Finance and facade

Tabish Khair in The Hindu

REGULATION NEEDED: “Finance capital is the storm, and our governments can and will do nothing about it."  

Imagine a mythical planet not visited by the Little Prince. This is a planet divided up into a thousand and one sections with walls between them. There are doors in the walls, and windows of course. But there is no roof to the planet. Everyone on the planet is affected by storms that cross the skies, sometimes devastating this section, sometimes that. Sometimes the storms afflict all the sections, but in different ways: flood in one place and hail in another; cyclone on one, landslide in another.

A man-made storm

The denizens of this planet are peculiar: they are mostly unable to look up. As such, many of them cannot see signs of a gathering storm. The few who can are helpless. What can they do about storms? This is also true of the various presidents, prime ministers, monarchs and dictators who govern the different sections of this planet. Many of these leaders even believe that the storms are necessary: some good will trickle down. So all they can do is regulate the doors and windows of their sections, and the citizens inside them.

We are living on this planet today. With one difference: most of the storm clouds circling us are man-made.

Finance capital is the storm, and our governments can and will do nothing about it. If you are running a national government but cannot really regulate financial speculation and finance capital as the main source of power, what is it that you can do? Regulate people — as citizens and as foreigners. That is the condition, in slightly different ways, of almost every country in the world today.

When liberal capitalism died

Sometime in the 1980s, a strange thing happened to classical liberal capitalism. It was murdered. No one noticed the crime. Today, we are living with the dead body of liberal capitalism, which is why leftist critiques of it also fail. What we have today is said to be neo-liberalism, but neo-liberalism is almost as different from classical capitalism as night is from day. Actually, neo-liberalism is partly a misnomer: it has little to do with liberalism.

Liberalism insisted on the separation of the state and the market, and decried government interference in markets. Neo-liberalism believes that governments should intervene in markets — but only on the side of banks, finance capitalists and lending agencies. Every time financial speculation creates a crisis, governments are expected to tax their citizens and use that money to save banks and financial institutions. Even if one argues, as some do, that liberal capitalism was always to some extent state capitalism, this signifies a major shift.

We have known since the 19th century that money makes better sense than production or services in capitalist societies. Goods and services fluctuate in demand, but money has to be employed no matter what good or service is on offer. Hence, it makes sense, finally, to traffic only in money. Financial speculation is built into capitalism. 

But when financial speculation takes over, as it started doing from the 1980s, an entirely different situation comes into being. Today, financial speculation far outstrips global trade. Finance capital tyrannises not just social capital but even industrial capital. Most of the capital used for such financial speculation does not need to be invested in production or services; it can just be moved around in, as U.S. President Donald Trump said about his taxes, ‘smart’ ways. Most of this capital is not even in the shape of cash, which is cumbersome to move. It is sheer numbers, including digital money, and many types of debt and credit.

Mr. Trump’s victory is the assault of finance capital on not just social capital (welfare, public facilities, etc.), which has long been battered, but this time also on industrial capital. Mr. Trump might actually try to ‘bring jobs home,’ but what this will lead to is greater curbs on industrial capital — not only leaving finance capital free, as his Wall Street appointments have indicated, but probably forcing more industrialists to convert industrial capital into financial speculation. Demonetisation in India might be a sincere attempt to fight corruption, but it will also reinforce the ascendency of finance capital, regardless of what the government wants.

Maurizio Lazzarato points out in Governing by Debt that all national governments are basically employed in collecting taxes from their citizens and cutting on social services, in order to keep paying national and other debts to financial organisations. National leaders have come to believe that ‘economics’ is an independent field, far from politics, when actually economics is the new politics of neo-liberalism. That is why governments are employed to tax citizens in order to repay financiers and banks, and governments are also employed to smoothen the paths of financial speculation.

A necessary façade

In this context, the nationalist policing of ‘undesirable foreigners’ is a necessary façade — to obscure the lack of governance of global finance. Xenophobia is inevitable in such a situation, because national leaders cannot even talk of the real storm — invisible finance capital; they can only regulate the bodies on the ground. The general scepticism of politicians — on which Mr. Trump, Turkish President Recep Tayyip Erdogan and so many others have ridden to power — arises from the fact that politicians only govern people today. They cannot govern global finance capital. Instead, finance capital governs politicians.

Politicians have abandoned much of actual politics to the economic ideologues of neo-liberalism, and they cannot even confess it to ordinary people.

The cities where exercise does more harm than good

 Nick Van Mead in The Guardian

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Monday 13 February 2017 07.00 GMTLast modified on Monday 13 February 2017 07.02 GMT

Who says exercise is always good for you? Cycling to work in certain highly polluted cities could be more dangerous to your health than not doing it at all, according to researchers.


In cities such as Allahabad in India, or Zabol in Iran, the long-term damage from inhaling fine particulates could outweigh the usual health gains of cycling after just 30 minutes. In Riyadh, Saudi Arabia, this tipping point happens after just 45 minutes a day cycling along busy roads. In Delhi or the Chinese city of Xingtai, meanwhile, residents pass what the researchers call the “breakeven point” after an hour. Other exercise with the same intensity as cycling – such as slow jogging – would have the same effect.

“If you are beyond the breakeven point, you may be doing yourself more harm than good,” said Audrey de Nazelle, a lecturer in air pollution management at Imperial College’s Centre for Environmental Policy, and one of the authors of the report.

The study, originally published in the journal Preventive Medicine before the World Health Organization’s latest global estimates, modelled the health effects of active travel and of air pollution. They measured air quality through average annual levels of PM2.5s, the tiny pollutant particles that can embed themselves deep in the lungs. This type of air pollution can occur naturally – from dust storms or forest fires, for example – but is mainly created by motor vehicles and manufacturing.

Breathing polluted air has been linked to infections including pneumonia, ischemic heart disease, stroke and some cancers. The Institute for Health Metrics and Evaluation’s Global Burden of Disease study ranks it among the top risk factors for loss of health.

The report in Preventive Medicine assumed cyclists moved at speeds of 12/14kph, with health benefits calculated in a similar way to the WHO’s Heat assessment tool. It also assumed cyclists used roads with double the background levels of air pollution, which may underestimate how poor air quality is in many developing world cities: for example, a study in Lagos found five out of eight sites exceeded Delhi’s annual PM2.5 concentration.

People commuting to work along busy roads in a city with average annual background PM2.5 levels of 160 micrograms per cubic metre (μg/m3) or above will pass the breakeven point at just 30 minutes a day, the study found. Using the WHO’s latest global estimates, published in May, those levels are only reached in Zabor, and in Allahabad and Gwalior in India – although many large cities in the developing world do not accurately measure air pollution so were not included in the WHO database.

Fifteen cities (see map above and table below) have annual mean PM2.5 levels of 115μg/m3 or above, according to the WHO data, so the breakeven point is reached after an hour of active travel. Fine particulate levels above 80μg/m3 were found in 62 cities, making cycling more harmful than beneficial after two hours.

The study found people in western cities such as London, Paris or New York would never reach the point where PM2.5 air pollution’s negatives outweigh exercise’s positives in the long term.

“The benefits of active travel outweighed the harm from air pollution in all but the most extreme air pollution concentrations,” said Nazelle. “It is not currently an issue for healthy adults in Europe in general.”

London’s annual average PM2.5 pollution was estimated at 15μg/m3 by the WHO – above the WHO’s guideline of 10, but still at a level at which the study estimated active travel would always be beneficial. Paris had ambient PM2.5 levels of 18μg/m3, while New York had 9μg/m3.

However, the study did not consider the health impacts of short-term spikes in PM2.5 pollution, or take into account the effect of exercising in air containing larger PM10 particulates, ozone, or toxic nitrogen oxides (NOx) from diesel cars.

London mayor Sadiq Khan issued his first “very high” air pollution alert last month when air in the UK capital hit the maximum score of 10 on the Air Quality Index, equivalent to PM10 in excess of 101μg/m3. NOx pollution causes 5,900 early deaths a year in the city, and most air quality zones across Britain break legal limits.

“This is the highest level of alert and everyone – from the most vulnerable to the physically fit – may need to take precautions to protect themselves from the filthy air,” Khan warned.

The point at which air pollution becomes so bad that the harm from cycling to work outweighs the health benefits

City	Country	PM2.5 annual mean, micrograms/m3, from WHO 2016	Minutes spent cycling per day for harm to outweigh benefits
Zabol	Iran (Islamic Republic of)	217	30
Gwalior	India	176	30
Allahabad	India	170	30
Riyadh	Saudi Arabia	156	45
Al Jubail	Saudi Arabia	152	45
Patna	India	149	45
Raipur	India	144	45
Bamenda	Cameroon	132	45
Xingtai	China	128	60
Baoding	China	126	60
Delhi	India	122	60
Ludhiana	India	122	60
Dammam	Saudi Arabia	121	60
Shijiazhuang	China	121	60
Kanpur	India	115	60
Khanna	India	114	75
Firozabad	India	113	75
Lucknow	India	113	75
Handan	China	112	75
Peshawar	Pakistan	111	75
Amritsar	India	108	75
Gobindgarh	India	108	75
Rawalpindi	Pakistan	107	75
Hengshui	China	107	75
Narayangonj	Bangladesh	106	75
Boshehr	Iran (Islamic Republic of)	105	75
Agra	India	105	75
Kampala	Uganda	104	90
Tangshan	China	102	90
Jodhpur	India	101	90
Dehradun	India	100	90
Ahmedabad	India	100	90
Jaipur	India	100	90
Howrah	India	100	90
Faridabad	India	98	90
Yenbu	Saudi Arabia	97	90
Langfang	China	96	90
Dhanbad	India	95	90
Chittagong	Bangladesh	95	90
Ahvaz	Iran (Islamic Republic of)	95	90
Doha	Qatar	93	105
Bhopal	India	93	105
Khurja	India	90	105
Dhaka	Bangladesh	90	105
Kaduna	Nigeria	90	105
Gazipur	Bangladesh	89	105
Karachi	Pakistan	88	105
Cangzhou	China	88	105
Baghdad	Iraq	88	105
Al-Shuwaikh	Kuwait	88	105
Tianjin	China	87	105
Raebareli	India	87	105
Kabul	Afghanistan	86	105
Zhengzhou	China	86	105
Barisal	Bangladesh	85	105
Beijing	China	85	105
Al Wakrah	Qatar	85	105
Kota	India	84	120
Udaipur	India	83	120
TETOVO	The former Yugoslav Republic of Macedonia	81	120
Alwar	India	81	120
Wuhan	China	80	120

Instead of draining the swamp, Trump has become Wall Street’s best buddy

Will Hutton in The Guardian


President Trump was an accident waiting to happen. The US had entered a zone of fragility: there were too many inequalities, grievances and accompanying disillusion in a system felt not to work .

A chief reason for that economic and social fragility was the behaviour of the American financial system. It is still astounding how close to disaster high finance brought the US and global economy in 2008. It provoked a vast bailout, and the recovery that followed has been one of the most anaemic sort, during which the wages of average Americans have scarcely grown.

The hangover of debt and legacy of banks trying to rebuild their shattered balance sheets has held the economy back. Meanwhile, some of the weak links in the system, like the sheer scale and opacity of the derivative markets, plus business models riddled with conflicts of interest, have remained unaddressed. Fortunes are still being made and very few have paid the price for cataclysmic mistakes.

On the campaign trail, Trump unfailingly tarred Clinton as compromised by, and enmeshed with, Wall Street and its mega banks. Goldman Sachs had “total control” of her; she was in thrall to a “global power structure that is responsible for the economic decisions that have robbed our working class, stripped our country of its wealth and put that money into the pockets of a handful of large corporations and political entities”.

Trump would drain the swamp, he claimed, and reinstate a “21st-century” version of the law separating main street banking from Wall Street – Roosevelt’s Glass-Steagall Act – which was scrapped by President Bill Clinton, in one of his worst decisions. Trump would throw the money men out of the temple, he said. He would reshape finance for the “little guy”. His audiences roared him on.

But, in office, Trump has proved to be a great deal friendlier to the titans of Wall Street and their interests than he suggested he would be as a candidate, although a close reading of his speeches foretells some of what is now happening. Far from draining the swamp, he is opening the sluicegates; the money men are not so much being hurled out as in full occupation of the economic citadel.

Goldman Sachs’ number two, Gary Cohn, is to be Trump’s chief economic adviser; his Treasury secretary, Steve Mnuchin, was 20 years at Goldman Sachs before running OneWest Bank, which made a fortune by improperly foreclosing on mortgages in ethnic minority communities after the financial crisis. These are not men on the side of the little guy: Cohn has promised to attack “all aspects of Dodd-Frank”, the partially effective regulatory framework that Obama laboriously passed into law in 2010, in the teeth of Republican and Wall Street opposition.

What we know from the financial crisis is that the banking system has become a highly interdependent network in which contagion spreads in hours – it is only as strong as its weakest link. Yet Trump, in thrall to some of the most demonic figures in American finance, last week demanded a 120-day review of all the US’s financial regulations to tame their alleged excesses.

His intent is clear. He has Dodd-Frank in his sights, a “disaster” on which he aims to do “a big number”. There is only one end: to regulate the links in the financial network so they have even less oversight than they do now. And, if things go wrong, Trump will have no hesitation in writing whatever cheques that have to be written to bail out the banks again, just as he backed the bailouts in 2008/9. It is careless, don’t-give-a-damn insouciance on an epic scale.

It seems that a 21st-century version of Glass-Steagall, the core building block in the wholesale reconstruction of the US financial system in the wake of the Depression, was code for doing the exact opposite. Dodd-Frank certainly has weaknesses – in many respects, it does not go far enough and many of its recommendations are yet to be enacted – but it has made US banking immeasurably safer.

Former Goldman Sachs banker Gary Cohn, left, now Trump’s senior economic adviser, flanks the president during a meeting with business leaders in the White House. Photograph: Chip Somodevilla/Getty Images

The banks now hold a third more capital than they did 10 years ago. They are forbidden from trading in securities on their own account. Thirty-four of them, described as “systemically important financial institutions”, are kept under especially close watch, as key elements in the network. The newly established Consumer Financial Protection Bureau tries to ensure customers are dealt with honestly.

You might think after the extraordinary fraud at Wells Fargo last autumn – bank employees opening millions of phantom accounts and credit cards in customers’ names – that a president on the side of the little guy would at the very least not want to weaken American financial regulation. Rather, Trump is in sympathy with the bankers, horrified at the scale of fines they are now paying – Wells Fargo paid a cool $185m. He is also scandalised that holding so much buffer capital and not being able to trade in securities is damaging the bankers’ personal remuneration.

Dodd-Frank has been under fire since its inception, but then Republicans hated the New Deal too. Roosevelt, like Obama, was a hate figure whose every work had to be undone. Both men represented challenges to an idea of America as offering limitless freedom, not least to billionaires. The accompanying social distress is a price worth paying for such freedom – or so the thinking goes.

Billionaire Trump was right in one respect: Hillary Clinton was profoundly compromised by her relationship with Goldman Sachs, pocketing $675,000 for a mere three private speeches, in which she did voice sympathetic concerns about Dodd-Frank for allegedly making banks more cautious in their lending. She was, and is, indisputably a member of a global elite that cannot escape responsibility for the emergence of so many blighted lives.

But, beyond that, Trump is a phony. His economic programme is no more than Reaganomics on speed run by a group of opportunists and self-interested chancers. In the short run, there will be a Trump upswing triggered by the prospect of careless deregulation, unaffordable cuts in corporate tax and lots of infrastructure spending.

How long it will last, and whether it will be a trade war or a financial crisis that will bring it to an end, is anybody’s guess. But we have now had a glimpse of a darker Trump, the hypocrite for whom the little guy is but a pawn to serve his own delusional ambitions. Pity the US. And pity Brexit Britain, forced to bend the knee to such a man and such a president.

Fatah Ka Fatwa - Episode 6

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