Rudd Calls For New World Order  

The weekend SMH had a front page article claiming Kevin Rudd is calling for a "new world order" to solve the financial crisis - Time for a new world order: PM.

KEVIN RUDD has denounced the unfettered capitalism of the past three decades and called for a new era of "social capitalism" in which government intervention and regulation feature heavily.

In an essay to be published next week, the Prime Minister is scathing of the neo-liberals who began refashioning the market system in the 1970s, and ultimately brought about the global financial crisis. "The time has come, off the back of the current crisis, to proclaim that the great neo-liberal experiment of the past 30 years has failed, that the emperor has no clothes," he writes of those who placed their faith in the corrective powers of the market. Neo-liberalism and the free-market fundamentalism it has produced has been revealed as little more than personal greed dressed up as an economic philosophy. And, ironically, it now falls to social democracy to prevent liberal capitalism from cannibalising itself."

Mr Rudd writes in The Monthly that just as Franklin Roosevelt rebuilt US capitalism after the Great Depression, modern-day "social democrats" such as himself and the US President, Barack Obama, must do the same again. But he argues that "minor tweakings of long-established orthodoxies will not do" and advocates a new system that reaches beyond the 70-year-old interventionist principles of John Maynard Keynes.

"A system of open markets, unambiguously regulated by an activist state, and one in which the state intervenes to reduce the greater inequalities that competitive markets will inevitably generate," he writes. He urges "a new contract for the future that eschews the extremism of both the left and right".

He mocks neo-liberals "who now find themselves tied in ideological knots in being forced to rely on the state they fundamentally despise to save financial markets from collapse".

He advocates tighter regulation and policing of global finances, and identifies the immediate challenge as restoring global growth by 3 per cent of gross domestic product, the amount it is expected to fall in 2009. Next week, as Parliament resumes, his Government will chip in with a second economic stimulus package.

Mr Rudd commits to keeping budgets in surplus "over the cycle", meaning deficits should be temporary. In a further sign the Government is not contemplating additional tax cuts, which would deliver a permanent hit to revenue, he stresses that stimulus measures have to be paid for when the economy recovers.

Mr Rudd singles out Thatcherism as a culprit, as well as the former Howard government. His essay implicitly attacks the Opposition Leader, Malcolm Turnbull, who this week urged the free market be allowed to dictate commercial property values as he slammed a Government measure to prop them up.

Mr Rudd's essay follows the blast Mr Obama gave Wall Street bankers yesterday for awarding themselves $28 billion in bonuses last year at the same time as they were being bailed out by taxpayers.

Rudd's article in The Monthly has driven Dan Denning at The Daily Reckoning a little round the bend, first firing this salvo and promising more on one world government and one global currency soon (I love the close intertwining of Libertarian culture and the tinfoil world) - A $4 Trillion ‘Big Bang’.

Finally, did you notice the obnoxious change in political rhetoric this weekend? You knew Barrack Obama was going to give it to Wall Street, calling executives "shameful" for getting bonuses while their firms received TARP money. Remember, by the way, the TARP money was forced on some firms in an effort to boost confidence in the overall plan.

We normally try to keep a reserved, ironic, and sceptical air when reading the statements of politicians. Most of them are not worth taking seriously. But every once in a while, you get the scent of something so noxious and dangerous that you have to put aside humour and call it what is. Today is one of those days.

Now, the populist shame game is to be expected. That's not a big deal. What's more alarming is the bilge and claptrap spilling from Kevin Rudd's gob and what it may mean for your ability to preserve and create wealth in the coming years.

In The Monthly, Rudd plants a Neo-Marxist flag in the ground of the current debate with the kind of jargon-laden elitist preening that makes academic critics of the free market (who've never spent a day in the business world creating value) so nauseating.

Specifically, Rudd writes that, "The time has come, off the back of the current crisis, to proclaim that the great neo-liberal experiment of the past 30 years has failed, that the emperor has no clothes. Neo-liberalism, and the free-market fundamentalism it has produced, has been revealed as little more than personal greed dressed up as an economic philosophy."

Why not proclaim, since he is apparently in the position to make such proclamations, that the experiment in paper money and the deliberate policy of inflation it implies is theft? It is bureaucratic lust for power and authority disguised as monetary policy? It's also, at its heart, the belief that one or a few people in government know better than you how you should lead your life.

Leave it to Rudd and the resurgent global Left to use the present crisis as an occasion to expand their political ideology of government power and wealth confiscation. Despite the fall of the Berlin Wall in 1989, Marxism never really went away. It ensconced itself in Western universities and colleges, and in the careerism of the political class, which believes it is entitled to govern by virtue of its intellectual superiority and the moral justness of its anti-market position.

Their strategy, as always, is to control the rhetorical high ground by framing the discussion in populist terms and making an enemy of "greedy capitalists." Don't get us wrong. There are plenty of greedy capitalists to go around, or to go to jail. In fact, many more of them would be going out of business if the government would quit propping them up with taxpayer money. This generation of corporate executives shares plenty of blame for playing fast and loose with the corporations they were supposed to be stewards of. They over-levered, over-speculated, and over-paid themselves.

But Rudd is an ignoramus of the lowest order to say that current events somehow negate the last thirty years of globalisation, or three hundred years of economic growth and the division of labour. Tens of millions have been lifted out of poverty. Hundreds of millions have more economic and political freedom than ever before.

These results can only be the product of a system in which risk taking entrepreneurs have access to capital and savings, allocated through competitive markets where firms that deliver real value to consumers thrive and those that don't fail. That system has worked for 300 years of Western history to create wealth, choice, and opportunity.

Shame on Kevin Rudd for calling that "market fundamentalism", as if belief in the institutions that create wealth and liberty is akin to the same kind of religious fundamentalism that permits suicide bombing. If there is a more offensive use of rhetoric to equate two vastly different things, we haven't seen it.

But the Neo-Marxists are back on the march. And they are probably coming for your wages and pension sometime soon. Make no mistake about it. 2009 is the year the Neo-Marxists have been waiting for.

It is their chance to undo all the perceived evils of Thatcher and Reagan. There would be plenty of those to undo, of course, not least the idea that deficit spending is morally permissible. But the real push by the Neo-Marxists is to use the present occasion to expand the scope and reach of government power into your private life, so they can tell you what to do, what to watch, what to eat, what car to drive, and ultimately, what to think or say.

This will be disguised as better more "parental" regulation to achieve more equality and social justice. But behind the false populist outrage and the elevated language of idealism, it's just another push for government elites to expand their ability to compel you to live the life they think you should lead.

The simple regulatory response to all this is to reduce the amount of leverage available to financial players. Reduce margin lending in shares. Let bankers get back to making prudent loans in the housing market based on what a buyer can actually repay, rather than letting the government subsidise subprime lending because it's politically desirable.

There are other sensible regulatory responses to the mess. But they will be discarded in favour of grandiose and over-reaching plans to redesign the entire world in some utopian image. A 'big bang'? Really. Does that mean they're going to blow things up and call it a "fix?"

What we're getting at is that it's going to be a tremendous challenge to withstand this push in the next few years, mostly because it will have so much popular support from people with no brains who believe in fine sounding speeches and appreciate getting tax rebates/credits/handouts from the government. The first battle in the war on wealth creation is wealth redistribution, whether you like it or not.

It would be more honest if the Left just came out and said something like, "The last ten years have been a huge wealth transfer from the middle class to Wall Street and from the developing world to the developed world. We're going to try and reverse all that now because we know it's our best shot in the last thirty years to get some back. So here we come! Open your wallet and shut your mouth!"

Neo-liberalism isn't the culprit in all this. What does that word even mean? Isn't Rudd using it because it sounds like Neo-Conservatism? And everyone knows that Neo-conservatism is evil, therefore Neo-Liberalism must be evil too!

The real evil of the last thirty years is the vast expansion of credit in the world that changed personal and corporate incentives. The plunge in the cost of capital-encouraged by governments and Central Banks-set of an orgy of bad risk taking, quietly condoned by regulators and politicians who all benefitted in some way from housing/commodity/trade booms.

But now the credit cycle has turned. The Credit Depression is upon us. And Comrades Rudd and Obama will try and use it for the next great push in the Neo-Marxist dream, one world government with one world currency. More on that tomorrow!

Cryptogon notes the NWO phrase is appearing pretty frequently in the media lately (helped along by Gordon Brown, Sarkozy and others) and thinks currency consolidation is on the way - Amero Could Result from Crisis: ‘The New World Order Is Upon Us’. One commenter noted that while the SMH was yelling "NWO" on the front page, Rudd didn't seen to actually say the words "New World Order" at all.

I don’t know about you, but when I see the phrase, “New World Order” bandied about on the mainstream sites like it’s a new flavor of TicTac, I have to wonder if people know what this actually means.

The New World Order used to be something that people like me would read about in books that were never in stock in the local book store. We had to special order them. (Unless you happened to live near a book store that focused on unusual stuff.) The New World Order was talked about on radio shows that broadcast in the dead of night, after the alien guy went off the air. The New World Order was the butt of jokes: “Are you a conspiracy theorist who believes in the New World Order? HAHAHA. And Black helicopters? HAHAHA.” etc.

When I went to college, and majored in International Relations, I wasn’t expecting to hear much about this stuff. On the contrary, I encountered heaps of what ignorant people refer to as conspiracy theory as part of my coursework. Is it conspiracy theory if you have to write papers and take exams on things like the World Order Models Project, the Club of Rome, global federalism, multilateralism, economic interdependence, system transformation, the United Nations and its failed predecessor, the League of Nations? Many of the professors were members of the Council on Foreign Relations. Go to see a guest speaker and it was Such-and-Another from the Royal Institute of International Affairs. The next week’s speaker, General Bob, was Assistant Deputy Director of Death and Mayhem at the Legion of Doom before becoming an adviser to the Trilateral Commission. Oh, and Kevin, by the way, can you help out at the World Economic Forum next month? The elite don’t hire people to do work there, they just ask students to do it for free. There might be some free food in it for ya’, so what do you think? It’ll look great on your CV.

Sorry, I have to joke about it now because the whole thing was incalculably dumb and such an incredible waste of time and money… Near The End (graduation), I thought, “Maybe I’ll try to get a job stamping shit in passports.” (That means working for the U.S. Foreign Service.) I went to register for the exam and the only thought in my head was, “Oh eff this.” How was I going to be able to bend my conscience enough to maintain appearances in that show if I damn near broke my liver getting the degree???

So, I saw both sides of it. I was one of the greasy “conspiracy theorist” slobs who read comic books and William Cooper. Then, I took a couple of steps down the path to a career in Elite Enabling by getting that silly degree. But looking back on my brush with the New World Order, the thing that sticks out is just how blah and bland it was at that level.

Indeed, you can be looking right at a factory for globalist zombies and not even know it. Look no further than your closest large university with an International Relations program. What you’ll see there are a bunch of people wearing sensible shoes and reading the New York Times and Foreign Affairs. Many of them will drive Volvos and have subscriptions to National Public Radio. There will be an occasional person in a military uniform. The scene will not look too weird at all. But spend a few years in that environment and then tell me that there’s no such thing as a New World Order.

Actually, never mind, tell it to MarketWatch (Part of the Wall Street Journal Digital Network).

Leftists are protesting on the streets of France, with this BBC report doing some interesting spin to justify future interventions against "extremists" (I've become remarkably cynical in recent years as too many violent incidents at left wing demonstrations have been shown to have been instigated by plain clothes police and the like - see the Ottawa and Genoa examples for the most blatant acts - rather than by supposedly violent lefties) - French government fears rise of left.

"Sarkozy is right to be afraid of us," says Marine, a 22-year-old student and member of the League of Communist Revolutionaries in Toulouse. "We are the ones who are going to break the rules and the control of the old system. We are the new alternative".

Across Europe, victims of the economic slump who are losing their jobs in their tens of thousands are furious that public money is being doled out to the banks. In some countries, they are more willing to vent their anger. As huge crowds took to the streets across France this week, in a national day of protests and strikes, the far left points to a boost in the number of its supporters in times of financial gloom.

The French communist movement has remained a significant political force even in the decades when their cause was less than fashionable abroad. Now, France's communists believe they are staring at the proof that capitalism has failed, once and for all. And they see an opportunity.

Marine and her fellow party-member, Hugo, who is 18, do not envisage a violent revolution. "There is no need for guns or bullets," says Hugo, "just a realisation that the situation is not fair, that all the state's money is being spent on the people who need it the least."

Stephane Borras, who is one of the group's organisers and a candidate to lead a new party that is being formed under the banner of anti-capitalism, says attitudes are changing. "We are seeing a radicalisation, perhaps the beginning of a very big movement. I am not a clairvoyant, but I live in France, I have a lot of contacts with a wide range of people and it's not just leftists, not just militants who cannot accept the injustice. Inequality is growing in Europe and inequality is always the cause of revolt". ...

Recent intelligence reports talk about an "elevated threat" from an "international European network… with a strong presence in France" and a "new generation of activists", possibly a "re-birth of the violent extreme left". A spokesman for the interior ministry, Gerard Gachet, told the BBC that the threat was real. "The term 'ultra-left' was used by the interior minister to set this group apart from the extreme left who turn up for elections and keep within the parameters of democratic debate," he says.

But talking of more radical groups, he points to recent pamphlets and books published anonymously, but sometimes with a circulation of about 20,000, with titles such as How to Start a Civil War and The Insurrection That is Coming.

"They say that the fires of revolt will spread everywhere," he says, "and we see acts like damage to bank branches or state buildings and claims of solidarity with the Greek rioters. So there is undoubtedly a threat which needs to be taken into account… This is not about criminalising opinions. Everyone has the right to an opinion. It is about making sure that illegal actions do not take place…. In any case, we can be extremely vigilant. We have surveillance and intelligence teams."

Some Russians have also taken to the streets to vent their displeasure - Thousands protest across Russia

Thousands of people have held rallies across Russia protesting against what they describe as the government's mismanagement of the economy. The biggest demonstration took place in the eastern city of Vladivostok, where protesters demanded the resignation of Prime Minister Vladimir Putin. ...

Protests on such a large scale were unthinkable just a few months ago as the economy boomed with record high oil prices and as the Kremlin tightened its grip over almost all aspects of society, the BBC's Richard Galpin in Moscow says. But now with the economy in deep trouble, there is real fear amongst ordinary people about what the future will hold, he says. He adds that unemployment is rising rapidly, as are the prices of basic food and utilities.

In Vladivostok, the anti-government demonstration was called by the Communist Party. "The crisis is in the heads of the authorities, not in the economy!" chanted protesters. The protest was joined by a local group angered by higher tariffs imposed on cars imported to the city. The region has thrived on the car import business and the government's decision has led to job losses, correspondents say.

In Moscow, police detained a number of members of the radical National Bolshevik Party, including its leader Eduard Limonov.

While communism seems to be showing faint signs of revival in Europe, the "dot commie" movement in the west has generated remarkably little attention, given the impact it is having on some industrial sectors. The Business Spectator reports - Strong silent type.

What if the collapse of the credit bubble is not the only reason capitalism is under threat?

This morning’s interview with the CEO of Craigslist, Jim Buckmaster, is a must-read for anyone interested in the future of the media – and the future of capitalism itself for that matter.

Craigslist is a classified advertising website that employs about the same number of people as Business Spectator – 28 – and gets about 15 billion page views a month. We get about one 2,500th of that, which we’re pretty happy with after 14 months.

Obviously we’re rather different creatures: Craigslist is an automated bulletin board; Business Spectator publishes carefully produced original content, and we don’t rely on classified advertising.

But most of the great newspapers of the world do, and for them Craigslist is incredibly destructive. It’s almost entirely free and, according to Buckmaster, always will be. In fact none of the big new global websites, apart from search engines like Google, make money and they don’t look like doing so. All the dreams of huge wealth from accumulations of internet traffic have come to nothing so far.

The owners of Facebook, MySpace, YouTube, Wikipedia and Twitter are all either struggling to make any money or not trying to, even though hundreds of millions of people around the world use them every minute of every day.

MySpace’s owner, News Corporation, has failed to turn its 106 million active accounts (increasing at 230,000 new ones every day) into serious revenue and the business has consistently run behind budget. Instead of making a fortune on the internet, Rupert Murdoch has returned to newspapers and the Wall Street Journal.

In the past few days the other big social networking site, Facebook, which is still mostly owned by venture capital and staff, has come up with what it thinks might be a way finally to make some money out of its 150 million active users: it says it will allow multinational companies to selectively target members to research new products.

It’s not advertising, but it might produce some money. But the founder and CEO of Facebook, Mark Zuckerberg, said a few months ago: “I don't think social networks can be monetised in the same way that search was.” The same applies to Twitter, a much more immediate social networking site on which users constantly “tweet” each other. Google will probably have more success monetising YouTube because there are signs that online video advertising is going to take off.

Google's success in monetising its search engine and then floating at a market cap of $US23 billion, enriching its founders, encouraged online entrepreneurs everywhere to think the internet was the road to vast riches. But it has not turned out to be that easy, partly because of people like Craig Newmark, the founder of Craigslist, and its CEO Jim Buckmaster. ...

In the US Craigslist is the silent newspaper killer, and is undoubtedly one reason why newsrooms in that country have been cut back more dramatically than they have been here.

More broadly, the internet is bleeding away the traditional media’s monopoly rents, without replacing them with new ones. The key exception is Google, a money-making machine that uses constant innovation to stay ahead of the hounds of competition and maintain its market power.

Perhaps the other big sites will one day do the same, but there’s no sign of that yet. And even if they do, it’s unlikely that the great family fortunes that were made by newspaper and television owners will ever be repeated. Online advertising is too accountable (there is no wastage) and the barriers to entry are too low.

So while the threat to the foundations of capitalism from the credit crisis are noisily occupying the public debate at the moment, there is another quieter one going on: the hippies are back and they’re taking over the internet. Craigslist even has a peace sign as its symbol.

This whole transition to a new order thingie is something I've noted in a few books I've read lately (one Russian novel called "The Night Watch" I've already reviewed at BGBR, and the other - Bucky Fuller's "Critical Path" I hope to have a review done on soon).

I'll have a bit on this topic later in the week (probably veering further out into the fringes).