Dr. David Paul Bennett in analysing a wide range of historical and current events in this article argues that the best hope to avoid catastrophe is for there to be independent political and economic actors in relation to political leadership and forces within society in accordance with established social action theory.

A New Axis of Evil?

Although Aleppo is held by soldiers of the Free Syrian Army the general military situation in Syria’s biggest city is precarious due to the reluctance of the international community to establish a no-fly zone. This city could still eventually fall to Baathist forces (with the possible assistance of *Iranian Revolutionary Guards) which would mean that the regime of Bashar Assad will have the requisite capacity to crush the eighteen month rebellion. This in turn would result in bloody purges of communities throughout Syria that had previously supported the revolt.

(*Republican Iran is discreetly despatching its Revolutionary Guards to Syria while Bashar Assad plays for time by his regime engaging in fruitless talks with the Arab League’s peace envoy).

An emboldened republican Iran which is closely aligned with Baathist Syria will then have the subsequent capacity to potentially re-orientate the domestic and foreign policy of contemporary Iraq toward a formidable anti-American Axis in the vital oil producing Gulf region. Gulf nations such as Qatar and Saudi Arabia will be threatened by an invigorated republican Iranian/Baathist Syrian Axis. This is a distinct possibility due to these two-aforementioned nations’ support for the Syrian people’s uprising against the Assad regime.

But revenge will only be half the motive for republican Iran and Baathist Syria. Republican Iran knows that because the United States is very vulnerable in the context of the Global Financial Crisis (GFC) that a destabilized Gulf region could fatally undermine future American economic viability.

The strategically shrewd Castro regime of Communist Cuba is keenly aware that republican Iran (which could be nuclear armed in less than two years) can disrupt the world economy by destabilizing and eventually dominating American aligned Gulf States such as Saudi Arabia. The strategic links that Communist Cuba still has with Russia and the People’s Republic of China (PRC) potentially intersect with regard to republican Iran.

Why an International Nuclear Space Shield is Indefensible

Republican Iran could develop a nuclear weapon with the support of the PRC and Russia which becomes the basis of the world again becoming divided into two polarized nuclear armed camps. If there is a Romney administration military action against a nuclear armed republican Iran may not be undertaken so that a proposed nuclear space shield can be constructed by the United States.

In the above cited scenario the Khamenei regime in Iran may not launch a nuclear strike once a nuclear capacity is acquired. This is because the benefit for the Khamenei regime will be integrating be integrating republican Iran with the PRC, Russia, Communist Cuba and North Korea against the United States and other nations to create a new bi-polarized world.

Due to the inherent danger of republican Iran having a nuclear bomb it is also too much of a risk to allow the Tehran regime to acquire such weapons. In this context it would be best if the United States or Israel (or both nations) undertook a quick surgical military raid to incapacitate republican Iran’s nuclear programme if is logistically feasible to undertake such expeditious military action.

If the United States undertook such military action it would be confined to incapacitating republican Iran’s nuclear programme as opposed to deposing the Khamenei regime. This is because of opposition from Russia and the PRC the United States unfortunately cannot lead an international military coalition to quickly depose the Khamenei regime, install an effective provisional government and then militarily withdraw.

Paradoxically, if Governor Mitt Romney wins the 2012 presidential election republican Iran’s acquisition of nuclear weapons may provide the justification for the United States to construct a nuclear space shield. Such a project could also be initiated by a Romney administration in the time *lag before or as republican Iran acquires nuclear weapons.

(*There are however very frightening indications that republican Iran may developed nuclear weapons within the next six months).

The inclination of a Romney administration to construct a nuclear space shield was reflected by the former Massachusetts governor in his acceptance speech at the Tampa GOP convention attacking the Obama administration for allegedly letting Poland down in 2009 by not proceeding with the construction of a nuclear space shield. Governor Romney’s probable policy as president of having the United States build a nuclear space shield is ill-advised to say the least because it will help set the necessary framework to artificially and unnecessarily divide the world.

The previous global divisions of the Cold War were artificial due to the illegitimacy of the imposition of Marxist-Leninist regimes on nations around the world by the Soviet Union. American led resistance in the Cold War to the Soviet Union was still however necessary to prevent the imposition of Marxist-Leninism on other countries. For this reason it was correct for the United States to undertake the so-called nuclear arms race on the basis that the Soviet Union could not keep up due to the inherent economic and political weaknesses of its system. Crucial to this American led victory over Soviet Communism was the support of the Russian people.

It should not be forgotten that Russia under the leadership of President Boris Yeltsin succeeded from the Soviet Union at the end of 1991. The once unimaginable dream of the Russian people overthrowing a system that was inflicted on them in 1917 might not have occurred had the Reagan administration (1981-1989) had the insight of judiciously knowing when to be conciliatory toward Moscow. This was first reflected by President Reagan at the October 1986 Reykjavik Summit refusing to fall for the trap set by the Soviet leader Mikhail Gorbachev.

At the Reykjavik Summit President Reagan refused to endorse an agreement whereby the Americans and Soviets substantially reduced their respective nuclear arsenals in return for Washington abandoning the Strategic Defense Initiative (SDI, which was popularly known as ‘Star Wars’). Had this being agreed to the United States would have squandered its crucial advantage in developing a space nuclear weapons shield should the Soviet Union again becoming threateningly hostile. Having called Gorbachev’s bluff, President Reagan subsequently signed a landmark treaty in Washington with the Soviet leader in November 1987 in which American and Soviet stockpiles of nuclear weapons were substantially reduced.

The signing of the November 1987 Intermediate-Range Nuclear Forces Treaty also signalled to the Gorbachev regime that it was relatively safe from external threat to continue with political liberalization which laid the groundwork for eastern Europe breaking free in 1989 and the Soviet Union imploding at the end of 1991. These developments illustrated the fundamental importance of foreign and defence policies taking into account the domestic vicissitudes of the opposing (or formerly hostile) nation’s politics. In this regard President Reagan was fortunate that he had an insightful unofficial of his adviser on Soviet domestic policy, the author Suzzane Massie.

Mrs. Massie informed President Reagan of the contempt that most Russians toward the Soviet Union that they considered it to be an external imposition on them. As a result President Reagan intuitively knew what the probable domestic ramifications of American policy would be for the Soviet regime. Ironically, President Reagan found himself respectfully at odds with Richard Nixon (RN) and Vice-President George Bush between 1987 and 1988 as they were concerned that the president was being conned by Gorbachev.

Vice-President Bush was mistaken in not trusting President Reagan’s judgement and it was a missed opportunity on his part as president that he did not appoint Suzzane Massie as American ambassador to Moscow. It is probable that an Ambassador Suzzane Massie could have helped facilitate the promotion and consolidation of Russian democracy in the Yeltsin era.

This development would have helped end the Cold War legacy of international division and in doing so helped Russia achieve that greatness. This could have been previously accomplished had the domestic impact of World War I precipitated the final establishment of a Russian constitutional monarchy with responsible parliamentary government as opposed to the collapse of the Romanov dynasty precipitating the former Russian empire subsequently becoming a totalitarian communist nation.

The major post-1991 American contribution to Russian democracy was the behind the scenes role that a group of American political operatives fulfilled in the 1996 Russian presidential election campaign in helping President Yeltsin win re-election. These Americans had previously supported then California Governor Pete Wilson’s month long abortive presidential campaign for the GOP presidential nomination earlier that year. The ideas and proposed strategies of these advisers were conveyed to President Yeltsin’s daughter Tatyana who utilized her critical judgement to apply them in a Russian context.

The importance of family to President Yeltsin was such that in deciding to voluntarily resign on New Year’s Day of 2000 he ensured the succession of Vladimir Putin (who was then next in line to the presidency as prime minister) on the basis that he would protect himself and his family from possible future retribution. The outgoing Russian president might have believed that there was scope for the consolidation of democracy under Putin on the basis that he was a protégé of former St. Petersburg mayor, Anatoly Sobchak.

Unfortunately Sobchak suddenly died in February 2000 while campaigning for Putin’s election to the presidency. There could have been a distinct possibility that had Sobchak lived he would have being appointed prime minister under Putin as president. As prime minister, Sobchak (who although an avowed monarchist had effectively written Russia’s 1993 republican constitution) might have orientated President Putin toward a politically liberal agenda.

As it has been since Putin served as president between 2000 and 2008 and again since 2012 he presided over an authoritarian regime. It is uncertain whether President Putin now has the majority support that he once enjoyed for having provided stable and effective government for Russia and in so doing overcoming the at times near anarchy of the Yeltsin era. There is now the distinct prospect that as opposition to his regime grows that President Putin may transition to an outright dictatorship.

Such a move would be risky because dictatorships are more often than not based upon self-interest. To establish a basis of support for an outright dictatorship would require the unflinching support of the military. The construction of a nuclear space shield by the United States would understandably alarm the Russian military who would probably give their support to an outright Putin dictatorship.

Military support for such a regime would be enhanced by President Putin harnessing domestic resources for the armed forces to counter a perceived (and a possibly actual) threat from the United States. There would also be considerable domestic popular support for a Putin dictatorship due to the long standing Russian fear of foreign encirclement.

If Russia transitions to a consolidated dictatorship as a consequence of an American nuclear space shield then Moscow may enter into alliances with the PRC, Communist Cuba, Stalinist North Korea and republican Iran. The prospect of an anti-American Sino-Russian alliance provides the basis for the PRC’s People’s Liberation Army (PLA) selecting mercantile Leninists as the next generation of national leaders at the Chinese Communist Party’s (CCP) 18th Party Congress in October this year.

Such a development at the 18th CCP Congress might fundamentally undermine the incredible progress that the PRC has made in the last thirty years since the market reforms of the late paramount leader Deng Xiao-ping’s created the current scope for China to now overtake the United States as the world’s biggest economy within ten years. There are still major socio-economic challenges confronting the PRC which the selection of an anti-reformist mercantilist CCP senior leadership could not only fail to address but actually plunge the nation into profound crisis which imperils national unity.

Furthermore, it ultimately does not make sense for the PRC to enter in an alliance with a dictatorial Russia. The economic distortions that will be caused by the PRC and Russia mis-directing resources to their militaries could set the scene for over-dependence on natural resources for economic viability. This in turn could lead to dangerous conflict along the Sino-Russian over mineral resources.

The other major potential ramification of the United States alienating Russia and the PRC by having a nuclear space shield is that their needed economic co-operation in helping end the GFC will be squandered. The ramifications of this could be a resulting economic melt-down with horrendous consequences for the United States, the PRC and Russia. An inherently anti-American regime such as Fidel and Raul Castro’s dictatorship in Cuba could only benefit from an American led global financial collapse.

Why The Gulf Crisis Must Not Lead to an International Gulf

Cuba’s senior communist leadership may be correct in their assumption that the currently fragile international financial system of the more or less free world may come crashing down if republican Iran gains effective control of the Gulf region’s oil supplies. However, because the PRC holds a substantial number of American Treasury bonds and Russia has developed an impressive international market for its gas and oil the global economy is now too interconnected for either nation to effectively adapt to any successful undermining of the United States and/or European Union (EU) economies.

The senior echelons of republican Iran’s armed forces and Revolutionary Guards similarly appreciate that their military and economic power will eventually be fatally undermined should either the American or EU economies collapse. Republican Iran is not a superpower as the Soviet Union once was with the necessary coercive control over a vast array of economic, industrial and natural resources to have potentially gained an ascendancy over the *United States.

(*Such a Soviet ascendancy over the United States could have occurred in the late 1980s had then American Treasury Secretary James (‘Jim’) Baker not effectively handled the aftermath of the stock market crash of October 1987).

With regard to the PRC and Russia, they are now sufficiently economically integrated with the west that an American and/or a European financial collapse would also be (to say the least) very counterproductive for them. Nevertheless, middle range powers such as republican Iran still have the capacity to wreak havoc on the world should either or both the PRC and Russia support Tehran establishing a dominance in the Gulf region.

The scope for an American led international coalition to terminate republican Iran’s nuclear weapons programme by bringing down the regime of Ali Khamenei is understandably constrained by the prospect of generating a broader international conflict by that could involve a hostile Russia and the PRC. Another important constraint is the American people’s fatigue with regard to undertaking another war and ensuring occupation similar to Afghanistan and Iraq.

With regard to the respective liberations of Afghanistan and Iraq in 2001 and 2003 the fundamental mistake was made by the United States of not helping create the conditions for the election of credible and effective governments by supporting the establishment of initially capable provisional governments. Paradoxically a Romney administration might be disinclined toward taking military action to end the Khamenei regime to help renew the American arms industry by counter-productively constructing a nuclear weapons space shield.

The American construction of a nuclear space shield would therefore disastrously invert Clausevitz’s dictum that politics is the purpose of war by deliberately creating new international power blocs that are formed as part of domestic political considerations. Republican Iran since 1979 has been a prime example of how a dictatorship deliberately promotes international discord to maintain its domestic power. In a situation such as this it is impossible, if not counterproductive, for nations such as the United States to enter into negotiations with such regimes.

To avoid a potential re-polarization of the world into hostile nuclear power blocs the PRC and Russia should support the establishment of an international no-fly zone in Syria around Aleppo to signal to republican Iran and Communist Cuba that they will not buy into a divided the world. At the very least Beijing and Moscow will hopefully call on Bashar Assad to resign to make way for a provisional government that will protect all Syrian citizens and ensure that democratic elections are held.
Such a call by the PRC and Russia could be used by them as a signal to republican Iran to desist in developing nuclear weapons and to the United States that the development of a nuclear space shield is unwarranted.

Future Middle East Peace? Why All Roads Go Through Damascus

Having a future democratic Syria would substantially (if not fatally) undermine republican Iran’s capacity to disrupt and ultimately dominate the Gulf region. It is in this context that the historical and political contexts of Syria is overviewed so that the option of western aerial support for the Free Syrian army in Aleppo can be rationally but urgently considered by senior international policy makers.

Aleppo was the political base of the Syrian People’s Party (SPP), which was once one of the two main parties of pre-Baathist Syria. This party’s major rival was the Damascus based Syrian National Party (SNP). These two parties had been the dominant constituents within the National Bloc which was an umbrella group of political parties and social movements which advocated full independence under the League of Nations French ‘Mandate’ of Syria which was established following the First World War.

The amicable dissolution of the National bloc in 1947 seemed to herald an independent Syria have a viable two party system and a consolidation of a prior decade of constitutional electoral democracy when the nation was self-governing under the mandate. Israel’s success in winning her War of Independence in 1949 shook the foundations of Syria’s democracy even though the Syrian military contribution in the war had been relatively modest. This was because First Arab-Israeli War of 1948-1949 brought to the fore latent tensions as to whether Syria should unite with Lebanon or Iraq.

The resulting spate of military coups that occurred in 1949 ushered in a chaotic nearly ten period of alternating democracy and military dictatorship which ended with the SPP and the SNP eventually supporting Syrian union with Egypt in 1958 to form the United Arab Republic (UAR). Even though the Egyptian leader Gamal Nasser was a socialist his anti-communism was such that the pre-dominantly middle class SPP and the SNP supported union with Egypt in 1958 out of a fear of a take-over by a very well organised Syrian Communist Party. These two parties also supported the formation of the UAR in deference to Nasser’s recent massive popularity as an Arab nationalist titan who had successfully defied the British in 1956 over the nationalization of the Suez Canal.

Another contributing factor toward Syrian union with Egypt was the electoral strength of the Baath (i.e. Renaissance) Party. This party was founded in Syria in 1947 by Michel Aflaq. The Baath Party was distinguished by its advocacy of a united Arab state being formed on a secular nationalist basis.

The secularism of the Baath Party was reflected by the fact that Aflaq was a Christian in a predominately Muslim nation. By the 1950s the Baath Party had successfully established an inter-religious cell-structure throughout much of the Arab world. The growth of the Syrian Baath Party was reflected by it displacing the SNP in the 1954 elections to become Syria’s second strongest party in electoral terms after the SPP. Measuring actual party strength in Syria was complicated by the preponderance of independents in rural areas.

The Baathist Party might have been the glue that held the Syrian component to the UAR while allowing Nasser to extend his influence to other Arab nations (where there were Baathist parties and military cells plotting military coups) had the Egyptian leader not marginalized the Baathists. Perhaps it was too much for Nasser to delegate political authority and leadership to a party that he did not completely control and which could one day later challenge him. This was despite the Baathist Party, along with the SPP and the SNP, having reluctantly merged into the National Union which was the newly formed party that supposedly ruled the UAR as a *single-party state.

(*The UAR was really a military dictatorship).

Had Nasser supported the temporarily super-ceded Baathists fulfilling a leading role within the National Union in representing Syrian interests then the UAR probably would have survived. Nevertheless, to Nasser’s credit he refused to move against a revolt by Syrian officers who rebelled against the UAR in September 1961. This revolt undoubtedly would have been crushed had Nasser ordered military action. It should also be admitted that despite the centralist nature of UAR rule there was still substantial (albeit reflecting minority opinion) pan-Arab sentiment which was refected by pro-Nasserists demonstrations in Damascus opposing Syrian secession.

Majority support for Syrian renewal was manifested by the re-emergent Aleppo-based SPP winning a clear plurality of the seats in the December 1961 elections. The Damascus orientated SNP and Baath Parties respectively came second and third. The SNP supported renewed Syrian independence while the stance of the Baathist Party was more ambiguous. The latter party was avowedly pan-Arabist but the Baathists had more or less supported the re-establishment of the Syrian republic because they had fallen out with Nasser.

That is not to say that the position of the SPP-led government (1961-1963) of Nazim Kudsi was politically secure. The Baath Party was still open to supporting Syria joining another pan-Arab state so long as its power interests were accommodated. The SNP (which had previously supported the formation of the UAR in 1958) had similarly strong pan-Arabist sentiments that it too was amenable to Syria joining another Arab federation.

Baathist Syria: 1963 to 20??

The issue of a continued Syrian state came starkly into question when there was an apparent Baathist led military coup in Iraq on February 8th 1963. The Iraqi coup led to Baathists within the Syrian armed forces seizing power a month later (March 8th). There might have been an Iraqi-Syrian union had it not been for Iraq’s new military ruler; General Abdul Aref purging Iraqi Baathists from his government in November that year. The now banned Iraqi branch (or command) of the Baath Party remained supportive of the leadership of Michel Aflaq, particularly with regard to tension between him and the new military regime in Damascus.

This tension existed because there was a subtle but distinct separation of interests between the Baathist faction within the Syrian military and the party’s civilian party leadership. The former tended to be more left-wing and fixated on destroying Israel as part of the process of establishing a pan-Arab state. Aflaq by contrast was probably a liberal (if not a conservative) who was prepared to collaborate with military regimes as a necessary expedient toward ultimately establishing a unified Arab state.

The Syrian military was initially prepared to endure Aflaq because his cross-national network and personal prestige offered the basis to possibly facilitate inter-Arab unity. The state of Aflaq’s domestic power was measured by his trusted supporter Salah al-Din Bitar either serving or not serving as Syrian prime minister. Aflaq’s capacity to influence Syrian domestic politics ended when General Nueddin al-Attassi seized power a left-wing Baathist military coup in February 1966.

The Attassi led coup could not have succeeded had a leading member of the right-wing of the Baathist Party, air force commander, General Hafez Assad not defected from the Aflaq camp. As a pay back for supporting the coup Assad was made defence minister. Assad’s accommodation within the new regime did not end the left-right factional division within the Baathist military faction and party’s civilian wing. The defence minister remained at odds with Attassi’s focus on destroying *Israel and his Marxist ideological orientation. The major unifying objective that Attassi and Assad had in undertaking the 1966 coup was to end Aflaq’s domestic power base.

(*Assad still wanted to destroy Israel but was more pragmatic and less ideological in how he ultimately achieved this objective).

Although Aflaq (who took political asylum in West Germany) was effectively consigned to political oblivion he still remained a very important political symbol in wider inter-Arab Baathist politics. Saddam Hussein, the relatively young civilian leader of the Iraqi branch (command) of the Baath Party declared his continued loyalty to the exiled and now politically powerless Aflaq. As a result the Iraqi branch effectively broke free from Syrian control to allow Saddam to later emerge as a major contender to be the Arab world’s Baathist leader.

Saddam Hussein Enters The Scene

The political situation became even more complicated when the Baathists seized power in Iraq in a military coup in July 1968. A crucial factor for the success of this coup was the prestige and popularity of General Ahmed Hassan al-Bakr within the Iraqi armed forces. This general was the leader of the Baathist network within the army while his cousin Saddam Hussein led the civilian wing of the Baathist Party, which was then a small secretive party, organised on a cell basis. In contrast as to what might have been expected it was the civilian wing of the Iraqi branch of the Baath Party that became more important than the party’s military faction following the 1968 coup.

Saddam achieved his political dominance due to the relative laxity of President Bakr who allowed his cousin to organise the myriad of secret services that afflicted Iraq under Baathist rule. The crushing of a military coup attempt in 1973 consolidated Saddam’s dominance but he was careful to continue to defer to his essentially naïve cousin who still remained a prestigious figure with a substantial degree of influence (as opposed to actual power).

As brutal as the Iraqi Baathist regime was from the onset the Bakr government was apparently more moderate than the Attassi regime in Syria which seemed obsessively determined to destroy Israel. In the light of subsequent events it was ironic that between 1968 and 1970 Defence Minister Assad of Syria seemed to be a relative moderate who was inclined toward the rival Baathist Baghdad regime. Assad’s ‘moderation’ was also apparently manifested when he opposed an Iraqi invasion of Jordan in September 1970 to support the PLO attempt to overthrow King Hussein.

The formidable professionalism of the Jordanian army combined with Assad’s opposition helped ensure that the short-lived invasion ended in a rout. The ensuing two months (September to November 1970) engulfed Syria in political turmoil as Attassi and Assad utilized Baath Party forums (including the acrimonious October 1970 party congress) to blame the other for the Jordanian debacle. Party and military sentiment shifted toward Assad at the expence of Attassi which allowed the former to seize power in a military coup in *November 1970.

(*The 1970 Syrian coup was officially known as the ‘Corrective Revolution’ and this term was also used to describe President Anwar Sadat’s self-coup in Egypt of May 1971).

Hafez Assad: The Lion of Damascus or A Wolf in Sheep’s Clothing?

The new Assad regime appeared relatively moderate that Syria’s new leader seemed to be similar to Anwar Sadat, who had succeeded to the Egyptian presidency following Nasser’s death in September 1970. The Egyptian and Syrian leaders were ostensibly similar in that they were more collegiate in their governing styles than their predecessors and more respectful of constitutional processes as Assad did not formally become president until after a plebiscite was held in February 1971.

Syria was arguably then more pluralist than Egypt in the early 1970s because alternate parties were formally legalized in 1972. These parties –three Nasserist parties and the Syrian Communist Party - entered into an alliance with the Baath Party in 1972 which was known as the National Progressive Front (PNF). The following year legislative elections were held in which there was a limited degree of competition. This was reflected by the regime allowing independent parliamentary candidates to run and win in the 1973 parliamentary elections.

In this respect Assad institutionalized his Syrian regime as single-party state (similar to the regimes in East Germany and Poland) where parties other than the ruling party existed within a regulatory framework led by a constitutionally recognized vanguard party. In the context of a single-party regime the Syrian people in the 1970s had a degree of latitude to express views critical of the implementation of government policy so long as the regime’s overall authority was not challenged. General Assad seemed to lend himself to this process due to his introverted but still apparently open-minded demeanour.

The apparent rationality of the Syrian regime and its cordial relations with Egypt was manifested in 1971 when a union between these two nations and Libya was proclaimed. The paradox of this declared union was that it subtly conveyed the message that Egypt (which had dropped its official appellation as the UAR in 1971) and Syria had foregone practical measures to pursue unification by declaring what everyone (besides, perhaps Colonel Qaddafi of Libya) knew to be a cosmetic union.

Egyptian and Syrian unity of purpose was apparent when the two nations launched the Yom Kippur War against Israel in October 1973. The Syrian regime’s adherence to the cease-fire that US Secretary of State Dr. Henry Kissinger subsequently negotiated between Egypt and Israel allowed Syria to dis-engage from its military campaign with the a degree of recovered military pride.

The ensuing visit of RN to Cairo and Damascus in July 1974 seemed to bolster both the Assad and Sadat regimes in terms of their leaders been accepted as important international players in Middle East politics. For Egypt the *Nixon visit ushered in profound domestic and foreign policy change for the Arab world’s most populous nation. In the Syrian context the presidential visit (which resulted in the formal restoration of diplomatic relations between Washington and Damascus following the Six-Day War of 1967) was significant in that it seemed to signal a shift in official attitudes away from strident anti-Americanism toward rational engagement.

(*All of Cairo seemed to turn out to welcome the embattled American president).

The Assad regime’s rationality was seemingly apparent in 1976 when Syria militarily intervened in Lebanon to prevent the *Palestine Liberation Organization (PLO) from effectively taking over the country with its Muslim allies. The fact that Syria did not move to exploit its domination of Lebanon by formally annexing the country and indeed supported the continued ascendancy of its Christian Maronite population indicated the moderate approach of the Assad government.

(*The PLO had moved into southern Lebanon after their 1970-1971 expulsion from Jordan. The Lebanese army was too weak to prevent the PLO’s virtual occupation of southern Lebanon where a Palestinian state within a state- ‘Fatahland’- was virtually established).

General Assad’s ‘moderation’ in Lebanon was more calculatedly tactical than actual. The president was determined to consolidate his personal authority in Syria by entrenching the power of his Alawite sect. This community had ties with Lebanon’s politically ascendant Maronite Christian community. If Assad was to get away with establishing a sectarian based dictatorship in Syria he could then not allow the interests of Lebanon’s Maronite community to be fatally undermined.

This calculatedly ‘moderate’ approach was also evident in 1977 when Assad refused to join the Libyan-led rejectionist front of Arab nations which called for the Egyptian leader’s overthrow following the Sadat visit to Jerusalem that year. However when Egypt was essentially isolated from the Arab world in 1979 following the Camp David Accords of that year– as reflected by the Egyptian expulsion from the Arab League- Syria made claim to be the new leading pan-Arab power. This claim was contested by Iraq which now competed with Syria with regard to being the Soviet Union’s most important Middle East ally.

Baathist Iraq and Baathist Syria: Divided By Similarities

Indeed, the paradox of Iraqi-Syrian relations was that of intense rivalry because of, as opposed to instead of, their similarities. Both nations were military backed Baathist dictatorships ruled over by minority communities. In the case of Iraq the domination of the Sunni minority went back to the nation’s establishment in 1921 that a case could be made that 1968 Baathist *regime represented the interests of a vanguard minority within a minority which ruled over the Shiite majority. The Syrian regime by contrast eventually became one ruled by the Alawite minority (an off-shoot of Shiite Islam) over a Sunni majority.

(*To be relatively fair to Saddam Hussein his regime was constructive in his eleven year transitionary period between 1968 and 1979. During this time when Saddam was known as ‘Mr. Deputy’ literacy and land reform programmes were undertaken, an accommodation with the Kurdish minority was temporarily achieved and the Baath Party became, for a time, a genuinely inter-communal party).

Due to the inter-related differences and similarities between the two nations it is interesting to speculate what sought of Baathist state would have been established had had Iraq and Syria ever united. This is more than idle speculation because in the 1970s moves were made to unite Iraq and Syria. In 1976 President Bakr of Iraq visited Damascus to discuss the proposal of unity of his nation with Syria.

It was not beyond the realms of possibility that Assad could have ceded his position as president of Syria to Bakr as the leader of a new united state in the realistic expectation that he would eventually succeed the Iraqi general. Pro-Bakr officials in Iraq who were wary of Saddam were open to supporting such a scenario. Furthermore, the creation of such a state could have filled the vacuum caused by Egypt’s de facto expulsion from the Arab world in 1979.

But such a united state was not to be for in July 1979 Saddam suddenly moved by forcing President Bakr to resign in his favour. Although this was the first peaceful transfer of power in Iraq since the very unfortunate abolition of the monarchy in 1958 a bloody pre-emptive party purge was still undertaken by Saddam to put pay to any chance of a future union with Syria. Saddam’s ascension ironically ensured that the two Baath states were both ruled by former protégés of Aflaq who at one stage or another had opposed left-wing Baathists.

Although Saddam was far cruder and less subtle than Assad he seemed to have successfully moved his country into a stronger position in the Arab world than his Syrian rival following Egypt’s post-1979 ostracism. This pre-eminence was apparently consolidated in September 1980 when Iraq invaded republican Iran with the tacit support of most Arab League nations which feared the relatively new Khomeini regime. Syria by contrast fell into disrepute among other Arab governments by aligning itself openly with Tehran in accordance with the dictum that ‘my enemy’s enemy is my friend’.

Subsequent events were to show that Assad’s alliance with republican Iran would reap even greater dividends for Syria beyond undermining *Iraq. Assad was prepared to play a slow game as opposed to a fast and daring one that Saddam who had invaded republican Iran on the mistaken assumption that the Khomeini regime would soon fall.

(*Indeed, even today the regime of Bashar Assad could still fatally undermine western interests in the Gulf due to its alliance with republican Iran if it crushes the domestic revolt).

The Tortoise Beats the Hare: Assad’s Struggle to Control Lebanon

Assad’s comparative subtlety was evidenced in Lebanon where Syria maintained its dominance by aligning with the Maronite Christian community against a powerful PLO which had effectively established a sub-state in the southern part of the nation. To stop the PLO from using *southern Lebanon as a base to launch attacks against Israel the Israelis invaded this part of Lebanon in June 1982. They pushed northwards to the outskirts of the Lebanese capital of Beirut, to the predominately Muslim western section of the city which was occupied by the PLO.

(*Most people in southern Lebanon, including the overwhelming majority of a substantial Shiite community initially welcomed the Israelis as liberators from repressive PLO rule).

The 1982 Israeli invasion of Lebanon was a military disaster for Syria whose troops were easily swept aside. The adept Assad made a subsequent secret visit to the Soviet Union were he persuaded an ailing Leniod Brezhnev to re-supply his army. This, Brezhnev (who was particularly astute at supporting Soviet allies/proxies) arranged to do in his last effective action as Soviet leader.

However, the re-supply of weapons to the Syrian army was not so that they could fight a proxy war in Lebanon against Israel but rather so that Assad could maintain the support of the Syrian army. With a re-supplied army Assad was able to both deal with formidable domestic challenges at home so that he could fight a proxy war in Lebanon by supporting the proxies of republican Iran.

The domestic challenges that Assad faced in Syria were daunting and had he been less astute then his regime probably would have fallen. The post-1976 occupation of much of Lebanon had a profound impact on Syria because inter-communal tensions came to the fore which had previously not been evident.

In contrast to neighbouring Iraq, a particular religious or *ethnic minority did not at first rule the nation when self-government was granted by France in 1936. This was followed by full independence 1944, although most Syrians did not consider their nation to be really independent until the last French troops withdrew in 1946. As previously mentioned Syria’s two major political parties reflected the rivalries between Aleppo and Damascus.

(*A Kurdish general, Husni al-Zaim inaugurated over twenty years of political turmoil by seizing power in a military coup in March 1949. As an ethnic Kurd, Zaim was widely unpopular and overthrown and executed nearly six months later. His overthrow allayed the widespread fear that the Kurds would become Syria’s ruling minority elite).

The major religious communal dimension to Syrian electoral politics from the 1940s until the 1963 coup was the Muslim Brotherhood (which was and is overwhelmingly Sunni) supporting independent candidates in rural and regional areas that were outside Aleppo and Damascus. This support was more akin to independents being supported by an extensive service club movement rather than a tightly controlled religious cadre party.

The major source of acrimony in pre-Baathist Syria was not only the rivalry between Aleppo and Damascus but also dis-agreement as to whether the nation should prioritize uniting with Lebanon or Iraq. Nasser’s emergence as an Arab super-hero following the Suez crisis of 1956 further complicated the political situation regarding Syria’s sense of national identity and subsequent political direction.

The 1963 Baathist coup precipitated domestic turmoil because there was a seven year period in which the nation’s rulers treated their nation as transitory institution until union into a broader Arab state could be arranged. Due to this Baathist objective of achieving Arab unity there was no focus on facilitating a return to multi-party rule, political liberalization or regime institutionalization between 1963 and 1970. The Assad regime by contrast in the 1970s seemed to address the need for institutionalization by granting a degree of liberalization which apparently forfeited facilitating pan-Arab unity.

In actual fact the agenda of promoting Arab unity was pursued by the Assad regime dominating Lebanon after the 1976 Syrian military intervention/invasion. An overlooked ramification of the ensuing Syrian occupation of Lebanon was domestic opposition within Syria by the nation’s Sunni majority. The 1982 Israeli invasion of Lebanon obscured the fact that between 1976 and 1982 the Assad regime was aligned with Lebanon’s Christian Maronite community.

Due to family and social ties between Lebanese and Syrian Sunni Muslims the Muslim Brotherhood activated as a source of opposition between 1980 and 1982 against the Assad regime. This opposition was undoubtedly also caused by Syrian domestic grievances against the regime which enabled the Brotherhood to become a depository for Sunni Muslim discontent. The undoubtedly intelligent and seemingly rationale General Assad nevertheless displayed the characteristics that Bashar, his son and successor has demonstrated since the outbreak of rebellion in 2011 – an absolute refusal to compromise political power despite coming across as reasonable.

The carnage in Syria that the world has witnessed by social media since 2011 was inflicted in February 1982 when an estimated 40, 0000 male inhabitants in the predominately Sunni Muslim city of Hamah were systematically massacred. The Hamah massacres were undertaken as a warning by the Assad regime to the Sunni majority, who now approximately compromise 80% of the population, not to oppose the government.

The Hamah massacres also conveyed that effective power had passed to the Alawite community through General Assad’s brother (Rifaat) control of the security forces. This development eventually became a shock to the Sunni Muslims army officers who had been instrumental in ensuring the success of the 1963 Baathist coup. It was true that there was a strong Alawite presence in the military and the Baath Party in 1963 but few Sunnis at the time realized that this would later result in a substantial power transfer to one community. Indeed, the arch-rivalry between Generals Attassi and Assad in the 1960s apparently indicated that communal politics were not a factor in Syria because both were Alawite.

The 1982 Hamah massacre was therefore notable not only for its brutality but also for showing that Syrian politics had undergone a fundamental if subliminal transformation- the concentration of power with a particular community. This massacre was attributed to General Assad’s younger brother Rifaat who in organising a Baathist party militia had established a virtual parallel army that was overwhelmingly composed of Alawites.

Hafez Assad had crucially helped his brother get away with establishing Alawite dominated security forces in the 1970s by devising a complex set of procedures which had made it virtually impossible for army officers (most of whom were Sunni) to independently manoeuvre troops. The near fail proof anti-coup system was not able to prevent the near outbreak of a civil war in February/March 1984 when Assad suffered an apparent heart attack.

The prospect of Rifaat succeeding to the presidency understandably galvanized the nation’s Sunni Muslim officers led by the Defence Minister Mustafa Tlas into possible open rebellion. The president’s recovery of health and Rifaat’s departure later that year for Europe helped avert a potentially chaotic break down of Syria’s complex but delicate power structures. Such was the Byzantine nature of Syrian Baathist politics that the departure of the regime’s Svengali (Rifaat) figure probably strengthened instead of weakened Hafez Assad’s position. This was because Rifaat was possibly becoming a Saddam Hussein to Hafez Assad’s General Bakr.

Had Rifaat opposed his banishment Syria he might have been plunged into civil war. But considering the relatively small numbers of the Alawite community and the prospect of destroying his base Rifaat, opted for an exile which would be intermittedly punctuated by brief returns until his nephew’s 2000 succession. Since Bashar’s succession Rifaat has apparently not returned to Syria.

It is possible that Rifaat calculated that his extensive power and influence within the security forces, powerful kinship networks in Syria and neighbouring Arab nations as well as his massive personal wealth (most of which is reputedly invested abroad) would allow him to return to a degree of power in the vacuum caused by his ailing brother’s future death. At the very least it did not seem worth the risk to Rifaat of squandering his powerbase by challenging his brother.

Rifaat’s shrewdness following the 1984 crisis was reflective of the Assad regime’s overall tenacity and capacity to maintain its position in the most challenging of situations. These characteristics are now being manifested in the current crisis which is why it is fundamentally incorrect to say that the regime will later fall even if Aleppo is taken by government security forces. Should the regime take Aleppo it will have the requisite capacity to brutally crush the popular revolt.

The Assad clan is very pragmatic if not brilliant at overcoming adverse odds that it can live to fight another day by being a potent force for international disruption in the Gulf region. This adeptness was previously demonstrated in Lebanon in the 1980s and 1990s.

Shifting Alliances: General Hafez Assad Prevails in Lebanon

Even though Israel had militarily wiped the floor with Syrian Baathists during the initial invasion of Lebanon in 1982 it was Syria which eventually politically prevailed in Lebanon in the 1980s. The Israeli objective of the invasion of southern Lebanon actually aligned with President Assad’s goal of forcing PLO Chairman Yasser Arafat out of that country. By September 1982 with Israeli troops on the outskirts of Beirut, Arafat was forced to withdraw his PLO forces from most of Lebanon to relocate to the Tunisian capital of Tunis in North Africa.

Israel’s 1982 military success in Lebanon led to a potential political shift with the Christian community’s political leadership shifting in alliance from Syria to Israel. Such a change could have fatally undermined the domestic base of the Assad regime due to its reliance on Syrian Christians to maintain its domestic power. To help thwart this development Lebanon’s president-elect, Bashir Gemayel was killed in September 1982 by a pro-Syrian assassin.

Bashir Gemayel had been recently elected by the *Lebanese Parliament as president. He was the leader of the Phalangist Party which had originally been founded by his father Pierre. The president-elect had a reputation for political ruthlessness and Lebanese nationalism. Although his political base was 99% with the Maronite community, Bashir Gemayel had a strong nationalist streak because he desired the establishment of a strong Lebanese state where there was no room for any sectarianism.

(*This parliament had been elected in 1972. Elections had not been held since then due to war conditions).

The paradox of Bashir Gemayel was compounded by his deep antipathy toward the Assad regime even though Syria had previously safeguarded the Maronites against a PLO Muslim takeover of all of Lebanon. From Hafez Assad’s perspective a Bashir Gemayel-led Lebanon had to be avoided at all costs because this Lebanese leader’s political skills were such that he could have ended Syrian power with the backing of Israel and the United States. The Bashir Gemayel assassination was also sad because it resulted in reprisal massacres.

The Phalangist aligned Lebanese Forces aligned militia carried out reprisal massacres following the Bashir assassination in the Beirut Palestinian refugee camps of Sabra and Shatila in September 1982 in which an estimated 3,500 refugees were killed. This massacre led to the despatch to Beirut a United Nations multi-national force composed of American, French and Italian troops. The will-power of the United States to maintain a military presence in Lebanon was fatally undermined by suicide bombings undertaken of the American Embassy and the UN military headquarters respectively in April and October 1983.

These terrorist attacks were undertaken by members of the Iranian and Syrian backed Lebanese Shiite Hezbollah. The considerable loss of life ensued the re-infliction of the so-called ‘Vietnam Syndrome’ in which the United States shies away from sustained military action abroad due to domestic unease. The deployment of American marines to Lebanon was the first major deployment of United States troops in a hostile military environment since the Vietnam War.

The strength of the Vietnam Syndrome was then that powerful that the Reagan administration realized that a successful operation in Lebanon could not be maintained due to domestic political considerations. The withdrawal of all American troops from Lebanon by early March 1984 paved the way for Lebanon’s veteran politician and ultimate political survivor, the Sunni Rashid Karami (who was assassinated in June 1987), forming a national unity government the following month.

Prime Minister Karami’s cabinet was perhaps the only one in the world where its members’ respective military supporters fought each other on the ground while still at times administratively co-operating with each other. President Amin Gemayel* was the strongest anti-Syrian political leader in the cabinet. Ironically his political survival was underwritten by Assad’s toleration of him as a concession to the Maronite community whom he wished to later fully reconcile with to achieve an eventual outright Syrian domination of Lebanon.

(*Amin Gemayel was the older brother of Bashir who had been elected by the parliament as president following his sibling’s assassination. As intelligent as Amin was he had been politically no match for his younger brother who had previously supplanted him to become effective Phalangist leader.

Syria’s continuing wariness regarding the Gemayel family’s as the leading anti-Syrian political force in the Maronite community probably led to the 2005 assassination of Amin’s son Pierre. He had become leader of the Phalangist Party despite that party temporarily following his father’s departure from office and exile going into Damascus’s political orbit).

War in Lebanon continued between 1984 and 1990 as the Maronite Phalangists and the minority of Lebanese Muslim army troops loyal to their president resisted Syrian encroachment. More often than not the Phalangists fought against the Iranian backed Hezbollah which, with Syrian support, had supplanted the relatively moderate rival Amal militia as the major force representing Shiite military interests. The military interests of the Sunni community were not represented by a major militia but rather by units which formally belonged to the Lebanese army. These Sunni units alternately fought with or against their constitutional government.

Although Lebanon’s Sunni community was wary of Syrian domination the political and military dynamics were such since the final American military withdrawal in early March 1984 their political leaders aligned with Damascus. This was reflected by the pragmatically flexible Rashid Karami serving as prime minister. The *Druze community was similarly reluctantly aligned with Syria because of political dynamics.

(*The political leader of the Druze community is the witty Walid Jumblatt, who is perhaps Lebanon’s most popular politician. His father, Kamal, who was his predecessor as Druze political leader, was assassinated in 1977 at the probable instigation of the Assad regime).

Baathist Syria’s political interests were also later consolidated in Lebanon in the 1980s within that nation’s Palestinian community. The PLO Chairman was forced out from the Lebanese port city Tripoli in 1983 by the pro-Syrian Popular Front for the Liberation of Palestine-General Command (PFLP-GC). The PFLP-GC did not however become a major military threat in Lebanon to Israel due to distance from the Israeli border. This role was fulfilled by the pro-Iranian republic Hezbollah (Party of God) militia in southern Lebanon.

Hezbollah was formed in 1982 in southern Lebanon following the Israeli expulsion of the PLO. This guerrilla group initially operated as a guerrilla force which harried Israeli and the Christian dominated South Lebanon Army. Following Israel’s withdrawal from southern Lebanon in 1985 Hezbollah became the dominant power in that region. It was a major mistake on Israel’s part that the establishment of a supportive Shiite force in southern Lebanon was not formed. This was particularly the case because Shiite Lebanese in the south had initially welcomed the Israelis as liberators in 1982 from de facto PLO rule.

The gravity of Israel’s mistake of not cultivating a political force in southern Lebanon that would have been supportive of cordial relations with its neighbour became apparent after 1985 as Hezbollah become the major force in the south of the country. From their base in southern Lebanon Hezbollah have launched missile attacks and terrorist raids against Israel. In a broader Lebanese context Hezbollah in the 1980s had also prevailed over the Amal militia as part of the process of becoming the force that advanced the interests of republican Iran and Baathist Syria in Lebanon.

The Assad regime’s alliance with Hezbollah is however superficially illogical. The Syrian Baathist regime is avowedly secular and pan-Arab nationalist. Damascus’s alliance with Hezbollah is therefore unexpected in that this party/militia is religiously based and closely aligned with republican Iran, which is one of the two major non-Arab powers in the Middle East (the other major non-Arab power being Turkey).

The reality is that the Assad regime has always had a shrewd understanding of how to best utilize alliances to pursue its long-term objectives. The Syrian alliance with republican Iran and Hezbollah enabled the Assad regime to fill the vacuum in Lebanon caused by Israel’s expulsion of the PLO. The actions of pro-Iranian republican groups such as Hezbollah in kidnapping American citizens in Lebanon in the 1980s helped Damascus maintain its overall ascendancy in Lebanon by dissuading the Reagan administration from effectively supporting President Gemayel.

Baathist Syria’s Strategic Value to Republican Iran

Baathist Syrian influence, if not power, was also maintained in other parts of the Middle East by Syrian alignment with other pro-Iranian religious organisations, such as *Hamas in the Gaza Strip.

(*Hamas is a predominately Sunni Muslim organisation which was originally an off- shoot of Egypt’s Muslim Brotherhood. Contrary to media reports, Hamas is still aligned with the Assad regime despite strong domestic Sunni opposition to the Syrian dictatorship).

Even though there is negligible Palestinian electoral support in the territories of the Palestinian Authority for Baathism the Syrian regime still poses a major threat (even in its currently challenged position) to Israel through its alliance with Hamas. There is also the possibility that through Hamas, Egypt’s new president, Dr. Muhammad Morsi will eventually forge an alliance with republican Iran and Baathist Syria.

Such a re-alignment is currently a remote (but not impossible) prospect because the Egyptian president cannot presently afford to alienate the support of neo-Nasserists and the Wafdists. Furthermore, most members of Egypt’s Muslim Brotherhood are sentimentally supportive of the Syrian opposition (which is substantially but by no means exclusively Sunni Muslim) that it is now too difficult for President Morsi to align with republican Iran due to its support for the Assad regime.

However, a Muslim Brotherhood ruled Egypt might eventually join the Iranian-Syrian Axis if the Egyptian military withdraw their discreet support for the democratic secular opposition to allow President Morsi to establish a dictatorship. This could occur by Tehran making financial offers to the Egyptian military by republican Iran gaining control of the oil producing Gulf region. This could be a distinct possibility because a major priority of the Egyptian military since Anwar Sadat’s May 1971 Corrective Revolution has been to secure funding for a massive but secret military budget.

Consequently the Obama administration’s refusal to support the Syrian National Council’s (SNC) request for a no-fly zone round Aleppo or covertly help arm (which perhaps, hopefully the United States actually is) the Free Syrian Army there could be terrible long term strategic ramifications for the Middle East and the world. The particular gap that covert foreign military assistance needs to cover is that of supplying anti-aircraft weaponry, particularly stinger missiles to the Free Syrian Army.

The Assad regime won’t stand chance of ultimately prevailing if it loses its air supremacy. Caution must of course has to be taken with regard to the United States appreciating that American backed NATO air support in Syria could precipitate intervention by republican Iran which is supported by Russia, even though it is ultimately not in Moscow’s interests to do so. It is the prospect of Syria being the flashpoint for a twenty-first century Sarajevo that is necessitating caution with regard to American support for a no-fly zone in that beleaguered nation.

Nevertheless, it is becoming apparent that Iranian Revolutionary Guards are now fighting in Syria. Should there consequently be a combined Turkish/Saudi Arabian military response this would prevail over republican Iran if there was the back up of American led military air power. Under such a scenario the Tehran regime’s viability would be threatened because 70% of the Iranian people are opposed to the ruling government. Nevertheless, there is still the distinct prospect that Russia and the PRC might counterproductively support republican Iran.

Given the high power stakes the United States will hopefully support the Free Syrian Army by providing sufficient weapons so that it will prevail. This could be done by America supplying weapons to a third nation such as Turkey or Saudi Arabia. An American failure to support the Syrian people could be fatal because the Assad regime’s recuperative powers are formidable as was previously demonstrated in Lebanon.

1988-1990 Endgame: General Assad Eventually Wins His Lebanese Chess Marathon

The Assad regime previously reaped the dividends of its strategic patience by eventually achieving dominance in Lebanon in the early 1990s. Upon the expiration of President Gemayel’s presidential term in September 1988 a deadlock ensured with regard to the election of a successor by the parliament. The outgoing president dismissed the Sunni Muslim prime minister, Salim Hoss and appointed the Maronite Christian General Michel Aoun as his replacement. Due to the non-election of a president, the presidency in accordance with the constitution passed on an interim basis to the prime minister pending parliament electing a new president.

The provisional presidency of Michel Aoun was challenged by Salim Hoss who in refusing to accept the constitutionality of his dismissal therefore claimed to be the Lebanese head of state. Therefore for the first time since the outbreak of the of war in Lebanon in 1975 the nation had two rival competing de jure governments. The Hoss claim to the presidency (albeit on a provisional basis) was also noteworthy because he was the first non-Christian to hold (or claim to hold) that post.

The then deep Baathist division between Iraq and Syria was reflected by their respectively recognising the competing *Aoun and *Hoss claims to the presidency. General Aoun actually had a substantial degree of support from Sunni and Shiite Muslims who were opposed to Syrian domination. The paradox of a complex political situation was compounded by the nation’s Maronite Christian community re-aligning with Damascus. This was reflected by the Lebanese parliament electing Elias Hrawi as president in November 1989.

(*Iraq recognised Aoun while Syria recognised Hoss).

General Aoun refused recognise Hrawi as president on the basis that he was a Syrian puppet. The general’s capacity to resist Syrian power was fatally undermined by Iraq’s invasion of Kuwait in August 1990. In return for Syria supporting the American-led international coalition to liberate Kuwait from Iraqi rule the United States effectively gave the Assad regime a free hand to militarily oust Aoun which was achieved in October 1990.

The Syrian led ouster of Aoun helped the Assad regime accomplish the remarkable balancing act of it aligning with the Maronite Christian community to maintain Syrian influence in Lebanon even though this community had initially resisted domination by its neighbour. The Assad regime had persisted in its strategy to align with Lebanon’s Maronite Christian community even though pursuit of this objective precipitated unrest amongst Syria’s Sunni Muslim majority. The striking of this balance is part of the riddle which reflects the domestic durability of the Assad regime and its continuing inherent capacity to pursue a disruptive international agenda in alliance with republican Iran and Communist Cuba.

The Hrawi government did actually crucially facilitate the end of war in Lebanon by effectively implementing after 1991 the Saudi backed 1989 Taif Accords between the various Lebanese military belligerent political forces. The Taif Accords were essentially a re-negotiation of Lebanon’s 1943 National Accords between religious based political factions. The Taif Accords achieved peace and laid the groundwork for a remarkable economic reconstruction in Lebanon. However the price that Lebanon paid was Syrian Baathist hegemony which President Hrawi acknowledged in agreement he signed in Damascus with President Assad in May 1991.

For the Baathist regime in Syria the Taif Accords were really an unqualified triumph. The political factions within the Maronite Christian community had effectively fallen back into line by supporting Syria. The Sunni and Shiite Muslim communities were similarly left with no choice but to accept Syrian domination. Furthermore, Baathist Syria could still rely upon Hezbollah (which under the *Taif Accords did not have to disband its powerful militia) to help maintain its power in Lebanon and harass Israel.

(*The negotiation of the Taif Accords in Saudi Arabia was reflective of that Gulf kingdoms then acceptance of Syrian domination in Lebanon).

A paradox of the Taif Accords was that Lebanon’s constitutional structure remained intact. The return of peace paved the way for economic renewal due to the commercial savvy of the Lebanese. Lebanon’s economic renewal was of great benefit to Syria which due to the implosion of the Soviet Union could no longer rely upon economic aid and trade assistance from a defunct Soviet bloc. The settlement of a substantial but unrecorded number of Syrian migrants in Lebanon and trade links between the two neighbours vitally economically bolstered the Assad regime while negating the need for it to undertake either domestic economic or political reform.

The 2000 Succession of Bashar Assad

The strategic successes of Hafez Assad were such that a smooth succession of his son Bashar to the presidency in July 2000 following the older Assad’s death the previous month. In contrast to the chilling trepidation that most Iraqis felt toward the possible succession of Saddam Hussein’s sociopathic sons Uddai and Quasi to the presidency, most Syrians accepted Bashar’s ascension to the presidency. This was because Bashar (in contrast to his older brother Bassel who had died in an apparent car accident in 1994) seemed more modest, broad minded and open to new ideas.

But politically savvy Syrians (of which there were and are many) would have known that the new president was no reformer due to his previous role in establishing a powerbase by ruthlessly establishing his political pre-eminence in Lebanon in the late 1990s. It was with regard to Syrian policy in Lebanon that the veneer of Bashar being a relative political liberal began to unravel with the assassination of former Lebanese prime minister Rafik Hariri in February 2005. Hariri (who as prime minister was a Sunni Muslim) had presided over a corrupt but economically effective pro-economic growth government.

Hariri had actually had been previously connected to the Syrian regime as nearly all senior Lebanese politicians at one time or another once were. The reasons for his falling out with Bashar Assad were generally reflective of the unease that most Lebanese politicians felt toward Damascus’s alliance with Tehran.

The Hariri assassination precipitated mass anti-Syrian demonstrations in Lebanon which allowed the nation’s major party/faction leaders to break with Damascus. Invoking the anniversary of an anti-Assad 2005 rally a March 14th alliance of political parties was formed. This development fundamentally challenged Syrian domination in Lebanon. Following the return to electoral politics the Assad regime had been able to subliminally dominate Lebanon because its constituent communities consistently voted for parties on a communal basis.

Although the conduct of Lebanese elections since 1992 has been beyond reproach the nation’s political leaders were effectively intimidated by Syria’s military presence and resort to selective assassination to toe the Damascus line. The launching of an anti-Syrian civil disobedience campaign essentially sent a signal to the nation’s communal political leaders (who were probably already supportive of this dissent) that they could assert Lebanese self-determination.

The Assad regime shrewdly and surprisingly responded by withdrawing its conventional troops from Lebanon in April 2005 (although secret service personnel remained behind). This concession was more calculated than manganous because Baathist Syria could not afford the re-ignition of another Lebanese civil war due to Lebanon’s economic value to Damascus. Furthermore, military conflict in Lebanon could have precipitated combined hostility on the part of both Syria’s Sunni Muslim and Christian communities which the regime could not have withstood.

Instead of basing its army in Lebanon, Syria has since maintained its influence through the powerful Hezbollah party/militia and its links to the now predominately pro-Syrian Lebanese army. The current Lebanese president, Michel Suleiman is a retired general who, although backed by Syria, is still widely respected by most Lebanese for his professional integrity. There seems to be an implicit political pact between anti-Assad Lebanese and their president that he be allowed to serve out his term on the condition that constitutional processes are respected and national unity maintained.

Lebanon (at the time of writing) also remains relatively peaceful due to an understandable desire to avoid another outbreak of war. In this regard Hezbollah is fulfilling a very valuable role for Damascus and Tehran in that this party/militia is prepared to plunge Lebanon into war if anti-Syrian political forces push too hard against the Assad regime’s continuing power over its neighbour. The apparent paradox of Shiite fundamentalist organisation supporting a Maronite Christian president also reflects the strategic domestic arrangements that are still ensuring the survival of the Bashar Assad regime.

The Extended Spring: The Syrian People’s Uprising, 2011 to 2012

Similar adroitness has enabled the Baathist dictatorship to survive in a domestic context since the outbreak of a revolution in January 2011. Currently, the crushing of the Syrian uprising essentially hinges upon the Assad regime maintaining the support of the Christian and Sunni elements of its security forces. For this reason the regime cannot now afford an outright conflict with Lebanon’s Maronite community due to resultantly unfavourable domestic repercussions in Syria.

Reports by various intelligence agencies around the world indicate that the ground regime troops near Aleppo are mainly Christian soldiers as opposed to Alawites. This is because Alawite troops are carefully monitoring Sunni troops and officers to ensure that they do not defect to support the popular uprising. The resort to massive aerial attacks by Baathist regime fighter planes on Aleppo is also reflective of the fact that the regime cannot absolutely trust that Christian troops will not defect in the thick of battle. The regime is therefore now trying to rouse Christians in surrounding villages near Aleppo to massacre Sunni Muslims.

The July 2012 assassination of the Christian Defence Minister Dawood Rajiha may very well have been instigated by the regime to prevent his possible defection and frighten his community into being complicity in carrying out repression. Such a scenario is plausible due to the desperate state the Baathist dictatorship is in. However, the worst mistake that could be made with regard to Syria is to forget that the Assads (first with regard to Hafez and his brother Rifaat) since the 1960s have brilliantly combined political daring and calculation with sheer brutality to prevail against seemingly impossible odds.

It is for the above reason that the Assad dictatorship could eventually prevail in Syria. The full conquest of Aleppo is a major challenge for the Assad regime because it cannot be fully certain that Sunni, Christian or Druze troops will not defect in the heat of battle. Despatching Alawite troops to Aleppo is also fraught with difficulty for the Baathist government because they are needed to effectively shadow Sunni Muslim troops in Damascus who are primarily loyal to the apparently exiled former defence minister, General Mustafa Tlas.

With regard to ensuring that Christian troops do not defect the regime is resorting to repression of the Sunni Muslim majority so that Christian and Alawite communities will be too frightened to defect for fear of later retribution.

Aleppo is now being brutally subjected to aircraft, helicopter gun-ship and heavy artillery bombardment so that ground troops can eventually be despatched as the regime currently lacks the manpower to take Aleppo. There is also the prospect that forces loyal the Assad family will resort to poison gas. This would be a horrendous action of last resort because a military revolt by Sunni officers and troops would almost certainly follow.

There is also the prospect of American military intervention as President Obama has declared that the use of chemical weapons is a red line that he will not allow the Assad regime to cross. Despite the president’s undoubted intention to militarily intervene should Bashar Assad cross this red line and the grave danger of Russian endorsed intervention by republican Iran, it is still close to morally unconscionable that the United States is not doing more to practically help the Free Syrian Army fight against such an abhorrent regime or re-consider establishing a no-fly zone around Aleppo.

It is also short-sighted on the part of democratic nations such as the United States not to at least provide the necessary weapons that the Free Syrian Army needs because scope is being created for Al-Qaeda to enter the breach.

Republican Iran is already doing what it can to help the regime short of open intervention. The ballistic rocket military testing that republican Iran has undertaken is as a signal to General Tlas that the Baathist regime will ultimately prevail due to its support. The dilemma for the apparently exiled Sunni general is that should his troops support the crushing of the revolt there is no guarantee that with later support from republican Iran that the Assad regime will not later purge the Sunni elements within the armed forces.

The probable later purge of the Christian, Druze and Sunni elements within the Syrian armed forces is a chillingly plausible scenario because the Assad regime will later have to fulfil the role of vital ally to republican Iran in establishing Shiite dominance in the Gulf region. The Assad regime will be a vital ally to Tehran because of its strategic skill as recent Syrian involvement in Lebanon attests.

Easy to Cure in the Early Stages But Impossible to Cure in the Late Stages: Why American Policy Toward Syria is Similar to Treating Tuberculous*

Indeed, both Baathist Syrian and republican Iranian have the strategic nous to achieve their long-standing objectives of overthrowing the Saudi royal family and aligned Gulf monarchies. The Assad and Khamanei regimes correctly believe that in an election year the Obama administration will not provide air support to the Free Syrian Army for fear of the American president undermining his standing with his base in a politically tight year.

(* Tuberculous has been effectively eradicated by modern medicine but Machiavelli’s illustrative example is still valid).

The problem is that if the Obama administration forgoes a golden opportunity to bring down the Assad family dictatorship then there could be economic havoc in 2013. The economic situation for the United States is precarious for next year because the impact of the American drought will then be felt. America will therefore be significantly challenged by either higher oil prices caused by Iranian/Syrian military disruption in the Gulf or the United States out of economic necessity committing to military intervention to the prevent the two regimes from establishing their dominance in this vital region.

The American capacity to opt for the shrewder option of supporting the intelligently led SNC is counteracted by the fear of incurring the wrath of Russia and the PRC who are obstinately supporting the Assad regime. There may be political leaders and strategic analysts in Moscow and Beijing who believe that future Syrian backed Iranian domination of the Gulf region is positive because such an outcome can help ultimately bring down western economies due to the overwhelming American reliance on oil.

For PRC and Russian analysts who support Fidel Castro’s objective of having republican Iran and Baathist Syria help destroy America economically by reeking havoc in the Gulf should appreciate that the international economy is now integrally inter-connected. A future American economic collapse will therefore have ripple effects that will ultimately cause socio-economic chaos in Russia and the PRC.

Furthermore, an Iranian weakening of Turkey will pave the way for avowed Islamists later challenging for power in the Central Asian Republics (which until the end of 1991 belonged to the Soviet Union). Similarly, a more powerful republican Iran could also later stir up unrest in Xinjiang Province amongst the Muslim Uyghur people there.

Ultimately, it does not make strategic sense for Russia and the PRC to oppose an American-led establishment of a no-fly zone around Aleppo. It is in the mutual interest of these three powers to co-operate in helping facilitate the formation of a capable Syrian provisional government which can make arrangements to safeguard minority community rights and conduct democratic elections.

The sooner that the PRC, Russia and the United States co-operate to assist in the formation of a new Syrian provisional government the less chance that there will be for Al-Qaeda to establish a base in Syria. Recent military-political history shows that Al-Qaeda is able to establish a base in a nation where anarchy ensues as a result of a protracted rebellion.

Alternatively, the other distinct option (beside Al-Qaeda supplanting the Free Syrian Army as the major opposition force) should the Assad regime prevailing is a Iranian/Syrian Axis moving toward later militarily challenging Turkey and Saudi Arabia. This would inevitably cause global economic chaos but help global division based on nations being divided into power blocs.

The strategic nous of the Baathist regime in Damascus will almost be as important as that of Communist Cuba in helping republican Iran to destabilize global politics. The political skills of the Assad regime are considerable as the current crisis in Syria attests. The regime’s domestic shrewdness has been manifested by its alliance with the Marxist Kurdish Workers’ Party (PKK)*. The Syrian Baath regime’s alliance with the PKK has enabled Damascus to effectively suppress the nation’s Kurdish minority and threaten Turkey.

(*Promisingly, the Democratic Party of Kurdistan is supplanting the PKK as the major force that represents Kurdish interests in Syria).

Undermining Turkish national security will be a major objective of the Syrian Baathist/Iranian Republic Axis. This is because Turkey is a predominately Sunni Muslim nation that is a democracy and as such serves as a model for future secular democracies in predominately Muslim Middle East nations. Furthermore, fatally undermining Turkish national security interests will be crucial to the Axis later extending their destabilization campaign into Central Asia. This campaign will eventually focus on consolidating the influence of republican Iran in Iraq and bringing down the *House of Saud so that the Gulf region will come under Tehran’s tutelage.

(*Although the avowed ideological aims of Baathist Syria and republican Iran are different, if not contrasting, a mutually shared long term objective of theirs has been to destroy Saudi Arabia. This will be a difficult undertaking but Damascus and Tehran between them does have the strategic capacity to accomplish this).

The current revolt in Syria is the major impediment to the Axis undertaking a destabilization campaign. Indeed, the Syrian revolt could actually end the Axis which has been declared by Tehran in the midst of this revolution. Nevertheless, current indications are that western support for the Syrian revolution will not be forthcoming from the world’s leading democracies.

Although a no-fly zone around Aleppo will unfortunately probably not be established due to international reticence the reasons why one should be are outlined so that awareness of the gravity of this situation can be conveyed. The first point that should be made is that the regime’s survival hinges on its taking of Aleppo. Syria’s largest city is the political and strategic equivalent of what Benghazi was during the recent Libyan revolution. As previously mentioned the Baathists have to be careful with regard to sending ground troops into Aleppo due to the distinct possibility that non-Alawite combat troops will defect.

For a Baathist assault on Aleppo to be successful Sunni troops in the Syrian army have to be convinced that it is too dangerous for them to launch a revolt in Damascus. For this reason Republican Iran previously launched ballistic missiles in military exercises to convey to Sunni officers and troops in the Syrian army that Tehran is staunchly supporting Bashar Assad that revolt on their part is not viable. Crucial to the communication of this presently existing reality is the western refrain from establishing a no-flight zone around Aleppo or alternately supplying necessary weaponry.

An important excuse that has been made by some western commentators against establishing a no-flight zone has been that the Alawite and *Christian minorities will be endangered should the revolt succeed. If the rebels were to hold and consolidate Aleppo due to the establishment of a no-fly zone around Aleppo the Alawite, Christian and Druze communities will still be relatively safe in Damascus and the surrounding regions.

(*Incredibly the politics of the next papal conclave to select Benedict XVI’s successor is a factor in some Catholic commentators around the world opposing the establishment of a no-fly zone in Syria. This reflects the power within the Catholic Church of some senior members of the Chaldean/Nestorian church who are short-
sightedly aligned to the Assad regime.

Catholic Church clergy should be careful not to allow forces which are determined to ultimately destroy the church to later convert innuendo that they have alluded to into credible allegations that could be made against future popes. Furthermore, the current and unprecedented politicking among the upper echelons of Catholic clergy must stop if the church is ultimately to survive.

The groundwork is now being set to convert geographical divisions into conclave voting blocs which will ultimately threaten the viability of the Catholic Church. Hopefully, Benedict XVI’s successor will be an Italian so that the previous paradox of popes coming from a particular country will crucially help maintain Catholic (i.e. universal) unity.

When the current pope was previously Cardinal Joseph Ratzinger he served as Prefect of the Sacred Congregation for the Doctrine in which he was charged with maintaining the orthodoxy of the Catholic Church’s teachings. During his time as prefect the then Cardinal Ratzinger gained a reputation for being strictly orthodox. However he skilfully maintained links with people, such as theologians that he had previously ruled against while still adopting some their ideas which he considered not to be conflict with Church teachings.

This practice of ‘maintaining the conversation’ was previously adopted and brilliantly applied by Paul VI. Unless this practice is applied by Benedict XVI’s successor in a time of rapid change the Catholic Church will be confronted by threatening future challenges in an ever changing world).

If the international community was to either establish a no-fly zone in Syria or expeditiously supply anti-aircraft weapons to help the Free Syrian Army secure Aleppo the necessary impetus would be established to form a new provisional government that was acceptable to all the communities within Syria. The securing of Aleppo will prompt senior Alawite, Christian, Druze and Sunni Baathists army officers to withdraw their support for the Assad family so that a replacement interim government could be formed as part of the transition to a provisional government that would protect all communities in Syria.

The Crucial Importance of Turkey to Syria and the World

It is a tremendous pity that the Turkish government of Prime Minister Recep Erdogan has not moved to establish a no-fly zone in Syria. Such a development would enable Syrian troops to defect so that the dynamics would be put in place to precipitate the eventual formation of a new provisional government in Damascus.

Turkish failure or reticence with regard to establishing a no-fly zone in Syria obscures the international importance of Turkey in international affairs. Moscow should appreciate that Turkish engagement in Central Asia is vital to countering the influence of republican Iran in that region which will eventually become a force for avowed Islamists to disrupt to the Russian Federation.

Furthermore, should Turkey hopefully become an EU member this could help pave the way for eventual Russian membership of the European Union and even of the North Atlantic Treaty Organisation (NATO). Such developments would be reflective of Turkey being a strategic bridge which returns Russia to the European mainstream which it exited from in 1917. It was Nicholas II’s very unfortunate determination to destroy Turkey to re-establish the Byzantium Empire that crucially led to Russia’s estrangement from Europe by the Tsar aborting the establishment of a fully fledged Russian democratic constitutional monarchy.

Imperial Russia’s defeat in the Russo-Japanese War of 1904-1905 had previously forced Nicholas II to concede to the establishment of a Russian parliament (Duma) which was first elected in April 1906. Although the Tsar blocked the Russian Empire’s full progression to responsible parliamentary government a very able civil service based cabinet was formed which more often than not worked co-operatively with the Duma to pass innovative and useful legislation.

At the time of the outbreak of the First World War in 1914 the Duma had a range of political parties which were social democratic, liberal, conservative and agrarian. There were also a slew of ethnic based parties which effectively represented the interests of non-Russians within the empire.

The strong public support for the entente when Russia entered the First World War in 1914 reflected an overwhelming sentiment which ranged from the aristocracy to the working class that the empire would transition to a fully-fledged constitutional democracy upon the defeat of Germany and the Austro-Hungarian Empire. To resist this outcome Nicholas II took direct command of the armed forces in September 1915.

In leaving for the front in 1915 the Tsar ceded responsibility for the government to the Tsarina Alexandra. Her Imperial Majesty’s disastrous dependence on the charlatan monk Gregory Rasputin precipitated the breakdown of functioning government, the collapse of the Russian war effort and eventually the fall of the Russian monarchy in March 1917. Had the Empress had simply allowed the empire’s competent, if not brilliant, cabinet ministers to remain in office then Russia probably would have withstood the military might of Germany to be on the Allied winning side when the war was won on the western front.

A constitutional democratic post-war Russian monarchy probably would have been more prestige than even the British royal family. As a leading democratic nation Russian influence would have been accepted around the world in diplomacy, international commerce and culture. The limits of Russian dynamism in a domestic context would similarly have no bounds.

Alas, Nicholas II’s determination that the end of the First World War result in a restoration of absolute aristocracy with a commensurate dismemberment of Turkey (in order to re-found the Byzantium Empire) led His Imperial Majesty to use the exigencies of war as a means to draw closer to the officer corps for the showdown he tragically sought with Russia’s powerful politically liberal monarchist establishment.

Ironically it was Turkey (previously been known as the ‘sick man of Europe’) which, despite formally been on the losing side in the First World War in 1918 and abolishing its monarchy in 1923, which experienced a post-war national renaissance as opposed to Russia. If there was a Russian-Turkish alliance in the twenty-first century the potential for good in international affairs would tremendously expand.

Turkey’s increasingly close links to the Arab League and diplomatic relations with Israel place ideally put Ankara in a strong position to reconcile potential American and Russian interests in the Middle East. Turkey due to its geographical location could also be the figurative bridges between Central Asia, Europe and the Middle East. With regard to the Middle East positive Turkish influence in the Arab world could become a powerful dynamic if a nation (i.e. Turkey) with an eminently successful foreign policy helped a people as smart and as courageous as the Syrians bring down the Assad regime.

Why it is Smart to Help Smart People: The Crucial Importance of Establishing a No-Fly Zone in Syria

Therefore it is to be hoped that Syria’s Baathist Party and allied factions within the military will withdraw their support for the Assad family to precipitate the formation of new interim government. The immediate objectives of such an interim government would be to ‘put its own house in order’ so that it could negotiate with the SNC the formation of a new provisional government which would organise national elections to be held a year to eighteen months time. This scenario is plausible because the religious communities (Alawites, Christians and Druze) that are currently aligned to Bashar Assad cannot wait until the last minute to defect to the opposition as family based Libyan clans did in Tripoli.

The American Secretary of State Hillary Clinton has already undertaken substantial preparatory work in helping the SNC. This American focus on helping the Syrian people has set the scene for an international conference to establish a future Syrian provisional government. Chinese and Russian participation at such a conference would also help ensure that the interests of the communities that were once aligned to Bashar Assad would be accommodated in a future provisional government.

By contrast a successful Baathist assault on Aleppo will effectively end the prospect of the rebels having the capacity to militarily bring the regime down. Urban revolts in other cities and a rural guerrilla campaign undoubtedly will continue but it would only be a matter of time before brutal counter-insurgency measures (with undoubted assistance from republican Iran) crushed resistance. A consolidated Assad regime would then be in a position to vitally assist republican Iran’s international de-stabilization campaign.

Not only would an Assad regime survival be terrible for the overwhelming majority of the Syrian people and peace in the Gulf region but it would constitute a tragedy with regard to forgone opportunities for having a Syrian democracy. An important reason why the term ‘the Middle East peace process’ is perpetually associated with hopeless gridlock has been the impact of the Assad regimes since 1970 in outmanoeuvring the United States in geopolitics.

A prime example of the Assad regime undermining the United States can be ascertained by analysing how Damascus exploited the American-led 2003 liberation of Iraq into to its advantage. Remnants of the Iraqi Baathist regime might not have later emerged as a potent military threat and a continuing source of de-stabilization in Iraq had they not received support from their former arch-rival in Damascus.

The Syrian Baath regime therefore have a capacity to help take post-Saddam Iraq into Tehran regime’s orbit while helping Damascus gain renewed strategic capacity in the Middle East. In this regard it can be said that the fall of the Saddam regime allowed Damascus to eventually win out with regard to which nation is the leading Baathist force in the Arab world. The formalization of the Axis now creates the potential for Baathism to be a disruptive force due back-up from republican Iran.

This Assad family triumph in regard to its rivalry with the Hussein clan vis a vis Baathist competition should be a pyrrhic victory due to the exhaustion of the Damascus regime’s popular base reflected by massive domestic Syrian opposition. However, Baathist supremacy is not achieved by popularity or winning incisive intellectual arguments but rather by brute force whether it be by suppressing dissent or seizure of power in a military coup. In the current context Baathist power will be advance by the Syrian regime being a vital appendage of republican Iran.

Alternately, should the Assad regime fall then the prospects for Middle East and world peace would substantially increase. Currently, the viability of this scenario hinges upon the establishment of an international no-fly zone around Aleppo would consolidate the Free Syrian Army’s control of Aleppo. This would crucially set the scene for the SNC to establish a government in Syria’s largest city. This development would also help avert a potential refugee crisis in the region and lay the groundwork for a political resolution of the conflict.

The above prediction as to a political resolution being achieved can be made with reference to the Libyan scenario in which there are broad parallels. Predictions that a protracted Libyan civil war would ensue following NATO air support for the brave people of Benghazi and the subsequent rebel campaign to take Tripoli did not eventuate. This was because clans in the capital rose up in the city as the freedom fighters advanced thereby effectively ending the Qaddafi dictatorship.

Indeed, recent demonstrations (September 2012) by the people of Benghazi against an anti-American militia illustrate the importance of the United States helping repressed nations gain political freedom. Al-Qaeda has moved into the breach in Libya due to the vacuum caused by the fall of Colonel Qaddafi. However, with a democratically elected government now in place and with popular support on the ground Libya is effectively countering the Al-Qaeda threat without the need for the despatch of any foreign troops.

By contrast the apparent lack of effective American or western support for the Syrian people is creating the scope for Al-Qaeda to move into the vacuum. Presently, anti-Assad family rallies have not become anti-American because there is still an expectation by many Syrians that the United States will eventually provide some form of assistance that will vitally contribute to their liberation.

Many Syrians have no sympathy what so ever for the recent anti-American demonstrations that have occurred in Muslim nations in reaction to the showing of a vile you-tube ‘movie’. Most Syrians realize that the American people and government are in no way responsible for this so-called movie. Indeed, many people in Syria are wondering why Muslims around the world are not rallying to support them in their hour of need. If western nations are not careful this question might be asked by Syrians with regard to why they are not been helped by governments around the world who have expressed sympathy for their plight, particularly as the west and other Arab nations vitally assisted the Libyan people in their hour of need.

There are also similarities between what happened in Libya in 2011 and what is happening now in Syria. The Alawite, Christian and Druze communities in Damascus are similar position to the Tripoli based clans in that they have no real interest in defending what is essentially (similar to what Libya once was) a family dictatorship. In this regard these three Syrian communities are similar to clans in the Libyan capital in August 2011- they are prepared to defect so long as their leaders can negotiate the formation of a future provisional government with the approaching opposition.

Should Baathist troops retake Aleppo (or crush the current rebellion in parts of Damascus) the opportunity to expeditiously topple the Assad regime will be foregone. Such a time lag will be fatal because the dictatorship will be able to wage with republican Iranian assistance a bloody counter-guerrilla insurgency. Nevertheless, Tehran can utilize its influence in Iraq to help arrange for Al-Qaeda operatives in that nation to establish a guerrilla insurgency in Syria after Baathist troops have withdrawn to the regions around Damascus.

Even though Al-Qaeda is a mortal enemy of the Damascus and Tehran regimes they both appreciate that this force can be utilized in the future to harass the United States to eventually giving up on the strategically and economically vita Gulf region. Furthermore, the ultimate Al-Qaeda goal of bringing down the Saudi monarchy is one that this diffuse military-political force shares with republican Iran and Baathist Syria.

Why Turkey is the Linchpin in Opposing the Axis and Al-Qaeda

It is consequently not only in the United State’s interests to help the Syrian people but ultimately in the interests of the PRC and Russia to prevent the global spread of Al-Qaeda backed insurgencies. Furthermore, Syria’s neighbours Saudi Arabia and Turkey understand the necessity of both opposing the Axis and of pre-empting Al-Qaeda. Therefore Turkey has helped the Free Syrian Army to establish border enclaves in Syria’s north near the Turkish border.

This type of astuteness has been apparent since Turkey was notionally on the ‘losing’ side following the First World War. As previously analysed, this nation then went on to be one of the most successful successor states in the Middle East. It is therefore promising that a strategically astute nation such as Turkey is helping a people as smart as the Syrians. This is because the balance between religious and secular tendencies that the Turkish nation has achieved offers a model for a post-Assad Syrian democracy. Indeed, Syria in achieving a democracy would be a beacon of hope and a practical model for other Arab nations to follow suit.

Cynics might claim that Turkey is only helping the Syrian people due to close geographic proximity. Even if this is true the point is that the chances of a beneficial outcome are increased which otherwise might not exist. World history is tragically replete with examples of worthy causes failing because an immediate strategic dividend could not be ascertained due to national leaders not going outside their ‘comfort zone’.

Why International Resolve in Syria Could Help Forge Necessary Unity to Overcome the GFC

Due the political and economic imperatives caused by the GFC nations such as Britain, France and the United States should expeditiously vitally assist the SNC by establishing a no-fly zone around Aleppo. French president Francois Hollande’s apparent refusal to support the establishment of a no-fly zone around Aleppo is only contributing to *British temporizing on this vital issue.

(*It would not hurt if Britain and France proactively worked together to support the Syrian people. Such a development would help establish a pattern for needed Anglo-Franco co-operation in the context of the eurozone crisis. It should not be forgotten that the SFIO, the great predecessor of France’s ruling Socialist Party, (PS) often worked in close co-operation with British Tory governments during the Third and Fourth republics to make the 1904 Entente Cordiale a reality. British Tory/PS co-operation is now crucially needed if economic and employment growth is to be generated in Europe).

Politics at a senior national and international level is often about deciding how to make necessary but difficult decisions. To be blunt unless senior leaders are prepared to make the challenging decisions before time then they should not aspire to national leadership. The current context of the GFC validates this maxim.

If international leaders do not grasp the nettle of helping a people as smart (and courageous) as the Syrians than valuable resources will have to be later squandered in containing an axis composed of republican Iran, Baathist Syrian and Communist Cuba that could well bring down the world’s established economic order.

The major challenge for a re-elected Obama administration will be handle threat posed by such an Axis. To cut to the chase should a no-fly zone be established around Aleppo then the necessary groundwork would be in place for an alliance between Rifaat and General Mustafa Tlas*. Such an alliance would be incredible given their deep hatred toward each other. However, the paradox of the Baath Party is that it once had a substantial and genuine support base among Sunni Muslims who did not realize until it was too late in the late 1970s that Hafez Assad in establishing a family dictatorship had transferred predominant power to his Alawite community.

(*A Rifaat-Tlas alliance taking the form of a new Baathist administration in Damascus would help ensure that Russian and PRC interests are accommodated at a possible international conference to form a Syrian provisional government to supervise democratic national elections).

The late dictator (Hafez Assad) could not have got away with this virtuoso performance had it not been for the crucial support he received from his devious brother Rifaat. Nevertheless, Hafez Assad was still able to utilize existing Sunni Baathist support led by General Tlas to stop Rifaat in 1984 from supplanting him. Although Rifaat is exiled he is still powerful but is in no position to supplant his nephew as the protector of Alawite interests if the regime takes Aleppo.

A viable potential ramification (if unintended) of the recent assassination of the Defence Minister General Dawoud Rajiha in July 2012 is that should there be an Alawite defection from Bashar to Rifaat, then the nation’s Christian community will probably also move into his sphere. This is plausible due to the close links between *Alawites and Syrian Christians and because Rifaat has a support base with the latter community. It is improbable that Rifaat could forge an alliance with Sunnis Baathists, who as the defection of the short serving prime minister, Riad Hijab, illustrates, would if they could, defect.

(*Alawites have been described as Christianized Shiites).

Nevertheless, Sunni Baathists such as Prime Minister Ibrahim Ghalawanji (Hijab’s successor) are not going to defect unless and until General Tlas can effectively represent and protect their interests in a post-Bashar Assad run Damascus. In such a context the Syrian Baath Party would do what it has done best since 1963, accommodate the interests of different army generals by representing their communities in a party context.

This important accommodative function of the Baath Party becomes a viable scenario if an internationally enforced no-fly zone is established around Aleppo. Should this occur then the Bashar Assad government would be unable to crush the revolt. Such a positive development would not necessarily mean that the Free Syrian Army could promptly take Damascus. For this to occur the Free Syrian Army would require foreign air support which could then be withheld on condition that a continuing Baath regime in Damascus agree to negotiate in the formation of a new provisional government with the SNC.

The Libyan precedent was one where a continuing rebel advance to the capital was facilitated by foreign air support. In the Libyan context the deals were made between Tripoli based clans and the freedom fighters before the assault on the capital so that the former could defect at the opportune moment. This scenario ensured that there would and could be no widespread retribution against one time supporters of the Qaddafi regime.

A Libyan type scenario is very plausible in Syria because the Sunni components within the armed forces and the Baath Party (as the Hijab defection attests) are more than willing to defect. An Alawite/Christian defection is a more difficult proposition but a rebel victory in Aleppo due to the establishment of an internationally enforced no-fly zone (or external supplying of useful weapons to the Free Syrian Army if international complications create potentially dangerous scenarios) would provide the necessary impetus for the formation of a new Baathist administration in Damascus to negotiate with the SNC the establishment of a new provisional government.

The above scenario would not only be a giant step for Syrian democracy but also help ensure that Syria again becomes one of the most important nations in the Arab world instead of being a satellite of republican Iran. It is clear that the overwhelming majority of the Syrian people want to see the end of the Assad regime. Having lived for nearly fifty years under dictatorship it is difficult to envisage the majority of Syrian people acquiescencing to a new dictatorship should there be a post-Assad era.

The longevity of the Assad family reflects their shrewdness which should serve as a warning that the Syrian Baathist regime’s fall is not an inevitability. Even though Syrians are smart and courageous they are up against a formidable domestic adversary which with the backing of a determined and powerful republican Iran can still prevail.

Given the continuing dependence of the industrialized world on oil and the context of the GFC it is better that the Syrian people now be helped by the international community supporting the establishment of an international no-fly zone around Aleppo so that Machiavelli’s analogy to tuberculosis be appreciated – that the decease be treated in its early before progressing to being fatal. Not only would a dangerous anti-democratic Axis be stopped before it has formally started but the more or less free world could only benefit from having a valuable ally in a future democratic Syria.

Why The Syrian Road to Democracy Has Such Important Global Ramifications

The contrasting alternate scenario of a three powered Axis (Communist Cuba, republican Iran and Baathist Syria) fatally international stability in the context of the GFC is still frighteningly a distinct prospect. The era of nations with dictatorships engineering economic and political havoc should have ended because the imposition of a central ideology on a global scale, such as Marxist-Leninism- is now over. Nevertheless, internationally generated conflict can still be engineered for the purpose of perpetuating the power of dictatorships (such as republican Iran’s) to compensate for its lack of a sufficient domestic support.

Alternately, authoritarian governments, such as Vladimir Putin’s Russia, can enhance their nation’s socio-economic prospects by making the outward form of constitutional pluralistic structures a reality while they still have the necessary support base and opportunities to do so. Alternatively, history is replete with examples of authoritarian and totalitarian regimes diverting people’s attention and national resources into foreign (and ultimately military) conflict instead of attending to internal problems.

Russia has fundamental challenges with regard to under-population in regions, such as Siberia, which if unattended to will cause a future crisis. Presently, a Putin-led Russia has shrewdly adapted to the challenges of a post-Cold War world by utilizing its intelligence agencies to help pursue a well thought out energy policy which has reaped amazing economic benefits. However, the long-term viability of rentier Russia in the context of the GFC is questionable to say the least.

It is not inconceivable that there could be future military conflict between the PRC and Russia if the political economies of both nations are ultimately dependent upon the manipulation of their natural resources and those of other nations. That the PRC is currently militarily stronger than Russia is a result of the economic dividends that China gained from the economic and social reformist legacy of Deng Xiao-ping. The most important legacy of Deng’s was that he bequeathed a political structure that to date has ensured the national unity a nation with the world’s biggest population.

But with such formidable resources comes the fundamental challenge of keeping China internally strong. In such a context the PLA should avoid supporting CCP leaders who will mis-direct attention and resources away from effectively addressing domestic challenges. Indeed, not only will China suffer from having a flawed national leadership but the entire world.

For the above reason the leaders of China and Japan should avoid any disputation over the *Diaoyu Islands. The PRC has the capacity to militarily prevail if there should every very unfortunately be armed conflict with Japan. This would partly be because the Japanese Self-Defence Forces would be too psychologically challenged to undertake military action which might be deemed aggressive. However Japan’s Self-Defence Forces will effectively counter any external attack against unambiguously national territory.

(*The Diaoyu Islands should never have been taken from China by Japan in the 1894- 1895 in the Sino-Japanese War, the result of which substantially undermined China’s Imperial Ching dynasty).

Ultimately, Japan cannot survive as a trading nation unless it maintains and develops trading and financial ties with a peaceful, united and economically strong PRC. Consequently, the scope for a very beneficial Sino-Japanese relationship based on a ‘win-win’ basis is considerable that the costs of such an outcome being squandered are too horrendous to contemplate.

Therefore, Leninist mercantilists within the Chinese Communist Party (CCP) should desist from trying to manipulate senior echelons of the PLA supporting the selection of an anti-reformist new generation of leaders at the party congress in October this year. Such an outcome will eventually lead to an unmitigated disaster because underlying socio-economic challenges in China will not be addressed. This in turn could see a mis-direction of PRC resources in international entanglements which will threaten the viability of a fragile global economy.

Recent and widespread anti-Japanese demonstrations in China could lead to a Yugoslav/Serbian scenario in which possible popular support for political reform is mis-directed to the benefit of a future regime that is cunning but ultimately inept. The option that senior echelons of the PLA will hopefully go with will be a Mexican scenario to avoid a Yugoslav outcome.

For over seventy years *Mexico was ruled by a military backed dominant ruling party (DRP), the Institutional Revolutionary Party (PRI) whose rule became so entrenched that the armed forces eventually ceded the reality of political power factor to civilian Mexican presidents. After 1946 Mexican presidents (who under the 1917 constitution were strictly confined to single six year single terms) selected civilians as their successor by anointing them as the PRI presidential candidate in a presidential election year.

(*Mexico still has massive problems such as drug related crime and corruption but adept political reform averted that nation becoming a failed state).

Eventually a practice was established in Mexico after 1982 where presidents selected technocrat successors that they (i.e. technocrats) became the dominant force within the PRI. This development had its pros and cons but ultimately the former outweighed the latter because technocrats were very intelligent that they had the political skills to engineer a genuine democracy which circumvented a socio-economic induced explosion of popular unrest which could have threatened the viability of the Mexican state.

In the Chinese context the importance of technocrats been selected as the next generation of leaders at the CCP’s October 2012 Congress cannot be overemphasised.
Technocrats are intelligent, honest and are generally not wedded to corrupt power interests which ultimately lack the capacity to cope with the terrible problems that they cause. The world therefore needs the PLA to support the selection of intelligent and honest CCP leaders so that the international economy can eventually overcome the still very dangerous threats connected to the GFC.

The PRC is still dangerously threatened by the GFC because the viability of its export markets to Europe is currently imperilled. Furthermore, an important fall-back for the PRC expanding its internal markets to compensate for a possible contraction in export markets will be denied by the perpetuation of Leninist power-over economic and political structures.

Economic growth can be organically sustained by the formation of new smaller and medium banks and financial institutions through which new credit lines can be established to generate continue to lift millions of Chinese into a middle class which will help guarantee continued Chinese national unity. Strict prudential controls for banks will need to be maintained by the Chinese central government to prevent an implosion of the PRC’s financial system, to keep inflation down and to provide the state with sufficient leverage to continue to promote employment generation and help safeguard employee labour rights.

How the profound future challenges that confront the PRC will be handled and Chinese national unity forever assured ultimately rest with the senior echelons. Previously in 1976 the PLA very wisely applied their version of ‘ruling without governing’ model which resulted in national unity and ultimately spectacular socio-economic progress.

At the very least the selection of capable and honest senior CCP leaders in October 2012 will provide the PLA with the scope to choose from a range of statecraft options that are conducive to achieving viable outcomes as opposed to a suite of disaster horror scenarios arising from the army supporting a self-seeking corrupt CCP leadership that will also have supported a diversionary counter-productive foreign policy.

The Internal Contradiction of American Neo-Isolationists Gratuitously Antagonizing the PRC

Due to China’s fundamental importance to the world the Obama administration is making a terrible mistake by gratuitously agonising the PRC by supporting the apparent policy direction that is being set by the Defense Secretary, Leon Panetta. President Obama’s 2011 appointment of Panetta to this senior position was politically understandable. The president needed a defense secretary who could and would carry out a full withdrawal of American troops from *Iraq so that he could maintain faith with his political base in the election year of 2012.

(*The 2010 appointment of the brilliant James Jeffrey and the uprising in Syria helped the United States and more or less free world temporarily avoid the potentially disastrous consequences of the full American military withdrawal from Iraq).

The problem with Secretary Panetta is that his Vietnam Syndrome affliction is resulting in his either consciously or unconsciously fundamentally undermining American interests around the world. Paradoxically, the American Defense Secretary would be doing less harm if he was more of a dove. This is because Panetta’s bolstering of American military power against the PRC is counter-productive to say the least.

The United States cannot afford to antagonise the PRC without whose economic support America might not have survived the 2008 GFC. Ironically, the traditional neo-conservative argument could be ironically invoked by Panetta that democracies should not pander to dictatorships. But the senior members of the CCP and the PLA are on the cusp in October this year of potentially selecting (or not selecting) an effective leadership that will hopefully prioritize focussing on safeguarding Chinese national unity.

Commensurate with the PRC’s future senior leadership pursuing the vital domestic objective of safeguarding national unity is maintaining relatively cordial international relations on a ‘win-win’ basis. China’s national and international strength will be undermined if the PRC’s massive economic strength is squandered by falling into the trap of supporting medium powers (such as the axis of Communist Cuba, Baathist Syria and republican Iran) becoming the metaphoric tale that wags the dog.

Without International Co-Operation the GFC Cannot be Overcome

The importance of the PRC helping to save the world from an economic cataclysm reinforces how dangerous the GFC is. The GFC also threatens catastrophe unless American fiscal policy helps ensure that the US dollar remains the world’s reserve currency. The other very important threat posed by the GFC is that of the eurozone debt crisis precipitating a financial contagion due to the distinct possibility of member states defaulting on their public sovereign debts. Therefore, the decision of the German government to buy some of the sovereign debt of the so-called PIGS nations is a very promising development for which the Merkel government in Berlin should be applauded.

(*The euro will hopefully remain the currency of so-called PIGS nations unless and until it is safe for them to later adopt their own national currencies or form another inter-European currency so that debt servicing will be feasible and easier).

Nevertheless, the German government is still making the fundamental mistake, or calculated decision, of trying to impose austerity measures on the Hellenic Republic which makes an economic recovery impossible because the Greek economy is service based. Without sustained economic recovery in Greece, and for that matter Europe and the world, there is no possibility for putting the GFC into past tense.

The only nation that is currently benefiting from the GFC is Germany. This is because Berlin’s de facto domination of the euro has led to the direct correlation between financial precariousness throughout the eurozone and high German economic rates of growth and near full employment.

Ultimately nations such as Britain, France and Italy have to work co-operatively to harness private capital to maintain European banking solvenancy and capital formation to spur sustained economic growth in the eurozone. Instead of allowing Greece to be the catalyst for an economic implosion in the Eurozone, EU nations such as Britain and France must take the lead to provide capital to the Greek private sector.

Therefore the recent announcement that the European Central Bank (ECB) will be issuing new bonds to cover public foreign debts of EU nations is a tremendously positive step in the correct direction.

If Germany had adopted (or still later adopts) a ‘win-lose’ approach toward Europe then a ‘lose-lose’ horrendous scenario for the world economy would have ensured. Hopefully, German economic power by supporting the ECB will be utilized for preventative maintenance purposes so that debt defaults by nations and European financial institutions can be avoided. The resulting maintenance of international credit lines combined with the institution of effective and transparent prudential controls by the ECB in conjunction with national reserve banks of EU nations will provide a practical basis for financial solvency and for vitally needed international economic growth.

The Fundamental Importance of the American Dollar

Covering EU debts is half the equation with regard to overcoming the GFC, the other crucial factor is to ensure that the American dollar remains the world’s international reserve currency. This must be the prime economic priority for either an Obama or a Romney administration to enable the United States to continue to service its foreign debt and maintain the credit worthiness of American financial institutions. Because the PRC is a major holder in American Treasury Bonds and trading partner of the United States, Chinese assistance in supporting the American dollar is unavoidable.

It is therefore in the interests of the United States to at least have constructive relations with the PRC. This is one area where the Obama administration is possibly going astray due to imbalances between short and long term policy because of Leon Panetta being Defence Secretary.

The current White House administration is a curious combination of sound long term policy direction countered by tepid policy implementation in the short to medium term. The upshot of this imbalance is that long standing problems have been avoided which could fatally undermine the Obama presidency. (The current situation in Syria is a vivid example of this imbalance regarding sound policy direction often being undermined by at best, tepid implementation).

Why President Obama is Still the Better Presidential Candidate

The reason for this policy imbalance is so that the Obama administration can avoid alienating its massive support base that was assembled in 2008 and has since more or less been maintained. Generally sound policies, such as avoiding spending cuts which could have precipitated de-inflation and massive employment, have not only crucially helped keep President Obama maintain his support base but also contributed to substantial numbers of non-aligned voters remaining inclined toward the current White House incumbent.

Due to a determination to avoid losing existing support President Obama has often not taken the next step. A vivid example of this has been the refusal of the Obama administration to balance environmental and economic factors which has prevented the construction of the keystone oil pipeline. This is a manifestation of major policy failure due to short term political considerations taking priority. This project would have crucially helped the United States be energy self-sufficient while generating (no pun intended) much needed employment growth.

Furthermore, *natural gas should not be foregone being utilized as an alternate energy source because it can substantially reduce carbon emissions. According to the Danish environmental economist Professor Bjorn Lomborg (who is a sceptic concerning the extent of the threat posed by global warming but not the validity of this phenomenon) carbon emissions in the United States are down to their lowest levels in twenty years. He claims that this is due to the switch to natural gas which emits 45% less carbon than a carbon unit.

(*Australian has massive reserves of natural gas that could and should be utilized in a domestic context to lower carbon emissions - an infinitely better policy option than having a devastating carbon tax - and as a very valuable source for exports that will now be needed because Australia’s China mining boom is effectively over).

In the context of the keystone debacle the great question of American politics in 2012 is whether deserves to be re-elected? The answer is still yes! This is because the Obama administration has taken the United States in generally the correct economic policy direction due to the president’s unstinting support for Treasury Secretary Timothy Geithner.

Under Geithner’s tutelage the United States has so far avoided debt default the nation’s financial sector has remained viable and due to his excellent links to foreign governments and financial corporations. This has been crucial to ensuring that international credit lines have remained open. The appointment of Geithner as Treasury Secretary has also vitally provided crucial continuity between the outgoing Bush administration and the incoming Obama administration with regard to ‘bailing out’ Wall Street by supporting the big American banks*.

(*The real contemporary danger with regard to the ramifications of the so-called Wall Street bail out is that there will be a greater concentration of capital with the big American banks. This is a concern because should they, the big banks, collapse there may be no fall-back position. Furthermore, consolidated big corporate American banks will probably be less inclined toward lending to smaller businesses, let alone being supportive of the formation of new smaller lending financial institutions.

Recent indicators have been encouraging because President Obama has recently vocally advocated the need for a greater range of financial institutions to support the growth of small business and employment).

This bail out Wall Street policy has been attacked from differing left-wing and right wing perspectives but in essence this policy saved the international economy from collapse. In particular the Obama administration’s bail out of the American car industry has staved off a possible domestic economic crash. Furthermore, the maintenance of welfare services has critically maintained social harmony in American society which the onset of the GFC is threatening.

There are important questions as to what a second Obama administration will do if it wins a second term. When it is all said and done taxation policy will be the make or break of the administration comes to office in January 2013. Going by avowed policy positions it seems that the Obama administration should be re-elected because of its overall taxation policy - which is essentially that the top richest one percent should pay more in tax.

The United States’ huge budget deficit is mainly due to taxation revenue base (which now represents just under 15% of the total economy) being insufficient. The resulting increased reliance on borrowing to service basic services is increasing America’s debt burden which in the long term threatens the US dollar’s status as the world’s reserve currency. This consequently undermines the United State’s capacity to service its foreign debt and remain economically viable.

The resulting reduction in government spending on services, the reluctance of the domestic banking sector to lend and the decreased value of wages have also cumulatively undermined the purchasing power of the American dollar. This has imperilling the prospects for middle class renewal without which there ultimately can be no lasting American or global economic recovery.

The engineering of higher economic growth in the private sector is ultimately the panacea that will get the United States (and the world) out of the GFC. Higher taxation rates on the United States very rich will not destroy them but actually sufficiently expand the nation’s tax base so that existing services can be financed and possibly expanded in the future. Increased public spending on infrastructure and ancillary services will precipitate higher levels of employment and with that an expanded tax base that will vitally help the United States to service its debts and reduce the budget deficit.

The above scenario is essentially a Keynesian one. Keynesianism is not by definition necessarily a left/left of centre policy framework. Whether a Keynesian or a monetarist approach (or a combination of the two economic paradigms) is adopted should be determined by prevailing economic circumstances.

There is also need for a genuinely Keynesian approach to economics to be adopted by the American federal government spending money on capital infrastructure projects. This will simultaneously create employment and facilitate the spending of money to create further demand and employment. A monetarist approach, by contrast, due to current uncertainty is not viable in the United States due to a fundamental lack of economic confidence. It is this phenomenon which is negatively at the very heart of the GFC.

Major tax cuts, as the centrepiece of a Romney-Ryan administration’s economic strategy, would not facilitate the needed and intended economic growth due to a profound lack of consumer confidence. There may be a time in the future when a monetarist approach will work a treat for the United States (such as in the 1980s because of the Reagan tax cuts) but alas, not in the current environment. The inadequacy of tax cuts under a Romney-Ryan administration will be compounded by expenditure/entitlement cuts possibly fatally contracting the private sector of the American economy by undermining the private sector by depressing demand.

By contrast the Obama administration to date has crucially helped prevent a catastrophic economic collapse by its bailout of the American auto industry. In this context the recent announcement by Federal Reserve Bank Chairman Ben Bernanke (September 2012) that a massive new round of quantitative easing (i.e. the injection of funds by the American government into banks after printing more dollars) is promising. This is because Chairman Bernanke is maintaining a pro-growth approach to economic policy which is focussed upon achieving employment growth.

The potentially negative consequence is that this quantitative easing by itself will not work due to an absence of confidence that consumers will not spend enough despite the massive injection of capital will still not be able to sufficiently lend. There is also the prospect that the US Treasury’s purchasing back of bonds that it once sold to banks might not also work because the absence of economic confidence mitigates against American banks being able to lend to kick start the economy. In this regard to this quantitative easing could be as ineffective as cutting taxes as the Romney-Ryan ticket proposes due to an acute lack of consumer confidence.

Quantitative easing in a European Union (EU) context could similarly eventually become unviable, but for different reasons. This would be because the euro does not necessarily reflect the value of the goods and services in all EU nations which could mean that hyperinflation later eventuates. The future option of eurozone nations such as Greece re-adopting their own currency or joining another currency block within the EU so that future debts can be more easily repaid should not be discounted.

However, for the immediate future it is very important that Greece remain in the eurozone for the sake of international financial stability and until it is safe to consider the option of adopting another currency. If Greece later re-adopts the Drachma this should be based upon a considered analysis of a range of financial contingencies.

Hopefully, as with all ambitious business and economic strategies the Obama administration will take into account different contingencies by having a methodology to validly assess the effectiveness of the recent round of massive quantitative easing (QE 3). Consequently, (if there is to be a continuing Obama presidency) a re-elected administration will have the capacity to expeditiously shift to more spending on infrastructure. Obviously, the vital component of assessment will be whether sufficient consumer demand is being stimulated to spur necessary economic growth.

More targeted spending directed toward poorer people who will increase the prospects for boosting economic growth. In the United States new employees working on federal and state infrastructure projects will more expeditiously spend money and create demand because they are coming from an economically poorer base. More affluent American consumers in the context of the GFC by contrast are frustratingly more inherently cautious. Furthermore, if there is to be more government spending in the United States care will need to be taken to ensure that money is not squandered (as it was in Australia) on so-called stimulus packages where people often spend newly available funds on imported consumer goods.

The economic position of the United States is already being undermined by possible Sino-American estrangement. The PRC and Japan are both reportedly selling their holdings in US Treasury Bonds that the American Treasury Department is now reputedly purchasing its own bonds! The ramifications of this development in a nutshell challenge the long term viability of the Obama administration policy of quantitative easing.

Why Keynesianism Could Provide the Means for the PRC to Break with Corrupt State Socialism

The nation that is best applying a Keynesian approach to economics is the PRC. Massive spending on infrastructures that have been brilliantly devised by state bureaucrats which are crucially helping the Chinese state to stimulate spending while still amazingly avoid inflation. This success to date is not only helping the PRC avoid a GFC induced economic collapse but also crucially helping the world.

The PRC still has inherent economic weaknesses associated with being a predominately state controlled economy. The lack of property owning and labour rights as well as massive corruption within state sector are distortions that will eventually overtake the PRC’s talented bureaucrats with regard to their continuing to successfully engineer sustained high economic growth rates.

Hopefully the soon to be selected next generation of CCP leaders will address the above cited gaps in the PRC’s political economy by allowing independent political and economic actors, such as genuine trade unions, to be formed. Such a development would not mean that brilliant state bureaucrats recede from continuing to ensure that effective macro, and where appropriate, micro-settings are maintained. These settings have helped, and will continue to help ensure that the PRC avoids high inflation, mass unemployment and major regional disparities in economic growth.

The Appropriateness of Keynesianism in the Current American Economic Context

The application of a Keynesian approach by American federal and state governments in the form of capital spending on infrastructure will not mean that a statist approach to economic policy will become the new paradigm. Rather, a Keynesian approach can be applied in a short to medium policy period until financial confidence is restored to the banking sector and in the broader private sector of the American economy. By and of itself increased spending is not a panacea but rather a necessary ingredient for other policies such as the state encouraging the growth of small financial institutions to encourage the growth of small business.

The very interesting (and crucial) aspect of the 2012 American presidential election is that the two major presidential tickets are a glaring dichotomy between an essentially *Keynesian approach and a very pronounced monetarist approach to overcoming the GFC. Although there is often great merit in being broad-minded the current economic and political situation in the United State is one in which, on balance, a Keynesian approach is appropriate as an alternate monetarist approach is not only wrong but potentially disastrous.

(*If there is to be a second Obama administration an effective Keynesian-type approach could be accurately categorized as such if resulting economic demand generated a sufficient employment growth and tax revenue base so that the grave danger of the GFC was finally overcome).

An alternative monetarist approach is currently not viable because in the American context credit worthiness and the lending capacity of American banks has been undermined too much by the effects of the current economic crisis. Most importantly, the lack of confidence in the American economy mitigates against tax cuts for the rich (who do not actually need them) spurring the needed economic growth for the United States to eventually break with the GFC.

Economic growth in itself will not precipitate an economic recovery unless there is also a resultant expansion of the American government’s tax base and substantial increase in bank deposits to help secure solvency and an enhanced credit lending capacity of financial banks and the formation of new smaller financial institutions. The achievement of these additional needed outcomes will require immense technical and policy skill by the next administration.

The Nexus Between American Policy Gridlock and Political Polarization

Governor Romney’s selection of Wisconsin Congressman Paul Ryan as his running mate is indicative that the above cited policy balance will not be pursued if the Republicans win the November 2012 presidential election. Congressman Ryan’s selection suggests that a future GOP regime* will be based upon politically orchestrated class divisions which are substantially derived from a regressive taxation policy.

(*The term ‘regime’ does not necessarily refer to an authoritarian government but more generally to the political structure in which power is exercised).

The September 18th 2012 revelation of a covertly filmed address by Governor Romney in Boca Raton, Florida in May this year is an indication of the potential for his class based approach to taxation to cause subsequent economic and social disaster. In his address Governor Romney said that the 47% of Americans who are on welfare (meaning that they receive some sort of welfare entitlement) and did not pay income taxes and would always support President Obama. As such, Governor Romney said that he could still win the presidency by gaining the support of the 10% in the centre who he believes holds the balance of power.

This address gives credence to the analysis that GOP establishment strategy is to deliberately polarize the electorate by proposing to finance middle class tax cuts by cutting entitlements for economically vulnerable Americans (i.e. the 47% of Americans that Governor Romney referred to). A socio-economic ramification of this policy approach will be to entrench high levels of underemployment and perpetuate societal divisions based upon access to credit.

An argument could be made, which Governor Romney is obliquely attempting, that his comments reflected an abhorrence of people being on welfare and an inference that as president he would lift millions of underemployed and unemployed Americans into full-time employment. Romney’s condescending tone to the selected guests indicated that that a President Romney would not be prepared to attempt to advance the interests of half the American population by establishing the conditions for employment growth.

The above cited approach is reprehensible in its own right but in the context of the GFC it is potentially disastrous. Institutionalizing high levels of unemployment/underemployment will make it near impossible to generate sufficient goods and services in the American economy. As a result a Romney administration will not be able to re-establish economic confidence necessary to fully restore the credit worthiness of either the American or the international financial systems, thereby perpetuating the GFC.

So long as the GFC is still in place there will always be the threat that should another major financial institution collapse that combined with high institutionalized levels of unemployment/underemployment, an international economic collapse could very unfortunately occur.

Disturbingly, Governor Romney has made virtue out of necessity in his subsequent press conference following the broadcast of his previous address to essentially appeal to middle class income tax paying voters to leave poorer Americans behind. In this context Governor Romney is still pursuing his original strategy of polarizing voters but with the important qualification that any pretence of helping poorer Americans by an administration of his generating substantial employment growth been effectively dispensed with.

The scary aspect of what is occurring is that Governor Romney could still win the election by consolidating his party’s base if too many GOP inclined voters are short-sighted. There is also the danger that too many less well of Americans will still not be sufficiently committed to turn out to re-elect President Obama.

The Obama campaign will hopefully avoid the trap of becoming complacent due to the broadcasting of these Governor Romney’s comments. The Romney campaign is probably now in a state of crisis, but as often occurs in times of an emergency, a strong willed and astute operative comes to the rescue. The Romney base is still substantially intact and a very good performance in the presidential candidate debates could still turn the situation round to ensure that the former Massachusetts governor wins an upset election victory.

Consequently, it still might be that American middle class voters that will decide the presidential election. In this context sufficient numbers of American middle class voters can either support President Obama’s attempts to grow the economy for the intended benefit of all Americans or go with the Romney-Ryan option of entrenched class division, with a possible racial basis.

History* has shown that economic and political elites that attempt to align with the middle class at the expence of poorer sections of society usually ‘come a cropper’. There may be instances where this is done inadvertedly, such as in Germany between 1930 and 1932, but in the case of the Romney-Ryan ticket this approach is part of a deliberate GOP establishment political strategy that has been pursued since Barack Obama became president.

(* It was assumed that the reign of the ‘Citizen King’ Louis Philippe of the French was secure following the 1830 Revolution because His Majesty did what his Bourbon family rivals had conspicuously previously failed to do, align the monarchy with the middle class, the bourgeoisie. This alliance went awry because the House of Orleans cultivated bourgeoisie support by denying voting rights to an emerging industrial working class and yeoman farmers and by maintaining regressive taxation.

The idiocies of the two above cited policies contributed to the successful February 1848 Revolution which was driven by working class and peasant hostility to King Louis Philippe and a lack of compensating deep middle class commitment to the Orleans cadet dynasty. Ironically, as the election victory of the Orleanist Party (Party of Order) presidential candidate Louis Napoleon Bonaparte later that year demonstrated, that had the Orleanist regime previously granted the vote to the industrial working class that this would have been off-set by suffrage rights also been extended to conservative peasants.

The frustratingly avoidable mistakes of King Louis Philippe’s reign, 1830-1848, are still a salutary warning to political and economic elites against their preventing the growth of a middle class by denying the opportunities to economically poorer people to advance into it).

Due to the leadership of so-called fiscal ‘conservatives’ such as Congressman Ryan that President Obama was unable to reach a budget deal similar to the one that President Bush negotiated in late 1990 with a Democrat Congress which ended America’s spiral of debt and deficit. It is true that the political cost of President George HW Bush’s 1990 tax deal with the Democrat Congress cost him too much of his base which unfortunately went to the bizarre independent presidential candidacy of Ross Perot in 1992. But this budget deal helped lay the groundwork for an amazing economic recovery in the 1990s due to the political leadership of both President Clinton and GOP House Speaker Newt Gingrich.

Had the current Republican House leadership made a similar budget agreement with President Obama the president’s all but assured re-election would have been countered by a formidable entrenchment of Republican congressional dominance (the new Republican majority) at congressional and state levels. The strategy that the GOP has instead adopted (as reflected by its House leadership refusing to allow tax increases for the super-rich) has been to create policy gridlock so that the ensuing political polarization will result in President Obama failing to win re-election.

The inherent riskiness of this GOP strategy was demonstrated in 2011 by almost too many Republican federal legislators opposing the raising of the debt ceiling that could have precipitated an international financial collapse. The ‘backbone’ that too many Republicans had to pursue such a moronic course was derived from the success of the anti-tax Tea Party movement.

Thankfully due to President Obama’s administration essentially being a centrist one (partly due to the president’s maintenance of relatively cordial relations with the Clinton Democrats) the polarizing conditions necessary to consolidate a polarized political environment conducive to the Tea Party have been undermined. The Tea Party has since its effective formation in the 2010 congressional elections has not matured into a political force which independently represents the interests of its middle class/lower middle class voting base.

The Tea Party Tragedy

As analysed in previous Social Action Australia articles the Tea Party’s approach approximates with a perversion of the analysis of the late American historian Christopher Lasch concerning the social conservatism of much of the lower middle class and working class.

A Lasch strategy was utilized in early Republican primaries in 2012 when the dogged seemingly underdog candidacy of former Pennsylvania senator Rick Santorum effectively undermined the potential for former House Speaker Newt Gingrich to be the Reagan conservative maverick who won his party’s presidential nomination. As a result the GOP 2012 presidential nomination went to the default front runner, Mitt Romney.

The unfortunate failure of the Gingrich candidacy was also reflected by the 2008 GOP vice-presidential candidate and former Alaska governor Sarah Palin failing to emerge as an independent political actor by helping the former House Speaker win the presidential nomination. It was therefore not surprising that Governor Palin either had a very low profile at the August 2012 GOP convention or was altogether absent.

Governor Palin’s essential non-show in Tampa and the non-reference at the convention to the ‘Tea Party’ by name probably indicates that this political movement is disappearing into the ether. This development is reflective of the Tea Party failing to become a political force independent from the Republican Party establishment.

Furthermore, had the Gingrich-Santorum sub-contest gone the other way the Tea Party could have helped ensure that the Republican Party had a base that would ensure that a GOP president was pro-employment growth. Due to Senator Santorum’s focused determination in stopping Speaker Gingrich, as opposed to actually winning his party’s presidential nomination, his limited but intense political objective was achieved.

Santorum’s ‘success’ in winning the struggle for Tea Party’s soul has ensured that this political movement will try to provide the populist depth that Romney needs to win over Democrat and independent voters to support a fiscal cutting GOP presidential administration. It is true that there are times when spending cuts are needed, but not now!!!

The probable objective of a Romney administration will be to establish an employment regime in which there is a division between those with full-time employment and those on proverbial Struggle Street. It is true that this dichotomy is a long-standing one in the United States but there has always been sufficient scope for socio-economic mobility due to the reality of the American dream being underpinned by an amazingly productive and resilient private sector.

The unfortunate failure of Speaker Gingrich to harness Tea Party support for his 2012 presidential bid has meant that this movement is still a captive of the Republican Party establishment which is now supporting Governor Mitt Romney. For both the Tea Party to be effective and for the Romney campaign to secure broad middle class support needed to defeat an essentially centrist Democratic president there must be a polarized political environment.

Congressman Ryan utilized his skill to help author the Congressional Republicans ‘Pathway to Prosperity’ economic policy which has contributed to political polarization. This policy specifically precludes raising taxes thereby preventing the United States from expeditiously servicing its massive foreign debt and reining in the budget deficit. In lieu of expanding the United States its revenue base by raising taxes on the super rich the Ryan economic strategy establishes the settings for a socio-political regime where class division is engineered by having too narrow a tax which is sustained by substantially cutting expenditure on social services.

The Republican establishment is now gambling that the Ryan selection will help precipitate the political polarization needed to defeat President Obama. Consequently, a future Romney administration will probably be one that will consolidate class divisions so that the long-term interests of the American middle class will ultimately be undermined due to the social harmony of American society being disrupted. It is for this over-riding reason that it is best that President Obama should be re-elected.

Why a Close Election Still Gives Governor Romney the Advantage

Nevertheless, the polarizing strategy of the GOP establishment ticket is a high risk one because it means that the Obama campaign can ironically maintain much its electoral base to ensure a close presidential election. In the context of a close 2012 election race Republican establishment strategists know that their having a superior organisation on the ground will be the key to victory in November. Political polarization will also help ensure that independent voters (or even stalwart Republican supporters) do not distinguish GOP congressional incumbents from their Democrat counterparts with regard to the contempt that most Americans feel toward the current Congress.

Because of the closeness of the election the Obama administration cannot afford to make any mistakes, due to the probable success of the increasingly well-organised Romney campaign moving into the breach. The current situation in 2012 starkly contrasts with 2008 when the shambolic GOP presidential campaign of Senator John Mc Cain failed to exploit political opportunities despite a committed party base.

The Romney campaign is virtually the inverse of the Mc Cain 2008 effort in that the former is very well organised with a dutiful (which is now becoming committed) party base. The ultimate success or otherwise of Mitt Romney’s presidential bid will depend on whether anti-Obama sentiment can be generated and then converted into electoral support. This will be a difficult (but not an impossible task) due to a widespread positive sentiment toward the president who is widely regarded - and probably actually is- as a decent person. However, economic uncertainty is such that there is a rapid shift toward Governor Romney.

Although the former Massachusetts governor has not harnessed the full range of talent within the Republican Party he has a sufficient range of astute operatives who are adept at using social media to create that the necessary base for Romney to win the 2012 presidential election. This can be achieved by maintaining and expanding upon Mc Cain’s 2008 voting base.

If the 2012 campaign is essentially a series of mud-slinging exercises then President Obama will lose re-election. The truthful narrative that the Obama administration can tell that its major success has been to avoid an economic melt-down will not necessarily translate into a compelling positive argument for re-election if the tone of the Democrat campaign is too personally negative.

It is therefore imperative that the Obama campaign refrain from attacking the personal values that Governor Romney and Congressman Ryan espouse because this will alienate too many American social conservative voters. Their (socio-economically conservative voters) actual interests will be best served by there critically focusing on the vividly contrasting socio-economic approaches between the two major party presidential tickets.

Specific Obama campaign attacks against Governor Romney and Congressman Ryan will hopefully be made in the context of the underlying philosophies of their policy positions and the consequent ramifications of the application of such policies. The president’s supporters can credibly argue that a Romney presidency will lead to horrendous socio-economic decline due to massive spending cuts fatally undercutting demand to adversely affect the economically vulnerable.

However, this probable Democrat message could be effectively countered by Romney coherently outlining how he would engineer economic and employment growth*. Consequently the Obama campaign should focus on the Republican Congress’s refusal to expand the tax base while granting tax cuts for small business to stimulate employment and economic growth.

(*Had Speaker Gingrich been the 2012 GOP presidential nominee and then been elected president a suite of effective pro-growth employment policies undoubtedly would have later been implemented to have ended the GFC).

Governor Romney in his acceptance speech at the GOP presidential convention referred to his role in successfully managing the private equity firm Bain Capital. Oblique reference was made by him to investment failures that were almost inevitable due to the nature of a private equity investment business such as Bain Capital. The sub-text that Governor Romney may have been implicitly conveying was that as president he would bolster the middle class by providing them with tax cuts to be financed by draconian expenditure cuts that would hit hard America’s poor.

Such a policy direction of the GOP establishment is still a high risk one because it helps ensure that millions of economically vulnerable Americans will continue to support President Obama. Senior Republican strategists such as Karl Rove would know this and therefore appreciate that it is essential that both majority of middle class and a substantial number of economically vulnerable socially conservative voters galvanize behind Governor Romney. Current indicators are that this strategy is still viable despite the revelations of Governor Romney’s Boca Raton address.

Although the Obama campaign will probably eventually win the crucial 5% to 10% of independent voters who are now undecided, Governor Romney will still ultimately prevail because enough socially conservative lower income voters will go to the GOP. This will be mainly be due to the ramifications arising from debacle at the Democratic Party Convention in Charlotte concerning the original omission of God from the party platform and recognizing Jerusalem as the capital of Israel.

These initial profound mistakes were compounded by the verbally expressed opposition from a substantial number of convention delegates to the voice vote that overturned these two omissions. While it is unclear whether a majority of delegates supported the inclusion it is virtually certain that the required two-thirds majority was not reached.

Even though the pro-Obama mainstream print and electric media are ignoring this particular incident at the convention the pro-Romney forces will effectively utilize on-line media to swing enough economically vulnerable social conservative voters to win a tight election. This will happen in the eight swing states and possibly in other states that are considered to be in the Obama ledger.

Enough socially conservative voters who have been hit hard by the GFC and their alienation toward President Obama is being consolidated by the perceived secular humanism of his administration. These voters are now accepting the contention of the Romney campaign that the Obama administration is hostile to them and that this is being manifested by its supposed indifference and apparent policy failure with regard to overcoming the profound challenge of the GFC.

In fact the Obama administration has served the American people well by preventing the GFC from becoming an economic cataclysm. Furthermore, a re-elected President Obama will not be beholden to the financial backers behind the Romney campaign which essentially want a low wage economy with a relatively narrow tax base as a Romney administration would be. The over-riding point also should be made that the Obama administration is not anti-Christian as a majority of its officials, including the president, are Christian. Nevertheless, the crucial importance of religious faith to the United States is overviewed due to its importance in determining the 2012 presidential election result.

The Nexus Between American Religious Faith and Higher Purpose

Any White House administration which challenges the central importance of Christianity will fall. The American Revolution which broke out in 1775 had a strong Christian basis to it which reflected that most immigrants to then British colonies in North America had migrated due to a desire for religious freedom. This was reflected in the 1776 Declaration of Independence striking a balance between establishing a secular republic and guaranteeing religious freedom with strong Christian overtones.

The almost unique balance that the American republic achieved between secularism and entrenching religious faith in society was reflected in the insights of the French liberal monarchist Alexis de Tocqueville’s book Democracy in America which was published in 1835. De Tocqueville identified the close connection between culture and religious faith as well as the importance of property rights as factors which arguably made the United States the world’s first modern democracy.

The importance of religious faith to American society was also recognised by the German liberal monarchist Max Weber (who disappointingly became a republican following the fall of the German monarchy in 1918). Weber, who similar to De Tocqueville established the basis for the academic discipline of sociology, analysed in his 1905 book The Protestant Work Ethic and The Spirit of Capitalism.

In this work Weber argued that because Americans as descendants of refugees from religious persecution rejected who rejected the Catholic assumption that seeking profits was inherently sinful had developed a culture where there was a strong belief that people should use their talents to be wealthy. Indeed, the miracle that became the United States apparently validates Weber’s premise.

The anti-American far-left have seemingly also negatively endorsed the Weberian thesis by caricaturing American society as essentially a dog eat one with an underlying Darwinian logic. However, the importance of religious faith (particularly Christianity) has underpinned an altruistic ethos within American society that has invaluably helped the world.

The magnamity of the United State’s 1947 Marshall Aid Plan, which saved Europe from economic, political and social collapse, was inspired by the Christian derived ultraism of the American people. This ultraism had been previously manifested in the 1930s by so-called ‘small town’ America being sympathetic toward China in resisting Japanese military aggression due to widespread community links to Christian missionaries in China. This sentiment, which went against the prevalent isolationism of the 1930s, helped set the scene for the American Congress declaring war on Japan following the Japanese attack on Pearl Harbour in December 1941.

However, many non-Christians migrants almost instantaneously became patriotic Americans upon arrival due to freedom of religion being respected. For many new migrants this freedom was integrally connected with respect for the right to apply their talents in a free society.

An important community whose rights to freedom which were not respected were African slaves that were brought to what became the United States. However, many African slaves were able to maintain their identity and sense of community by converting to Christianity. Even though white plantation owners and their overseers were Christians, this did not prevent there being cruel to slaves.

Indeed, many slave owners were suspicious of slaves practicing Christianity for fear that they could develop social organisations that would provide an organisational basis for revolt. The slave revolt of 1831 which was ruthlessly suppressed helped spawn a formidably extensive repressive apparatus in the South with agents patrolling between plantations to prevent escapes and destroy the so-called Underground Railway which helped slaves escape to non-slave (‘free soil’) states.

A leading organiser of the Underground Railway was Harriet Tubman who was an escaped slave. Tubman was inspired by Mose’s example of leading the Jews to freedom from slavery in Egypt that she emulated him nearly three thousand years later. She was also the first woman in American history to lead a military action by commanding the Combahee River Raid on behalf of the Union army in 1863.

The Union victory in the American Civil War in 1865 naturally endowed many, if not all, freed slaves with initially patriotic sentiment toward the United States. This patriotism would be severely tested by the politics in the 1860s and the 1870s by the politics of Reconstruction in the South, where due to an absence of northern support, freedman organisations such as the Loyal Leagues ultimately failed to hold their own against the Klu Klux Klan.

Nevertheless, the formal establishment of the southern black based Consolidated American Baptist Convention in 1866 illustrated the crucial importance of Christianity in advancing African American post-war interests by at least providing a basis for independent community organisation. This church established the basis for the subsequent formation of the National Baptist Convention which is now the United State’s biggest predominately African American congregation.

Criticisms could be made of that African Churches did not go far enough to socially and politically advance the interests of their congregationalists. However, American blacks having independent organisations after been so brutally and methodically suppressed, particularly after the abortive 1831 slave revolt, was a major accomplishment in its own right.

The importance of Christianity spiritually and organisationally in advancing the socio-political interests of American blacks became apparent following the foundation in 1957 by Dr. Martin Luther King Jnr of the Southern Christian Leadership Conference (SCLC). This organisation helped endow the *National Association for the Advancement of Coloured People (NAACP) with a mobilizing drive and effectiveness that it might not otherwise have had during the 1950s when the SCLC’s specific campaign for racial equality in education in the 1950s metamorphosed into the civil rights movement of the 1960s due to the involvement of the NAACP.

(*The NAACP was initially founded by white liberals in 1909. This association had its own interesting history with regard to blacks eventually leading the organisation and it consolidating its effectiveness during and following the 1960s civil rights movement).

An important legacy of the NAACP’s impact on contemporary impact on American politics is that blacks are strongly involved and represented in the Democratic Party. Therefore it would be a major mistake on the part of secular liberals within the Democratic Party to adopt an authoritarian attitude that is intolerant of Christianity and other faiths from having a significant input into public policy making in their party.

The paradox and contradiction of promoting freedom by persecuting religion occurred in Mexico following the 1910 Revolution. The entrenched and often virulent anti-clericalism did not really begin to end until the presidency (1982-1988) of Miguel De La Madrid. Because of its recent past of missed opportunities Mexico is now becoming an example of how secularists can productively politically co-exist with people of religious faith who participate in public life. As a result Mexico has moved from being a quasi-authoritarian state to a liberal secular democracy by ironically removing barriers that once discriminated against Catholics.

Due to increasing secularisation around the world it is not surprising that many secular liberals are now becoming involved in the Democratic Party. These secular liberals have been accepted by religious members of the Democratic Party that it would be a pity if there was no reciprocation on their part. In the Australian context, Prime Minister Julia Gillard is an atheist who has worked with a wide range of people in public life who have religious faith.

Returning to the American context it is possible that the initial and deliberate omission of God from the Democratic Party platform was actually inspired by the West Wing episode involving the character of Senator Arnold Vinick (played by Alan Alda). This character is a liberal Republican who deliberately goes against the practice of most American politicians of invoking God.

Emulation of the Vinick character by secular Democrats would be best pursued by individual example rather than by adopting a collectivist top-down/power-over approach which will alienate the Democratic Party’s majority religious base and most Americans. A similar ‘win-win’ approach to the Israel-Palestine issue would not have gone astray at the Democratic Party convention where there was unfortunate resistance to Jerusalem being recognized by the United States as Israel’s capital.

Why Jerusalem Could be the Capital of Two States

The initial omission of recognising Jerusalem as Israel’s capital from the Democratic Party platform and some convention delegates subsequently resisting this reinstatement was also unfortunate. This probably occurred because many American Arabs have joined the Democratic Party and established party networks. Arab Americans should appreciate that the best option for Palestinians achieving a state is to support a two state solution in which there is a co-existing Jewish state and an Arab Palestinian state.

It should not be forgotten that had Palestinian Authority President Yasser Arafat not nixed the negotiations between him, President Clinton and then Israeli Prime Minister Ehud Barak at Camp David in July 2000 in which a Palestinian state probably could then have been established. Part of this proposed deal encompassed allowing the Palestinian state to have official offices in Jerusalem.

Such a development would have allowed a Palestinian state to claim sovereignty over Jerusalem without operationally affecting the unity of the city or compromising Israel’s own claim to sovereignty. Due to the complex ambiguity of the Israel-Palestinian issue American recognition of Jerusalem as the Israeli capital does not necessarily constitute an abandonment of Palestinian aspirations but rather ultimate support for a Palestinian state as part of a two-state solution.

If Arab supporters within the Democratic Party really want to help the Palestinians they should pressure the Obama administration into supporting the establishment of a no-fly zone in Syria to vitally contribute to that nation eventually becoming a democracy. A Syrian democracy (which Secretary of State Hillary Clinton has been working toward) would vitally help contribute to a successful Middle East process finally facilitating a two-sate solution for Israel and Palestine.

The Crucial Importance of the Obama Administration Avoiding Tragedy

The Democratic Party mistakes with regard to the two original platform omissions are gist to the mill with regard to facilitating a Lasch strategy for the Republicans and tragedy for the Democrats. Tragedy is where a party destroys what it purports to seek to achieve. The tragic situation before the United States is that despite the Obama administration having avoided an economic disaster and established a basis for an economic recovery that overcomes the GFC, the president will probably fail to win re-election.

If President Obama is to have a viable chance of winning re-election his campaign needs to emphasise its commitment to respecting religious freedom of belief and the imposition of practices that violate particular values that people have derived from their beliefs. The Romney campaign is successfully applying a Lasch strategy by presenting the narrative that the Obama administration is undermining respect for freedom of religion. Charges are being made by the Romney supporters that Obamacare (which is actually not yet operational) is forcing Catholic hospitals to dispense abortifacient medication.

At the very least, unambiguous support by the Obama campaign for religious freedom will prevent the successful application of a Lasch strategy by the Romney campaign. Advocacy of religious freedom will also provide the president with the scope to gain the support of key voting blocks that are probably less enthusiastic for the president than what they were four years ago, such as predominately African American religious congregations.

Support for religious freedom by the Obama campaign will hopefully be combined with explanation of how the prospects of usually economically disadvantaged communities can be advanced by utilizing technological innovation to facilitate new employment generating goods and services as part of a positive application of creative destruction.

Why Smaller Economic Actors Will Eventually Rescue the World from the GFC

Already the reforms that the Obama administration’s success in making it feasible for student loans to be re-paid will probably give the president the edge amongst tertiary students. However, this accomplishment will not necessarily translate into the president having the electoral support of recently graduated students or young people in the workforce who are knowledge workers.

A knowledge worker (a concept originally formulated by the late and great management guru Peter Drucker) is an employee or an individual who through the application of their personal skill in utilizing technology can essentially create their own means of production. For example a receptionist in a small company by utilizing new computer technology can substantially expand the business and their role as an employee. According to Drucker the impact of such a worker on management is that their role and authority within a company is derived by the application of knowledge as opposed to official ranking in an organisational hierarchy.

A major impact of the phenomenon of the knowledge worker has been that management practices have tended to become more flexible with the emergence in many industrial nations of so-called ‘boundary less’ organisations. To date such organisations have generally benefited technologically savvy or creative employees in management positions rather than regular wager earners who have more rigidly defined job functions which make them more dispensable due, in part, to looser management structures.

Indeed, a hallmark of casual and part-time employment is labour dispensability which in the context of the GFC is being consolidated. This is due to un-serviced debts of national governments and financial institutions causing downward pressures on pay and employment generation because of restricted access to credit. Therefore processes associated with Schumpeter’s concept of ‘creative destruction’ (in which technological innovation facilitates new industries and services to replace old ones) under the GFC are now leading to de-employment.

A Romney-Ryan administration would be more inclined toward facilitating the entrenchment of high levels of unemployment/underemployment due to a monetarist policy probably being adopted in which demand and wages are deliberately depressed. Monetarist policy was highly effective in Britain in the 1980s under Margaret Thatcher because the subsequently increased value of pound sterling immeasurably strengthened the service sectors of the economy based in London and in southern Britain.

A monetarist approach to economics in the current economic environment in the United States would not work because private sector growth is not intertwined with the trading strength of the nation’s currency but rather with credit availability and consumer demand. President Obama apparently acknowledged the importance of America’s private sector with reference to the vital importance of small business. This acknowledgement led to criticism of the president because he stated that small businesses could not be established without government assistance.

This presidential statement was tragic in that it negated the importance of entrepreneurial drive even though the underlying assumption was correct- which is that government has an important role to set the parameters in which small business can prosper. President Obama’s expression in this particular instance created the scope for him to be mis-represented as a statist who is opposed to the interests of small business. Consequently Congressman Paul Ryan is now well-positioned to ‘talk the talk’ about pro-small being small business growth even though his underlying monetarist approach in the current context of the GFC will be very detrimental to the private sector of the American economy.

The Obama campaign in criticising the underlying restrictive nature of monetarist economic policy of the Romney-Ryan ticket will hopefully simultaneously advance coherent policies of how the role of knowledge workers can be consolidated and expanded upon. Current Obama administration policies such as the provision of vocational training, reform of student loans and attempts to introduce tax cuts for small business can legitimately be emphasised to help win the support of undecided voters.

As previously mentioned, many of these undecided voters are unemployed/underemployed university/community college graduates whose potential to secure their futures would almost be assured as knowledge workers. The Obama campaign has close links to this demographic that there is potential scope to expeditiously formulate and coherently communicate how government policies can promote knowledge work and subsequent employment security.

The facilitation of knowledge work could tremendously help establish a basis for an expanded private sector to be the basis for stable employment. Analysis in economic history has consistently shown that poverty is overcome and a middle class consolidated by small business being the engines of economic and employment growth. A depressed small business private sector invariably leads to underemployment/unemployment which, if not remedied, can entrench widespread poverty and social alienation.

*Japan is a nation that has brilliantly avoided high levels of underemployment /unemployment and widespread poverty due to the state putting in place excellent policy settings which are conducive to employment growth in the small business sector of the economy. Every nation must determine its own course as to how it facilitates full employment but the most important prerequisite is a willingness to do so.

(*There has admittedly been a change since the early 1990s with regard to Japanese state policy moving away from promoting full employment. Nevertheless, Japanese public policy has still supported the small business sector that the nation has not become a two-tier nation similar to Brazil where there is a small super rich buffeted by approximately under half the population belonging to the middle class and the majority of the population living in poverty. For a range of reasons it would be best for the United States to avoid a Brazilian model by not electing the Romney-Ryan ticket).

The Obama administration is hopefully committed to converting the fundamental challenges posed by the GFC into opportunities to generate needed economic and employment growth needed by crucially supporting the small business sector. Such an approach should consequently and consistently promoted by all subsequent White House administrations.

Perhaps the only potential ‘benefit’ of the GFC is that the wisdom of governments supporting the small business sector by policies such as special tax concessions, vocational training and spending on scientific research and development will become de regur. In keeping with the Japanese model (or as it was applied until the early 1990s) American federal and state governments will hopefully put in place prudential policy banking regulations that are conducive to capital formation so that small and medium financial institutions can exist to provide credit to privately owned small businesses to help them initially start, survive and grow.

There are already promising signs in India that technological innovations are helping facilitate the establishment of small units of economic production (such as internet hubs) that are overcoming poverty. The multiplier effect of this trend is leading to the growth of new small and medium business growth which is contributing to a near parallel expansion of new bank branches which (providing there are effective and monitor able prudential regulations in place) can lift even more Indians out of poverty into an already expanding middle class.

The PRC similarly has an expanding middle class but economic growth is generated by a combination of an expanding private sector and a shadowy state backed sector. Due to tight political controls technocrats are maintaining a balance between these two sectors. However because corruption is inherent within an authoritarian regime *internal contradictions will emerge which will eventually challenge the viability of the PRC’s current post-Deng political order.

(*Marxist precepts are usually and ironically appropriate in explaining the weaknesses of Leninist regimes).

Continued encouragement of private small sector expansion combined with the maintenance of strict transparently applied banking control should enable the PRC’s productive private sector to eventually super-cede a state sector that will finally become unviable because high economic growth rates cannot be permanently engineered. Scenarios regarding India and the PRC supporting their small business sectors as a means of coming out of the GFC will become more viable if a re-elected Obama administration supports small business growth and expanded capital credit formation.

Why The Side with the More Committed Base Will Win the White House in 2012

The vital question in relation to the above scenario is whether there will be a second Obama administration? There is a very good chance that the Obama administration will win the support of the 5% to 10% of independent voters who are or have the capacity to be knowledge workers but will still lose because the Romney foisted perception that the Democrats are intolerant toward religious freedom will sufficiently expand the Romney voting base to assure victory.

Although most opinion polls continue to suggest an Obama victory this will probably not be the case because the Republican voting base is more committed than the Democrat one. In a close run election this fact will make all the difference. It is probably for this reason that some GOP establishment governors are trying to ‘tighten’ voting registration requirements so that it will be more difficult for blacks, Hispanics and economically disadvantaged people to vote in the 2012 presidential election. Furthermore, reiteration of the theme by the Romney campaign that the Obama administration is a failure is trying to create an attitudinal setting in which enough of the president’s base will not vote on election day.

To offer independent and undecided voters a positive reason to vote for him Governor Romney has promised that as president he would create twelve million new jobs. However it is difficult to see how this promise can be honoured (or is actually intended to be honoured in the light of the Governor’s Boca Raton comments in May) when massive expenditure cuts will cause massive job losses and a fatal contraction in economic activity. The overriding theme that Governor Romney’s convention acceptance speech was that President Obama’s administration is a failure that the United States cannot afford in a time of profound crisis.

The fundamental truth is that the Obama administration is a success because economic collapse has been staved off by directed spending that has *stimulated economic activity. This administration has also been pro-business by crucially providing capital to financial institutions and trying (despite Republican congressional opposition) to support small business with special tax concessions.

(* Due to the strong economic position that Australia was in 2008 because the nation’s public foreign debt being previously paid off, the China minerals boom and the application of effective prudential controls the Rudd government’s resort to stimulus spending packages by contrast were not only unnecessary but have had long term economically disastrous ramifications).

The major charge of the GOP establishment that the Obama presidency is an egregious failure has been made by reference to the United States high public foreign debt which has increased from $US10 trillion to $US16 trillion under the current administration. It should be pointed out that the continuing high levels of borrowing would have been unnecessary had the Republican Congress agreed to tax increases on the super-rich to fund the expenditure which has been crucial to avoiding an economic collapse.

Indeed, without an expeditious expansion of the United State’s revenue base by increasing taxes America will be too long mired in debt and deficit. Time is of the essence if the United States is to have the capacity to cover the collapse of another major credit institution and to effectively co-ordinate with other major economies to help lead the world out of the GFC. Under a Romney presidency the probable scenario will be that expenditure welfare cuts will disastrously contract the economy and the United States will have an insufficient revenue base to cope with any GFC induced emergencies.

Mitt Romney: The Warren G Harding for the Twenty-First Century?

The proceedings of the August 2012 GOP Tampa Convention suggest that Governor Romney is propped up by a powerful entourage. This can be an asset but there will be problems (to say the least) if a President Romney leads the United States in the wrong policy direction by adhering to the direction that the GOP establishment has set for him. In the context of the GFC setting the scene for an economic cataclysm it is improbable that Governor Romney’s undoubted managerial skills will necessarily translate into the leadership capacity required to save the United States and the world.

Although there substantial personal and historical differences between Governor Romney and President Warren G Harding (1921-1923) there is a potentially dangerous similarity: an incapacity to effectively lead the nation because of an overly powerful entourage. In this regard a Vice-President Paul Ryan might be more of a hindrance (to put it mildly) than a help because he will use his undoubted technical skill and committed ideological vision to put a Romney administration on an irredeemably wrong policy course.

Due to the historical importance of the 2012 American presidential election to the world there is little leeway for mistakes to be made with regard to choosing the appropriate presidential candidate. As a result the ideas and policies of President Obama and Governor Romney must be scrutinized in respect to their probable impact. The great trap of the 2012 campaign is that it will become polarized according to personality that the closeness of the contest will paradoxically become a source of dis-empowerment due to voters forgoing critical scrutiny of proposed policy directions and approaches. This would be a terrible outcome in the context of the GFC when critical policy scrutiny is a must.

Ultimately, the consolidation of high levels of poverty (which are reflected by ethnic demographics) that will be facilitated by a Romney administration cutting spending on services and refusing to expand the nation’s revenue base. This policy mix will eventually undermine America’s middle class in the long term because history has repeatedly shown that middle classes are threatened by civil unrest from below. Social disharmony ensues when a pronounced majority of a nation’s population is consigned to entrenched poverty. Depending on who wins the 2012 presidential election the GFC could consolidate the framework for a future Divided States of America.

The GFC Fork in the Road

The GFC is an historical phenomenon which is a fork in the road. This fundamental crisis can consolidate an economic structure where capital (money) is restricted to a relatively narrow base of society whose power is perpetuated by their access to full employment, financial credit and education opportunities. Alternatively, adaptation to the GFC can be facilitated by technological advances creating new jobs, social mobility and capital formation at a new micro level.

The achievements of these above cited outcomes require that governments consistently promote high economic growth rates. This can be accomplished by governments instituting new prudential regulations which are conducive to capital formation that will generate sustained employment growth by creating new goods and services within an economy. Increased and sustained employment growth can in turn expand a nation’s revenue base to crucially help service a public national debt the burden of which will decline over a medium to long term if the purchasing power of a nation’s currency is maintained.

A remarkable aspect of the stark choice that confronts the United States is that in perhaps in less that a fortnight of the presidential inauguration in January 2013 the vividly contrasting policy approaches will go before the Congress to determine which economic paradigm will be adopted. Paradoxically, the Romney-Ryan ticket’s coherently formulated monetarist approach is actually a drawback because it is predicated on there being entrenched class division in American society because middle class tax cuts which will be financed by deep cuts to social welfare entitlements and associated government outlays.

A Divided House Cannot Stand

The above policy direction is particularly dangerous because the GFC has created a situation for the United States where existing societal divisions can be entrenched by establishing new ground rules with regard to credit and employment creation in digital age. The current indications are that a future Romney administration, or its powerful backers, will lock in such a political economy. This would be fatal to the United States by consolidating income divisions by restricting the scope for employment growth to particular sectors of society.

Solidified American societal divisions combined with social media technology will create the scope for a disruptive far-left social movement which the United States and the world cannot afford. A socially polarized and economically weak America will simply not have the capacity to counter a (depending on the national leadership that is announced at the CCP’s 18th Party Congress) a probably hostile PRC. Because the poor will eventually constitute the majority of America’s electorate the election of a moronic left-wing administration cannot be ruled out because a Lasch strategy can only work for so long.

Perhaps the above scenario is too bleak but I don’t think so. The recent defeat of Indiana *Senator Richard Lugar in a Republican primary by a *Tea Party candidate in May this year is reflective of the beginnings of transformational decline in American politics with the virtual disappearance of the progressive pro-employment tradition within the GOP that was apparent in the administrations of Teddy Roosevelt and surprisingly in the anti-union administration of Ronald Reagan.

(*The term, the ‘Tea Party’ is advisedly applied because the GOP establishment are ensuring that this political phenomenon is receding into the ether).

(*Senator Lugar’s defeat is unfortunate for Australia because he was such a friend to one of the United State’s staunchest allies. The Indiana senator as the ranking Republican member of the Senate Foreign Relations Commission was also an exceptional authority on Pacific matters. The major constructive criticism that can be made of Senator Lugar was that he was too conciliatory toward Communist Cuba).

The pro-employment approach within the Republican Party was last apparent in Newt Gingrich’s Contract on America manifesto which swept the GOP to congressional victory in 1994. The impact of this Gingrich suite of policies which President Clinton generally supported in the 1990s generated employment growth which crucially helped the United States out of debt and deficit. The defeat of Gingrich bid for the 2012 GOP nomination could constitute the final demise of the different forms of political progressivism that have prevented a consolidation of class fissures in America’s political economy.

As previously analysed Governor Romney’s selection of the fiscal conservative Wisconsin Congressman Paul Ryan as his vice-presidential running mate indicates that economics will be at the forefront Republican establishment strategy to polarize the election so that Governor Romney will win. Congressman Ryan’s co-authorship of the Republican Party’s 2013 budget proposal, ‘The Pathway to Prosperity’ indicates that the policy mix of tax cuts for the wealthy and extensive spending cuts for social programmes will be the orthodoxy of a Romney administration.

The above policy approach is one which seeks to facilitate winning sufficient middle class voter support for the Romney-Ryan ticket. The establishment Republicans are unfortunately resorting to a Lasch strategy to appeal to lower middle class/ higher skilled blue collar employees to win the election on social issues as opposed to the merits (or otherwise) of their espoused economic policies.

Recent attacks by probably bogus advocates of same-sex marriage on Dan Cathy, the CEO of the southern based Chick-fil-A restaurant chain regarding his support for traditional marriage ultimately only served to offend many voters (particularly in the South) who will probably vote for the Romney-Ryan ticket. Most Americans, including those who profoundly disagree with Dan Cathy, should respect his right to express his opinion on marriage and oppose any adverse action being taken against his business.

The attacks on the Chick-fil-A restaurant chain by possibly disingenuous supporters of same sex marriage can lead to a subliminal message that the Democrats seek to undermine important employment generating businesses. In a time of such economic uncertainty millions of undecided American voters or those who originally intended not to vote might be motivated to support the Romney-Ryan ticket.

Furthermore, the debacle over the attempt by Wisconsin’s labour union movement to depose Republican Governor Scott Walker in a recall election only serves to illustrate that there will be a strong middle class reaction against any perceived threat from an organised minority that is perceived to challenge the fundamental right of Americans to make a living. If the Romney-Ryan campaign successfully fosters the mis-perception that the Obama administration is anti-employment or leading America toward irreversible economic decline via unfair union dominance then President Obama will undoubtedly lose re-election.

The Democrats in attacking Congressman Ryan’s fiscal conservatism should not fall into the trap of being a policy void by personalizing attacks on the GOP presidential ticket. Whatever legitimate criticisms can be made of the selection of Congressman Ryan as the GOP vice-presidential nominee his selection is an indication that the Romney campaign is propounding policies that will galvanize the Republican Party’s massive support base to make for a close election. This galvanizing of the GOP base is translating into the Romney-Ryan campaign becoming a very well organised operation in a campaign where momentum is everything.

Forward: Who Stays Policy Positive Ultimately Wins

President Obama could have a crucial advantage over Governor Romney if he effectively articulates a positive policy approach (such as proposed taxation reform and proposed infrastructure spending initiatives) of how his administration will engineer economic growth so that the United States helps lead the world out of the GFC. However, (in what will be a close run election) more will be required than presidential verbal eloquence. Most astute Washington insiders know that unless a campaign has key operatives on the ground in the crucial swing states then it will lose the presidential election.

The dynamics of the 2012 presidential race are such that the Obama campaign has so far been outmanoeuvred by a pre-determined campaign by a Republican establishment which had previously decided on support Mitt Romney as the GOP presidential candidate for 2012. This establishment has brilliantly and judiciously timed the dealing in of different stakeholder groups on a basis that the ramifications of the GFC affords an opportunity to establish the ground rules upon which credit will be created and lent.

The nexus between elite reconfiguration and campaign timing has been manifested by the skill in which Speaker Gingrich’s presidential candidacy was undermined by Rick Santorum. Similarly, the Ryan vice-presidential candidacy is still giving valuably timed momentum to Governor Romney’s presidential candidacy despite the revelation of Governor Romney’s Boca Raton comments.

The Obama campaign still has time to gain the support of pro-employment growth Republicans in the key swing states. This is because the current White House administration has links with the Clinton Democrats who previously effectively worked with the contemporary equivalent of contemporary Progressive Republicans. Such GOP stalwarts that have not yet been integrated into supporting the establishment backed presidential Romney-Ryan ticket.

While out of political necessity there will have to be an attack component of the Obama campaign (particularly with regard Mitt Romney’s management role of the private equity firm of Bain Capital) considered care will have to be taken by the president’s supporters to enure that lateral Republican support is not forfeited. If vital GOP support is secured in relation to securing the president’s re-election then pro-economic growth Republicans should have an important role in a second Obama administration.

2012: Is it Too Late for There to be Republicans for Obama?

The polarized 2012 American presidential election, the result of which will help determine which party wins control of Congress, is one in which the Republican establishment do not have the option of securing a crucial component of the Democrat’s support base. This is not the case with regard to the Obama campaign with regard to the GOP base. Nevertheless, recent American presidential history is one in which specific campaigns have been organised to ‘raid’ another party’s base.

The 1972 Democrats for Nixon campaign headed by former Treasury Secretary John Connally was very successful in influencing millions of Democrats for voting for RN’s re-election. For the then president the Democrats for Nixon operation was more than a quixotic venture but a vital component in the re-election campaign because RN knew that a majority of Americans in 1972 were essentially Democrat in sentiment.

There was also a notional Democrats for Reagan operation in 1984 but historical data on this phenomenon is not readily available that its actual organisational existence beyond being a campaign label is uncertain. But even a president as popular as Ronald Reagan in 1984 was unable to entice many Democrat voters who supported his presidential candidacy to vote for the Republican Party at either a congressional or at a state level.

The respective Nixon and Reagan campaigns specifically targeted stalwart supporters of the opposing ticket occurred in a context of where the incumbent had massive popularity. In the 1972 context this was because Senator George Mc Govern was outside the political mainstream which enabled RN to appropriate substantial centrist Democrat support. Paradoxically and perhaps inversely, presidential elections in which there is apparently little ideological distinction between the presidential candidates are closer and therefore more keenly fought. The two stand out examples of such polarization are the 1960 and the *2000 presidential elections.

(*Although the political and policy positions of then Texas Governor George Walker Bush and Vice-President Al Gore was clearly contrasting their political pedigrees as scions of their respective party establishments made them so similar that the paradox of differences supporting underlying similarities was validated).

The 2012 presidential election in contrast to the 1960 and the 2000 contests is more ideological in dimension and the ramifications of which candidate wins will have fundamentally longer term historical ramifications concerning the United States fundamental socio-economic direction. This election (2012) however is not one between two extreme polar opposites due to the Obama administration’s centrism.

There is a danger that because the Obama administration is partly reliant upon a distinct left-wing base that it could move toward the left if the president is re-elected. This prospect makes it doubly important that the Obama campaign gains a degree of existing GOP support to win re-election to help guarantee that the current administration maintains its current centrist direction while effectively proceeding in a second term to secure non-inflationary economic growth to eventually overcome the GFC. Ensuring a particular policy direction by gaining support from an opposing party has been previously undertaken in American political history.

An important reason why the Kennedy-Johnson ticket narrowly prevailed in 1960 was because the Democrat campaign had subtle support from people associated with the out-going administration of President Dwight D Eisenhower. The Eisenhower administration was the most non-partisan political administration in twentieth century American political history. This was because Eisenhower (with the crucial help of party insiders such as New York Governor Tom Dewey) won ‘his’ party’s nomination in 1952 as the result of a draft and his ensuing presidential election victory due to his popularity as a war hero.

Many senior Eisenhower administration officials and the president’s entourage had no party political background whatsoever. It can be a positive when a presidential administration utilizes talent outside of political circles but there can be problems when key presidential advisers are inherently hostile toward established politicians within the ostensible administration party. As time progressed senior Eisenhower administration officials adapted to politics but maintained their initial hostility toward RN who was vice-president and a Republican Party stalwart.

The anti-Nixon sentiment of senior Eisenhower administration officials converted into tangible political action by the outgoing president encouraging his vice-president to select former Massachusetts Senator Henry Cabot Lodge as his running mate for the 1960 elections. Lodge then seemed to the appropriate choice because as someone from *Massachusetts it was then thought he could give Kennedy a run for his money in his home state.

(*Massachusetts had traditionally been a fascinating battle ground state between the state’s two leading Catholic families, the Kennedys and the Lodges as respective scions of the Democratic and Republican parties battling it out in elections since the early twentieth century. As it was Massachusetts overwhelmingly rallied to support JFK in the 1960 presidential election).

The choice of Lodge as RN’s running mate seemed logical because the former Massachusetts Senator seemed was the closest approximation to being the anomaly of an Eisenhower GOP loyalist. He was a war hero who had virtually sacrificed his prospects for winning re-election to the senate in 1952 by devoting his efforts to secure his former war colleague Eisenhower’s (‘Ike’) party nomination and subsequent election to the presidency. His failure to win Senate re-election was also due to Taft loyalists (i.e. supporters of Senator Robert Taft, the runner up for the 1952 GOP presidential nomination) in Massachusetts withholding crucial support.

Even though RN was a Taft supporter there was apparently no ‘bad blood’ between him and Lodge during the period of the Eisenhower administration. This was because they both had an internationalist outlook which was determined that the United States oppose the Soviet Union by American engagement in international affairs.

Indeed, one of the first major impacts that RN had on American party politics was to convert Taft isolationists within the Republican Party into stalwart internationalists. Lodge, as American ambassador to the United Nations under the Eisenhower administration Taft’s anti-communist credentials were impeccable that he was a popular vice-presidential choice among Republican Party regulars in 1960.

The main political electoral reason that Lodge was selected as RN’s running mate was on the expectation that the outgoing president would utilize his massive popularity to swing the election in the Republicans favour against the formidable Kennedy-Johnson ticket. That Ike conspicuously failed to do what was expected was partially due to his antipathy toward RN. There was however more than personal sentiment at play on Ike’s part with regard to this dynamic.

Senior anti-RN officials in the Eisenhower administration had business (and by extension political) links to JFK’s father Patrick (‘Pat’) Kennedy. He was a very successful businessman who, although a staunch New Dealer and an isolationist in the 1930s, had by the 1950s become an anti-communist internationalist. The Kennedy patriarch had let it be known in elite circles that were he not supporting his son for president in 1960 his preferred candidate would have been RN.

Ike himself seemed comfortable with the 1960 Kennedy victory that he prevented RN from legally challenging the election result based on credible allegations that there had been vote rigging which had changed the outcome. Despite controversy over the 1960 election result and the incoming and outgoing administrations being from different political parties the transition from Eisenhower to Kennedy was far more cordial than that of Bush to Clinton in 1993-93 and from Clinton to Bush in 2000-2001. This may have been because there was as much, or even more continuity, between Eisenhower and Kennedy than had there being in a possible Nixon administration that came to office in early 1961.

There was however no direct cross-over of outgoing Eisenhower officials into the new Kennedy administration but rather a continuity with regard to there being a caste of talented and senior business executives (epitomized by Robert Mc Namara’s unfortunate appointment as Defense Secretary) who were appointed to the new president’s cabinet.

Lodge himself was appointed American ambassador to South Vietnam by the Kennedy administration in 1963 where he failed to take the steps to save the lives of President Ngo Dinh Diem and his brother just after a coup in November that year*. Ironically had Lodge not accepted this senior diplomatic appointment as ambassador to South Vietnam and instead actively sought the Republican Party nomination he probably would have won the 1964 GOP presidential selection.

(*Another brother of President Diem’s, Ngo Dinh Can, took initial asylum in the American consulate in Hue. Ambassador Lodge however authorized his being handed over to the new authorities in the certain knowledge that he would be executed as indeed occurred).

The salient point that needs to be made about vice-presidential running mates in relation to the 1960 Lodge debacle is that their selection can (contrary to popular belief) fundamentally affect the dynamics of a presidential contest, i.e. which presidential candidate wins. The selection of Congressman Paul Ryan is an important and vivid contemporary case in point. President Obama has a very good vice-president in Joe Biden who has an excellent Democratic Party base. As important and loyal as Vice-President Biden is to President Obama he does not necessarily expand the president’s support base in a tight presidential race.

Furthermore, it is now absolutely impossible for any senior Republicans who want to maintain their political base to either defect to support President Obama’s re-election or have any credibility to electorally affect the result if they did. Nevertheless, Republicans at local level can still provide crucial support to affect the presidential election outcome if President Obama clearly articulates how the policy direction of a second administration is amenable to appointing pro-growth Republicans to senior positions. Independent voters (and/or pro-employment growth Republicans) similarly might swing the election the president’s way if they knew ahead of time of who the next Treasury Secretary will be in a possible second Obama administration.

It is consequently a tremendous pity that Treasury Secretary Geithner will not continue in his position should there be a second Obama administration. In practical terms Secretary Geithner has probably been the most important administration official after the president due to his impact in saving the world from economic collapse in the continuing context of the GFC.

Hopefully, the outgoing Treasury Secretary will utilize his financial connections to help put in place an economic team that the president can announce before November polling day that will serve in senior positions if there is to be a second Obama administration. The announcement of such a team would serve to practically show how the standout economic achievement of the first Obama administration of avoiding a cataclysmic financial collapse will progress in a second presidential term to securing a permanent economic recovery.

Unless, there is a foreshadowing of a high powered, or at least credible economic team for a second Obama administration the president, then on the balance of probabilities, Barak Obama will lose the 2012 presidential election (despite Governor Romney’s Boca Raton revelations) of and the world will be plunged into an economic abyss.

Why Transparency is the Anecdote to A Rent-Seeking in Australia

Australian politics is in a similar state to that American politics because there is a need for the electorate to know where they actually stand so that they can make informed voting decisions. There has been too much subterfuge with regard to the real agendas of rent-seeking elements within both the coalition parties and the Australian Labor Party (ALP) since the Howard government’s demise in 2007. Such political chicanery has been detailed in previous Social Action Australia articles that it is now best to overview the most recent Australian political situation.

There have been recent moves to depose Prime Minister Julia Gillard to reinstate her predecessor Kevin Rudd as her successor. The commencement of this campaign was signalled by former New South Wales ALP Senator Graham Richardson in The Australian newspaper in August setting September of this year as the deadline for Rudd *supporters to facilitate a leadership change.

(*Kevin Rudd does not really have ‘supporters’ within the ALP parliamentary caucus but rather people who want to just use him again as a transitional prime minister to implement rent-seeking measures for a future Abbott government. Mr. Rudd should test the actual loyalty of his erstwhile parliamentary supporters by having them lobby for his reinstatement as foreign minister.

It was therefore a mistake of Prime Minister Gillard’s not to have acknowledged Kevin Rudd’s previous contribution as prime minister because this contributed to his later resignation to challenge for the ALP leadership. As a result of Mr. Rudd again becoming a political pawn of rent-seeking elements within the ALP the prime minister’s capacity to be an independent political actor was undermined.

If Senator Bob Carr is really loyal to the ALP he should be willing to make way for a Rudd return as foreign minister in exchange for a senior diplomatic posting. The benefit of this arrangement would be that Carr would still have a senior position which an Abbott government could not legally deprive him off until his tenure expires).

The Richardson canvassed deadline of September helped place in train a series of events for the August parliamentary session to be used as the time for a leadership change. The doyen of the press gallery Paul Kelly in an interview on the AM programme aired on Sunday the 19th of August asked the prime minister about her 1995 resignation as a partner from the law firm Slater and Gordon. Someone as politically shrewd as Kelly must have known that his canvassing of the Gillard departure from Slater and Gordon departure would create the necessary momentum for a possible Rudd leadership challenge.

Further momentum for a leadership change was potentially added by Barrie Cassidy on the ABC’s Insiders programme the same morning (i.e. the 19th of August) showing a snippet of the Gillard-Kelly exchange. Cassidy was circumspect about elaborating further but would have known that reference to and showing of a snippet of the Kelly interview was sufficient to potentially generate a potential Rudd leadership challenge. Cassidy’s reticence may have reflected a more cautious approach on the part of the left-wing elements the Canberra press gallery toward destabilizing Julia Gillard then the more right-wing journalists such as Kelly and The Australian newspaper columnist Janet Albrechtsen.

The 19th of August edition of the *Insiders programme was notable in that there was no out there right-wing/conservative journalist among the three guest commentators. This may have been to give this edition of the Insiders more credence that it was not part of a then agenda to depose the prime minister by setting a more left-wing tone to the discussions that took place.

(The Insiders is a prime example of how Australian journalists can crucially help determine the political agendas that they report on. It is a pity that the public does not have a keener awareness of the extent to which too many journalists often collude with political actors to help set the news rather than merely report it).

The destabilization campaign against the prime minister continued with Graham *Richardson on the ABC’s Q & A programme on Monday the 20th of August raising the so-called issue of why Julia Gillard did not keep a legal file on the AWU Bruce Wilson matter.

(*Richardson, although an ALP stalwart, is connected to the right-wing of the Australian news media as constituted by News Limited).

By the end of the week of the 20th of August the right-wing of the Canberra press gallery had pulled back from the destabilization campaign. This was probably partly due to the decency of most federal coalition MPs in their showing personal and professional (as distinct from political) respect for Julia Gillard in the first half of the August session of parliament. The prime minister also considerably helped her own cause by giving a forthright press conference about her 1995 resignation from Slater and Gordon on Friday the 24th of August, 2012.

Back to a Rent-Seeking Future?

The real underlying issue concerning the abortive politically motivated news cycle was why was there a campaign to have Prime Minister Gillard deposed in favour of Kevin Rudd? The answer is so that a rent-seeking agenda can be resumed that a Rudd Labor government will have done the ‘dirty work’ for a future Abbott government to preside over an essentially established rentier state. Consequently the extent to which Prime Minister Gillard remains an effective leader will correlate with the degree to which she effectively resists rent-seeking.

An Australian political leader’s inclination and capacity to effectively resist rent-seeking is relevant to the concept of ‘actors’ in relation to social action theory. Actors in a social action theoretical context do not refer to people associated with drama but rather the independence (or lack thereof) of political leaders that they have in impacting on society. In a political context social action theory conceptualizes and assesses leadership in terms of the extent to which an actor (i.e. a political leader) is sufficiently independent to be a force in their own right instead of a cipher for other power interests.

Former prime minister, John Howard (1996-2007), is an interesting case of someone transitioning from being a powerful independent political force to a dispensable leader after he had his previously transformational role in Australian politics had ended. This was reflected by his being was dispensed with in 2007 by pro-rent seeking forces in the Liberal Party that were associated with big mining corporate interests.

The power of this mining corporate elite could not be as formidable as it is unless their reach also extended into the ALP. The Labor leadership alternative to Howard who could advance a rent-seeking agenda for the big mining companies was Kevin Rudd. Due to rent-seeking inter-party collusion Rudd had a dream run from the time he became Opposition Leader in late 2006 until his election as prime minister in October 2007.

As prime minister, Kevin Rudd was paradoxically given a free hand to implement an essentially rent-seeking agenda that he was probably not conscious of at the time. In this context as a political actor Rudd was a contradictory hybrid of an authoritarian prime minister and a policy cipher for rent-seeking interests in both major parties and in the Commonwealth public service. Had the then prime minister not narrowly concentrated administration with his personal office he could have potentially been more politically along the lines of what Sir Robert Menzies had been as an independent political actor.

This prime minister (Menzies) astutely dispersed power so that he presided over a regime where power actors such as the public service and his own party implemented his agenda as opposed to foisting one on him. An important reason why the Liberal Party founder had an independent power capacity as prime minister (1949 to 1966) was that he never allowed external forces to gain control of Australia’s natural resources.

Indeed, Australia’s political economy from the time of the 1808 Rum Rebellion in New South Wales until the commencement of the Hawke-Keating era in 1983 was antithetical toward allowing political elites to undermine their nation’s economic capacity. Consequently it was next to impossible for elites to manipulate policy settings to assist foreign interests gain control over Australian natural resources.

Since the election of the ALP in 2007(in collusion with the rent-seeking of the coalition parties) Australia has seen its economic capacity undermined. A disastrous manifestation of the Rudd government unwittingly pursuing a rent-seeking agenda was a massive public foreign debt been chalked by profligate spending following the 2008 GFC. This was undertaken so that federal governments would eventually becoming dependent upon Sovereign Wealth Funds (SWFs). A major source of revenue for SWFs will be derived from super-profits mining taxes.

Another important rent-seeking objective of such a super-profits mining taxation regime is to consolidate the dominance by the big three corporate mining companies of BHP-Billiton, Xstrata and Rio Tinto and the respective mining companies privately owned of Gina Rinehart and Clive Palmer. Super-profits mining taxation is conducive to rent-seeking domination by these aforementioned mining interests because they have the economies and/or commercial links to a mercantilist PRC to minimize the tax they pay that they can gain a comparative business advantage.

Therefore when Australia’s rent-seeking Treasurer Wayne Swan gave a recent speech (against the annoying backdrop of Bruce Springstein music) ostensibly condemning mining *tycoons he was probably only sincere in denouncing Fortescue Metal’s Andrew (‘Twiggy’) Forrest. This is because Andrew Forrest has launched a High Court challenge against the unconstitutional anti-sates Minerals Resource Rent Tax (MRRT).

(*Gina Rinehart’s recent reference to African mining employees being prepared to work for $2 a day and inference that wage in the Australian mining sector should be lowered essentially provides Swan with material for his political theatre that the power of such tycoons should be broken by adopting dud super-profit taxation regime for this vital sector).

The aim of the Forrest legal challenge is to ensure that there is a diversity of sources with regard to mining investment in Australia so that the mega companies cannot enter into sweetheart deals with a mercantilist PRC. In this context the economic prospects for the Australian economy have been bolstered by Fortescue Metals securing over 4 billion dollars in a crucial re-financing loan to remain viable. If Australia itself is to remain economically it is vital that federal and state governments encourage diversity in the mining sector by creating a stable and welcoming investment conditions.

A diverse Australian mining sector will vitally contribute to international trading competitiveness and deny the leverage necessary for those mining companies with strategic links to the PRC to dictate public policy such as advocating lower wages. The capacity of these mining companies to be immersed in a rentier state will be enhanced by the adoption of a super-profits taxation regime and the subsequent utilization of SWFs.

To cover his tracks with regard to his being actually supportive of a super profits mining taxation regime the Opposition Leader Tony Abbott made a visit in July this year to the PRC in which he avowedly denounced major attributes of the nation’s mercantilist economic infrastructure such as SWFs. Abbott with apparent courage also called for political reform in the PRC and said that a coalition government would lower the threshold at which there can be intervention to possibly stop foreign ownership of Australian agricultural properties.

Given Abbott’s past domestic role in inflicting a rent-seeking framework on Australia his comments in China should be regarded in the vein of ‘talking the talk’. There are different variants of ‘talking the talk’. The most common version of ‘talk the talk’ is that of some-one, particularly a politician, saying what they intend to do but lacking the fortitude to follow through. Another version and a sinister one at that, ‘of talking the talk’ is that of consciously verbally re-assuring the party that is being harmed so that they will acquiesce to their interests being undermined.

The Abbott visit to the *PRC is in the sinister category of ‘talking the talk’ to hypocritically re-assure important coalition electoral bases of support, such as regional/rural Australia. Following his return for the PRC it was interesting to note the way that Abbott and his deputy Julie Bishop called for stricter foreign investment controls to help protect Australian farms but in almost in the same breath seemed to blithely dismiss the need for such measures.

(*That senior Chinese government officials received Abbott and provided him with a platform to ostensibly criticise their nation’s political structure is possibly indicative that Australian economic and political dynamics are a factor in the lead up to the CCP’s eighteenth congress in October this year. If this is the case then it is all the more important that rent-seeking be stopped in Australia to help undermine mercantilism in the PRC. Therefore the selection of a highly intelligent, honest and strategically flexible generation of leaders at the 18th CCP Congress would not only naturally benefit China but also Australia).

Probable Abbott disingenuousness on protecting the interests of Australian farmers is in keeping with his rent-seeking agenda. It therefore would not (to say the least) hurt if the Gillard government changed foreign investment rules to have the scope to protect Australian farms and agricultural property with regard to foreign investment. This would be a form of ‘me tooism’ with a difference. The Labor federal government would be appropriating avowed coalition policies that Abbott is probably really opposed to while potentially safeguarding the nation’s genuine national socio-economic interests.

Why Peter Costello Should Not Help Destroy What He Has Bequeathed

Because an important reason why Australia is now on a rent-seeking path is because Peter Costello’s succession to the prime ministership was thwarted his recent public comments warrant analysis because they suggest he is aligning himself with the people who once tried to destroy him. The former Treasurer has publicly denounced proposals that the federal government protect Australian agricultural property rights from foreign buy ups and stop retail monopolies as ‘socialistic’. It is not ‘socialistic’ for governments to put in place institutional settings which protect private property and consumer rights so that there can be a viable market economy.

A genuine market economy is one where no one group gains and sustains an unfair economic advantage by establishing virtual monopolies. The safeguarding of private property rights and the interests of smaller economic producers (such as farmers) in Australia is not only an honourable practice but one which is crucial to the nation’s continuing economic viability and economic independence.

Peter Costello previously fulfilled a vital role in restoring Australian economic viability by paying off Australia’s massive foreign public debt and creating a new non-inflationary revenue stream by introducing the GST. These achievements helped overcome much of the destructive legacy of the Hawke-Keating era which is now
subsequently and ironically perceived in a positive light.

It therefore does not make sense for Mr. Costello to publicly oppose the adoption of sensible protective policy direction (which does not necessarily mean tariff protection) that is opposed by rent-seeking elements within the coalition who had previously tried to politically destroy the former treasurer. His support for allowing a Chinese SOE (Ru Yi) to buy into the massive Cubbie cotton station in Queensland is an unfortunate indication that Mr. Costello is not going to effectively defend his economic legacy by opposing rent-seeking.

Mr. Costello in supporting a Chinese SOE purchasing a stake in the Cubbie Station claimed that this was no less dangerous than allowing Ford and General Motors (GM) to operate in Australia because the American government had acquired financial stakes in them as part of the GFC bailout packages of the Obama administration. This is factually correct but the United States is a democracy in which private property and labour rights (in the main) are respected.

It is not (despite the GFC) integral to the success of the United States economy that the state have overall control of economic resources and acquire de facto control over the natural resources of trading partners. The PRC by contrast is a mercantilist economy with a top-down Leninist political system which will eventually lack the flexibility to adapt to unanticipated crises. For the PRC to maintain its current socio-economic and political systems without fundamental reform will now unfortunately require gaining de facto control over the natural resources of nations that it trades with.

If a Japanese owned multi-national wanted to gain a controlling stake in an agricultural property as important as the Cabbie Cotton Station that would be economically non-threatening to Australia because Japan is a democracy with sufficiently transparent corporate governance processes despite the often close relationship between the Japanese state and the nation’s corporate sector which facilitates co-ordination in foreign investment and trade policy. This coordination is not necessarily a threat to Japanese trading partners because private property and labour rights are domestically respected in Japan which help facilitate transparency in external trade relations.

Perhaps the PRC will become a democracy with a co-ordinated economy (similar to Japan’s) to maintain social stability so that Chinese mainland investments in Australia will constitute no threat to Australia’s economic and political sovereignty. However that day is yet to arrive and *Australia’s transition to a rentier state might actually contribute to the PRC consolidating as a Leninist mercantilist state at the CCP’s Congress in October this year.

(*The apparent failure of the Australian federal government and opposition to advocate on behalf of the former Rio Tinto executive Stern Hu, who is serving ten years imprisonment after a questionable trial, is reflective of Australia’s weak bargaining position vis a vis relations with the PRC.

If the ALP and the Liberals are too gutless to defend an imprisoned Australian citizen who was denied a fair trial then perhaps the Greens will. After all, the Greens supported the former Taliban fighter David Hicks when he was detained at Guantanamo Bay, even though he had received more due process and legal justice than what Stan Hu has).

Admittedly Australia would not be vulnerable to becoming a rentier state beholden to the PRC had Peter Costello (who unfortunately would have been a very anti-union prime minister) succeeded Howard and won the 2007 federal election for the coalition. The hypothetical question as to whether Mr. Costello would have been a good or a bad prime minister can now be answered in the context of his now utilizing his astuteness to oppose Australia becoming a rentier state.

The former treasurer’s astuteness in not taking the prime ministership in 2007 and thereby avoiding following Howard into pre-arranged political oblivion marked an important (albeit late) point when he politically saw the situation as it actually was as opposed to how he wanted it to be. The major example of this was Mr. Costello failing to separate hope from expectation by believing that Howard would honour a succession plan that they had previously negotiated.

Mr. Costello had a right to expect that Howard would honour their succession plan because he had previously provided the latter with crucial support in the first half of the 1990s in his home state against of Victoria which was the power base of Howard’s then arch-rival, Andrew Peacock. With the benefit of hindsight Andrew Peacock should have utilized Alexander Downer’s transitionary period (1994- 1995) as Liberal leader to support Costello succeeding as Opposition Leader in order to stop Howard returning to the leadership. Under a Costello government Andrew Peacock could have served as foreign minister and being a power broker.

It was Mr. Costello gave his support to Howard without which he could not have returned to the Liberal leadership in January 1995 and to have then won the March 1996 federal election. Furthermore, the economic successes of the Howard government (1996-2007) were as much, or even more, due to the Treasurer Costello than the then prime minister.

Howard probably reneged on his succession plan that he made with Mr. Costello - that he would make way as prime minister for his deputy after two terms in government - that ensured his return to the Liberal leadership in January 1995-based on the forlorn hope that he would somehow be remembered as even greater leader than that of Sir Robert Menzies by surpassing his record period of sixteen years that he achieved in his second prime ministership (1949 to 1966).

Unfortunately, for Mr. Costello, he was unable to launch a leadership challenge as Paul Keating did in 1991 after Hawke reneged on a similar leadership deal. This was because the political network/base base that Mr. Costello had established from his days in student politics was predominately loyal to his former major ally Michael Kroger.

Mr. Costello could probably have still successfully led his party as Opposition Leader after its 2007 federal election defeat as his political stature was still substantially intact. This was because he had not fallen for the trap of taking the prime ministership on the cusp of an election that rent-seeking elements within the coalition had pre-arranged to lose. To have consolidated his authority over a party that had previously almost destroyed him could have still been achieved by Mr. Costello appointing a stalwart supporter of his as Federal Liberal Director and negotiating a succession plan with Malcolm Turnbull, which in contrast to the previous leadership deal with Howard, would have been honoured.

An important service that Mr. Costello could still fulfil in opposing rent-seeking would be to explain how SWFs could be properly administered on a non-political basis to avoid rent-seeking. For it was the former treasurer who established Australia’s best known SWF in the form of the Australia Fund from the proceeds of the sale of Telstra so that public service payments could be funded.

Perhaps had there ever being a Costello prime ministership SWFs could have been established and professionally managed to crucially help provide greater government funding for essential services and government initiatives from the proceeds of the mineral boom and demand for other primary exports before international demand had declined. In such a context the boom and bust cycle that predominately primary exporting countries such as Australia are vulnerable to could have been avoided.

But in Australian public policy underlying intention is everything. This assertion has previously been analysed in Social Action Australia articles by reviewing how rent-seeking elements within the coalition parties tried to politically destroy Mr. Costello by having him depose Howard as the nation approach the 2007 federal election. An important reason for rent-seekers within the coalition pursuing this anti-Costello agenda might have been to later ensure that SWFs could be used in the context of Australia being locked into disadvantageous trading relations with the export of minerals to the PRC and being inflicted by a high public foreign debt.

Due to the high level of public debt that has been accumulated since 2007 as part of ALP federal governments pursuing a rent-seeking agenda caution must therefore be taken with regard to the Gillard government funding the recent education and health initiatives such reflected by the Gonski Review of education and denticare. The question that should be answered with regard to these potentially very worthwhile initiatives is how are they to be funded?

The horrendous scenario that confronts Australia is that the groundwork is now being set to introduce SWFs to fund new major government initiatives such as denticare. However, the appropriateness of adopting SWFs is dependant upon external settings which more often than not are reflective of the impact of powerful behind the scenes political actors.

Since the time of the fall of the Howard government in 2007 the intentions of powerful elements within Australia’s political elite have been selfishly destructive as is the nature of rent-seeking. Only a prize idiot would believe that the nation’s emerging rent-seeking elite want to arrive at ‘win-win’ outcomes. At best it can be said that Australian political leaders who advocate essentially rent-seeking policies are ‘useful idiots’.

The Australian Greens: The Useful Idiots for the Rent-Seeking Abbott Liberals

To give the Greens federal leader Senator Christine Milne the benefit of the doubt as being a useful idiot as opposed to a self-serving rent-seeking the probable impact of the policies she has endorsed are analysed. The Tasmanian Senator has advocated a more extensive super profits tax regime be adopted to fund major spending initiatives. Does the Greens federal leader realize that this type of tax regime will ultimately facilitate domination by mega mining corporations by allowing them to enter into sweetheart deals with a mercantilist PRC?

The ramification of the above mentioned development will be the consolidation of political and economic power of by the mega-corporate mining companies who will be able to legally minimize their taxes. The adoption of a super-profits mining tax regime is bad enough* but its application in conjunction with a carbon tax undermining the service and agricultural sectors of the economy will consolidate a dangerous transition to a rentier state. Does Senator Milne want to establish a future scenario in which every one-time national park (national parks in a rentier Australia will go into a past tense category) is recklessly mined?

(*BHP-Billiton’s decision not to proceed with the Olympic Dam mining project in South Australia is essentially an exercise in corporatist political power which this company could not have undertaken if the carbon tax was not helping consolidate an over-reliance on the mining sector).

Due to the terrible socio-economic consequences that will result from the infliction of a carbon tax rent-seeking elements within the coalition parties (and possible satellite populist parties) will be able to apply a Lasch strategy to destroy the Greens and pulverize the ALP. As a result the Greens will not have the political capacity to satisfactorily defend the environment. Such a development pre-supposes that the Greens are sincerely committed to protecting the environment.

The hard-left of the Greens Party and probably most of the rent-seeking strategists within the ALP might envisage the entrenchment of economic and political power via ‘regionalization’ (sic) and SWFs. However, the terrible consequences of destroying Australia’s economic foundations will generate a virulent populist political right which will crucially help ensure that the Greens and the ALP are deservedly consigned to the political wilderness.

The recent September 2012 New South Wales local government election results are an indication that a Lasch strategy is working very effectively for the rent-seeking Abbott Liberals. Media coverage of these election results has focussed on the decline of the Green Party vote. The more important ramification is that the massive vote against the ALP in the March 2011 New South Wales state election has been reflected in the recent local government elections by the Liberals performing strongly in western Sydney!!

The Greens are mainly to blame for this electoral shift because their blocking in the Senate (by voting with the coalition) of an ETS in early 2010 set the scene for the carbon tax to become the cornerstone for the Abbott Liberals effectively applying a Lasch strategy. The poetic justice of the situation is that the Greens and the rent-seeking elements of the ALP will not (as the New South Wales local government election results are an indication) have a basis to partake in the spoils of a rentier state. The decline of the Greens will be accelerated by a Liberal Party refusal to preference them.

But then again, why should the Liberals preference the Greens after they have served their purpose by helping inflict a carbon tax on the nation? Furthermore, it makes no sense for the Liberals to now preference the Greens (either in the federal seat of Melbourne or in the Senate) because to do so will undermine their chances of gaining stalwart ALP voters who are alienated by the carbon tax.

All is not however doom and gloom for the ALP. The federal government’s refusal to close down the brown coal power stations in eastern Victoria’s La Trobe Valley is a promising sign. Had these power stations being immediately closed Victoria’s power supply and economy could have suffered major disruption. In this context Senator Milne’s outrage that the power stations were not closed is itself outrageous.

A Win-Win Approach to Really Lowering Australian Carbon Emissions

The Greens Party’s desire to immediately close the Hazelwood power stations is symptomatic of their destructive and ultimately counterproductive approach to public policy. If this party is really sincere about really achieving carbon reduction then they would support the immediate replacement of the carbon tax with an ETS. Such an ETS should be administered by a federal Environmental Protection Agency (EPA).

A federal EPA could apply varying charge rates for carbon emissions based on the environmental impact, capacity to pay and associated socio-economic impacts. Such an approach would be fairer and more practical than the power over/’win-lose’ approach of a carbon tax. The only ‘win’ with regard to the infliction of the current carbon tax will be for the rent-seeking elements within the coalition parties under a future Abbott government.

Alternately, Australia has strong prospects for moving forward to a ‘win-win’ scenario in relation to actually lowering carbon emissions due to having some of the best scientists in the world. The shift in prospects essentially depends on the determination of the Gillard government to break from the emerging over-arching rent-seeking framework that has been constructed with Abbott’s deposition of Malcolm Turnbull in late 2009, the Gillard government going into minority following the 2010 federal election and the passage of the carbon tax legislation in late 2011.

While the establishment of a rentier state may ensure the political dominance of the Liberal, National and associated satellite parties the price will be too high. The Liberal Party was once (as envisaged by Sir Robert Menzies) a branch based party which accommodated a wide spectrum of beliefs and ideas. Power dynamics in the Liberal Party will however change for the worse.

The movers and shakers within the Liberal Party behind the push to rent-seeking are ruthless. When the economic pie eventually contracts (as it is bound to in a rentier state that has unfavourable trading arrangements with a mercantilist PRC) those Liberals and Nationals who are not in the rent-seeking ‘magic circle’ will eventually be dispensed with.

Prime Minister Julia Gillard will be politically dispensed with at the next federal election. This prediction is not meant as an insult to the prime minister but rather as a candid analysis of recent political trends leading to probable outcomes. It is true that Ms. Gillard has probably staved off a leadership challenge from Kevin Rudd and is now demonstrating the attributes of being an independent political actor. However she has still not broken with the rent-seeking edifice that is enveloping the nation.

At best the federal government’s announcements concerning its endorsement of the Gonski Review and denticare will help the ALP recover much its electoral base when it loses the next federal election. However, questions as to how such initiatives will be funded between now and the 2013 federal election will inevitably provide the momentum (as intended by rent-seeking strategists within the broad left) to establish the groundwork for introducing SWFs. But the most important rent-seeking measure that the Gillard government will retain until the next federal election will of course be the carbon tax.

Should the carbon tax miraculously not have a terrible impact combined with big election promises such as denticare then the Gillard government might even be competitive in the next federal election. However, as happened with Howard internal sabotage will ensure that Julia Gillard loses the next federal election. The only potential benefit for the ALP will be that the margin by which they lose will be mitigated so that Bill Shorten will have a sporting chance of winning future federal elections.

In the interim an Abbott government will undoubtedly move to ‘regionalize’ (sic) Australia and if the Gillard government has already obliged by introducing SWFs and an RSPT then these can be retained by the next coalition federal government as vital rent-seeking instruments. Prime Minister Tony Abbott government will undoubtedly repeal a carbon tax to earn the undeserved gratitude of the Australian people which will importantly contribute to the longevity that the federal coalition will need to remake the nation as a rentier state.

The above scenario is unfortunately plausible, not inspite of, but because Prime Minister Gillard recently demonstrated strong leadership with regard to proposed policy initiatives which are ultimately in keeping with transitioning to rent-seeking. Yes, it is important that Australia’s education system be enhanced and that the availability of dental care be expanded. However, such policy initiatives have to be funded based upon the nation’s actual economic capacity.

If Prime Minister Gillard really wants to be an independent political actor then she should utilize Australia’s international trading advantages with regard to agricultural products as a result of the American drought. This trading advantage will be properly utilized if the golden opportunity is taken to substantially reduce, if not pay off, Australia’s public foreign debt. A replication of the Howard-Costello government’s stupendous achievement in paying off the foreign debt can also be achieved by the Gillard government also reining in spending.

The Australia people may have to endure some austerity but this will be better than a government deceiving them that there can be spending on ‘big ticket’ items such as denticare financed by further foreign borrowing that the nation eventually will not be able to service. Similarly, the Gillard government must retain faith with the Australian people by refraining from establishing SWFs and moving to a dud super-profits tax regime.

The most important initiative that a Gillard government will hopefully undertake while there is still time will be to repeal the carbon tax by replacing it with an Australian based ETS with a floating price. The immediate abolition of an ETS will be the circuit breaker that thwarts Abbott’s rent-seeking agenda and with it the prospects of him winning the next federal election in a mega-landslide even though most Australians do not (to say the least) want him to become the next prime minister.

If there are to be future professionally and transparently administered SWFs and major spending in relation to social policy initiatives let them be when Australia has the inherent economic capacity. Unemployment and inflation in Australia are still relatively low which affords the Gillard government the opportunity to maintain Australia’s high living standards during the GFC by attending to the fundamentals of the national economy such as supporting the rural sector before and as the mining boom ends.

Furthermore, should the Gillard government remain in office and hopefully beat Tony Abbott at the next federal election then the chances of Australia’s pluralist system of enterprise bargaining focused industrial relations system consolidating will be substantially advanced. But if the ALP is to win the next federal election it should also look to safeguarding the interests of rural and regional Australia.

Is the ALP a Neo-Liberal Cipher?

To be candid the ALP has a negative record with regard to protecting the interests of rural Australia. The floating of the Australian dollar in late 1983 made it much more difficult for farmers to service their loans as did the subsequent infliction in the 1980s and 1990s of high interest rates regime caused by the progressive accumulation of a high public foreign debt. Furthermore unnecessarily allowing an inflow of cheap agricultural imports and ‘deregulatory reforms’, such as abolishing the single desk wheat export marketing system, were acts of socio-economic vandalism during the Hawke-Keating era which are still difficult to understand because there was no apparent compensating benefit.

For all the criticisms that can be made of the Howard-Costello era concerning industrial relations, *refugee asylum policy and attacks on state rights, the coalition government’s policies did substantially contribute to an economic revival in regional/rural Australia. This was due to the federal coalition government’s stupendous achievement in paying off the nation’s public foreign debt, instituting effective banking prudential controls and utilizing the bonanza of increased revenue from the GST to spend more money on services in regional Australia.

(*The Gillard government re-introducing off-shore processing via its acceptance of the Houston Report was a ‘bullseye’ on the part of rent-seeking elements within the ALP and the Liberal Party coercing the Labor federal government into laying the groundwork for a future Abbott government.

Humanitarians instead of denouncing Prime Minister Gillard as a traitor on refugee asylum policy should realize that there is more than one way to skin the proverbial cat. Principled people should become involved on a case management basis in administering refugee processing on Manus Island and Nauru.

The scandal of Australian asylum policy has been the lack of efficiency in processing claims. This has resulted in would be refugees waiting years and years in conditions of virtual imprisonment. If rent-seeking Treasury bureaucrats can be figuratively parachuted into the Department of Climate Change (sic) then human rights lawyers can be based on Nauru and Manus Island as part of secondments with the Department of Immigration and Citizenship. This would vitally help ensure that due process is promptly and fairly applied to would be refugees in accordance with Australia’s international legal obligations).

These policies crucially complemented increased international demands and prices for Australian agricultural exports (while providing a fallback for when prices and demand decreased) helped revive Australia’s rural economy. The irony of the current situation is that if rent-seeking elements within the ALP and the coalition parties (including the National Party) have their way then the rural sector will again be undermined.

Moves to restrict access to irrigation by the Murray River Darling Basin Authority (MRDB) and for the federal government to steal authority from the states for responsibility for granting mining concessions on agricultural land threaten the very viability of Australia’s agricultural sector. These threats are all the more shocking because the impacts of the former Rudd government’s policies of massively in-debting Australia have already undermined the services sector of the economy. With the mining boom now coming to an end the strength of the agricultural sector offers the nation its only viable escape route from pending economic disaster.

The Australian agricultural sector can potentially now rescue the overall economy due to the high prices and international demand for Australian agricultural produce. The American *drought offers Australia the invaluable opportunity to counterbalance the decline in the mining boom wrought by the mega mining companies seeking to expand their political and economic power to put a rent-seeking structure in place.

(*Even though Australia stands to immensely benefit from the American drought the overwhelming majority of Australians wish the United States well. In the context of the GFC it is vital to the world that America adapts to the drought. The foreshadowing now by President Obama of who he intends to appoint as his next Agricultural Secretary should he win re-election could immensely help his prospects for election victory.

Hopefully that potential next Agricultural Secretary would be manifestly brilliant and a registered Republican to help voters who might not otherwise vote for a Democrat presidential nominee to do so. The American middle class are going to decide the 2012 presidential election and it is to be hoped that a majority of them will support President Obama because the economic policy direction of Secretary Geithner requires continuity to avoid an economic cataclysm).

As previously analysed the recent decision by BHP-Billiton to not to proceed with the Olympic Dam mining project in South Australia would not have such potentially dire economic consequences if high public debt levels had not been previously accumulated and the canvassing of a super profits tax regime not discouraged smaller investors away from Australia’s mining sector. More diversified sources of investment would not only have created scope for the capital infrastructure required to undertake mining projects but also created the potential for Australia to have more trading partners than an over-reliance upon the PRC.

As it is the Gillard government’s prospects to now safeguard Australia’s economic well-being rely upon the agricultural sector. In this context the federal government should refrain from either seeking to gain responsibility for granting exploration rights from the states for mining on agricultural land or allowing traitorous state governments to cede this responsibility to Canberra. Australian farmers and associated regional communities are relatively safe so long as they pressure state governments not to allow mining companies to gain control over agricultural land.

In this context, the federal Agriculture Minister Tony Burke could well be manifesting a sinister version of ‘talk the talk’ by canvassing the appointment of a pro-mining panel to review the granting of coal seam mining concessions on agricultural land even though the Commonwealth does not yet have jurisdiction for this vital area of state responsibility.

Furthermore, it should not be forgotten, that the Liberal National Party (LNP) Queensland state government of Campbell Newman has a very substantial rural/regional support base. This should mean that this government will protect its constituent’s interests by safeguarding Queensland farms against property acquisitions by mining companies. In this context, Queensland LNP Senator and aspiring National Party leader Barnaby Joyce could consolidate his reputation as an opponent of economic rationalism by voicing his unqualified support for the continuation and constitutional protection of Australia states.

With regard to New South Wales anti-rent seeking elements in the state branches of the Liberal Party and the National Party will be required to prevent the pro-‘regionalization’ premier, *Barry O’ Farrell from betraying the interests of the state’s farming/regional communities.

(*The pro-‘regionalization’ (sic) New South Wales premier’s advocacy of increasing the rate of GST from 10% could be part of a stratagem to establish grounds for a new GST clawback by the Commonwealth which fatally undermines the interests of states).

In a national context with regard to the infliction of rent-seeking it is to be hoped that the apparent public spat between Senator Joyce and coalition Treasury Spokesman Joe Hockey over the federal government allowing a PRC SOE to buy Cabbie Station, Australia’s biggest cotton plantation is not just ‘talking the talk’. Hopefully Senator Joyce is sincerely opposed to foreign mercantilist-Leninist interests gaining a predominant influence over Australia’s agricultural sector and not providing Hockey with a platform to help ensure that the nation’s foreign investment review laws are not changed.

Hockey had previously ‘talked the talk’ in late 2009 by declaring his avowed support for Malcolm Turnbull’s leadership by standing for Liberal leader which split the Turnbull vote to facilitate Abbott unfortunately becoming the new Opposition Leader. Treasurer Wayne Swan is already ‘talking the talk’ by assuring the nation that the acquisition by Shandong Ruyi (a Chinese SOE) of Cabbie Station is not a threat to Australia’s economic sovereignty. Having crucially helped inflict a carbon tax and dud super-profits taxation as part of a rent-seeking agenda Swan can be expected to further this agenda by also undermining the nation’s agricultural sector, which is now Australia’s new economic hope as the mining boom peters out).

Due to the impact of rent-seeking policies in now threatening the mining boom federal and state government policy will hopefully be directed toward safe-guarding the nation’s rural economy which is now even more important to Australia’s overall economic interests. Due to the tremendous political clout of the mega mining companies it will not be easy for either the Gillard ALP federal government or coalition state governments to actually protect rural and regional Australia from rent-seeking.

The capacity of Australian state and federal politicians to advance the genuine national interest by safeguarding the rural economy is also challenged by the links that rent-seeking economic and political actors have to mercantilists within the CCP. However China’s current mercantilist economic system is ultimately not viable that the PRC’s CCP’s senior leadership will hopefully adopt a ‘win-win’ approach by not supporting attempts to reconfigure Australia’s political and economic systems.

Why the ‘Real’ Julia’ Must Be An Independent Political Actor

The overall point that consequently needs to be made is that Prime Minister Julia Gillard can prevail over the settings that were imposed by the 2010 election result to be an independent political actor as prime minister as she previously was as a senior minister in the Rudd government. Her political independence can currently be gauged by whether the particular interests of regional/rural Australia are safeguarded against rent-seeking by the federal government.

Achieving the above stated objective is ironically more difficult to achieve due to the prime minister’s reliance upon Tony Windsor, the independent federal member for New England. A possible impact of Windsor’s ostensible attack on Tony Abbott during the first part of the recent 2012 August sitting of federal parliament was that it challenged the credibility of the plausible contention that Julia Gillard had been previously coerced into making her pledge just prior to polling day for the 2010 federal election that no carbon tax would be introduced under a government she led after the election.

The canvassing by the ABC’s Lateline and *Landline programmes in the lead up to the 2010 polls of the prospect of rural independents holding the balance of power was reflective of the capacity of rent-seeking elements within both major parties to secure the result that they wished. The rent-seeking Abbott Liberals would not have acquiesced to a Gillard led minority government unless it introduced a carbon tax that they knew to be economically destructive that the Labor Party would lose the next federal election in a landslide.

(*Landline has traditionally been very right-wing in keeping with the rural component of the ABC’s radio and television which contrasts with the national broadcaster’s left-wing orientation).

The member for New England’s claim that Abbott after the 2010 federal election was prepared to support a carbon tax in return for his (i.e. Windsor’s) support to form a government has the effect of undermining the contention that the Leader of the Opposition was (and is) covertly supportive of a carbon tax. Abbott’s becoming Liberal leader in late 2009 and his subsequent political ascendancy has been predicated upon the adoption of a carbon tax.

With the benefit of hindsight the paradox of Malcolm Turnbull’s 2009 deposition was that Australia moved away from having a non-detrimental Emissions Trading Scheme (ETS) to an economically and socially destructive carbon tax. In fairness to Kevin Rudd he did actually fulfil his promise to introduce an ETS but was thwarted by rent-seeking elements within the Liberal Party using the proposed introduction of this scheme to depose Malcolm Turnbull.

However, the prize for super *hypocrisy with regard to the politics of the 2009 Turnbull deposition went to the Australian Greens. The Greens senators had the balance of power in the senate that even with Abbott as Opposition Leader the government’s ETS legislation could have passed. Instead the scenario that now awaits Australia is of the carbon tax fundamentally undermining the economy so that an over-reliance upon SWFs will be established. Such a development will be tan important hallmark of an Australian rentier state.

(*Hypocrisy in relation to humour can be a valuable tool if people have sufficient discernment to understand the insight that is intended to be conveyed).

Because it is the rent-seeking Liberals who are still predominately driving the nation’s socio-political and economic agendas the recent announcement by the Gillard government that from 2015 an Australian ETS will be linked to the European Union’s (EU) trading scheme should be placed in context. The fundamental point is that a carbon tax should never be adopted because of its destructive impact on a nation’s domestic economy, particularly when the rate charged is a prohibitive $23 a tonne!

Ideally, if there is to be a national policy to reduce carbon emissions then a floating ETS should be introduced in 2015 without a preceding carbon tax. Due to the high levels of public foreign debt that have been accumulated since 2007 and the China mining boom petering out it would have been in Australia’s economic interests to have established a regulatory framework for an ETS to become effective three years after the passage of the relevant legislation.

An effective and fair ETS is one that facilitates an interactive process so that businesses and industry have the capacity to genuinely trade carbon credits so that emissions can actually be reduced. The recent so-called important concession of abolishing a floor price in 2015 does not negate that between now and the next federal election in 2013 small and medium businesses will be too hard hit by an iniquitous carbon tax.

The actual impact of the recent government announcement that a future ETS (which will never be introduced because Abbott will win the next federal election) will be linked to the EU trading scheme is more political than environmental. This is because the misperception is being bolstered that the prime minister is an independent political actor with regard to carbon policy. There is no doubt that Julia Gillard is highly intelligent, tough and principled but even very astute leaders can still be gulled.

Prime Minister Gillard has not asserted full independence as a political actor since she was coerced into announcing just before 2010 polling day that a government she led would not introduce a carbon tax under a government. The prime minister knew that rent-seeking elements within the two major parties could have engineered an Abbott victory unless she made a promise that she would have to break.

Rent-seeking Liberals (such as Abbott) were prepared to endure a possible further three years in opposition on the basis that the ALP will be decimated at the next federal election following federal election. This on-coming electoral decimation of federal Labor will be substantially due to the terrible consequences of the infliction of a carbon tax on Australia’s economy and Prime Minister Gillard breaking her promise that she ironically would have been more than happy to have honoured (i.e. not introducing a carbon tax).

Therefore the federal government’s so-called concession of abolishing a floor price in 2015 only buttresses the contention that the Gillard government sincerely supports a carbon tax and as such is fully politically independent. An associated political impact of this government ‘concession’ that prime ministerial authority has been enhanced that the prospect of another Rudd challenge has apparently evaporated. This may be the case but the overriding point is that if a carbon tax remains in place by the time of the next federal election a rent-seeking Abbott government will be elected in a landslide.

Why it is Time For Kevin Rudd to Stop Being A Political Pawn

There is still the distinct, if receding prospect of avowed Rudd ‘supporters’ arranging a unity ticket between the former prime minister and the Health Minister Tanya Plibersek (who would run for deputy) to depose Prime Minister Gillard. The former prime minister (Rudd) deliberately left unanswered a recent media question as to whether he thought that Prime Minister Gillard could win an election against a ‘beatable’ Tony Abbott.

Kevin Rudd should appreciate that having previously failed to be an effective independent political actor due to the impact of Abbott unfortunately becoming Opposition Leader in late 2009 he would again fail against the Liberal leader at the next federal election. To be fair to the ormer prime minister, his major positive impact on Australian history was that without him as leader the ALP probably would not have won the 2007 federal election against Howard (inspite of all the internal sabotage on his side of politics). Nevertheless, the so-called me-tooism of the Rudd-led ALP adopted during the 2007 election campaign set the scene for subsequent political failure because the fiscal conservatism that Mr. Rudd espoused in opposition was not implemented in government.

A closer analysis of the politics and economic policy formulation of the Rudd government would indicate that the economic stimulus packages were irrelevant in relation to preventing a GFC induced collapse of the Australian economy due to excellent fiscal and banking settings being in place. Instead, the stimulus packages deeply in-debted Australia and set the scene for a transition to a rentier state. Even though Julia Gillard is currently more of an independent political actor than her predecessor she will ultimately still face the test of leadership by deciding whether or not to resist rent-seeking.

Rent-seeking elements within the ALP may believe that a Rudd return will at best mitigate against a coalition landslide, particularly in Queensland. However, ALP political strategists who hope to ‘advance by retreating’ should keep in mind the scale of defeat that the ALP experienced from the March 2012 Queensland state election result. This illustrated the point that once political parties begin squandering their voting base that the groundwork is set for mega-landslides against them.

If Kevin Rudd is petty-minded he might still feel a sense of satisfaction of leading the ALP to a mega-landslide defeat in a federal election because Julia Gillard will have been deposed as prime minister. Because it is doubtful that Rudd would remain on as ALP leader, Bill Shorten would have to serve as Opposition Leader for at least two parliamentary terms against a very politically formidable Abbott government. Such a government will be formidable due to the coalition’s previous success in having foisted a carbon tax.

The Carbon Tax: A Bad Tax Based on an Abbott Rent-Seeking Agenda

Due to Abbott’s success in having helped foist the carbon tax on Australia his mantra that the carbon tax ‘is a bad tax based upon a lie’ is ironically giving him undeserved credence with the electorate. Furthermore, proposed tinkering with the operation of a future ETS by linking it to the EU version would perpetuate the destructive consequences of a carbon tax if the ALP was some-how miraculously to win the next federal election. In the probable event of an Abbott landslide his government will probably rescind a carbon tax and not proceed to an ETS.

However the destructive socio-economic impact of the carbon tax and the legacy of a recycled Rudd government putting rent-seeking measures in place (such as establishing SWFs) will be such that Abbott will be able to politically and economically re-shape Australia. Therefore the dividends that rent-seeking elements within the ALP and the Greens hope to obtain via ‘regionalization’ (sic) will be optional extras dependent upon the goodwill of a future Abbott government.

Going by the lack of political mercy that Abbott showed the Gillard government over its capitulation in regard to adopting the Houston report only a fool would expect him to give a quarter to federal Labor in opposition. This is particularly the case when one considers how ruthlessly effective members of Abbott’s *brains trust are, such as Brian Lachnane, Peta Credlin, Joe Hockey, Andrew Robb and Senators Cory Bernardi and Arthur Sinodinos.

(*It will be interesting to see if Peter Conran, a former top bureaucrat under Howard returns to Canberra from Perth to be part of an Abbott government).

The Sinodinos Ascendancy: 2012 - ?

Senator Bernardi’s resignation as Abbott’s parliamentary secretary in September because of his outrageous comments on homosexuality was possibly more calculated than stupid. This is because his resignation cleared the way for Senator Sinodinos to become Abbott’s new parliamentary secretary. This succession is a development of fundamental importance.

Senator Sinodinos is arguably Australia’s smartest political operative. John Howard could not have achieved his political ascendancy had Sinodinos not served as his chief of staff between 1997 and 2006. Indeed, had Sinodinos remained the prime minister’s chief of staff at the time of the 2007 federal poll it is improbable that Howard would have lost that election.

This Sinodinos appointment as Abbott’s secretary following controversy over whether or not he physically threatened Barbara Ramjan in 1977 reinforces Howard’s former chief of staff authority to set opposition strategy between now and the next federal election. For Prime Minister Gillard the Sinodinos appointment means that it is ‘game on’ for the federal Labor with regard to effectively opposing Abbott. Indeed, it will be ‘game over’ for the ALP if the Gillard government does not quickly repeal the carbon tax.

The Sinodinos strategy of transitioning Australia to rent-seeking is predicated upon the maintenance of a carbon tax. It is in this context that it is possible that Abbott’s recent stumbling with regard to his activities in student politics has lulled the ALP into a false sense of security so that the mining tax is retained while setting the scene for Sinodinos to become Abbott’s new parliamentary secretary.

But even before Abbott becomes prime minister after the next federal election the Sinodinos appointment as the Opposition Leader’s parliamentary section may still have a major impact on Australian public policy. An important reason why Sinodinos is so potentially (or actually is) very powerful is because of his connection to the Department of Treasury where he had previously been a senior official and as an investment banker following his retiring as Howard’s chief of staff in 2006.

It is therefore not beyond the realms of possibility that Senator Sinodinos’s appointment as Abbott’s parliamentary secretary has given important impetus to the recent push from the Business Council of Australia (*BCA) for structural reform to Canberra’s public service. BCA chief executive Jennifer Westacott has recently released a plan in which the size of Canberra’s public service will reduced but security of tenure and the professional integrity and independence of public servants will be protected.

(*The BCA previously fulfilled an important transformational role in Australian public policy by releasing a paper in 1986 which advocated the introduction of enterprise bargaining. This industrial concept/practice was inherently commendable because it offered a means by which productivity gains could be achieved and passed on to employees. Trade unions stood to gain from enterprise bargaining because this process offered a potential means by which the official union organisation could engage with their rank and file members to facilitate union effectiveness.

Instead, the transition to enterprise bargaining that was commenced in the 1990s was integrated to the union amalgamation policy which instead of concentrating union power decreased it because of the de-unionising ramifications of this policy. Due to union amalgamation too many unions failed to adapt to the shift from a centralized award system to workplace based enterprise bargaining that net union effectiveness was substantially undermined.

The Australian union movement and the ALP should therefore be inherently cautious with regard to automatically adopting ideas of the BCA because their implementation can have profound and unanticipated ramifications).

The most apparently laudable aspect of the Westacott BCA report is its recommendations that the power of ministerial political staffers be essentially emasculated. However, this BCA report could actually be the beginning of the process (as signalled by Sinodinos’s appointment as Abbott’s parliamentary secretary) by which new power structures are put in place to establish a rentier state.

Australian political history has shown that the most effective governments are those which have sufficient independence or authority over the public service. Sir Robert Menzies established his supremacy over the public service by almost instantly lifting petrol rationing and price control on becoming prime minister again in late 1949 while safeguarding the then predominately pro-ALP public servants from Liberal Party political hacks.

Therefore Sir Robert Menzies was able to utilize the technical skill and strategic economic nous of statist orientated public servants such Herbert ‘Nugget’ Coombs. He served successively as Governor of the Commonwealth Bank of Australia (which was then government owned) and of the Reserve Bank of Australia. Coombs pursued essentially Keynesian economic policies which in the 1950s and 1960s were conducive to middle class growth and national prosperity. Sir Robert Menzies reaped the political dividend of Australia having a strong middle class that it became the backbone of a Liberal Party with a rank and file structure. This gave the then prime minister the scope he needed to be an independent political actor.

By contrast an important reason why the Whitlam government was such a failure was because elements of the public service were given support by the then prime minister to undertake disastrous decisions on the incorrect premise that the supposed conservative and staid legacy of the Menzies era had to be overcome. This was manifested in early 1974 when Whitlam supported the initiative of then Tariff Board chairman, *Alf Rattigan to convert the board into the Industries Assistance Commission (IAC).

(*As Opposition Leader in the 1960s and 1970s Whitlam had previously declared himself to be a ‘Rattigan Man’ which meant that the ALP leader supported the widening back of tariff protection for Australian industries).

To the horror of many sensible Treasury officials the Whitlam government had previously cut tariffs by a steep and sudden 25% in July 1973. This disastrous decision was suppose to bring down domestic prices and make Australian industry more competitive. Instead it undermined the capacity of the nation’s manufacturing sector which helped contribute to a substantial increase in inflation. The Treasury Department’s understandable distrust of the Whitlam government led the prime minister to undertake (to put it politely) unorthodox means to raise money which led to the Loans Affair in 1975.

Senator Sinodinos and the Whitlam Continuum

Australia since 2007 is again falling into the same Whitlamite pattern of terrible mis-government. Disastrous macro-economic policies are being implemented (today’s carbon tax is an approximation of the 1973 tariff cut) which undermine the nation’s economic capacity. The resulting diminished national capacity then sets the scene for rent-seeking policies to be pursued as a supposed panacea to rescue Australia from an induced economic catastrophe. In the Whitlam era the federal government attempted to covertly raise loans to buy privately owned mining interests so that the government acquired a new cash cow.

The contemporary rent-seeking scenario is different in that it is now the PRC connected mining companies that are working in alliance with the hard left and opportunistic elements within the ALP to establish a rentier state via the introduction of a dud super profits mining taxation regime and the establishment of SWFs.

The hard left of the ALP foolishly believe that their links to the PRC will provide them with an ultimate advantage over the five mining companies (BHP-Billiton, Xstrata, Rio Tinto and Clive Palmer and Gina Rinehart’s respectively owned companies). The probable reality will be that Australia’s consequently retracted economic capacity will undermine the power of labour power. This will be the result of increased precarious employment undermining the position of the ALP and the union movement to enable the Abbott Liberals to effectively apply a Lasch political strategy.

From a federal coalition perspective a re-organisation of Canberra’s public service will establish the power structures which will determine institutional relationships between public servants and Liberal Party power brokers. The effective elimination of political advisors will undermine the power of coalition MPs and the factions to which they belong to influence government policy. An Abbott led coalition government will therefore be very regimented in terms of party discipline. This will be a pity because coalition federal governments (particularly the Menzies government) were often effective due to the critical input they received from MPs.

The regimentation of coalition MPs under an Abbott government will be crucial to facilitating a tight nexus between power brokers associated with the New South Wales Right of the Liberal Party and senior Canberra public servants. It is probable that this power relationship will encompass selected elements of corporate Australia linked to the mining sector.

To ensure that either Julia Gillard or Kevin Rudd is undermined at the next federal election the rent-seeking components of the ALP will probably be accommodated for a while-but only a while. The disrepute into which the Labor brand name will eventually fall will ensure that ALP is politically dispensed with. Even the onset of ‘regionalization’ (sic) will not save the ALP from the contempt in which the overwhelming majority of Australians will perhaps unfairly but understandably hold this party in.

The ALP that its previously insufficient independence in public policy that was manifested by the so-called ‘economic rationalism’ of the Hawke-Keating era did not result in perpetual opposition after 1996 because rent-seeking elements within the Liberal Party throw the 2007 election. It is improbable that the Liberals will after the ALP loses the next federal election again engage in calculated self-sabotage.

A very important issue for federal Labor is how it maintains a sufficient degree of independence between now and the next federal election? With an ALP branch structure essentially now moribund the Labor Party’s best hope is now to safeguard the interests of ministerial advisers. It may seem strange to advocate that current ministerial advisers and party political staffers be maintained but their presence is now vital to impeding the establishment of a future bureaucratic rentier state.

The ALP may not have had the capacity in June 2010 to quickly switch from Kevin Rudd to Julia Gillard if it were not for the political skills of government and Labor Party ministerial staffers. Important ramifications of political staffers exercising their skill were that many of the top-down recommendations of the Henry Taxation Review (in which there was insufficient public consultation and input) were not implemented. Prompt adoption of Henry Review recommendations would have included a transition to dud super-profits taxation for the mining sector and the de facto elimination of Australian states.

Overall, Australian economic and political history has consistently shown that poor and/or weak political leadership in Canberra allows a powerful public service to inflict counter-productive macro-economic policy. It may seem strange that power in public policy direction essentially rests with the parliamentary opposition but it should not be forgotten that the Liberals strategically ceded power to the ALP in 2007 to have them establish the fundamentals of a rentier state.

Prime Minister Julia Gillard undoubtedly has the courage and intelligence to objectively assess the rent-seeking direction that the nation is moving in. The question therefore is not one of the prime minister’s integrity but rather of her capacity to overcome the external conditions which she must contend with. It is therefore something of a paradox that Julia Gillard is now prime minister.

The toughness and independent mindedness which Ms. Gillard has demonstrated in university student politics, as a mover and shaker in the Victorian branch of the ALP, as a federal MP and senior minister has paradoxically steeled her to become prime minister and since survived as the head of a minority government. The above cited paradox of Julia Gillard’s career is that she is an independent political actor who has invariably successively found herself in a position where she must assert her independence.

In many ways the trials and tribulations of Julia Gillard’s career are no different from the lives of so many peoples – that of asserting independence against external forces. However, in the case of Julia Gillard the stakes are higher because if she fails to effectively assert her leadership skills then Australia will ultimately lose its independence to powerful external pro-rent-seeking forces.

Australia is therefore fortunate that Julia Gillard is prime minister because her leadership provides the distinct possibility that Australia might avoid becoming a rentier state. Unfortunately it is not inevitable that Julia Gillard will ultimately prevail because the Abbott/Sinodinos alliance might have already put in place external factors which create the context in which a rent-seeking framework will inexorably become Australia’s future reality.

Abbott has previously shown himself to be a formidable political operator because he has been prepared to ‘advance by retreating’. While this is a formidable political skill it is still one based on cunning deception which naturally involves Abbott concealing his actual rent-seeking agenda.

For Abbott to achieve his rent-seeking agenda will require Sinodinos’s skilful strategic assistance in colluding with rent-seeking elements within the ALP. The Opposition Leader’s brains trust will could also be confronted by the challenge of co-opting elements of the Liberal and National parties which might think better of consigning Australia to perpetually high public foreign debt levels, an over-dependence on a mining sector dominated by a mercantilist-Leninist PRC and de facto press censorship.

The chief competitive advantage that Senator Sinodinos provides Abbott with is the strategic co-ordination that will be necessary to engineer a transition to a rent-seeking future. That is not to say that Abbott is not a formidable political leader in his own right as he is now establishing the groundwork to be one of Australia’s most powerful prime ministers.

Why Tony Abbott is A Neo-Liberal As Opposed to Democratic Labor

Possibly the most important factor with regard to Abbott’s effectiveness as a future prime minister is his own personality. In this context the recent profile of Abbott in the Australian Political Quarterly by the journalist David Marr is interesting as is this journalist’s analysis of the Liberal leader. In a September 2012 interview on the ABC’s Lateline program Marr maintained that Abbott was different from other Liberal leaders because he was ‘DLP’ and this was reflected by his previous in cabinet opposition to Howard’s No Choices legislation.

It was note-worthy that Marr, who is negatively critical of the DLP, effectively recognized that this party was (and is) as its name suggests, pro-labour. Consequently, Marr in the Lateline interview in effect set the test as to whether Abbott would stick by his ‘DLP’ principles as prime minister by opposing IR hardliners in the coalition who would desire a return to a No Choices type of industrial regime.

Any possible back handed complement that the DLP may have received from Marr might have been counteracted by reference to Abbott’s alleged near altercation with then rival student politician Barbara Ramjan in 1977 after she defeated in election for the position of Sydney University’s Student Union. The inference that Marr may have been making was that student supporters of the university Democratic Clubs, to which Abbott then belonged, were extremist thugs whose male members, were misogynists because they were religious zealots.

Reference by Marr and other journalists about Abbott’s links to the late B.A. Santamaria via the university based Democratic Clubs in the 1970s will have the ultimate effect of temporarily discrediting him so that the Gillard government will make the mistake of retaining the carbon tax until the next federal election which the ALP will consequently lose in a landslide.

For the sake of historical accuracy assisting the ALP and non rent-seeking elements within the coalition parties an overview of the Democratic Clubs is undertaken. These clubs were essentially the university student wing of B.A. Santamaria’s National Civic Council (NCC) which were at the forefront in the 1970s of opposing the extreme left-wing Australian Union of Students (AUS), a national federation of student unions and student associations.

The Democratic Clubs had unfortunately super-ceded the Democratic Labor Clubs after 1970 as the DLP as a party began to withdraw from campus politics and the NCC state offices moved into the void. The underlying reasons concerning the how and why the transformation of the DLP Clubs into the Democratic Clubs in the 1970s occurred is too convoluted to be concisely detailed. However, the consequences of this transformation were that these clubs became increasingly less effective to the point of irrelevance due to Santamaria increasingly retreating from practical involvement in Australian party politics.

There were still however plenty of party members who belonged to and actively supported the Democratic Clubs but these clubs were not strictly speaking the student wing of the DLP. Many, if not most, of the Democratic Club members in the 1970s were Catholics who supported Santamaria’s NCC organisation, which in the state of Victoria at least, was distinct from the DLP between 1974 and 1978. The Democratic Clubs (which had also gone by the by the name of the Moderate Students Alliance) had strong support from many non-religious and non-Catholic students in the 1970s due to their opposition to AUS.

Therefore the Democratic Clubs were not extremist Catholic religious organisations in the 1970s. Indeed, following the DLP’s very unfortunate loss in 1974 of all its Senate seats, Santamaria maintained a degree of political relevance at the coal face by his NCC organisation having a viable student wing. Nevertheless, Santamaria was too narrow-minded to have helped harness students from the Democratic Clubs into post-university politics so that he could have maintained his own broader relevance to Australian politics.

To be relatively fair to Santamaria in the 1980s and 1990s he did attempt to convey his perspectives on economics with regard to there being a threat of an international financial collapse wrought by financial deregulation. During this period Santamaria also engaged the support of academics such as Robert Manne who was a keynote speaker on the fiftieth anniversary of ‘*The Movement’s’ foundation in Melbourne in 1991. In his speech Manne praised the courage of Groupers in the union movement, the DLP’s impact on Australian politics following the Labor Split and the then role of Democratic Clubs in student politics.

(*’The Movement’ was a term that Santamaria consistently used. This provided a sense of historical continuity between the Catholic Social Studies Movement and the NCC).

Professor Manne was an inspiration to some Democratic Club university students in the 1990s as a trenchant opponent both of right-wing economic rationalism and the historical revisionism of university Marxists which had previously supported far left genocidal regimes such as Pol Pot’s in Cambodia. The prospects for the continued viability of the Democratic Clubs during this period was however fundamentally challenged by Santamaria’s dis-interest in politics other than being a commentator and to focus on Catholic ecclesiastical matters which tended counter-productively toward Integralism.

Indeed, in the early 1980s Santamaria deliberately thwarted Melbourne University’s social democratic right ALP Club’s (which was possibly inspired by the academic Dr. Frank Knopfelmacher) move to amalgamate with that university’s Democratic Club. This action by the NCC president reflected his previous role in 1982 of purging his organisation’s industrial wing. Ironically the purging of the NCC’s union wing helped the so-called Grouper unions to re-affiliate to the ALP in 1984.

Santamaria’s ostensible public support for these unions re-affiliation to the ALP was disingenuous because he knew that it would have made it more difficult for them to re-enter the Labor Party. It was due to Dr. Knopfelmacher’s public countering of Santamaria in the media by pointing out that these unions now had nothing to do with the NCC which crucially helped them gain re-affiliation to the ALP in 1984.

That Santamaria would undermine people who by in large supported his purported philosophical outlook demonstrated that he had at times an essentially negative and tragic agenda. He also had an orientation toward being inward looking in terms of his approach to politics. This was possibly reflected in the projection of the interview that Santamaria did in 1993 with the ABC journalist Geraldine Doogue. In this interview Santamaria stated that politics was never fought out in a room as ‘nice’ as the one in which he was being interviewed and that in effect by engaging in the fight ‘you’ (i.e. the political actor) avoid fading away into ‘nothingness’.

But in terms of politics at the coal face Santamaria following his 1982 purge of the industrial wing from the ALP had faded away to ‘nothingness’ by essentially taking refuge in his office. Normally, when a political leader deserts the battlefield the resource capacity of his or her organisation is diminished. However, this was not the case with Santamaria because his continued control of the NCC’s financial resources enabled him to acquire impressive new offices in North Melbourne which buttressed the impression that he was still interested and relevant to Australian politics.

For a particular segment of Australia who remained interested in the 1955 Evatt Purge of the ALP (which precipitated the formal formation of the DLP in 1957 and the separation Catholic Social Studies Movement from the Catholic Church that year to become the NCC) Santamaria remained an interesting and even important socio-political and economic commentator.

It was therefore tragic that often useful insights that he still had, such as the evils of the ideologically Marxist policy union amalgamation in the late 1980s and 1990s, could not have occurred had he previously not undermined the Federated Clerks Union (FCU). Santamaria did this despite the stalwart loyalty of FCU president John Maynes who possibly lost his usually astute sense of industrial and political direction because he was understandably put out by Santamaria’s personal betrayal. Indeed, without John Mayne’s support Santamaria probably could not have remained politically and industrially relevant between the 1950s and early 1980s.

Due to Santamaria’s final withdrawal from politics at the coal face following his 1982 his capacity to really influence Australian politics was apparently fatally undermined. However, his past association with Abbott provided him with the potential for renewed political relevance in 1993 when he helped the former Democratic Club activist to become the first Executive Director of Australians for Constitutional Monarchy (ACM). Abbott gained this position due to Santamaria’s recommendation to Sir Arvi Parbo who was then the Executive Director of Western Mining (which is now part of BHP-Billiton).

Although ACM had the very laudable objective of defending Australia’s system of constitutional monarchy another purpose of this organisation was (and is) to help ensure the pre-selection of Liberals who were stridently opposed to the nation’s arbitral system of industrial relations. This ulterior purpose reflects the power of Australia’s mining sector to affect public policy according to their specifications.

To be relatively fair to Santamaria his recommendation of Abbott to initially lead ACM was then an inspired choice. Even though Abbott’s time as a student leader is probably now going to be used against him, he had then shown great courage and perseverance in fighting against AUS’s extreme left-wing leadership which was at times brutal. Abbott arguably more than anyone could claim credit among student politicians on the broad right for having taken the fight to *AUS in the 1970s and therefore helped ultimately brought this organisation undone in the early 1980s.

(*AUS was succeeded by the more moderate but still essentially left-wing National Union of Students, NUS, in 1984).

Even Abbott’s decision to go into the Liberal Party in the early 1990s was understandable because of the overwhelming republicanism of the ALP. However, the independence that Abbott had previously shown as a university student leader did not continue after he became a parliamentarian in 1994.

To be fair to Abbott his ideological move to the right was of his prerogative and as such should have been respected. However, an overview of Abbott’s post-university political career indicates that he adapted his political actions to accommodate external interests to which he consequently became beholden to instead of being a maverick, which he is still mis-perceived as by many Australians. As then Opposition Leader Dr. John Hewson’s press secretary between 1990 and 1993 Abbott wholeheartedly supported the super neo-liberal policy manifesto of Fightback. This extremist policy tome undoubtedly cost the Liberals the 1993 election when an overwhelming majority of Australians probably reviled the then Keating federal Labor government.

As a federal MP since 1994 Abbott found his niche as a stalwart supporter of John Howard. Therefore the basis for his subsequent political ascent was established as a Howard loyalist following Howard’s return to the Liberal leadership in January 1995 and his election as prime minister in March 1996. Abbott was not only a Howard loyalist in personal terms but in an ideological context. This was not surprising because Santamaria had effectively abandoned any prospect of being a social democratic by purging the NCC’s union wing in 1982.

Even though Abbott gained a reputation as a verbal loose cannon in the Howard government he was consistently disciplined in the work he undertook successively as a parliamentary secretary and as a cabinet minister. As Employment, Workplace Relations and Small Business Minister between 2001 and 2003 Abbott was consistently anti-union. The convention which ALP governments had honoured of appointing half the commissioners from business community to the bench of the Australian Industrial Relations Commission (AIRC) was not reciprocated by him as the responsible minister.

Despite his prior association with the NCC when it had a union wing, Abbott had a superior understanding of union politics than most of his party parliamentary contemporaries. Nevertheless, Abbott refused to make a distinction between moderate union and hard-left unionism. As well read as Abbott was as Employment Relations Minister he attacked the organising union model which was (and is) aimed at facilitating rank and file activation by claiming that this model treated union members as ‘sheep’ even though he probably knew otherwise.

Again, it may seem unfair to criticize Abbott for finding his own ideological way, which is the prerogative of every politician. However, the Liberal leader is more probably not a creature of conviction but essentially the cipher for the rent-seeking agenda of the New South Wales Right of the Liberal Party. There will be times when Abbott espouses policies that are surprisingly lateral, such as paid maternity leave, but ultimately he is a determined individual who achieves his successes by focusing on implementing a pre-set agenda regardless of its potentially adverse impact on broader society.

Abbott also achieves his successes by ensuring that his avowed opponents in the ALP support an agenda which they both opportunistically share: rent-seeking. In this context Abbott is prepared to endure ridicule and contempt that may come his way as a one-time extremist student leader if it might, for example, set the scene for a Rudd return as prime minister by the end of 2012. The determination and courage that Abbott had previously shown as a student politician has since converted into political ruthlessness by his relentlessly implementing a rent-seeking agenda. However, as ruthless and determined as Abbott is, he still needs ALP collusion to implement this ruinous agenda.

Why The ALP Will Exit To The Political Wilderness if Rudd Returns

It is in this context of Abbott re-asserting (or maintaining his political dominance) that Kevin Rudd is re-emerging as an alternative prime minister by personally criticising Abbott and the austerity measures of the Newman government in Queensland. As implausible as it may seem there is still a distinct chance that Prime Minister Gillard will be deposed by a Kevin Rudd-Tanya Plibersek alliance.

The overriding purpose of a Rudd-Plibersek government will be to institute a rent-seeking agenda in the period between its assumption of office and the wipe out of the ALP at the next federal election. The rent-seeking policies that a Rudd-Plibersek government will probably adopt will be the adoption of an RSPT, colluding with traitorous state governments in selling out Australian farmers by allowing coal seam natural gas exploration and arranging a clawback of GST revenue from the states as part of the process of ‘regionalization’ (sic).

The economic ill-effects of the above cited policies in the context of the GFC will be horrendous as they will lock in a high level of public foreign debt and an over-reliance on the mining industry in which a mercantilist PRC will have an unfair trading advantage. The electoral consequences for the federal ALP will be devastating that the relative strength of the ALP in Victoria (even though state Labor is in opposition) will be undermined thereby thwarting the prospects for Labor renewal under Bill Shorten following the next federal election.

Indeed, due to the terrible impact of the carbon tax it will not be possible for rent-seeking elements in the two major parties to again essentially pre-determine the federal election result as occurred in 2010. In the improbable event of a recycled Rudd government shoring up the electoral base of the broad left (i.e. the ALP and the Greens) this will not prevent an Abbott victory at the next federal election.

An Abbott government will not necessarily grant faction leaders within the broad left access to SWFs. Furthermore, even if such a government does ‘regionalize’ Australia (which it probably will do) the brand name of the ALP and the Greens will have become too tarnished for faction leaders in either party to later establish effective power bases in new regional bailiwicks.

The Carbon Tax and the ALP Federal Election Wipe-Out

To help ensure that the ALP before time does not see the writing on the wall too much of the print and electronic media is mis-reporting the already adverse impact that the carbon tax is having on the nation. Since the introduction of the carbon tax on July Ist of this year average consumer electricity price have already increased by 10%! As occurs with Reserve Bank of Australia (RBA) interest rate cuts taking six months to have an impact, it will take a similar time range for the negative consequences of the carbon tax to become apparent.

Indeed, opinion polls between September 2012 and the second economic quarter of 2014 will most probably show the ALP clawing back support due to the ill-effects of the carbon tax not having taken fall adverse effect and growing public unease about Abbott’s character. However, the ALP’s failure to rescind the carbon tax by immediately adopting an ETS, similar to the CPRS that Abbott and the Greens blocked in early 2010, will set the scene for Abbott to lead the coalition to win a landslide at the next federal due to the adverse impact of the carbon tax.

If Prime Minister Gillard is now (September/October 2012) really in the political ascendancy she will not fall for the con that the ALP could win the next federal election in the second half of 2013 with a carbon tax in place.

As painful as it might be ALP federal and state MPs should have their staffs investigate the adverse impact that the carbon tax is already having on local businesses. Such an exercise, if effectively undertaken, will establish a plausible predicator of the very adverse impact that a carbon tax will have had on business capacity and consumer confidence by the second economic quarter of 2013.

Anecdotally, smart ‘everyday’ people on the ground are observing how the carbon tax is seriously undermining the economy. Already staffers and operatives associated with rent-seeking elements within the coalition parties are not only utilizing intelligence gathered at a grass-roots level but are analysing resultant data to make credible predictions which at the very least will validate Abbott’s words that the carbon tax ‘is a bad tax’.

The inconvenient truth for the ALP as to the current actual detrimental impact of the carbon tax is now reflected by ludicrously high electricity prices that have been inflicted on some hotels in Adelaide. It is true that these higher electricity prices are directly the result of infrastructure upgrades that the carbon tax has helped facilitate. However, the prime minister is respectfully warned that her proposal to use the Council of Australian Governments (COAG) meeting in December to ensure that state governments that still own electricity services bring down power prices cannot work if a carbon tax is still in place.

It was therefore an unhelpful suggestion by the Natural Resources Minister Martin Ferguson that remaining state government owned electricity plants be privatized. Whatever the minister’s reasons for advocating such a policy it only served to help ensure that the Gillard government fulfils the role of being a transitionary one that establishes the rent-seeking groundwork for an Abbott government.

While Tony Abbott did not have a good parliamentary session (20th to the 23rd of August) because the momentum for a Rudd leadership challenge did not take off he is still on course to ultimately politically prevail because of the carbon tax being in place. The Opposition Leader knows that he must continue to relentlessly attack the carbon price because the terrible socio-political impact of this tax will become glaringly apparent by 2013. He is therefore prepared to endure media and government ridicule in the interim before the adverse impact of the carbon tax demonstrably undermines the economy to cause massive social harm and parallel electoral benefit to the coalition.

Ironically recent government announcements of policy initiatives in relation to adopting some of the recommendations of the Gonski Review and the flagging of denticare are probably detrimental to the ALP in the long term. This is because the short to medium momentum that the government is experiencing is obscuring the urgency of immediately rescinding the carbon tax by replacing it with a floating ETS. Furthermore probably commendable aforementioned policy initiatives will be cynically used by the Greens and rent-seeking elements within the ALP to press for the adoption of a broader super-profits mining tax* and the introduction of SWFs.

(*The current failure of the MRRT to bring in sufficient revenue should serve as a warning that a supposed application of a wider super-profits taxation regime – such as an RSPT-for the mining sector cannot raise enough capital to put the budget back into surplus let alone fund major expenditures stemming from recommendations of the Gonski Education Review).

The Greens and rent-seeking elements within the ALP delude themselves that an Abbott government will later accommodate them within the parameters of a future rentier state. The ruthlessness and political effectiveness of an Abbott government will be such that a Lasch strategy will be applied to pulverize the ALP and the Greens despite their having done much of the dirty work for the rent-seeking Abbott Liberals. Therefore, the recent supposed policy shift by the federal government by announcing a future linkage of Australia’s ETS to the EU’s cuts no real ice because a break with a rent-seeking agenda has in no way been advanced.

Why The Carbon Price Will Still Floor Australia

The announcement concerning the abolition of a floor price for the carbon tax by 2015 and linkage to the EU’s ineffective ETS has raised concerns that there will be a massive future budget black hole. The truth is that a carbon tax by undermining productive economic activity will make it even more difficult, if not impossible, for Australia to service its massive and growing public foreign debt.

High public foreign debt levels will inevitably lead to a situation where the federal government becomes even more dependent upon the mining sector as a source of revenue, despite the application of a super profits taxation facilitating a PRC domination of this sector. The impending and cruel tragedy of Australia becoming a rentier state will be further facilitated and compounded by the establishment of politically dominated SWFs which will ultimately serve the interests of a narrow elite.

As personally formidable and well intentioned as the prime minister is she cannot prevail if Australia remains on course to a rent-seeking future via the infliction of a carbon tax. There is a consequent trap that Prime Minister Gillard in having demonstrated strong political leadership by initiating recent proposals such as the NDIS, that she will believe that the government has gained sufficient independence to be effective that it can win the next federal election. With a carbon tax in place and with rent-seeking saboteurs within Labor ranks the best that the ALP can hope for at the next federal election is to avoid a wipe out when it is defeated.

In itself the carbon tax is fundamentally the wrong way to proceed to achieve carbon *emissions because too much of the agricultural, manufacturing and services sectors of the Australian economy will be placed at risk with no compensating economic benefit or environmental benefit.

(*I personally believe that human induced global warming is bunk but agree with the Rupert Murdoch injunction that it is best to give the environment the benefit of the doubt, particularly with the phenomenon of melting polar ice-caps. Reducing carbon emissions is actually inherently worthwhile but vigilant caution must be taken to prevent shrewd but selfish political actors on either the far right or the far left from counterproductively reconfiguring a nation’s socio-economic structures to what they perceive will be their benefit).

The question that may be asked is why there are so many political actors in the ALP and the Greens, as well as their allies in the media, prepared to support rent-seeking by helping bring Julia Gillard down so that Tony Abbott eventually becomes prime minister? The broad answer is that they believe that their political power as part of a new rent-seeking elite will be entrenched by ‘regionalization’ (sic), by instituting a de facto press censorship by a *Media Council and achieving economic domination in a rentier state via SWFs.

(* It was interesting to note that Tony Abbott’s speech to the once great Institute of Public Affairs (IPA) in which he opposed the establishment of this de facto censorship council he advocated the repeal of 18 C of the Racial Discrimination Act 1975. This advocacy essentially constituted an escape clause for the pro-rent seeking left not to really oppose the establishment of a censorship council. Julia Gillard will hopefully show even greater courage then she did in repealing the No Choices legislation by refusing to allow a censorship council to be established. Such a council will be a greater threat to political liberty than what Howard’s draconian industrial relations laws were).

Such an elite will be disconnected from the needs of everyday Australians because economic policy direction will be substantially informed by Canberra based SWFs. The economic potency of such funds will be derived by a political and administrative elite having political connections to a mercantilist PRC which has unfair trading access to Australia’s mineral resources.

The above scenario is dangerously plausible due to the infliction of a carbon tax. History has shown that wealth is unevenly distributed in rentier nations because the generation and distribution of economic resources is politically manipulated and therefore restricted. Consequently, unless the rent-seeking elite is very politically adept at manipulating public opinion then social unrest will ensue.

Why The Prompt Adoption of an ETS/CPRS Can Still Save Australia from Rent-Seeking

If Australia is to avoid the horrors of becoming a renter state then the carbon tax must be rescinded by the immediate adoption of a floating ETS. Even though an ETS can have a potentially negative impact on the Australian economy the political reality is that the adoption of a floating carbon price is the only practical way of throwing a proverbial spanner in the works that thwarts a transition to a rentier state.

Australia’s course to rent-seeking effectively commenced in late 2009 with Tony Abbott supporters using Malcolm Turnbull’s negotiation of bi-partisan ETS legislation (which Mr. Turnbull had prior Liberal Party room authorization to negotiate) as a pretext to institute a Liberal Party leadership change. From this point to the present, as analysed in previous Social Action Australia articles, an overriding political context has been put in place that is conducive (to say the least) to rent-seeking.

Therefore let the immediate replacement of a carbon tax with a floating ETS by a private member’s bill be the point at which the Abbott political ascendancy is ended. There are still inherent dangers concerning a floating *ETS but there is still more of a chance of an effective balance between the primary and secondary sectors of the economy to ensure continuing national economic viability, the maintenance of high living standards and the continuance of an effective social welfare security net.

(* Hopefully a floating ETS will be administered by a regulatory authority predominately composed of technically competent environmentalists as opposed to destructive rent-seeking Treasury bureaucrats).

Will Julia Gillard Take the Andrew Fisher Pathway or the Gough Whitlam Pathway?

Prime Minister Gillard can either be one of Australia’s *greatest prime ministers or one of the nation’s worst. The proverbial chickens are now coming home to roost for Australia because the China mining boom has effectively ended, revenue receipts for the government are substantially falling and a crippling high interest rate regime that will have to be imposed to service the massive foreign debt that has been accumulated since 2007. Furthermore, unless rent-seeking policies are discontinued massive social security expenditure cuts with terrible social consequences will have to be undertaken by a future Abbott government.

(*The four greatest Australian prime ministers are Sir Robert Menzies, Andrew Fisher, Sir Alfred Deakin and John Curtin. Fisher’s major mistake was that he resigned in 1915 because he could no longer endure the intrigues of Billy Hughes who succeeded him to become one of the nation’s worst prime ministers. Nevertheless, Hughes did later help redeem himself somewhat by bringing his successor Stanley Melbourne Bruce down as prime minister in 1929. Hughes did this in order to prevent him from destroying Australia’s brilliant system of industrial arbitration.

Malcolm Fraser had also made the mistake (similar to Fisher) of departing the political scene too early. Had Fraser stayed on as Opposition Leader after the coalition’s unfortunate March 1983 election defeat he could have made way for Andrew Peacock just before the next election was called to help ensure that Hawke was later beaten at that poll. Although a Malcolm Fraser return as prime minister was an impossibility he has since defended his liberal-conservative prime ministerial legacy by continuing to fight for the Deakin-Menzies traditions that were once predominant within the Liberal Party.

The Fraser prime ministership was paradoxically still a success because he failed to implement a so-called economic rationalist agenda that Treasurer John Howard tried to foist on the government. It was therefore unfortunate that Mr. Fraser foolishly appointed Howard federal treasurer in 1977 in succession to Sir Phillip Lynch whom the prime minister had regrettably failed to support).

There is still sufficient time for Prime Minister Gillard to utilize the opportunities of the American drought so that the rural sector delivers the equivalent economic capacity that the China mining boom is still affording Australia. While a boom in Australian rural exports is crucially helping Australia maintain sufficient economic capacity the Gillard government will hopefully follow in the footsteps of the Howard-Costello government by beginning to pay off Australia’s massive public foreign debt.

Having a substantially debt-free Australia will be crucial to maintaining a balance between the primary and secondary sectors of the economy without which the nation’s high standard of living and excellent social welfare system cannot be maintained. It will also be important for the Gillard government to protect the nation’s established system of federal-state relations particularly with regard to possible attempts to either abolish or modify the operation of the Grants Commission.

2012: Politically Speaking Why Gough Whitlam’s Time Should Be Over

Gough Whitlam’s concerted attempt to dismember Australian states was the stand-out political objective of his prime ministership (1972 to 1975). For all the praise bestowed upon Whitlam for his stirling leadership he was essentially a weak man who did not stand up to the people around him such as the Natural Resources Minister Rex Connors. His weaknesses were concealed by his engaging and witty personality which endowed him with a sense of gravitas similar in style (but not in substance) to that of Sir Robert Menzies.

The leadership failures of the Whitlam prime ministership were obscured by his great success in demonising the Governor-General Sir John Kerr for dismissing his government on November 11th 1975. It is therefore somewhat disconcerting that the Melbourne newspaper The Age has recommenced attacking the person of Sir John in a probable attempt to defend Whitlam.

The Age’s recent attack has centred on the ‘revelation’ that Sir John Kerr did not follow Sir Anthony Mason’s advice in 1975 that His Excellence should warn Whitlam that he was considering dismissing him as prime minister if could not secure the Senate’s passage of supply bills to fund the government. Sir John Kerr had asked for Sir Anthony Mason’s legal opinion as to whether he agreed with his own legal opinion that he had the constitutional right to dismiss a prime minister when he could not guarantee government supply.

With regard to Sir John not adhering to Sir Anthony Mason’s advice that Whitlam be forewarned is countered by the simple point that this component of advice was an optional extra. What Sir John Kerr sought –and received from Justice Mason- was an affirmation of his own legal opinion that he had the right to dismiss a prime minister who could not guarantee supply.

The decision not to forewarn Whitlam was a decision that solely rested with Sir John Kerr as the Governor-General was under no constitutional or legal obligation to warn Whitlam that he might be dismissed if he tried to govern without supply.

Sir John Kerr also received advice from the Chief Judge of the High Court Sir Garfield Barwick (who was a strong supporter of state rights) that he was in his constitutional rights as Governor-General to dismiss Whitlam as prime minister if he could not guarantee that the Senate would pass the necessary supply bills. The Governor-General’s actions in seeking the constitutional advice from Sir Garfield Barwick and from Sir Anthony Mason reflected the fact that Sir John Kerr took the option of dismissing the government in a very considered and serious manner.

Although it is inherently difficult to ascertain personal motivations there is a high chance that Sir John Kerr long considered the action of dismissing Whitlam as prime minister due to the personal guilt he may have felt for not being present as was his constitutional obligation when the Executive-in-Council (Australia’s formal constitutional government) authorized the dubious commissioning of petro-dollar loans in December 1974.

Even though it was ultimately Whitlam’s abuse of procedure which resulted in Sir John Kerr being absent for this Executive-in-Council meeting the Governor-General as a lawyer would have known that the chain of causation for the deferral of supply in November 1975 arguably went back to his absence at that crucial meeting.

Based on Whitlam’s previous disrespect for constitutional propriety the balance of probabilities, Sir John Kerr made the correct determination that Whitlam could not be trusted not to have pre-emptively dismissed him as Governor-General by sending such a request through to the Queen.

Indeed, the day after (November 12th) the dismissal a request was sent by the former Speaker Gordon Scholes of the House of Representatives to Elizabeth II asking Her Majesty to reinstate Whitlam as prime minister. This request was made on the basis that a vote of no-confidence had been passed by the House of Representatives in the caretaker government of Malcolm Fraser later on the eventful day of November 11th 1975.

This request probably would not have come to light had it not been for the Queen’s private secretary being obliged to convey Schole’s correspondence to the Governor-General when replying to the former Speaker. The Queen’s private secretary replied that the prerogative for dismissing or reinstating a prime minister was with the Governor-General and not the British monarch. It was ironic that a republican such as Whitlam specifically sought the British monarch’s direct intervention in Australian domestic affairs.

Where Elizabeth II was a factor in the dismissal was Sir John Kerr’s resolve that the Queen would not be brought into the political fray by possibly having Whitlam send through a request by the Executive in Council that the Governor-General be dismissed. This was a plausible scenario had Sir John Kerr previously cautioned Whitlam that he might dismiss him if supply could not be guaranteed.

Matters for Judgement/ The Truth of the Matter: Whitlam’s Role in His Own Downfall

Whitlam has never refuted the account given by Sir John Kerr in his memoirs Matters for Judgement that he responded to his being informed of his dismissal by saying that he would have to contact the palace (i.e. have the Queen intervene). As His Excellency pointed out in his memoirs his informing Whitlam of his dismissal did not then constitute the actual termination of his commission as prime minister.

The former Governor-General wrote that had Whitlam asked him to re-consider his dismissal that he would have done so on the basis that a double disillusion election be called then and there. Had Whitlam called such an election he would have instantly become a caretaker prime minister and as such could not dismissed the Governor-General. As Sir John Kerr outlined in his memoirs he informed Whitlam that he could not have the palace intervene because he was no longer prime minister. The conveying of this fact was facilitated by the Governor-General than revealing to Whitlam the signed letters which affected his dismissal.

With regard to the Governor-General’s verbal communication of Whitlam’s dismissal Sir John Kerr had upon the then prime minister entering his study to ask for writs to be issued for a half-Senate election asked if he could guarantee supply. Whitlam replied that he could not guarantee supply. The Governor-General then subsequently asked Whitlam if he intended to govern without supply and when the prime minister replied that he did he was verbally informed of his dismissal.

In fact Whitlam honestly could have said that he could guarantee supply because a small but sufficient number of Liberal senators probably would have crossed the floor. However, the Governor-General could only go by what Whitlam said and his response that he intended to govern even if then Senate deferred supply was the trigger for His Excellency conveying the verbal (as opposed to actual) dismissal of the prime minister. Whitlam’s re-action that he intended to contact the palace was the trigger for the Governor-General to affect the actual dismissal by revealing the signed document dismissal to the now former prime minister.

Gough Whitlam in his later vitriolic denunciation of his dismissal omitted that he still could have thwarted Malcolm Fraser’s being commissioned caretaker prime minister- by stopping the passage of supply bills by the Senate. The political numbers in the Senate were evenly poised between Whitlam supporters and opponents that had the former prime minister informed ALP Senators of his dismissal they probably would not have voted to pass supply bills for a Fraser government. Coalition senators by contrast were informed of the dismissal and voted for the supply bills.

With the Senate’s passage of supply Whitlam informed his colleagues of his dismissal so that the House of Representatives would pass a vote of no-confidence in Malcolm Fraser so that he (Whitlam) could be re-instated as prime minister. To expedite this the former Speaker of the House of Representatives Gordon Scholes went to the Governor-General’s official residence to petition for Whitlam’s re-instatement.

Schole’s action was however a farce. The only prerogative that Malcolm Fraser had as caretaker was to request that a double disillusion election be called. Mr. Fraser was specifically commissioned as care-taker prime minister by the Governor-General on the condition that he agreed to call a double disillusion election for the 13th of December 1975.

Consequently when the House of Representatives passed its vote of no-confidence there was already a caretaker prime minister who had the constitutional right to call an election and to govern the country in the interim (without making any appointments or dismissals) until a new government had been elected. The exercise of reserve powers by the Governor-General ensured that sovereignty remained with the people by allowing them to vote in a federal election which resulted in a landslide to the coalition.

Furthermore, the revelation after the December 1975 federal election that Whitlam had been complicit in trying to raise petro-dollar loans from Baathist Iraq should have squelched any notion that it was wrong for either the Senate to have deferred loans. This particular revelation should also have resolved any question that it was wrong for the Governor-General to have facilitated an early general election so that the Australian people could resolve the crisis.

Whitlam attempted to obscure the fact that the supply crisis (which Sir John Kerr had not initiated) was resolved by the people voting in a federal election by denouncing the legitimacy of the dismissal. Perhaps this was understandable because to be deprived of leadership of a nation is more often than not a difficult blow.

However, the former prime minister was in the wrong to condemn his dismissal as divisive when it was he who led an unrelenting hostile campaign against the person of Sir John Kerr. Whitlam’s personal vendetta against Sir John Kerr was all the more reprehensible if one considers that Jack Lang refused to condemn the then New South Wales Governor Sir Phillip Game for dismissing him as premier in 1932 after he moved to repudiate paying international debts that the state owed.

In contrast to Whitlam, Sir Phillip was able to warn Premier Lang that he intended to dismiss him if he moved to repudiate New South Wale’s international financial obligations. Following the dismissal the former premier and Governor went out of their way to be publicly on good personal terms so that there would be no political discord in the community. Jack Lang in contrast to Gough Whitlam did not need to create a myth to conceal his personal leadership failings due to his courage and positive achievements in public life.

Sir John Kerr similarly did not have to create a myth because he did nothing wrong in how he had conducted himself. His Excellency demonstrated his sense of duty by deciding against resigning after the December 1975 election to stay on as Governor-General and tour the nation to help establish the legitimacy of the dismissal. Undertaking public engagements in the midst of a vicious campaign of abuse were acts of courage by Sir John Kerr and his wife Lady Anne.

As the Governor-General had originally intended by undertaking his public engagements the cycle of rancorous protests had petered out by the time Elizabeth II toured Australia in 1977 as a very important part of that year’s Silver Jubilee celebrations. Having selflessly served the nation Sir John Kerr *resigned as Governor –General just prior the December 1977 federal election in which the coalition was returned with its massive majority from the 1975 poll virtually intact.

(*Sir John Kerr had announced in July 1977 his intention to resign in December that year).

The Age’s recent vilification of the character of Sir John Kerr (who died in 1991) in order to help mythologize Whitlam is uncanny in the current political context. This is because the major reasons why the Whitlam government was Australia’s worst government – its pursuit of a *rent-seeking agenda and attempts to abolish states to further this agenda - are now the major political issues confronting Australia. An inter-related issue is whether federal and state politicians will now have the courage to stop the tragic infliction of rent-seeking that has being in train since the Howard government’s 2007 re-election was sabotaged from within?

(*A prime example of the Whitlam government’s rent-seeking agenda was reflected by his Minister for Minerals and Energy Rex Connor attempting to illegally raise loans through a Pakistani middleman Tirath Khemlani for the federal government to buy Australia’s natural resources).

The Impending Tragedy of the Gillard Government

Alas, the present indications are now that the Gillard government is finally succumbing to pressure to pursue a rent-seeking agenda. This is reflected by the release of very expensive government initiatives such as denticare that Australia’s current revenue base cannot cover. Consequently a dud RSPT will be re-canvassed to ostensibly fund recently announced government programmes. This will, in combination with the destructive impact of the carbon tax, create an over-reliance on the mining sector dominated by an oligopoly of five mining companies with links to a mercantilist PRC.

A tragedy in all of this is that supposedly left of centre political actors (such as ALP parliamentarians and journalists) are forcing Prime Minister Gillard into an agenda that will ultimately pave the way for Tony Abbott to become prime minister of an entrenched far-fight rentier regime in which they will have no place.

Therefore, the previous successes of Julia Gillard’s with regard to (re)-establishing an effective arbitration-enterprise bargaining system of industrial relations, in bolstering the teaching profession and the nation’s system of vocational training can avoid being squandered by the Gillard government refusing to allow Australia to go down a rent-seeking pathway. This is now the historic ‘fork in the road’ that the ALP previously referred to in its 2007 election campaign.

The threat of rent-seeking that Australia has as a mineral resource rich nation have usually been countered by viable political actors in the form of effective leaders, independent political forces and institutions, such as arbitral supports. The nation has endured the infliction of destructive public policy (such as so-called ‘economic rationalism’ in the 1980s and 1990s) because of the resilience of a range of Australian socio-economic actors.

However Australia’s effectively being brought into the vortex of contemporary mainland Chinese politics by CCP mercantilists co-ordinating with Australian rent-seeking forces seriously threatens the nation’s capacity to at least maintain its economic independence. Perhaps it is not too grand to say that if Australia resists rent-seeking then mercantilists within the CCP might be sufficiently undermined ?

For the above scenario to occur Australia does not have to become hostile toward the PRC but rather safeguard its genuine domestic national interests. Indeed, the PRC could not have become a super-power had the focus of the nation’s leadership since 1978 being to first be internally strong with the over-ridding objective of maintaining national unity at all costs. If Australia under Prime Minister Julia Gillard’s leadership safeguards the nation against the domestic threat of rent-seeking this might be the ultimate in ensuring that Sino-Australian relations are maintained on a ‘win-win’ basis.

Indeed, the recent September 2012 “Australia in China’s Century” Conference was essentially an event which highlighted the determination of elements of Australia’s political elite to maintain a ‘win-win’ approach to Sino-Australian relations despite the essential end of the China mining boom. The Australian component of the ‘win’ scenario however referred to the interests of a would-be rentier elite rather than Australia’s genuine national interest.

Whatever the motivations of the Australian participants in the “Australia in China’s Century” Conference this event was significant in its own right because it signified that the China mining boom is effectively over. This boom effectively ended in late August 2012 when the price for iron and ore fell to $A 80 a tonne. Although this price has since risen to $100 a tonne is all but impossible that the high of $160 a tonne for iron and ore will ever re-occur in the foreseeable future.

Even thought the China mining boom has ended this does not mean that the underlying objective of creating a new rentier elite has been forgone, far from it. Even though the MRRT is unambiguously a dud tax the ramifications of its official existence still contributed to undermining investor confidence in Australia’s mining sector. This has been reflected by the steep fall in the share prices for Fortescue Metals that the interests of the three mega-big corporate mining companies and the private mining companies respectively owned by Gina Rinehart and Clive Palmer are still being consolidated by their links to a mercantile PRC.

The attendance of corporate, media and political leaders at the September 2012 “Australia in China’s Century” Conference such as Kerry Stokes, Paul Kelly and Treasurer Wayne Swan is reflective of a determination to re-configure the power connection despite the effective end of the China mining boom. Indeed, the essence of the PRC’s continuing economic and political power in Australia is dependent upon restricting the investor base in the mining industry while perpetuating an overdependence on this sector.

It will therefore be important for the Gillard government, if it wishes to maintain its *integrity as an independent political actor, not to move to an RSPT. The action of the Newman government in Queensland in steeply raising royalties for coal could be part of a strategy to create a narrative that an RSPT should be introduced to replace state mining royalties. At the very least the Newman government’s increase in royalties for coal could have the effect of also restricting the investor base which is crucial to the mining sector remaining internationally competitive.

The motivation of the Newman government in increasing royalty charges raises the broader question as to whether the LNP government is really opposed to rent-seeking. Premier Campbell Newman’s call for industrial relations ‘reform’ in the mining sector also highlights the dangers of Australia being overly dependent on one sector of the economy. This is particularly the case because mining corporations were the driving forces in the 1980s behind the so-called ‘New Right’ whose specific (and continuing agenda) is to crush Australia’s arbitral system of industrial relations.

(The term ‘integrity’ does not only mean being morally upstanding but can refer to an entity maintaining its wholeness).

Crucial to the maintenance of Australian industrial rights and the nation’s tradition high standard of living is not only having an arbitral industrial relations system but also having a diversified economy that is conducive to employment growth. It is in this context that the infliction of a carbon tax is so disastrous because the price increases in production will be passed onto the Australian economy by 2013 by which time it will be too late for either a Gillard or recycled Rudd government to avoid electoral annihilation.

Given the ALP’s previous abysmal record of the Hawke-Keating (1983 to 1996) era is economically safeguarding the interests of rural/regional Australia it is ironic that if there is to be salvation of the Gillard government that this will depend upon it safeguarding the economic interests of the nation’s primary producers. As previously mentioned the American drought provides Australia with a distinct window of a golden opportunity to recover from the squandering of prosperity and economic capacity that occurred as a result of post-2007 ALP federal governments foolishly implementing a rent-seeking agenda.

A high international price for Australia’s primary produce exports is only half the equation for economic recovery and renewal. The half of the equation is for there to be an economic multiplier effect in which people in rural/regional communities can boost domestic demand by purchasing products and paying for services as a result of increased income. This dividend will not accrue due to the inflationary and de-employment impact of the carbon tax being apparent by either the first or second quarter of next year.

It is therefore imperative that the carbon tax be repealed and replaced by an ETS similar to the Carbon Pollution Reduction Scheme (CPRS) that Malcolm Turnbull had negotiated in good faith with the Rudd government in 2009. Although there is scope to improve this CPRS model its adoption in itself will stifle the infliction of a rent-seeking agenda on Australia.

The other crucial step that the Gillard government will hopefully undertake to protect Australia from rent-seeking will be to safeguard Australian agricultural properties from takeovers by PRC SOEs and the infliction of coal seam mining by corporations, some of which are actually Chinese SOEs. Because the implementation of a rent-seeking agenda is an inter-party endeavour the Gillard government will have to ensure that coalition state governments (such as the Newman government in Queensland and the O’Farrell government in New South Wales) do not betray the interests of farmers.

If the rural sector of the Australian economy is going to save Australia from rent-seeking then it will be necessary for Australian farmers and people living in regional communities to be independent political actors. At the very least this could be achieved by regional and rural voters placing pressure on their state and federal MPs (particularly state MPs) to safeguard state rights so that corporate interests cannot impose their rent-seeking agendas. Such a development would be a ‘win-win’ scenario for all Australians.

Will The Northern Territory Become A Beacon of Hope For Australia’s Indigenous Communities?

With regard to ‘win-win’, ‘win-lose’ and ‘lose-lose’ scenarios in Australian history a community that has consistently and tragically been on the losing side has been the nation’s indigenous community, the Aborigines. An important reason for this has been that for a variety of reasons they have not become sufficiently independent political actors in their own right.

An important reason for the lack of political development on the part of Aborigines was that Australia was the only one-time colony of Britain’s in which a treaty was not negotiated with the original inhabitants. While the institutional impact of the British Crown in colonial constitutions might have afforded Aborigines a degree of protection which arguably safeguarded them from extinction on the mainland this did not establish a framework for them to be independent political actors.

Therefore, the potentially most important advance for Australia’s indigenous people since 1788 may have come with the Country Liberal Party (CLP) winning the recent Northern Territory elections on August the 25th 2012. It is true that citizenship was at last granted to Aborigines as a result of the approval of an amendment to the Austrian constitution by referendum in 1967 and land rights been advanced by the Fraser Government in the 1970s after initial moves by the preceding Whitlam government.*

(*Probably, and strangely enough, the most effective government in Australian history to date in relation to supporting Aborigines was the Queensland state government of Sir Joh Bjelke-Petersen, 1968-1987. This was despite the then premier’s almost revelling in being denounced as a racist because of his strong support for mining on land which Aborigines often claimed possession.

The effectiveness of Sir Joh’s government in relation to indigenous affairs was due to Bob Katter, who served as minister for Aboriginal and Islander Minister between 1983 and 1987. Katter shifted effective control of reserves that many Queensland Aborigines lived on from government bureaucrats to their residents).

The constitutional granting of citizenship to Australian Aborigines in 1967 and of subsequent limited land rights as well as the provision of extensive social welfare still ignominiously failed to reverse the fact that they are the nation’s most disadvantaged community in relation to health, employment opportunities and high rates of prison incarceration.

Indeed, the disconnect between the provision of special welfare assistance to Aborigines and their continuing poverty was a factor which attracted some economically disadvantaged ALP voters to support the moronic One Nation Party in the late 1990s and early 2000s. This occurred on the basis of the belief by a substantial number of ALP supporters had that Labor state and federal governments were neglecting them by ineffectively focussing on Aborigines.

The fact that Prime Minister John Howard was able to win over many (if not most) one-time ALP voters who had briefly gone to One Nation Party over to the coalition parties to help him win the 2001 federal election was partly due to his prior refusal to issue an apology for the policy of removing Aboriginal children from their homes between the 1930s and 1960s. It is true that the history public policy concerning indigenous affairs in Australia was during this period was complicated because some white bureaucrats were sincerely, if condescendingly and paternalistically, motivated.

Nevertheless, it was ultimately wrong for governments to deliberately break up families based on their ethnicity. When it was all said and done the policy of forcibly removing Aboriginal children from their families was in keeping with a policy of assimilation which was premised on the assumption that Aborigines as a people would inevitably lose their sense of distinct identity because they came from such a supposedly backward culture.

John Howard as prime minister should have refrained from playing the politics of race with regard to both indigenous affairs and asylum policy. It is true that the political race card helped him gain previously stalwart ALP votes without which he arguably could not have won the 2001 and 2004 federal elections.

However, the fact that the then prime minister (Howard) was prepared to utilize the race card as part of a Lasch strategy should have been an indicator that he ultimately did not have the interests of the so-called ‘Howard Battlers’ at heart. This was reflected by the Howard government’s passage of Work Choices (No Choices) legislation in 2005 which ended the nearly century old award safety net established by Sir Henry Bourne Higgins 1907 Harvester Judgement.

Why The No Choices Legislation Lives on Spirit in the Federal Coalition

In relative fairness to Howard his comments in August 2012 in which he advocated a return to the industrial system that he had first introduced was not actually a call on his part for a return to Work Choices. Nevertheless, Howard’s underlying unitarist philosophy in which envisages excluding trade unions from the employment workplace was still conveyed.

The former prime minister specifically referred to the industrial relations regime that existed between 1996 and 2005 under his government’s Workplace Relations Act 1996, the main features of which were the introduction of individual bargaining agreements, AWAs and award simplification.

The No Choices legislation that the Howard government passed by parliament in late 2005 was even more of a radical and draconian departure in Australian industrial relations legislation than the Workplace Relations Act 1996. This was because the corporation’s power of the constitution was utilized as the sources of labour law for the so-called *Fair Pay Commission (sic) as opposed to the federal-states relations power.

(*Perhaps the Fair Pay Commission was appropriately named as the federal industrial tribunal if ‘fair’ referred to ‘low’ as opposed to setting sociably and economically just wage remuneration).

Due to this shift in the source of constitutional power the No Choices legislation effectively abolished safety award minimums with regard to wages and work entitlements. Furthermore, this legislation placed bargaining restrictions on unions which virtually made it virtually impossible for them to effectively represent their members. The 2005 passage of the No Choices legislation was also a repudiation of John Howard’s solemn long-standing pledge that no worker would ever be worse off under his system of industrial relations which had a non-union bargaining stream because a safety net would always be in place.

It was also interesting to note that the Victorian federal MP Kevin Andrews was the minister responsible for the passage of the No Choices law in late 2005, even though he was an avowed admirer of the then late B.A. Santamaria, who always claimed to be pro-union. In federal parliament at the time of the passage of the No Choices legislation Andrews referred to Kim Beazley Senior’s claim, which Santamaria had repeatedly used, that the ALP was now filled with the dregs of the middle class as opposed to the cream of the working class as it had once being.

The then Employment and Workplace Relations Minister’s (Andrews) inference was that because the ALP and unions no longer legitimately represented the interests of the working class that this somehow made it alright to deprive workers of their employment rights and that they should be willing to accept substantially lower pay.

It is true that there were times when the ALP and the Australian union movement could have done more to have effectively represented the interests of working Australians by countering the so-called economic rationalism of the Hawke-Keating era in the 1980s/1990s. Nevertheless, it was beyond the ambit of ALP governments to ever have contemplated imposing an industrial relations system in which employee bargaining rights and just remuneration were undermined to the point of denial.

The so-called economic rationalism of the Hawke-Keating governments was mitigated somewhat by federal Labor’s Prices and Incomes Accord (the Accord) with the Australian Council of Trade Unions (ACTU). This was because unions had an important role via the Accord to help formulate social wage policies in the 1980s/1990s in return wages restraint. As important as this was, the Accord undermined the interests of Australian employees because the involvement of unions within the unofficial power structures of the Hawke-Keating era facilitated union amalgamation.

Had Santamaria not previously fundamentally undermined the Federated Clerks Union (FCU) in 1982 by purging them from the NCC at a time when John Maynes was fighting against the SL then smaller craft based unions might have used the clerks union as a shield against union amalgamation. The final loss of the FCU to the SL in 1991 set the scene for the union amalgamation of the 1990s and 2000s. The union amalgamation process of this period was an important fact in Australian union membership falling from over 40% at the beginning of the 1990s to the current level which is just over 20% of the Australian workforce. The resulting weakening of Australian unionism crucially helped Howard inflict the No Choices legislation in late 2005.

The Santamaria irony/tragedy continues with Abbott being the Opposition Leader because he is taking Australia on the rent-seeking pathway future which the late NCC president (who died in February 1998) would have probably have been notionally philosophically opposed to. This was because Santamaria’s underlying economic philosophy was based on decentralization in which he envisaged an economic environment in which small producers were productively viable.

For the above reasons Santamaria was an avowedly strong supporter of small farmers and the development of smaller regional communities. He also avowedly supported the Australian state fulfilling an important role in financial capital formation so that the power of corporate banks could be broken to help allow smaller financial institutions to lend to small business and farms. Santamaria also decried the high levels of unemployment/underemployment which he correctly attributed to the decline of Australian manufacturing.

The tragedy of Santamaria’s espoused policies was that his actions undermined their achievement. The hallmark of the Hawke-Keating era was the development of political corporatism between big business and new emerging industry unions. Had Santamaria not previously undermined the FCU then the trade union component of corporate power might not have been such that so-called ‘economic rationalist’ policies could have been applied which undermined Australia’s actual economic capacity and dangerously mired the nation in public foreign debt.

Even though Santamaria was correct in warning about the dangers of accumulating high foreign debt he still helped set the scene for the current rent-seeking threat by advocating that large reserves of superannuation funds be established for investment purposes to help secure Australian economic independence. Santamaria’s advocacy of this particular superannuation policy has actually helped set the scene for the introduction of SWFs which will be the hall-mark of a future Australian rentier state that Senator Sinodinos and Abbott are coercing the Gillard government into establishing and which they will consolidate after the coalition wins the next federal election.

The rentier state which Abbott and Sinodinos will consolidate will be the antithesis of Santamaria’s economic philosophical vision. Under Abbott and Sinodinos Australia eventually will be a high foreign debt nation in which big corporate businesses aligned to the mining sector will predominate at the expence of small producers. The current moves to compel New South Wales and Queensland farmers from their properties in favour of coal seam mines are a harbinger of the political economy that Australia will become – a primary resourced based economy which is subordinated to help ensure the effective functioning of a centrally planned PRC economy.

Australia might have avoided its current rent-seeking pathway had Howard and Costello’s greatest achievement not been undone by the Rudd government – the massive foreign debt which had been accumulated during the Hawke-Keating era. The re-accumulation of public foreign debt since the ALP was elected in 2007 is crucial in making Australia into a rentier nation. Howard and Costello’s commendable aversion to public foreign debt was probably an important reason why his New South Wales Right faction party power-base sabotaged his re-election in 2007.

This New South Wales based Liberal Party faction under Abbott and Sinodinos’ leadership is advancing a rent-seeking agenda by coercing the Gillard government inflict a carbon tax. Because of ALP acquiescence to rent-seeking Australian unions will hopefully internally strengthen themselves against attack from a future anti-union Abbott government. An important aspect of Australian unions protecting the interests of employees across Australia will be for rank and file union members being independent industrial actors by assuming more responsibility for workplace organising to secure and improve their pay and conditions.

The Importance of Aborigines Being Independent Political Actors

The importance of being independent actors is similarly the case for Australia’s indigenous peoples the Aborigines and Torres Strait Islanders. Aborigines have not become effective independent political actors since a constitutional amendment passed by national referendum in 1967 granting the Commonwealth the right to legislate on indigenous matters. An important reason undoubtedly for this is due to the relatively small number of Aboriginal voters throughout Australia.

However, in the Northern Territory the indigenous vote is proportionally substantial significant. This was reflected in the 1999 referendum to make Australia a republic where the Aboriginal vote was decisive in the territory voting to retain the monarchy.

Even though Northern Territory Aborigine voters had predominately gone against the Labor’s advocacy of republic the ALP still took this community for granted. In this regard Labor was essentially no different from the Northern Territory Country Liberal Party (CLP) which had long presumed that the territory’s Aborigines would always overwhelmingly vote Labor.

Despite the CLP’s name this party since self-government was granted to the Northern Territory in 1978 has really being a Darwin based political party since its foundation in 1974. The term ‘country’ had really been adopted to help avoid a potential demarcation dispute between the Liberal Party and the National Party (which between 1975 and 1982 was officially called the National Country Party and before that the Country Party) in the territory. Indeed, between 1978 and 1987 most political scientists who took note of Northern Territory politics considered the CLP to be a National Party affiliate.

This assumption concerning the CLP’s affiliation changed after February 1987 when Queensland Premier Sir Joh Bjelke Petersen ran his own National Party candidates in the territory’s parliamentary elections without the authorization of his party’s federal branch as part of his ludicrous campaign to become prime minister that year. Other than the CLP then becoming an unambiguous affiliate of the Liberal Party (even though a notional dual affiliation with the National Party has officially been retained) after 1987 election there seemed to be little scope for any other significant or surprising political change in the Northern Territory.

However significant political change did come to the Northern Territory when the ALP won a stunning upset victory in the 2001 elections by unexpectedly gaining the majority support of Darwin voters. Then Northern Territory ALP leader Clare Martin worked hard to gain the support of interstate migrants to Darwin who were open to the prospect of voting Labor. She also considerably bolstered the Labor cause by helping pre-select candidates with excellent community bases of support which meant everything in an electorate as relatively small and as close-knit as the Northern Territory’s.

The CLP’s capacity to counter Labor’s in-roads into Darwin by falling back on a minority white voting base in the bush was thwarted because Aboriginal voters overwhelmingly voted ALP. This was understandable because it was the exception to the rule for the CLP to pre-select indigenous candidates and indeed this party often did not stand candidates in majority Aboriginal bush electorates.

From a Northern Territory Aboriginal perspective ALP federal rule was probably a mixed blessing as it produced a combination of fixed social welfare delivery and consequent entrenchment of poverty which had cleared the way for Howard’s outrageous so-called federal intervention in 2007. There may have been some justification for federal Labor more strictly supervising social security payments to Northern Territory Aborigines in remote communities to try stop an over spending on alcohol.

However, the territory’s ALP government of Paul Henderson, who succeeded Clare Martin in 2001 as Northern Territory Chief Minister, overstepped the mark by replacing existing local government councils with so-called super shires. This action was an insult to the Northern Territory’s indigenous people who had not been properly consulted about this fundamental local government change.

To the CLP’s credit they harnessed indigenous discontent by encouraging Aborigines to join their party and extensively involving community leaders in their candidate selection process. Furthermore, in the 2012 election campaign the wide use of orange (the main colour on the Northern Territory’s flag) as the CLP’s campaigning colour not only fostered a sense of kinship among many Aborigines toward their new party but has also encouraged unity of purpose with non-indigenous CLP supporters who also adopted orange for campaigning purposes.

Nevertheless, a caution may be sounded that the economic and social interests of the Northern Territory’s indigenous community will fall into the established historical pattern where the hopes of a long disadvantaged community are dashed because potentially transformational events are often a one-off phenomena.

This need not be the case if the new CLP Chief Minister Terry Mills genuinely consults with the Territory’s Aboriginal community to re-establish democratic local government structures.

The CLP indigenous Members of the Northern Territory’ s Parliament not only have the chance to be independent political actors but also to be powerful in their own right. Therefore they should help ensure that the Mills government does not take any steps to allow the Northern Territory to be used as a testing ground for ‘regionalization’ (sic) by either a coerced Gillard government or a future Abbott federal government.

It should be pointed out that many Northern Territory Aborigines still support the ALP. Hopefully, partisan party rivalry within the territory’s indigenous communities will lead to there being competitive elections in re-established democratic local government structures. This could help ensure that Aborigines become independent political actors who effectively control and administer resources as a crucial first step toward overcoming entrenched poverty.

An important reason why the fifteen year long (1990 to 2005) Aboriginal and Torres Strait Islander Commission was an abysmal failure in representing the interests of indigenous Australians which was reflected by there never really being competitive elections for this statutory body. Due to non-Northern Territory Aborigines being more geographically dispersed and generally lacking electoral clout it may be more difficult for them to become independent political actors.

However a possible Aboriginal political renaissance in the Northern Territory may help show the way for indigenous Australians around the nation to become independent actors as a prelude to overcoming the deep seated problems of economic and social disadvantage. There is of course the argument that encouraging a distinct sense of Aboriginal political culture is conducive to promoting a sense of separation from non-indigenous Australia.

The above charge can be countered by the observation that the only ‘benefit’ of the terrible poverty that most Aborigines live has been that it has helped paradoxically and perversely protected them against assimilation. Therefore the formation of the indigenous First Nations Party (which unfortunately advocates an Australian republic but commendably supports statehood for the Northern Territory) is a positive step if it contributes to the process of Aborigines in and outside the *Northern Territory eventually becoming independent political actors as part of the process of facilitating genuine Aboriginal renewal.

(*The 2012 Northern Territory election results from an historically counter-factual perspective are indicative of what could have been in American political history had former American slaves in the South not lost their struggle in the 1870s to become independent political actors because President Grant had betrayed them. As a community of independent political actors American southern blacks could have formed and led American agricultural workers’ unions.

The Republican Party could therefore have had a strong base within the American labour movement which might have helped the GOP to become a political force that advanced racial inclusion while respecting cultural diversity. There is still future ample scope in the United States for inter-ethnic community unity being forged by the paradox of partisan party political divisions.

However, because the stakes are so high in regard to the 2012 presidential election determining the nature of the United States and the world’s economic direction in the context of the GFC it is probably best that blacks and Hispanics still overwhelming vote to re-elect President Obama on a one-off basis. This is because a Romney presidency will, on the balance of probabilities, lead the world to economic ruin and to the permanent entrenchment of socio-economic divisions in the United States substantially based on race).

Why the ALP Needs Independent Political Actors if it is to Survive

The August 2012 Northern Territory election result was also historic because it undermined the prospect for dismembering Australian states via ‘regionalization’ (sic). The super shires structure that that the former Henderson government inflicted on the Northern Territory could have served as a template for national ‘regionalization’ (sic).

There are probably ALP power brokers who still believe that they can consolidate their power via ‘regionalization’ (sic) and access to wealth in a rentier state by SWFs. However, as the Northern Territory 2012 election results indicate the ALP’s taking their base for granted can lead to an opening for a Lasch strategy to be applied. In the Northern Territory context the version of a Lasch strategy that occurred was positive because the CLP respected the right of Aborigines to be independent political actors.

Consequently the paradoxical challenge for the ALP is not so much to manipulate class divisions (which the rent-seeking Abbott Liberals have the capacity to do) but to respect the communities who traditionally support them. During the Hawke-Keating era (1983 to 1996) the ALP sold its base short by facilitating union amalgamation. This was a de-unionising process which weakened the potential union capacity to represent their members’ interests because the replacement of craft based unions with industry unions alienated too many former union members who refused to join these new super unions out of a sense of loyalty to their former unions.

Perhaps as intended by left-wing strategists in left wing trade unions the super union amalgamation policy undermined the social democratic right of the ALP by depriving moderate Labor moderates of a stronger base in the labor movement. Therefore, had the Federated Clerks Union (FCU) not been eventually lost to the Socialist Left (SL) faction in 1991 then the numerical and resource strength of this union could have been utilized to support the existence of smaller craft based unions such as the Hairdresser’s Union.

The existence of a range of numerically smaller craft based unions that were more responsive to their members needs and could have provided a base of positive social democratic ideological formation for anti-Marxist members of the Australian Labor Party. Alas, due to the onset of union amalgamation Labor Unity* factional heavy weights too lack a sense of ideological/philosophical direction that they promote the special interests of sections of corporate Australia such as the National Broadband Network (NBN).

(*The non-SL ALP Right faction goes by a variety of generic terms which vary from state to state and from sub-faction to sub-faction. For simplicity’s sake the ALP Right in a factional context is referred to as ‘Labor Unity’).

There are also Labor Unity heavy weights which bring their particular expertise to public policy such as defence. However, despite the intensity and political skill of many Labor Unity operatives they do not belong to a faction with adequate grassroots to rank and file members of unions or the ALP.

The above criticism may seem to be too left-wing and therefore non-applicable to the Labor Unity faction. However, Labor Unity’s lack of social democratic philosophical formation is conducive to their leaders too often pursuing self-interested agendas which will ultimately deprive this faction to maintain a sufficient political base in Australian politics in the long-term.

An important factor which could help moderates who are now unfortunately in amalgamated industry trade unions to remain strong would be the application of the organising union model. This model provides a broad sense of direction as to how to facilitate rank and file support for unionism at a workplace level. The effective application of the organising model could help for employees to become independent actors which would contribute to union effectiveness within Australia’s industrial relations system

The hard left of the SL is still however better positioned to utilize to their bases in their industry super unions to harness the support of ALP rank and file members who have a stronger sense of left-wing ideological formation. This also helps set the groundwork for hard left of the SL to eventually outlast Labor Unity and for rent-seeking Liberals to apply a *Lasch strategy to appropriate the support of once stalwart ALP voters.

(*The application of a Lasch political strategy by the rent-seeking Abbott Liberals not only threatens moderate elements within the ALP but also the hard left of the SL and the Greens. The 2012 New South Wales and Queensland state election results should serve as a warning to the Australian broad left against colluding with Abbott to undermine established economic, industrial and political institutional settings. However, self-appointed left-wing radicals in Australia’s arts, economic, industrial and political sectors do not realize that the short term power-over gains will ultimately set the scene for an Abbott rent-seeking government to dispense with them due to the pulverization of too many independent political actors in different spheres of Australian life).

The major hope for Labor Unity faction is for its leaders to do what they can to help Australia to have as many socio-economic and political actors as possible so that Australia does not succumb to rent-seeking. A horrendous hallmark of rentier states are high levels of political apathy and/or political regimentation. Due to the vital importance for there to be small producers to have access to financial capital so that the GFC does not become a cataclysm nations all round the world (such as Australia) need more independent economic actors as practically possible.

Dr. David Paul Bennett is the Director of Social Action Australia Pty Ltd.