Archive for March 20th, 2013

by lizard

I have a hard time taking the Bloomberg soda war seriously, including the shrill shouts of TYRANNY from the conservative blogosphere.

Is the soda ban lubricating a slippery slope toward health-based Nazism? Hardly. It’s just another stupid nanny state swipe at the symptoms of a much deeper sickness.

I’ve been impressed with what can actually grab and sustain people’s attention in this country. The National Defense Authorization Act? Yawn. Limit how much soda I can have per order? TYRANTS!!! Walmart workers trying to unionize? Meh. Replacement Refs blow a call at the end of a football game? FREAK OUT!!!

There is actually an alarming example of tyranny on display, happening right now, but you won’t find it if you’re frothing at the mouth for a BIG GULP.

Today Mike Whitney reported on Rick Snyder’s coronation of Kevyn Orr as Detroit’s new “Emergency Financial Manager”:

Far-right Governor Rick Snyder has ignored Michigan voters and installed Washington DC attorney Kevyn Orr as Detroit’s emergency financial manager (EFM), a position that will give Orr sweeping powers to tear up labor contracts, slash pensions, cut public services, and privatize city-owned assets. From March 28–the date when Public Act 436 kicks in –Orr will make the decisions that would normally be decided by elected officials, primarily the mayor and the city council. In other words, Detroit will become the first city in the US to have its democratically-elected government replaced by a financial dictator.

When I first heard about this legislative madness getting passed in Michigan, I was aghast. How can any politician, from either party, go along with this?

It’s important to understand that a financial crisis, if it’s serious enough, creates fantastic opportunities for power grabs. Just look at how Europe’s sovereign debt crisis created opportunities for technocrats to grab power in Greece and Italy:

It is well established that incumbent parties tend to suffer electorally in tough economic times, and the recent period provides many examples. Elections in the UK, Ireland, Spain and Greece led to governing parties losing, catastrophically in the case of Ireland, merely disastrously in the cases of the UK and Spain. Elsewhere fringe nationalist parties such as True Finns in Finland or the New Flemish Alliance in Belgium made major gains. The only notable exception to this pattern is Germany, where Angela Merkel is the only major European leader to have survived a post-crisis election.

The sovereign debt crisis affecting the Eurozone periphery has taken this logic a stage further: in Greece and Italy, governments have fallen before they have had to face the electorate. The replacement of Papandreou by the unelected former ECB member Papademus followed Papandreou’s public commitment to a national referendum on the EU’s bailout proposal, a project vehemently opposed by the European ‘Troika’ (the EU, IMF, and the European Central Bank). In Italy, Berlusconi’s scandal-tainted reign in power ended as Italian bond yield spreads hit dangerous highs, and EU pressure helped force his resignation and replacement by former European Commissioner Mario Monti.

These episodes may appear to be a political innovation borne out of the need to address an unprecedented financial and economic crisis. This is only true in part. In fact, technocratic, non-partisan rulers fit in perfectly with the way in which European institutions for economic governance have been designed. The Maastricht Treaty laid down rules and created institutions which would remove a good part of the economic policy autonomy that national governments in the EU had previously enjoyed. Policies such as the size of the public deficit and the public debt, formerly the subject of intense political debate between national political parties, were to be subject to strict fiscal rules. Similarly, the creation of an independent European Central Bank with sole control over monetary policy marked the end of decades of political debate over the appropriate balance between price stability and employment.

The EU’s debt crisis has moved to a new level this week with the Cyprus experiment; an attempt to seize depositor money with an alleged one-off “tax”. If anyone is curious why this little Mediterranean Island has suddenly become so important, this Naked Capitalism post is a good place to start.

But for those who aren’t curious, and instead prefer gnashing teeth over soda bans, Bloomberg’s nanny state restriction on soda size is, IMHO, a very convenient distraction.

First they came for our BIG GULPS…

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