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The Mfecane of 2011

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I can hear you all scratching your heads right now. What the hell is a Mfecane? I first learned about this major event in 19th Century native African history by reading James Michener’s The Covenant, and the images presented within that novelized description exceed those of modern-day Darfur. To keep it somewhat short and simple, think of it as a societal purge by a self-defined chosen people conducting ethnic cleansing of “undesirables” in seeking their version of Lebensraum. To ensure that the job was completed, they also resorted to scorched-earth tactics to prevent any rival group rising and threatening their hegemony.

A case for a similar motivation in strategy could be made for today’s Republicans. Their slash-and-cut budget reductions are as single-minded and ruthless as the policies followed by these native Africans, and will prove to be equally as heedless of the obvious consequences. Allow me to detour into history again  – a bit more recently this time – to set the stage.

For a few decades now, the UK has regularly led the US in experiencing major societal changes, among them the rise of Maggie Thatcher and her anti-union Mfecane – a direct predecessor by two years of Ronald Reagan’s administration. There have also been things that happened first in the US before erupting in the UK, such as the collapse of banking due to fraudulent mortgages, but these influences aren’t as common. The frequent parallels are close enough that it isn’t even a surprise anymore when it happens. Such a major change has just occurred in the UK which will also happen here in the US, because the first signs have just emerged.

Just six months ago, David Cameron led the Conservatives to electoral victory on a platform which closely parallels that of the Republican Party: toss all but the wealthy over the side so that the wealthy can enjoy major tax cuts. The process went much faster in the UK for reasons that aren’t germane to my premise, so the UK supporters of this self-serving strategy are now in position to realize the consequences of that set of actions.

To their great and willfully-ignorant surprise, things aren’t quite working out as they hoped. The British economy isn’t booming as their version of Tea Baggers promised it would. Former Tory MP Archie Norman deemed these promises “too optimistic” while Andy Bond – who led the UK’s second largest supermarket chain, and who should be very familiar with the buying public – is now convinced that retail may well have cut its own throat by supporting these austerity measures.

Major UK retail firms report sagging sales, and some firms have gone into the British version of bankruptcy. Many of those which remain in business are issuing shareholder advisories alerting them to reduced earnings. They have been taken aback that the average British household income will be about £200 ($325.36 as of 4/18/11) poorer due to changes in taxation and government benefits. In addition, British 2010 take-home wages fell relative to prices. At least in the UK, awareness of the political payback is happening much more swiftly than I would expect in the US. As one major UK retail executive put it, “We have to take responsibility for our destiny.”

Similar portents are showing up in the US. Treasury Secretary Geithner just chided the Republican threat to block an increase in the government debt limit, declaring that to “take it to the brink” would be “deeply irresponsible”. Wall Street fears that the Congressional budget battle will result in their being stiffed in favor of foreign investors should the GOP force a governmental default.

The solution to this dilemma is simple: tax the rich! Even that Randian acolyte Alan Greenspan promoted the end of the Bush tax rates on Meet the Press just yesterday. I don’t hear the Tea Baggers boiling his bath water yet!

Not to raise the top tax rates would result in the sort of social damage -if magnitudes of order smaller- that the Mfecane caused. It isn’t known how many died from direct violence or the subsequent starvation. The best estimates indicate millions of victims. But with modern US homelessness up 10% (12% of these homeless are military veterans), foreclosures still all-too-common, reducing or eliminating unemployment benefits becoming a favorite target of GOP budget cuts, slow employment recovery, and many more factors, and it’s clear that many thousands -if not millions- of individuals so affected are on their own. Some will die. In Arizona, no thanks to Jan Brewer’s economic policies, some already have.

People without resources cannot participate in a consumer economy. Up until the mortgage bubble burst, consumer spending accounted for 70% of the US economic activity. US wages have been stagnant at best since Jimmy Carter, and earning power dropped accordingly. If survival is going to be the primary motivator of consumer spending, a whole lot of currently wealthy people are going to find themselves on the wrong side of this economy as their customers spend their money on necessities instead of the their proffered products. There is little evidence that these US “entrepreneurs” are a dialed-in as their UK counterparts, probably still believing in Obama being a socialist Kenyan Muslim impostor, and that the Rapture will be occurring on May 21. They will be easy prey for their brothers-in-billion-dollar-bonuses.

There is still time for saner heads to prevail, especially since it’s very clear that “our” elected representatives aren’t the ones making the real decisions. Based on the remarks of Geithner, Greenspan, and Standard and Poor’s, those in such a powerful position aren’t interested in riding the economic bomb to detonation. They also aren’t interested in trying to live in the economic wasteland that the Republicans seem insistent on creating. I guess maybe they realize that even they don’t have enough money to buy enough security protection from starving mobs, and want to head it off before things get out of hand.

It would be the smart thing to do – and be very humane toward those who haven’t benefited nearly as much.

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  • Glenn Contrarian

    Why do the Republicans want our economy to fail? Because if Obama succeeds at rebuilding our economy, well, Republicans remember what happened after FDR brought back our economy – four decades of Democratic control of Congress.

    Great article, Realist…and I know you’re already expecting what’s coming from the BC conservatives….

  • Boeke

    Realist makes an excellent point when he states :”…a whole lot of currently wealthy people are going to find themselves on the wrong side of this economy as their customers spend their money on necessities instead of the their proffered products”.

    Indeed, the austerity measures that the Tea Party maniacs are screaming for are very counter-productive: they will make things worse and accelerate American decline. Even among the rich and privileged.

    Why are those measures counter-productive? Mostly because they cut muscle instead of fat. The real fat in our business/commercial system is in the business/financial end of business, not the operational end where services and products are made and delivered.

    For example, Tea Party types seem to believe that tax subsidies to businessmen and rich people will stimulate investment and produce jobs, but the evidence is quite the contrary. They often pair that belief with the belief that unemployment insurance is bad because it might encourage idleness.

    Both ideas are wrong, econometrically wrong. Just glancing at a recent CBO report on the ARRA, “Stimulus”, reveals that Unemployment Insurance has an Economic Multiplier of more than 2.0, whereas business tax cuts are around 0.7. The Economic Multiplier is the net effect of inserting a dollar into the economy after you take account of secondary spending by the recipient.

    These results are familiar. They confirm history.

    So, clearly, mathematically, it makes more sense to give money to the unemployed rather than investors.

    Ah, but here is the problem: we cannot allow it MORALLY! It is against our puritan work ethic!

    So we think, anyway, but really it is simply against the interests of our feudal masters, who manipulate our feelings.

    Thus, while we excoriate the laborer who is unemployed (through no fault of his own, but because the boss screwed up management) we actually cheer the predations of the Feudal Lord and declare “greed is good!”.

    Pogo was right: “we have met the enemy and he is us”.