Doesn’t anyone remember ‘The Power of Nightmares’?


The Power of Nightmares, subtitled The Rise of the Politics of Fear, written and produced by Adam Curtis, was a BBC documentary film series broadcast in 2004.

The films compare the rise of the American Neo-Conservative movement and the radical Islamist movement, making comparisons on their origins and noting strong similarities between the two. More controversially, it argues that the threat of radical Islamism as a massive, sinister organised force of destruction, specifically in the form of al-Qaeda, is in fact a myth perpetrated by politicians in many countries—and particularly American Neo-Conservatives—in an attempt to unite and inspire their people following the failure of earlier, more utopian ideologies.

Nafeez Mosaddeq Ahmed charts the similar processes operating in the current instalment of the so-called ‘War on Terror’ – the threat of ISIS.  His article (16.11.15), posted on openDemocracy, is an extremely important read given the UK Government’s determination to get involved in the bombing.   As Nafeez warns of the intention behind the latest spate of atrocities which culminated in Paris:

The goal, of course, is to inflict trauma, fear, paranoia, suspicion, panic and terror – but there is a particularly twisted logic as part of this continuum of violence, which is to draw the western world into an apocalyptic civilizational Armageddon with ‘Islam.’

Below, I copy and paste Nafeez’ conclusion to ‘ISIS want to destroy the ‘grey zone’.  Here’s how we defend it’, but I recommend that you read the piece in its entirety:

All this calls for a complete re-think of our approach to terrorism. We require, urgently, an international public inquiry into the colossal failure of the strategies deployed in the ‘war on terror.’

How has over $5 trillion succeeded only in permitting an extremist terror-state, to conquer a third of Iraq and Syria, while carrying out a series of assaults on cities across the region and in the heart of Europe?

The re-assessment must accompany concrete measures, now.

First and foremost, our alliances with terror-sponsoring dictatorships across the Muslim world must end. All the talk of making difficult decisions is meaningless if we would rather sacrifice civil liberties instead of sacrificing profit-oriented investments in brutal autocracies like Saudi Arabia, which have exploited western dependence on its oil resources to export Islamist extremism around the world.

Addressing those alliances means taking decisive action to enforce punitive measures in terms of the financing of Islamist militants, the facilitation of black-market ISIS oil sales, and the export of narrow extremist ideologies. Without this, military experts can give as much lip-service to ‘draining the swamp’ as they like – it means nothing if we think draining it means using a few buckets to fling out the mud while our allies pour gallons back in.

Secondly, in Syria, efforts to find a political resolution to the conflict must ramp up. So far, neither the US nor Russia, driven by their own narrow geopolitical concerns, have done very much to destroy ISIS strongholds. The gung-ho entry of Russia into the conflict has only served to unify the most extreme jihadists and vindicate ISIS’s victim-bating claim to be a ‘David’ fighting the ‘Goliath’ of a homogenous “kafir” (infidel) crusader-axis.

Every military escalation has been followed by a further escalation, because ISIS itself was incubated in the militarized nightmare of occupied Iraq and Assad-bombed Syria.

Thirdly, and relatedly, all military support to all actors in the Syria conflict must end. Western powers can pressurise their Gulf and Turkish state allies to end support to rebel groups, which is now so out of control that there is no longer any prospect of preventing such support from being diverted to ISIS; while Russia and Iran can withdraw their aid to Assad’s bankrupt regime. If Russia and France genuinely wish to avoid further blowback against their own citizens, they would throw their weight behind such measures with a view to force regional actors to come to the negotiating table.

Fourthly, it must be recognized that contrary to the exhortations of fanatics like Douglas Murray, talk of ‘solidarity’ is not merely empty sloganeering. The imperative now is for citizens around the world to work together to safeguard what ISIS calls the “grey zone” – the arena of co-existence where people of all faith and none remain unified on the simple principles of our common humanity. Despite the protestations of extremists, the reality is that the vast majority of secular humanists and religious believers accept and embrace this heritage of mutual acceptance.

But safeguarding the “grey zone” means more than bandying about the word ‘solidarity’ – it means enacting citizen-solidarity by firmly rejecting efforts by both ISIS and the far-right to exploit terrorism as a way to transform our societies into militarized police-states where dissent is demonized, the Other is feared, and mutual paranoia is the name of the game. That, in turn, means working together to advance and innovate the institutions, checks and balances, and accountability necessary to maintain and improve the framework of free, open and diverse societies.

It is not just ISIS that would benefit from a dangerous shift to the contrary.

Incumbent political elites keen to avoid accountability for a decade and a half of failure will use heightened public anxiety to push through more of the same. They will seek to avoid hard questions about past failures, while casting suspicion everywhere except the state itself, with a view to continue business-as-usual. And in similar vein, the military-industrial complex, whose profits have come to depend symbiotically on perpetual war, wants to avoid awkward questions about lack of transparency and corrupt relationships with governments. They would much rather keep the trillion-dollar gravy train flowing out of the public purse.

Milan Kundera — ‘The struggle of man against power is the struggle of memory against forgetting’

Let’s not forget that we were swept into the invasion of Iraq on false pretences, with disastrous results for the peoples of the region.  Let’s fight even harder to stop the political elites in their gung-ho desire to bomb.  Let’s argue for the alternatives suggested by Nafeez Ahmed.  Jeremy Corbyn is certainly on board… but it seems that some of the Parliamentary Labour Party, like Mike Gapes and John Woodcock, are minded to vote with David Cameron and the Conservatives.  It is up to the LP membership and all right-minded people to challenge their decision, and so block Cameron’s futile plan to bomb a solution on the Middle East.


Further recommended:

Welcome to the 21st century – The Crisis of Civilisation Nafeez Ahmed’s 2011 “Crisis of civilization” film  (80 minutes)

The Power of Nightmares  Adam Curtice’s three part BBC documentary


Terrorism, Globalization and Conspiracy – Michael Parenti


Michael Parenti speaking in 2002 but he might as well be speaking now…. and he is well worth hearing now!  An hour of your life to understand the links between Capitalism, Poverty, the Trade Deals, Globalisation, Debt, the fall of the Soviet Union, the invasion of Iraq, Afghanistan and finally, Terrorism.


Terrorism, Globalization and Conspiracy – Michael Parenti

Deficit Fetish: Just say “No!”


Balancing Budgets: The Austerity Dogma

By John Weeks, previously published here on Piera

Twitter: @johnweeks41

Austerity NO

The Austerity dogma of George Osborne asserts that a negative balance between public revenue and overall public spending (deficit) is a problem requiring immediate policy measures to eliminate it.  He has gone further, asserting that the fiscal balance should be positive (surplus) when the economy is at or near its capacity.  His invariant form of “correction” is expenditure reduction (aka “austerity”).

He and his supporters give three justifications for this dogma.  There is the reductionist argument that compares public sector budgeting to households, so obvious to the austerity-advocates that it requires no explanation  Households must balance their books (“cannot spend more than their incomes”), and the same applies (or should apply) to governments.

Anyone who believes that households must spend no more than current income has never bought a house, sent an offspring to university or found her/himself between jobs (due to redundancy, firing or voluntary employment shift).

Statistics refute the like-households argument. Households across the income distribution spend more than their incomes, early and often.  That is why PwC projects average UK household debt to reach £10,000 at the end of 2016 excluding mortgages.  The very limited truth in the false comparison comes at the bottom of the income distribution, where households have no choice but to engage in desperation borrowing (see study by Johanna Montgomerie).

The more fundamental falsifier of the household-equals-government argument is that the UK government can borrow from itself and a household cannot. The government of a country that has a national currency is not constrained in its spending by revenue flow alone.  However, macroeconomic conditions can impose binding constraints to public spending, which I discuss at a later point.

Superficially more serious is the argument that public sector deficits put upward pressure on market interest rates.  Government bond sales compete with private borrowing, interest rates rise and private debt become more expensive and investment declines (“crowded out”).  Whether this represents an important macroeconomic interaction in general remains subject of empirical debate.

At the moment it is obviously irrelevant because the Bank of England rate is below one percent and money market rates hardly higher.  Indeed, a rise in interest rates could bring benefits, such as higher returns to pension funds.  Were the UK government concerned about “crowding out” it has an obvious way to avoid it, borrowing directly from the Bank of England (“monetizing” the deficit).

Another frequently encountered assertion is that the Chancellor should avoid public sector deficits because they generate inflationary pressures.  There exist concrete circumstances when this would happen, but at the moment the overall rate of inflation in the UK is slightly negative, and the “core inflation rate” is barely over one percent.

Finally, the deficit has been falling (albeit slowly), and for fiscal year 2014/15 was less than £60 billion (below 5% of GDP compared to over 10% in mid-2012).  With inflation at zero, government borrowing falling, and no empirical or theoretical basis for the dangers of deficits, further budget cuts would qualify as gratuitous and ideological.

Balancing Budgets: Anti-Austerity Variations

Among critics of Chancellor Osborne’s policies appear two counter proposals for fiscal policy guidelines, 1) borrow only for investment, and 2) balance the budget “over the economic cycle”.  Close inspection of these suggests that they are variations on the austerity argument rather than refutations.

The first would maintain balance or a surplus for current expenditure, and fund public investment through borrowing by sale of government bonds in the financial market or borrowing from the Bank of England.  In mainstream economics the former has no impact on the supply of money, while the latter increases it by the amount of the borrowing.  The qualifier “in mainstream economics” is necessary because a considerable portion of the economics profession rejects the implicit assumption that the supply of money is independent of the level of output.

We need not wade into the money supply argument to see that the “borrow only to invest” position accepts that deficits are a problem, though limiting the problematic role to the current budget, total revenue flows less non-investment expenditure.  In practice the distinction between current and capital (investment) expenditure is far from black and white.

By usual definition investment includes all expenditures that increase the capacity of the economy, now or in the future.  There should be no argument that much of education and health spending does exactly this, which explains the origin of the term “human capital”.  However, all but the building and equipment component of health and education fall into current expenditure.  This arbitrary definition treats activities of doctors, nurses and teachers analogously to those who repair and maintain capital equipment rather than improve human health and skills.

Finally the borrow-only-to-invest policy encounters a serious problem.  When economic contraction causes public revenue to fall below current expenditure, should a government cuts in public services and social support?  If so, this policy becomes a variant on the Chancellor’s austerity dogma.  And not making cuts implies that the policy cannot be implemented.

The second approach also considers deficits as problems needing correction, over the economic cycle rather than continuously.  The concrete guideline is that the fiscal balance can be negative when the economy falls into recession, then moves into surplus as it recovers.

In practice this policy framework flounders on several empirical and analytical flaws.  First, defining the length of the period over which the sum of deficits and surpluses sum to zero defies consensus.  Without clear definitions of the beginning and end of a cycle this framework cannot be implemented without arbitrary guidelines.

Both approaches offered as a counter to austerity suffer from the same fallacy as the dogma itself.  Any rule requiring a fiscal balance must apply arbitrary assumptions and definitions in order to define when the outcome conforms to the rule.  Supporters of budget cuts have attacked critics of austerity as “deficit deniers”.

The meaning of this accusatory term remains elusive, but it carries the implication that opponents of expenditure cuts “do not care” about the deficit and/or do not consider it a problem.

The counter proposals might be seen as being “semi-denials”.  Those advocating balancing the current budget deny the need for revenue to cover public investment.  The cyclical balancers deny any necessary to correct deficits in the short run.  Arriving at sensible and rational fiscal rules requires abandoning budget balancing as a goal and converting it into an outcome derivative from effectively achieving macroeconomic stability and high levels of employment.

The Role of Taxation

The various versions of deficits-are-a-problem might be epitomised in the cliché, “governments must live within their means”, with disagreement arising as to whether “their means” refers to the current or overall budget and/or the relevant time period.

Aversion to deficits comes from an analytical confusion, the commonsense generalization that the purpose of taxation is to fund public expenditure.  For the government of a country that is part of a currency union (e.g., the euro zone) or a regional or local government the generalization is valid.  These governments do not control the monetary system in which they operate their fiscal policy.  The generalization is not true for a government of a country with a national currency over which it has control either directly or via the central bank.  I call the former shared currency countries (SCC) and the latter national currency countries (NCC).

A SCC government has two methods of funding expenditure, taxation and selling bonds to the private sector (typically to banks and other financial institutions).  The SCC government must pay the debt service, interest and principle, to private bond holders from taxation for the life of the bond.  For SCC governments borrowing is similar to what households and businesses do.  The cliché “living within means” could be applied, meaning precisely that the combination of current outlays and debt service must be consistent with revenue flows.

NCC governments operate within quite different fiscal constraints, possessing an additional funding option and a quite different goal for fiscal policy.  The core purpose of fiscal policy for an SCC government is to provide necessary and discretional public goods, and fund these in a sustainable manner.  The core purposes of fiscal policy for the NCC government are to maintain macroeconomic stability and increase productive capacity for the medium and long term.  The NCC government uses current expenditure to achieve stability and capital expenditure to enhance capacity.  Any expenditure by an NCC government, current or capital, obtains its funding from taxation, bonds sales to the private sector, and/or borrowing directly from the country’s central bank (“monetization”).

The defining characteristic of borrowing from the central bank is that in practice the debt need never be repaid;  for example, the Treasury could sell the Bank of England 100 year bonds (though in practice the maturity period is much shorter), or “roll over” the bonds (issue new ones to replace those that reach their redemption date).  The Bank of England holds about 25% of UK public debt.

The short run goal of macroeconomic stability determines the mix of these three funding alternatives.  If the economy falls into recession with deflationary price pressures the NCC government increases expenditure to compensate for the fall in private demand, covering the increased outlays through monetization.  As the economy approaches full capacity with inflationary pressures, monetization ends.  Rising tax revenue from the expanding economy replaces bond sales.

Whether the public budget is in balance should be of no concern for the NCC government.  If economic activity is declining or stagnant, public borrowing should increase.  Whether this results in a deficit on current expenditure is little importance, for the policy purpose is recovery not hitting a fiscal target.  An overheating economy calls for increased taxation, perhaps generating an overall surplus.

Balancing Policy rather than Budgets

For the British government, and all other NCC governments, expenditures and taxation have different policy functions and motivations.  Current expenditure delivers public goods and services to the population, and regulates the short term stability of the aggregate economy.  Simultaneously achieving those two goals represents the main challenge of a rational fiscal policy.

The capital budget, public investment, enhances capacity and only in extreme circumstances such as the threat of high inflation would be adjusted for short term policy goals.  How our government funds any part of public expenditure is derivative from the overall goals of short term stability and long term capacity enhancement.

The rational approach to fiscal decisions is to balance policy not budgets.  The fiscal balance in itself is neither a target nor an indicator of successful policy.  Whether the fiscal balance is positive, zero or negative reflects the outcome of this rational approach.  This is not deficit denial.  It is rejection of deficit fetish.

Why everything is now different – the Sneerage Coefficient is off the scale.


Why everything is now different – the Sneerage Coefficient is off the scale.

By life-long Labour Party supporter,

Jim Moores

I have been a Labour Party member for 35 years. I almost left when Blair took us to war with Iraq on a lie.

I have never been to the Party conference and in recent years saw no reason to do so given that no front bench Labour MPS were offering anything different and the whole conference seemed to be a bland, stage managed affair – not quite as bad as the Tories’ marketing exercise which is their excuse for membership engagement.

I have pounded the streets for decades (on and off) and got absolutely sick of trying to convince decent working class people that what Labour offered was different to the Tories while at that very moment our Parliamentary “leaders” were cozying up to corporations and milking their power for all it was worth. Blair and Mandelson have made themselves a nice, comfortable, even rich existence out of “serving” the people. And both Blair and Mandelson have sneered at the pathetic Labour membership and have even suggested we get new hearts.

But this time I thought, “it feels different”, even before Corbyn won the leadership contest. So I booked my place, not as a constituency delegate but as an ordinary member. I wanted to be there to see history made – and history was made. Indeed everyone there felt it, speakers and delegates alike. From all sides the sneerage coefficient could be discerned, by all of us. Inside the conference the mood was fantastically upbeat; outside, in the mainstream media, we were all at war with each other.

How do I know that it is different this time? Because of the Tories and the stream of bile they have been pouring out. Despite all of the attacks against him, Jeremy Corbyn – and John McDonnell and other supporters – has stayed calm, respectful and has answered every charge thrown at him with dignity.

THAT is the difference, the dignity, and everyone I speak to tells me “he’s a decent man” or “I have never been interested in politics but Corbyn has convinced me”. Whenever a Mail journalist sneers about “scruffiness” dignity comes straight back them; or when we get a sneaky sneer from our “supporter” Polly Toynbee, of the Guardian, she is answered with dignity.

Just the simple change to Prime Minister’s Questions sums it all up. The Tories sneered, as did all of their press lickspittles – and that includes the BBC who have disappointed me more than anyone during this last year or so. And the Tories (and in particular David Cameron) were completely disarmed. They had to answer the questions or admit that they did not care a jot about “the public”. But Jeremy Corbyn read out those questions from members of the public. More than 40,000 such questions were submitted – 5 of them were picked which covered the main themes raised.

And as to my fundamental assertion that everything is now different. The eureka moment came at a fringe event hosted by, of all people, Tim Montgomerie (@montie) of the Times and the, splendidly named, Legatum Institute – and most importantly Chief Sneerer on Twitter. He was “interviewing” Nick Cohen of the Observer (@NickCohen4). It was a fantastic sneerathon and all but me and two other people in the room were on the right of the Party. They had obviously come to hear their heroes. However the Eureka moment was when Tim asked us all to put our hands up if we thought Jeremy Corbyn and Labour would win in 2020. I of course put up my hand and there were peals of raucous laughter – or crowd sneerage – from all those present (except my likeminded, two colleagues). But it was not the laughter of happiness; it was that nervous laughter that is heard when the laughers are not quite sure how to react.

Just before then Tim had asked, sneeringly, if there were any “raging Corbynistas” in the room and I had proudly waved my hand. I advised however that I was a Corbynite not Corbynista. Tim and Nick sniggered and asked why the distinction. I explained that the term “Corbynista” had been hijacked by the right  and used in a derogatory way to infer South American revolutionary. Not that I object to the comparison but it plays well to the Tory-floater types – whatever they may be. Yet more laughter but Nick did explain that in times past a Trotskyite would be affronted if referred to as Trotskyist.

So Corbyn, McDonnell and the new Labour front bench have been announcing radical changes like a complete review of the Treasury’s role; a panel of economics advisers comprised of Thomas Piketty, Joseph Stiglitz, David (Danny) Blanchflower, Mariana Mazzucato, Anastasia Nesvetailova, Ann Pettifor and Simon Wren-Lewis; a massive social house building programme; scrapping tuition fees; a people’s bank; major infrastructure projects; a proper living wage; reversing the NHS privatisation; and much, much more.

And what have the press done – raised the sneering level to a crescendo and talked endlessly about Corbyn’s unelectability. The day after his marvellous speech the Times, Telegraph, Express and Mail had no mention of it on their front pages. A silent sneer.

We have even had international sneerage from Sir/Lord Sugar who has recently advised that we should all emigrate to that bastion of democracy, China. This from the man who said in 2008 : ‘Next Christmas the iPod will be kaput’.

Final confirmation came when the Telegraph conducted its own sneer poll and its loyal readers got all confused and came out almost unanimously in support of Jeremy on the Nuclear issue :

1_JC_NuclearNo copy

And perhaps better still when Sky asked if Corbyn could be next PM they sneered :

2_47percentCorbynPM copy

Until someone pointed out, in their own organisation :

3_53percentCorbynPM copy

The world has changed – just ask Bernie Sanders.


Jim Moores can be contacted at: