Namibia, and Lesotho.” In Tuesday’s Democratic primary, Quinn defeated de Blasio in those parts of New York where average income tops $175,000 per year. But he beat her by 25 points overall.

Democrats in New York are more liberal than Democrats nationally. Still, the right presidential candidate, following de Blasio’s model, could seriously challenge Hillary Clinton. If that sounds far-fetched, consider the last two Democratic presidential primary campaigns. In October 2002, Howard Dean was so obscure that at a Jefferson-Jackson Day dinner, Iowa Sen. Tom Harkin repeatedly referred to him as “John.” But in the summer of 2003, running against the Iraq War amidst a field of Washington Democrats who had voted to authorize it, Dean caught fire. In the first quarter of the year he raised just under $3 million, less than one-third of John Kerry’s total. In the second quarter, he shocked insiders by beating Kerry and raising over $7 million. In the third quarter, he raised almost $15 million, far more than any Democrat ever had. By November, Harkin, Al Gore, and the nation’s two most powerful labor unions had endorsed Dean and he was well ahead in the Iowa polls.

At the last minute, Dean flamed out, undone by harsh attacks from his rivals and his campaign’s lack of discipline. Still, he established a template for toppling a Democratic frontrunner: inspire young voters, raise vast funds via small donations over the Web, and attack those elements of Clintonian orthodoxy that are accepted by Democratic elites but loathed by liberal activists on the ground.

In 2008, that became the template for Barack Obama. As late as October 2007, Hillary enjoyed a 33-point lead in national polls. But Obama made her support for the Iraq War a symbol of her alleged timidity in challenging the right-leaning consensus in Washington. As liberals began to see him as embodying the historic change they sought, Obama started raising ungodly amounts via small donors over the Internet, which in turned won him credibility with insiders in Washington. He overwhelmed Hillary Clinton in caucus states, where liberal activists wield greater power. And he overwhelmed her among younger voters. In the 2008 Iowa caucuses, youth turnout rose 30 percent and among voters under the age of 30, Obama beat Hillary by 46 points.

Hillary starts the 2016 race with formidable strengths. After a widely applauded term as secretary of state, her approval rating is 10 points higher than it was when she began running in 2008. Her vote to authorize Iraq will be less of a liability this time. Her campaign cannot possibly be as poorly managed. And she won’t have to run against Barack Obama.

Still, Hillary is vulnerable to a candidate who can inspire passion and embody fundamental change, especially on the subject of economic inequality and corporate power, a subject with deep resonance among Millennial Democrats. And the candidate who best fits that description is Elizabeth Warren.

First, as a woman, Warren would drain the deepest reservoir of pro-Hillary passion: the prospect of a female president. While Hillary would raise vast sums, Dean and Obama have both shown that in the digital age, an insurgent can compete financially by inspiring huge numbers of small donations. Elizabeth Warren can do that. She’s already shown a knack for going viral. A video of her first Senate banking committee hearing, where she scolded regulators that “too-big-to-fail has become too-big-for-trial,” garnered 1 million hits on YouTube. In her 2012 Senate race, despite never before having sought elected office, she raised $42 million, more than twice as much as the second-highest-raising Democrat. After Bill Clinton and the Obamas, no other speaker at last summer’s Democratic convention so electrified the crowd.

Warren has done it by challenging corporate power with an intensity Clinton Democrats rarely muster. At the convention, she attacked the “Wall Street CEOs-the same ones who wrecked our economy and destroyed millions of jobs-[who] still strut around Congress, no shame, demanding favors, and acting like we should thank them.”

And in one of the biggest applause lines of the entire convention, taken straight from Occupy, she thundered that “we don’t run this country for corporations, we run it for people.”

Don’t be fooled by Warren’s advanced age. If she runs, Millennials will be her base. No candidate is as well positioned to appeal to the young and economically insecure. Warren won her Senate race by eight points overall, but by 30 points among the young. The first bill she introduced in the Senate was a proposal to charge college students the same interest rates for their loans that the Federal Reserve offers big banks. It soon garnered 100,000 hits on YouTube.

A big reason Warren’s speech went viral was its promotion by Upworthy, a website dedicated topublicizing progressive narratives. And that speaks to another, underappreciated, advantage Warren would enjoy. Clinton Democrats once boasted a potent intellectual and media infrastructure. In the late 1980s and 1990s, the Democratic Leadership Council and its think tank, the Progressive Policy Institute, were the Democratic Party’s hottest ideas shops, and they dedicated themselves to restoring the party’s reputation as business-friendly. Influential New Democratic-aligned magazines like The New Republic and Washington Monthly also championed the cause.

Today, that New Democratic infrastructure barely exists. The DLC has closed down. The New Republic and Washington Monthly have moved left. And all the new powerhouses of the liberal media-from Paul Krugman (who was radicalized during the Bush years) to Jon Stewart (who took over The Daily Show in 1999) to MSNBC (which as late as 2008 still carried a show hosted by Tucker Carlson)-believe the Democrats are too soft on Wall Street.

You can see that shift in the race for governor of the Federal Reserve, where the liberal media has rallied behind Janet Yellen and against the more Wall Street-identified Larry Summers. In the age of MSNBC, populist Democrats enjoy a media echo chamber that gives them an advantage over pro-business Democrats that did not exist a decade ago. And if Clinton, who liberal pundits respect, runs against Warren, who liberal pundits revere, that echo chamber will benefit Warren.

Of course, Warren might not run. Or she might prove unready for the national stage. (She has no foreign-policy experience). But the youthful, anti-corporate passion that could propel her candidacy will be there either way. If Hillary Clinton is shrewd, she will embrace it, and thus narrow the path for a populist challenger. Just as New York by electing Ed Koch in 1978 foreshadowed a national shift to the right, New York in 2013 is foreshadowing a national shift to the left. The door is closing on the Reagan-Clinton era. It would be ironic if it was a Clinton herself who sealed it shut.

ABOUT THE AUTHOR

American political pundit. A former editor of The New Republic, he has written forTimeThe New York TimesThe New York Review of Books among other periodicals, and is the author of three books. He is associate professor of journalism and political science at City University of New York, senior political writer for The Daily Beast and the editor of its blog “Open Zion”. Beinart has been notably outspoken in support of liberal Zionism and critical of the Israeli settler movement.[2] 




Elizabeth Warren Comes Down Hard Against Global Warming, Separates Herself From Hillary Clinton on Climate Change

By Eric Zuesse

In two ways, now, Elizabeth Warren is opposing Hillary Clinton. Until December 20th, it was only in one way. This is major political news.

On Friday, December 20th, Democratic U.S. Senator Elizabeth Warren finally separated herself clearly from former U.S. Secretary of State Hillary Clinton, regarding the issue of climate change and global warming. Here is the story:

TransCanada Corporation wants to build the Keystone XL Pipeline to carry oil from Alberta Canada’s tar sands to two refineries owned by Koch Industries near the Texas Gulf Coast, for export to Europe; and Hillary Clinton has helped to make that happen, but Elizabeth Warren has now taken the opposite side.

Secretary of State Clinton, whose friend and former staffer Paul Elliot is a lobbyist for TransCanada, had worked behind the scenes to ease the way for commercial exploitation of this, the world’s highest-carbon-emitting oil, 53% of which oil is owned by America’s Koch Brothers. (Koch Industries owns 63% of the tar sands, and the Koch brothers own 86% of Koch Industries; Elaine Marshall, who is the widow of the son of the deceased Koch partner J. Howard Marshall, owns the remaining 14% of Koch Industries.)

David Goldwyn, who “served as Secretary of State Hillary Clinton’s Special Envoy and Coordinator for International Energy Affairs,” is yet another   lobbyist for TransCanada.   So, TransCanada has two of Hillary’s friends working for them. Misters Elliot and Goldwyn thus worked intimately with Hillary’s people to guide them on selecting a petroleum-industry contractor (not an environmental firm, much less any governmental agency) to prepare the required environmental-impact statement for this proposed pipeline.

Hillary Clinton: A complete sellout to corporate power.

Clinton:  Poster girl for liberaloid sellout to corporate power. 

Hillary Clinton as the Secretary of State had already displayed a record of carrying out the policies that were being promoted by her lobbyist friends, when she did everything possible, early in President Obama’s first term, to support U.S. funding for the fascist junta in Honduras that perpetrated a coup d’etat on 28 June 2009 overthrowing that nation’s progressive democratically elected President, and who then installed their own regime, and promptly placed their country into a continuing violent terror that caused Honduras ever since to be the nation with the highest murder rate in the world. Hillary’s lobbyist friend in that particular matter was Lanny Davis, who also is an occasional Fox News contributor.

Secretary Clinton’s State Department thus allowed the environmental-impact statement on the proposed Keystone XL Pipeline to be performed by a petroleum-industry contractor that was chosen by the company that was proposing to build and own the pipeline, TransCanada. That contractor had no climatologist, and their resulting report failed even at its basic job of estimating the number of degrees by which the Earth’s climate would be additionally heated if this pipeline is built and operated. Their report ignored that question, and instead evaluated the impact that climate change would have on the pipeline, which was estimated to be none.

President Obama himself is now trying to force the European Union to relax their anti-global-warming regulations so as to permit them to import the Kochs’ dirty oil. His agent in this effort is his new U.S. Trade Representative, Michael Froman, from Wall Street.

But on December 20th, Senator Warren signed onto a letter criticizing the Obama Administration’s apparent effort to force the European Union to agree to purchase this oil. As the Huffington Post’s Kate Sheppard reported, “Six senators and 16 House members, all Democrats, wrote a letter to Froman on Friday asking him to elaborate on his position on the matter. ‘If these reports are accurate, USTR’s [the U.S. Trade Representative’s] actions could undercut the EU’s commendable goal of reducing greenhouse-gas emissions in its transportation sectors,” these 22 Democratic lawmakers wrote.

This is, essentially, a rebellion by 22 progressive congressional Democrats against the Clinton-Obama effort to provide a market for the Kochs’ dirty oil. This letter was actually written by Representative Henry Waxman and Senator Sheldon Whitehouse, and co-signed by Senators Barbara Boxer, Ed Markey, Dick Durbin, Jeff Merkley, and Elizabeth Warren; and Representatives John Conyers, Jr., Barbara Lee, Raúl M. Grijalva, Rush Holt, Louise M. Slaughter, Jerrold Nadler, Judy Chu, Peter DeFazio, Anna G. Eshoo, Sam Farr, Peter Welch, Alan Lowenthal, Mark Pocan, and Steve Cohen.

What is at issue in the Keystone XL and Alberta tar-sands matter is governmental policies that will determine whether the tar-sands oil will undercut the production-costs of normal oil. Right now, normal oil costs far less to mine, process, and get to market (because tar sands oil is so dirty and so land-locked). However, if the Kochs win, then the existing governmental policies will change in ways that will eliminate this cost-advantage of normal oil. The result of that would be increased sales and burning of the tar-sands oil, and thus reduced sales and burning of cleaner oil. That would throw into the atmosphere “more than $70 billion in additional damages associated with climate change over 50 years.” However, that added $70 billion would be the added harms to the entire world, not to the owners of the tar sands.

The benefits to Koch Industries, from this competitive re-alignment in favor of tar-sands oil, have been estimated to be around $100 billion. This would add about $45 billion to the net worth of David Koch, $45 billion to the net worth of Charles Koch, and $15 billion to the net worth of Elaine Marshall. (David and Charles would then become the two wealthiest individuals in the world.)

On December 17th, the Republican House budget chief, Paul Ryan,   threatened to drive the U.S. government into default unless President Obama approves the Keystone XL Pipeline.

President Obama holds the sole authority to approve or disapprove this project, because it crosses the international border, but he has delayed this decision for years, because he doesn’t want to enrage the environmental community, and also because his tipping his hand in that way would be almost entirely a waste if he cannot first get Europe to weaken their environmental standards so as to allow this oil to compete in Europe with normal oil as if it weren’t far more damaging to the climate than normal oil is — just ignore that harm being added to the entire planet.

Thus, Senator Warren has now joined with the progressives on two big issues that arouse intense opposition to her from the aristocrats who finance most political campaigns: She opposes the taxpayer-handouts to Wall Street, and she now also opposes the entire planet’s, basically, environmental handouts, to the owners of the most-harmfully polluting corporations, such as Koch Industries. (The other owners of tar-sands oil are Conoco-Phillips, Exxon-Mobil, and Chevron-Texaco.)

This could be a turning-point in Warren’s political career. She’s no longer at war against only the financial-industry corruption that dominates the conservative, Clinton and Obama, establishment within the Democratic Party (and all of the Republican Party), but she is also at war against their environmental corruption. For yet another example of that corruption: On 2 October 2013, Joe Romm at Think Progress headlined “More Bad News For Fracking: IPCC Warns Methane Traps Much More Heat,” and he reported that, “The Intergovernmental Panel on Climate Change (IPCC) reports that methane … is far more potent a greenhouse gas” than previously known, so bad it “would gut the climate benefits of switching from coal.” And then, just five days after that, Jon Campbell in upstate New York headlined “In Oneida County, Hillary Clinton Touts U.S. Oil-and-Gas Production,” and he reported that at Hamilton College, Hillary Clinton praised fracking for methane, by saying, “What that means for viable manufacturing and industrialization in this country is enormous.” However, if Warren won’t be able to get either Wall Street or the oil patch to finance her political campaigns, then how can she even possibly rise within the power-structure?

ABOUT THE AUTHOR

Investigative historian Eric Zuesse is the author, most recently, of They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010and of CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.




Buzzsaw : Abby Martin on Breaking The Set and Her Work

 

We hail and support the appearance of citizens’ media capable of eventually neutralizing and rolling back the lies of the corporate press. 




What Really Happened in Ukraine

Putin Scores a New Victory
by ISRAEL SHAMIR, Counterpunch

Between misguided ultra-nationalists, the naive who think the EU signifies instant affluence, and unrelenting US-paid street agitation, the Ukraine has been shaken by huge demonstrations.

Between misguided ultra-nationalists, the naive who think the EU signifies instant affluence, and unrelenting US-paid street agitation, the Ukraine has been shaken by huge demonstrations.

Kiev.

It is freezing cold in Kiev, legendary city of golden domes on the banks of Dnieper River – cradle of ancient Russian civilisation and the most charming of East European capitals. It is a comfortable and rather prosperous place, with hundreds of small and cosy restaurants, neat streets, sundry parks and that magnificent river. The girls are pretty and the men are sturdy. Kiev is more relaxed than Moscow, and easier on the wallet. Though statistics say the Ukraine is broke and its people should be as poor as Africans, in reality they aren’t doing too badly, thanks to their fiscal imprudence. The government borrowed and spent freely, heavily subsidised housing and heating, and they brazenly avoided devaluation of the national currency and the austerity program prescribed by the IMF. This living on credit can go only so far: the Ukraine was doomed to default on its debts next month or sooner, and this is one of the reasons for the present commotion.

A tug-of-war between the East and the West for the future of Ukraine lasted over a month, and has ended for all practical purposes in a resounding victory for Vladimir Putin, adding to his previous successes in Syria and Iran. The trouble began when the administration of President Yanukovich went looking for credits to reschedule its loans and avoid default. There were no offers. They turned to the EC for help; the EC, chiefly Poland and Germany, seeing that the Ukrainian administration was desperate, prepared an association agreement of unusual severity.

The EC is quite hard on its new East European members, Latvia, Romania, Bulgaria et al.: these countries had their industry and agriculture decimated, their young people working menial jobs in Western Europe, their population drop exceeded that of the WWII.

But the association agreement offered to the Ukraine was even worse. It would turn the Ukraine into an impoverished colony of the EC without giving it even the dubious advantages of membership (such as freedom of work and travel in the EC). In desperation, Yanukovich agreed to sign on the dotted line, in vain hopes of getting a large enough loan to avoid collapse. But the EC has no money to spare – it has to provide for Greece, Italy, Spain. Now Russia entered the picture. At the time, relations of the Ukraine and Russia were far from good. Russians had become snotty with their oil money, the Ukrainians blamed their troubles on Russians, but Russia was still the biggest market for Ukrainian products.

For Russia, the EC agreement meant trouble: currently the Ukraine sells its output in Russia with very little customs protection; the borders are porous; people move freely across the border, without even a passport. If the EC association agreement were signed, the EC products would flood Russia through the Ukrainian window of opportunity. So Putin spelled out the rules to Yanukovich: if you sign with the EC, Russian tariffs will rise. This would put some 400,000 Ukrainians out of work right away. Yanukovich balked and refused to sign the EC agreement at the last minute. (I predicted this in my report from Kiev full three weeks before it happened, when nobody believed it – a source of pride).

The EC, and the US standing behind it, were quite upset. Besides the loss of potential economic profit, they had another important reason: they wanted to keep Russia farther away from Europe, and they wanted to keep Russia weak. Russia is not the Soviet Union, but some of the Soviet disobedience to Western imperial designs still lingers in Moscow: be it in Syria, Egypt, Vietnam, Cuba, Angola, Venezuela or Zimbabwe, the Empire can’t have its way while the Russian bear is relatively strong. Russia without the Ukraine can’t be really powerful: it would be like the US with its Mid-western and Pacific states chopped away. The West does not want the Ukraine to prosper, or to become a stable and strong state either, so it cannot join Russia and make itstronger. A weak, poor and destabilised Ukraine in semi-colonial dependence to the West with some NATO bases is the best future for the country, as perceived by Washington or Brussels.

Angered by this last-moment-escape of Yanukovich, the West activated its supporters. For over a month, Kiev has been besieged by huge crowds bussed from all over the Ukraine, bearing a local strain of the Arab Spring in the far north. Less violent than Tahrir, their Maidan Square became a symbol of struggle for the European strategic future of the country. The Ukraine was turned into the latest battle ground between the US-led alliance and a rising Russia. Would it be a revanche for Obama’s Syria debacle, or another heavy strike at fading American hegemony?

The simple division into “pro-East” and “pro-West” has been complicated by the heterogeneity of the Ukraine. The loosely knit country of differing regions is quite similar in its makeup to the Yugoslavia of old. It is another post-Versailles hotchpotch of a country made up after the First World War of bits and pieces, and made independent after the Soviet collapse in 1991. Some parts of this “Ukraine” were incorporated by Russia 500 years ago, the Ukraine proper (a much smaller parcel of land, bearing this name) joined Russia 350 years ago, whilst the Western Ukraine (called the “Eastern Regions”) was acquired by Stalin in 1939, and the Crimea was incorporated in the Ukrainian Soviet Republic by Khrushchev in 1954.

The Ukraine is as Russian as the South-of-France is French and as Texas and California are American. Yes, some hundreds years ago, Provence was independent from Paris, – it had its own language and art; while Nice and Savoy became French rather recently. Yes, California and Texas joined the Union rather late too. Still, we understand that they are – by now – parts of those larger countries, ifs and buts notwithstanding. But if they were forced to secede, they would probably evolve a new historic narrative stressing the French ill treatment of the South in the Cathar Crusade, or dispossession of Spanish and Russian residents of California.

Accordingly, since the Ukraine’s independence, the authorities have been busy nation-building, enforcing a single official language and creating a new national myth for its 45 million inhabitants. The crowds milling about the Maidan were predominantly (though not exclusively) arrivals from Galicia, a mountainous county bordering with Poland and Hungary, 500 km (300 miles) away from Kiev, and natives of the capital refer to the Maidan gathering as a “Galician occupation”.

Like the fiery Bretons, the Galicians are fierce nationalists, bearers of a true Ukrainian spirit (whatever that means). Under Polish and Austrian rule for centuries, whilst the Jews were economically powerful, they are a strongly anti-Jewish and anti-Polish lot, and their modern identity centred around their support for Hitler during the WWII, accompanied by the ethnic cleansing of their Polish and Jewish neighbours. After the WWII, the remainder of pro-Hitler Galician SS fighters were adopted by US Intelligence, re-armed and turned into a guerrilla force against the Soviets. They added an anti-Russian line to their two ancient hatreds and kept fighting the “forest war” until 1956, and these ties between the Cold Warriors have survived the thaw.

After 1991, when the independent Ukraine was created, in the void of state-building traditions, the Galicians were lauded as ‘true Ukrainians’, as they were the only Ukrainians who ever wanted independence. Their language was used as the basis of a new national state language, their traditions became enshrined on the state level. Memorials of Galician Nazi collaborators and mass murderers Stepan Bandera and Roman Shukhevych peppered the land, often provoking the indignation of other Ukrainians. The Galicians played an important part in the 2004 Orange Revolution as well, when the results of presidential elections were declared void and the pro-Western candidate Mr Yuschenko got the upper hand in the re-run.

However, in 2004, many Kievans also supported Yuschenko, hoping for the Western alliance and a bright new future. Now, in 2013, the city’s support for the Maidan was quite low, and the people of Kiev complained loudly about the mess created by the invading throngs: felled trees, burned benches, despoiled buildings and a lot of biological waste. Still, Kiev is home to many NGOs; city intellectuals receive generous help from the US and EC. The old comprador spirit is always strongest in the capitals.

For the East and Southeast of the Ukraine, the populous and heavily industrialised regions, the proposal of association with the EC is a no-go, with no ifs, ands or buts. They produce coal, steel, machinery, cars, missiles, tanks and aircraft. Western imports would erase Ukrainian industry right off the map, as the EC officials freely admit. Even the Poles, hardly a paragon of industrial development, had the audacity to say to the Ukraine: we’ll do the technical stuff, you’d better invest in agriculture. This is easier to say than to do: the EC has a lot of regulations that make Ukrainian products unfit for sale and consumption in Europe. Ukrainian experts estimated their expected losses for entering into association with the EC at anything from 20 to 150 billion euros.

For Galicians, the association would work fine. Their speaker at the Maidan called on the youth to ‘go where you can get money’ and do not give a damn for industry. They make their income in two ways: providing bed-and breakfast rooms for Western tourists and working in Poland and Germany as maids and menials. They hoped they would get visa-free access to Europe and make a decent income for themselves. Meanwhile, nobody offered them a visa-waiver arrangement. The Brits mull over leaving the EC, because of the Poles who flooded their country; the Ukrainians would be too much for London. Only the Americans, always generous at somebody’s else expense, demanded the EC drop its visa requirement for them.

While the Maidan was boiling, the West sent its emissaries, ministers and members of parliament to cheer the Maidan crowd, to call for President Yanukovich to resign and for a revolution to install pro-Western rule. Senator McCain went there and made a few firebrand speeches. The EC declared Yanukovich “illegitimate” because so many of his citizens demonstrated against him. But when millions of French citizens demonstrated against their president, when Occupy Wall Street was violently dispersed, nobody thought the government of France or the US president had lost legitimacy…

Victoria Nuland, the Assistant Secretary of State, shared her biscuits with the demonstrators, and demanded from the oligarchs support for the “European cause” or their businesses would suffer. The Ukrainian oligarchs are very wealthy, and they prefer the Ukraine as it is, sitting on the fence between the East and the West. They are afraid that the Russian companies will strip their assets should the Ukraine join the Customs Union, and they know that they are not competitive enough to compete with the EC. Pushed now by Nuland, they were close to falling on the EC side.

Yanukovich was in big trouble. The default was rapidly approaching. He annoyed the pro-Western populace, and he irritated his own supporters, the people of the East and Southeast. The Ukraine had a real chance of collapsing into anarchy. A far-right nationalist party, Svoboda (Liberty), probably the nearest thing to the Nazi party to arise in Europe since 1945, made a bid for power. The EC politicians accused Russia of pressurising the Ukraine; Russian missiles suddenly emerged in the western-most tip of Russia, a few minutes flight from Berlin. The Russian armed forces discussed the US strategy of a “disarming first strike”. The tension was very high.

Edward Lucas, the Economist’s international editor and author of The New Cold War, is a hawk of the Churchill and Reagan variety. For him, Russia is an enemy, whether ruled by Tsar, by Stalin or by Putin. Hewrote: “It is no exaggeration to say that the [Ukraine] determines the long-term future of the entire former Soviet Union. If Ukraine adopts a Euro-Atlantic orientation, then the Putin regime and its satrapies are finished… But if Ukraine falls into Russia’s grip, then the outlook is bleak and dangerous… Europe’s own security will also be endangered. NATO is already struggling to protect the Baltic states and Poland from the integrated and increasingly impressive military forces of Russia and Belarus. Add Ukraine to that alliance, and a headache turns into a nightmare.”

In this cliff-hanging situation, Putin made his pre-emptive strike. At a meeting in the Kremlin, he agreed to buy fifteen billion euros worth of Ukrainian Eurobonds and cut the natural gas price by a third. This meant there would be no default; no massive unemployment; no happy hunting ground for the neo-Nazi thugs of Svoboda; no cheap and plentiful Ukrainian prostitutes and menials for the Germans and Poles; and Ukrainian homes will be warm this Christmas. Better yet, the presidents agreed to reforge their industrial cooperation. When Russia and Ukraine formed a single country, they built spaceships; apart, they can hardly launch a naval ship. Though unification isn’t on the map yet, it would make sense for both partners. This artificially divided country can be united, and it would do a lot of good for both of their populaces, and for all people seeking freedom from US hegemony.

There are a lot of difficulties ahead: Putin and Yanukovich are not friends, Ukrainian leaders are prone to renege, the US and the EC have a lot of resources. But meanwhile, it is a victory to celebrate this Christmastide. Such victories keep Iran safe from US bombardment, inspire the Japanese to demand removal of Okinawa base, encourage those seeking closure of Guantanamo jail, cheer up Palestinian prisoners in Israeli prisons, frighten the NSA and CIA and allow French Catholics to march against Hollande’s child-trade laws.

***

What is the secret of Putin’s success? Edward Lucas said, in an interview to the pro-Western Ekho Moskvy radio: “Putin had a great year – Snowden, Syria, Ukraine. He checkmated Europe. He is a great player: he notices our weaknesses and turns them into his victories. He is good in diplomatic bluff, and in the game of Divide and Rule. He makes the Europeans think that the US is weak, and he convinced the US that Europeans are useless”.

I would offer an alternative explanation. The winds and hidden currents of history respond to those who feel their way. Putin is no less likely a roguish leader of global resistance than Princess Leia or Captain Solo were in Star Wars. Just the time for such a man is ripe.

Unlike Solo, he is not an adventurer. He is a prudent man. He does not try his luck, he waits, even procrastinates. He did not try to change regime in Tbilisi in 2008, when his troops were already on the outskirts of the city. He did not try his luck in Kiev, either. He has spent many hours in many meetings with Yanukovich whom he supposedly personally dislikes.

 

Like Captain Solo, Putin is a man who is ready to pay his way, full price, and such politicians are rare. “Do you know what is the proudest word you will ever hear from an Englishman’s mouth?”, asked a James Joyce character, and answered: “His proudest boast is I paid my way.” Those were Englishmen of another era, long before the likes of Blair, et al.

While McCain and Nuland, Merkel and Bildt speak of the European choice for the Ukraine, none of them is ready to pay for it. Only Russia is ready to pay her way, in the Joycean sense, whether in cash, as now, or in blood, as in WWII.

Putin is also a magnanimous man. He celebrated his Ukrainian victory and forthcoming Christmas by forgiving his personal and political enemies and setting them free: the Pussy Riot punks, Khodorkovsky the murderous oligarch, rioters… And his last press conference he carried out in Captain Solo self-deprecating mode, and this, for a man in his position, is a very good sign.

Israel Shamir reports from Moscow for Counterpunch, comments on RT and pens a regular column in Russia’s largest daily, KP. He can be reached at adam@israelshamir.net

[Language editing by Ken Freeland]
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Israel Shamir is an internationally acclaimed radical spiritual and political thinker, Internet columnist and writer. His comments about current affairs and their deeper meaning are published on his site www.israelshamir.net and elsewhere. They are also collected in three books, Galilee FlowersCabbala of Power and recently published Masters of Discourse available in English, French, German, Spanish, Russian, Arabic, Norwegian, Swedish, Italian, Hungarian etc.

A native of Novosibirsk , Siberia, he moved to Israel in 1969, served as paratrooper in the army and fought in the 1973 war. After the war, he turned to journalism and writing. In 1975, Shamir joined the BBC and moved to London . In 1977-79 he lived in Japan . After returning to Israel in 1980, Shamir wrote for the Israeli daily newspaper Haaretz, and was the Knesset spokesman for the Israel Socialist Party (Mapam). He translated and annotated the cryptic works of S.Y. Agnon, the only Hebrew Nobel Prize winning writer, from the original Hebrew into Russian. In 2006 his mammoth annotated translation of a medieval Hebrew classic Sefer Yohassin (The Book of Lineage) was published by Zacuto Books. Shamir also translated the Odyssey, and selected chapters of Joyce’sUlysses.

But Palestine , its sad history and enchanting landscape remained his most important subject. His views were summed up in The Pine and the Olive, the story of Palestine/Israel, published in 1988 and republished in 2004, and became a cult book among the readers. The second Palestinian Intifada turned Shamir to his highly political and poetic pieces centred on Palestine . As the battle for Palestine spilled over into Iraq , Shamir wrote more about the deeper, philosophical and theological meaning of the war. In 2004 he was received in the Orthodox Church of Jerusalem and Holy Land , being baptised Adam by Archbishop Theodosius Attalla Hanna. Shamir (60) lives in Jaffa and spends much time in Moscow and Stockholm ; he is father of three sons.