Norman Solomon: there’s no there there

Not a day goes by without some left-liberal taking Obama to task for either warmongering abroad or cozying up to Wall Street billionaires at home. Their information is often very useful but when it comes to analyzing why Obama does what he does no matter what liberals write, there’s no there there, as Gertrude Stein once said about her hometown Oakland.

The latest example of this is Norman Solomon’s article in the latest Counterpunch, titled “The Democrats and the Afghan War: Meet the New Escalators“. Taking off his gloves and showing no mercy, Solomon writes about what some people are beginning to regard as Obama’s Vietnam:

Over the weekend, the Sunday Times of London reported that U.S. drone attacks along the Afghan-Pakistani border on Saturday killed “foreign militants” and “women and children” — while Pakistani officials asserted that “American drone attacks on the border . . . are causing a massive humanitarian emergency.” The newspaper says that “as many as 1 million people have fled their homes in the Tribal Areas to escape attacks by the unmanned spy planes as well as bombings by the Pakistani army.”

After neatly dismantling Obama’s excuses for intervening in what he calls Pakeestan, Solomon reveals what the liberal-left has up its sleeves if the president doesn’t straighten up and fly right:

For those already concerned about Obama’s re-election prospects, such war realities may seem faraway and relatively abstract. But escalation will fracture his base inside the Democratic Party. If the president insists on leading a party of war, then activists will educate, agitate and organize to transform it into a party for peace.

Is Norman Solomon out of his mind, or what? Activists have about as much of a chance of transforming the Democratic Party into a “party for peace” as I do in winning the next American Idol contest. My wife, who has heard me singing in the shower, can back me up on this. It is particularly shocking to hear this kind of reformist claptrap at a time when the Democratic Party has demonstrated its true colors in defiance of the people who voted for its candidates.

There is open discussion in the mass media about the clear class divide between the people who run the party and the voters. Evan Thomas, a Newsweek editor, described how “the ruling class” views the chumps who vote for their politicians:

By definition, establishments believe in propping up the existing order. Members of the ruling class have a vested interest in keeping things pretty much the way they are.  Safeguarding the status quo, protecting traditional institutions, can be healthy and useful, stabilizing and reassuring.

He goes on to include himself as part of this ruling class.

As the financial crisis deepens, there will be more and more discussion about the 800 pound gorilla that people like Norman Solomon are anxious to ignore. As anger grows over finance capital’s domination of the government, ordinary people will be looking for explanations why the Goldman Sachs of the world get bailed out, while auto workers get screwed. Even members of the ruling class propaganda machine that Evan Thomas belongs to will be pressured into not only calling attention to the gorilla, but warning it to back off. The latest example is former IMF chief economist Simon Johnson’s Atlantic Monthly article titled “The Quiet Coup“ that describes the government as a virtual financial oligarchy run by Goldman Sachs and company:

The oligarchy and the government policies that aided it did not alone cause the financial crisis that exploded last year. Many other factors contributed, including excessive borrowing by households and lax lending standards out on the fringes of the financial world. But major commercial and investment banks-and the hedge funds that ran alongside them-were the big beneficiaries of the twin housing and equity-market bubbles of this decade, their profits fed by an ever-increasing volume of transactions founded on a relatively small base of actual physical assets. Each time a loan was sold, packaged, securitized, and resold, banks took their transaction fees, and the hedge funds buying those securities reaped ever-larger fees as their holdings grew.

Given the obvious power of big corporations over the Democratic Party, it is rather disingenuous for Norman Solomon to talk about capturing it from such people and turning it into an instrument of peace or social justice. But you have to remember that Solomon dubbed Ralph Nader “a de facto ally of the current emperor (i.e. Bush)” when he ran as an independent in 2004.

There is a certain naiveté at work in his analysis, as if the divide in the Democratic Party could be resolved through any kinds of activism. What exactly does he have in mind? Lobbying Congress? When you read about Senator Charles Schumer’s wallowing in the troughs of investment banks in the New York Times, you can only conclude that a visit to his office by housing activists et al is a complete waste of time.

Lately I have become more sensitized to the power of big foundations over the wing of the liberal-left movement that Norman Solomon resides in. He founded the Institute of Public Accuracy in 1997 with a $200,000 grant from the Stern Family Fund, a foundation that was spawned from the fortune left by Julius Rosenwald of Sears Roebuck. The IPA depends on funding from other such foundations today, including the Stewart Mott Charitable Trust (Mott is a GM heir), the Rockefeller Brothers Fund, and the Wallace Global Fund (from Reader’s Digest). I imagine that all these generous benefactors believe in the need for remedying the abuses of the capitalist system, all the while stopping short of measures that would undermine the system that allows them to fund the IPA as well as penthouses on Fifth Avenue.

I have vivid recollections of Tecnica’s executive director Michael Urmann paying a visit to Stewart Mott in his Fifth Avenue penthouse in 1989 when we trying to get funding for a major expansion of our volunteer program in Southern Africa. Apparently Mott was more interested in watering the plants in his rooftop greenhouse than hearing our spiel. Urmann told me that he thought that Mott held his supplicants in contempt even as he felt validated in writing them the occasional check.

Speaking for myself, I think that our movement would be better off trying to find a way to fund itself through small donations on the Internet rather than relying on liberal foundations especially when they are hardly interested in any kind of structural change that would challenge their funding sources: major corporations.

In doing research lately on George Soros, with an eye to writing a history of Bard College, I keep coming back to Joan Roelofs, the professor emerita of Keen College who wrote “Foundations and Public Policy: The Mask of Pluralism”. In the conclusion of that book she observes quite presciently-considering the fact that it was written during a period of relative prosperity-that foundations are the last defense of a decaying economic system:

The liberal foundations undoubtedly will continue their attempts to fix up the economic system, constructing epicycles if that would prolong capitalism. They, and the World Bank, are well aware of the poverty and inequality that remain even in the richest country. We can expect that nonmarket techniques, such as microcredit, individual development accounts, and subsidized employment, will continue to be piloted by foundations and advocated for full-scale government adoption. It would not be surprising if elites joined the basic income guarantee movement, echoing the “negative income tax” proposal proffered by conservatives in the 1970s.

Ultimately, the 1930s’ proposals for economic planning may be revived and the myth of the “free market” gently laid to rest. In that case, whether we would have fascism, socialism, corporatism, or something else would depend on who is framing and creating new institutions. Compassionate liberals often advance solutions to poverty that require more wasteful and polluting production. At one time, it was thought that the military-industrial complex, without actual war, would provide adequate economic stimulus. It may be that permanent war, which burns surplus faster, will be the winner.

The Quitter

I first learned about Harvey Pekar in a New York Times Sunday Book Review dated May 11th, 1986. The reviewer, David Rosenthal, summed up Pekar’s debut work, “American Splendor: the life and times of Harvey Pekar”, as follows:

Mr. Pekar’s work has been compared by literary critics to Chekhov’s and Dostoyevsky’s, and it is easy to see why. His stories, as he puts it, are about “the cosmic and the ordinary,” about the working stiff’s search for love and transcendence, the bleak reality of life in a hard town and the reflections of a volatile, passionate sensibility that vibrates with everything around it.

Unlike Chekhov and Dostoyevsky, Pekar’s medium was the comic book, which made it even more imperative for me to track down. Like many baby boomers (technically speaking, I am a pre-baby boomer since I was born before the end of the war), comic books were as central to my early childhood as the Internet and video games are to today’s kids. Each new issue of Mad Magazine was a major event. I would pick up the latest copy from Abe’s Candy Store in Woodridge, New York and rush home to devour it. Next I would call a fellow 11 year old, who was hip enough to get Mad Magazine’s subversive sense of humor, and discuss it as if it were the latest Woody Allen movie (in the 70s, to be sure.)

From that time onwards, I have bought every book published by Harvey Pekar, but somehow managed to bypass “The Quitter”, a 2005 comic book that can best be described as a coming-of-age work in the “Portrait of the Artist as a Young Man” genre. The comparison to James Joyce is intentional, since I am convinced that on its own terms “The Quitter” is a work that deserves as much acclaim.

For those whose knowledge of Harvey Pekar is based on “American Splendor”, the 2003 movie based on his books or the books themselves, “The Quitter” fills in the background on how he came to the point of launching a career in a genre that he would eventually dominate as a grand master. The irony is that his background would lead you to believe that he would never master this art, let alone the basic tasks of survival in a society that is characterized by its ability to grind people into dust. The title “The Quitter” alludes to Pekar’s tendency to quit various challenges before they got the best of him, ranging from a high school football team to college. Thank god for his willingness to not let writing get the best of him.

Harvey Pekar’s parents were Eastern European immigrants who settled in a working-class neighborhood in Cleveland. His father ran a small grocery store on more or less the same basis as my father’s fruit and vegetable store in the Borscht Belt in upstate New York. He put in long hours and trudged home each night to prepare himself for the next day. His father’s main interest, besides running the store, was religion. That was true as well for my own father besides playing poker with the other shopkeepers in Woodridge until my mother made him stop. Harvey’s mom was sympathetic to the Communist Party and even recruited the 9 year old Harvey to pass out campaign brochures for Henry Wallace in 1948.

As should be obvious, I feel a great deal of identification with Harvey’s early years-particularly with one incident that I went through in my own way. At a certain point, the Pekars decided to move to Shaker Heights, a Cleveland suburb that was a step up from the hard scrabble neighborhood they had been living in. His father, who did not own a car, came to pick him up from school in an old truck much to Harvey’s embarrassment:

One summer, when I was about 12 or 13 years old, my mother wrangled tickets to see the legendary Jewish tenor Richard Tucker perform at the Concord Hotel. She brought me and her mother in the family car, a 1952 Studebaker that not only looked like crap but was burning oil. When we arrived at the entrance to the Concord, the fanciest hotel in the Catskills, you could see a plume of smoke trailing the car for about 50 feet. My mom turned the key over to a valet who I heard make some wisecrack about the jalopy to the other valets. Meanwhile, the guests at the hotel out for an evening stroll in their mink stoles stared at us as if we were from another planet. It did not help that my deaf grandma spoke so loud that you could hear her from the next county. All I wanted to do is put as much distance as I could from these yokels as I could. Now at the age of 64 I feel somehow proud of the fact that appearances meant nothing to my mother. Plus, Richard Tucker was in great form that night.

If Harvey Pekar’s “The Quitter” was about nothing except his own coming of age, it would be worth the price since his story is so compelling. But beyond the Pekar story is the story of the development of an alternative culture that was bubbling up in Cleveland in the early 60s just as it was everywhere in America. Young people were bored and alienated by mainstream culture and were looking for something different. Harvey got turned on to jazz and began writing for a prestigious magazine at the age of 19, making him a local hero in his neighborhood. He also made a pilgrimage to New York City to seek out the beat generation, which by this time was much more of a tourist attraction than a happening scene. All in all, his spiritual and artistic growth was shaped by the same social forces that affected an entire generation, me included. If you are at all interested in finding out about the emergence the new political and cultural movements that came to a head in the 1960s, “The Quitter” is essential reading as well as a delight to read page after page. “The Quitter” is available from amazon.com.

The contradictions of Bat Ayin

Bat Ayin’s hippie fascists

Yesterday a Palestinian youth penetrated the Bat Ayin settlement in the West Bank and killed a 13 year old boy and wounded another 7 year old boy with an axe. Ofer Gamliel, the father of the wounded 7-year-old, is serving a 15-year prison term for planting a bomb outside a Palestinian girls’ school in Jerusalem in 2002 to go off at the busiest time of the morning. But, according to the N.Y. Times, there was no evidence that the attack on the boy was retaliatory.

Bat Ayin figured heavily in a PBS documentary on ultra-Zionists that can be watched online. Go to the PBS website and view the segment titled “A Plot that Shocked All Israel” for the facts on Ofer Gamliel’s terrorist plot that involved other members of what might be reasonably called a fascist Jewish sect.

Bat Ayin propaganda film

One thing that the PBS documentary does not get into is the “new age” character of Bat Ayin, something the N.Y. Times alluded to in its May 19, 2002 report on the bombing plot:

Most of the six detained so far come from Bat Ayin, a cluster of 13 trailer homes near Hebron that has attracted people known here as the “New Age” religious, a mix of newly observant Jews, Lubavitchers, and Bratslav Hasidim, followers of a rabbi who preached joy in Ukraine 200 years ago. Strict rules require men to grow beards, women to wear modest dress; in contrast to many settlements where menial labor is done by Arabs, there are no non-Jewish workers.

Indeed, the Bat Ayin sect’s religious ideology is referred to as Chavakuk, an acronym that stands for Chabad, Breslov, Carlebach and Kook. The aforementioned Carlebach is none other than Shlomo Carlebach, a Hasidic rabbi who launched a congregation on the Upper West Side of Manhattan that challenged conventional Jewish ideas about spirituality and ethics. He was a folk-singer who would energize his services with traditional Hasidic songs mixed with spontaneous recitations of religious fables. On a website devoted to the memory of Shlomo Carlebach, you can find the following quote:

After the Six Days War, I was one of the first people to walk into the Old City of Jerusalem. I walked up to every Arab, our cousins, and kissed them. I went to the top politicians in Israel and said, “We want to live in peace with the Arabs. As much as we need an army to make war, we need an army to make peace. Give me five thousand free plane tickets to bring holy hipp’lach [hippies] from San Francisco to here. We’ll go to every Arab house in the country. We’ll bring them flowers and tell them that we want to be brothers with them.

Needless to say, the Bat Ayin settlers are not that interested in peace but they certainly do embrace some values that resonate eerily with the 1960s counter-culture. The website for the school Midreshet B’erot Bat Ayin (midreshet is the Hebrew equivalent of the Arabic madrassa) reveals an affinity for “Green” values:

Recycling is part of the basic Jewish way of Tikkun Olam – (Betterment of the World) through the way we live. By recycling, we elevate even the “lowest” materials by reconnecting them to a purposeful role in the cycle. This connects the sparks of holiness and purpose in each thing that we work with to its higher capacity.

Composting is a form of recycling, in which kitchen scraps and yard waste are turned into a rich earthy fertilizer over the course of several months. This is accomplished by making a pile, alternating layers of food scraps and yard waste with thin layers of earth, finished compost, or manure. Any kind of plant material can be composted. The finished product looks like dark brown earth and is rich in nutrients essential to healthy plant growth.

Now I have never given much credence to the idea that the Nazis were heavily into environmentalism, but this stuff really makes me stop dead in my tracks.

They are also into yoga apparently, but worry about whether they are acting as infidels if they adopt the One-Legged King Pigeon position. One adherent posted an inquiry to the midreshet authorities after the fashion of a good Shi’ite asking an ayatollah about whether masturbation is permitted by the Quran:

To Whom It May Concern; I am wondering about one of the items on your course description. You list something called Meditative Movement, which you describe as “Yoga and Kabbalah.” I am informed that various positions and movements in yoga are signs of obesiance to various Eastern deities. This being the case, how can it be permitted to perform yoga? Please advise me on this matter.

They reply to her thusly:

Rabbi Mordechai Goldstein Shelita: Dear Chana Bracha, Hi, I’m a secretary at Diaspora Yeshiva and I was the one who sent the reply to your e-mail about Yoga. I asked Rebbetzin Goldstein and she gave me a Hebrew quote which I sent as an attachment. Since you haven’t gotten it the second time around, I’ll try transliterating that part in English. The Rebbetzin said, “Chachmah BaGoyim Tamin, Aval Torah Al Tamin.” the goyim know the human body. The main thing is your kavanah (intention). Our intention is purely physical; health, breathing and exercising every limb. Yoga is widely used for this purpose and has been for many years.”. I want you to know that she consulted with her husband, Rav Mordechai Goldstein, the Rosh Yeshiva after she received your message, just to confirm that this was correct. Sincerely, Feigy Ellenbogen

For those who are unfamiliar with Yiddish or Hebrew lingo, the term goyim refers to non-Jews but in a derogatory fashion. In my household growing up, I used to hear my father say things like “the goyim like to drink too much.” Hearing such things and being forced to go to Hebrew school steeled my resolve to break from this suffocating religion the first chance I got. With the zealots at Bat Ayin, the term encapsulates their attitude toward the outside world and functions more or less as the term untermenschen did in Nazi Germany.

It is also of some interest that the Chavakuk principles are based partly on the teachings of Abraham Isaac Kook (1865-1935), the first Ashkenazi chief rabbi of the British Mandate for Palestine. The wiki article on Kook states:

Kook built bridges of communication and political alliances between the various Jewish sectors, including the secular Jewish Zionist leadership, the Religious Zionists, and more traditional non-Zionist Orthodox Jews. He believed that the modern movement to re-establish a Jewish state in the land of Israel had profound theological significance and that the Zionists were pawns in a heavenly plan to bring about the messianic era.

In other words, he was instrumental in fostering the kind of alliance between religious zealots and secular nationalists that came to fruition in the modern state of Israel.

Rabbi Kook had a nephew named Hillel Kook, who is better known as Peter Bergson, a leading member of the Irgun from the 1940s onwards. During WWII, Bergson was an activist with the “Emergency Committee to Save the Jewish People of Europe”. Despite his Irgun membership, Bergson attracted the sympathy of Lenni Brenner who discusses him at length in chapter 24 of “Zionism in an Age of Dictators“. It turned out that Bergson was willing to put the Zionist project aside when it came to the urgent task of rescuing Jews. By committing to this course of action, Bergson won the enmity of the official Jewish leadership that was staking everything on the creation of a Jewish state. They were so opposed to his emergency committee that they pressured the government to have him deported. Brenner wrties:

The committee mobilised 450 orthodox rabbis for an October march to the White House, but Roosevelt would not see them; he rushed off to dedicate four bombers to the Yugoslav exile air force, but the campaign continued. Peter Bergson emphasises: “The rich Jews, the establishment, always fought us. It was always the little Jews – and Gentiles-who sent in the money for our ads.” Sensing that there was now clearly enough public support for the cause, their leading congressional friends, Senator Guy Gillette and Representatives Will Rogers Jr and Joseph Baldwin, put in a Bill for a rescue commission. They pointedly emphasised that their proposal had nothing to do with Zionism. Hearings in the Senate in September were friendly, but in the House Foreign Relations Committee the Chairman, Sol Bloom, a Jewish Tammany Democrat from Brooklyn, bitterly attacked Bergson and the hearings went against the proposition. For good measure, American Zionism’s most prestigious figure, rabbi Stephen Wise, came to Washington to testify against the rescue Bill because it did not mention Palestine.

The liberal defenders of Zionism, including their fellow travelers at the Militant Newspaper, Spiked Online and the Alliance for Workers Liberty, get all worked up when Israel is compared to the Nazis. In my view, it is a mistake to liken one fascist movement to another. For example, Mussolini’s Italy had no particular desire to exterminate Jews while Franco’s Spain was willing to trade with Communist Cuba.

As the fascist movement in Israel congeals around the rancid mixture of religious zealotry and secular nationalism, it will have its own characteristics. Marxist scholars will certainly have their work cut out for them in analyzing this toxic stew, but analyze they must.

Restless Conscience

Colonel Claus von Stauffenberg: martyr to the anti-Hitler cause

Despite my interest in films (Sophie Scholl, The White Rose, The Black Book) that illustrate German resistance to Hitler, I lacked the motivation to see “Valkyrie”, a movie that NYFCO colleague Armond White regarded as “intellectually insulting”. Fortunately, there is an alternative. You can now rent “The Restless Conscience: Resistance to Hitler in Nazi Germany” from Netflix, a documentary that features survivors of the plot to kill Hitler as well as the wives of some of the martyrs to the cause. Since the movie was made in 1992, this is the only record we have of their testimony since most of the interviewees are likely now deceased.

The movie makes very clear that this was not just a General’s revolt. In addition to religious figures like Dietrich Bonhoeffer or social democrats like Julius Leber, the documentary focuses on the importance of lawyer Helmuth James Graf von Moltke, who came from a long line of Prussian military officers and who used his professional skills to aid Jews and other potential victims of Nazi barbarism to leave the country. In 1941 he wrote a letter that expressed his horror over the exterminations that were beginning to take place: “Certainly more than a thousand people are murdered in this way every day, and another thousand German men are habituated to murder… What shall I say when I am asked: And what did you do during that time?” In the same letter he said, “Since Saturday the Berlin Jews are being rounded up. Then they are sent off with what they can carry…. How can anyone know these things and walk around free?”

The wiki on Moltke states:

During Nazi Germany’s war with the Soviet Union, Moltke wrote a controversial opinion urging Germany to follow both the Geneva Convention and the Hague Convention, in order to comply with international law and to promote reciprocal good treatment for German prisoners of war; however he was overruled on the grounds that Russia was not a signatory to the agreements, with Field Marshal Wilhelm Keitel describing the Geneva Convention as “a product of a notion of chivalry of a bygone era.”

One can only surmise that George W. Bush might have had one of his underlings study the writings of Keitel for tips on the war on terror.

“Restless Conscience” examines the participation of Colonel Claus von Stauffenberg and Major-General Henning von Tresckow in the plot against Hitler (they are played by Tom Cruise and Kenneth Branagh in the Hollywood movie.) These were not what you would call humanitarians in the mold of Bonhoeffer or Moltke. Both were very conservative military men who finally decided to move against Hitler because they saw the war as a disaster. Stauffenberg in particular knew firsthand about the costs of war, having lost a foot, an eye, and all but two fingers of one hand in combat. It was his disability in fact that allowed Hitler to escape with his life in the July 20, 1944 bombing attempt. Stauffenberg brought a briefcase to a planning meeting disguised as cognac bottles. He went to the bathroom to set the timers but his mangled hand allowed him to enable only one of the bombs. Went it went off, it killed three Nazi officers but Hitler escaped with his life.

One of the most interesting revelations in this documentary is how uninterested Great Britain was in hooking up with the anti-Nazi resistance, particularly around the time of the Munich Agreement widely regarded as “appeasement”. People like Moltke, who thought in moralistic rather than class terms, did not appreciate how much support there was in Great Britain ruling class circles for an “anti-Bolshevik” policy, even if it meant backing a madman bent on the destruction of their own country eventually.

“The Restless Conscience” is a very old-fashioned documentary relying on interviews with the principals and stock footage of the Nazi army on the march, etc. But that does not detract from its power. Highly recommended.

Trailer for “The Restless Conscience”

George Soros: “I’m having a very good crisis”

‘I’m having a very good crisis,’ says Soros as hedge fund managers make billions off recession

By Mail Foreign Service

George Soros said the current economic crisis has been the culmination of his life’s work

A hedge fund manager who predicted the global credit crunch has said the financial crisis has been ‘stimulating’ and the culmination of his life’s work.

George Soros, who predicted the global financial crisis twice before, was one of the few people to anticipate and prepare for the current economic collapse.

Mr Soros said his prediction meant he was better able to brace his Quantum investment fund against the global storm.

But other investors failed to take notice of his prediction and his decision to come out of retirement in 2007 to manage the fund made him $US2.9 billion.

And while the financial crisis continued to deepen across the globe, the 78-year-old still managed to make $1.1 billion last year.

‘It is, in a way, the culminating point of my life’s work,’ he told national newspaper The Australian.

Soros is one of 25, top hedge fund managers from across Wall Street who have defied the credit crunch crisis to reap a total of $11.6billion (£7.9bn) last year.

—

The Guardian (London) January 21, 1994

INSIDE STORY: THE SPECULATOR; Three years ago he was just another Wall Street drone. He amassed fortune but little fame. Then George Soros began to invest in Eastern Europe, gambling on people instead of money. Today, the man whose currency dealing forced Britain out of the EMS, holds uncanny sway over 22 countries. Michael Lewis joined him on a whirlwiind trip round the Soros Empire

By MICHAEL LEWIS

(clip)

Soros had boyhood friends in Hungary put him in touch with Hungary’s leading dissidents: Istvan Rev, Miklos Haraszti, the coincidentally named Janos Kis. Separately, Soros befriended a woman named Annette Laborey, who since 1974 had been running from Paris an underground network of nonconformists from Eastern Europe. “In those days,” recalled Laborey, seated beside me on Soros’s jet, “the only capital was the network of confidence and trust. George came to me and said, ‘How much do you need?’ I said, ‘$ 10,000 would be really helpful.’ He looked at me and he said, ‘Annette, you must think larger.’ ” And for the next few years she did, funnelling Soros’s (anonymous) money into her network.

IN 1984 Soros opened his first office, in Budapest, and began all manner of subversive activities for which he is temperamentally very well-equipped. “I started by trying to create small cracks in the monolithic structure which goes under the name of communism, in the belief that in a rigid structure even a small crack can have a devastating effect,” he wrote in Opening The Soviet System. “As the cracks grew, so did my efforts until they came to take up most of my time.”

Says Liz Lorant, who worked with Soros from the start: “It was the excitement of what we got away with [that is irreplaceable]. We got away with murder. [For example] at that time Xerox machines were under lock and key. That was the way it was. In Romania you had to register a typewriter with the police. Well, we just flooded the whole damn country with Xerox machines so that the rules became meaningless.” In short, by the time the dust settled over the Berlin Wall – boom! bust! – Soros had accumulated a highly-charged portfolio of gratitude. The Great White Gods of Eastern Europe – Havel, Michnik, Kis, Haraszti – were all in his debt. So were all sorts of lesser-known, highly motivated people wending their way to high political office.

—

Record fine for Soros Fund over Hungarian transactions

Hungary’s financial supervisory watchdog announced Friday it had slapped a 1.6-million-euro fine on an investment fund founded by US billionaire George Soros, for manipulating the market.

The PSzAF said it had fined Soros Fund Management LLC for transactions on the Budapest stock exchange on October 9 that led to a “significant loss in value” of Hungarian OTP bank stocks, which fell in days from 4,000 forint (13.2 euros, 17.86 dollars) to 2,500 forint.

The PSzAF “is imposing a 489-million-forint fine on Soros Fund Management LLC… for violating the rules regarding the illegal manipulation of financial markets,” the supervisory authority said in a statement on its Internet site.

The Soros Fund has 30 days to pay this record fine.

The PSzAF said the fund started putting OTP shares up for sale at 4:27 pm on October 9, just minutes before closing.

“The timing, the number and the effects of these transactions on the market point without any doubt to a an illegal market manipulation,” it added.

OTP, Hungary’s biggest bank, was already hit hard by the financial crisis, like many other banks, but then saw its share value crumble in a few days after October 9.

In a statement Friday, Hungarian-born Soros responded he had been informed of the fine but insisted that he was not involved in the transactions.

“I no longer control the Soros Fund Management’s operations, I retired last year and now only oversee the transactions to do with my private account,” he said in the statement, published by Hungarian news agency MTI.

“Soros Fund Management is cooperating with the Hungarian authorities and has also launched an internal investigation” into the illegal transactions, he noted.

He added he was “deeply sorry the Soros Fund Management had carried out such a transaction.”

—

NY Times, April 2, 2009 Politics Add to Economic Turmoil in Hungary

By LANDON THOMAS Jr.

BUDAPEST – The streets of London seethed with protests as the Group of 20 nations met, but this capital was arguably more unsettled.

Days before the leaders of the Group of 20 gathered to make decisions – or avoid them – that would directly affect Hungary, Sandor Csanyi, chairman of OTP, the country’s largest bank, could not conceal the stress, despite putting on a brave face.

Mr. Csanyi’s puffy red eyes showed the toll of the last seven months: the near default of Hungary on its foreign debt, the 90 percent plunge in his bank’s stock price as short sellers took aim at OTP, and, most recently, the surprise resignation of Hungary’s prime minister, which has raised questions about the government’s ability to carry out crucial economic reforms.

“Hungary is not Iceland,” he said, drinking a glass of red wine as the Danube rolled by a riverside restaurant here. “And OTP is not Citibank or RBS.”

But OTP may be more similar to its western peers than Mr. Csanyi cares to admit. Short-sellers have laid siege to the bank, calculating that it has more sour loans on its books than it is willing to admit and that its cash cushion may prove insufficient.

Like Hungary itself, which thought it could borrow its way to prosperity in a post-cold war economy that seemed boundless, OTP relied on cheaply obtained foreign capital to finance its growth – a practice followed by many of its peers in Eastern Europe.

But when the nation’s currency, the forint, collapsed last year, the foreign-denominated loans soared in value, making it extremely hard for domestic borrowers to repay their loans as the economy shrank.

This week, the bank received a $1.8 billion government loan backed by the International Monetary Fund in return for a commitment to increase domestic lending.

As for Hungary, the $25 billion agreement it signed with the monetary fund last year has put it in an awful policy vise. Mandated to squeeze its budget deficit below 3 percent of gross domestic product, the government is in no position to stimulate an economy estimated to sink by as much as 6 percent this year.

There is no painless path to recovery.

“Hungary has an uphill struggle, but we know that,” Gordon Bajnai, the economy minister, said in an interview in late March. “We need a reform-minded government.”

On Monday, Prime Minister Ferenc Gyurcsany, the former Communist who has led the country since 2004, appointed Mr. Bajnai, a 41-year-old former businessman, to lead that effort as his successor.

But furious opposition from Hungary’s right wing – which has called for elections – may limit the scope of his ambitions.

Lajos Bokros, a former finance minister, says that the alternative to not meeting the monetary fund’s conditions is bankruptcy. He worries that the forint will fall even further amid the political uncertainty – a concern underscored by downgrades of Hungary’s credit rating by Standard & Poor’s and Moody’s this week.

“Hungary is falling behind Europe,” he said. “This does not create much room for optimism.”

It is popular here to explain the acrimonious state of Hungarian politics as a consequence of an immature democracy still torn by a long dispute between former Communists and their bitter enemies on the right.

But Peter Muller, a well-known playwright, said the problem was societal in post-Communist Hungary. “We had daydreams of capitalism during communism,” he said. “But then becoming rich became a religion.”

Mr. Csanyi, 58, is certainly rich but he wears his wealth in a rough-hewn manner and is happiest when hunting wild boar in the countryside. Born poor in a small village southeast of Budapest, he spent years working in Hungary’s finance ministry before taking over OTP in 1992 when the bank was privatized.

Since then, he has overseen an ambitious expansion in central Europe, buying banks in Serbia, Bulgaria, Russia and Ukraine.

When foreigners withdrew their capital in a rush last year, OTP’s stock collapsed, as short-sellers saw it as a proxy for central Europe’s financial maelstrom.

Among the most persistent was George Soros, the Hungarian-born financier. His fund was fined $2 million by Hungarian regulators last week for having manipulated OTP’s stock price.

Mr. Csanyi’s response has been unconventional to say the least: OTP has spent $350 million buying back its stock in a bid to raise confidence in the bank. “I think now they are afraid,” he said, referring to short-sellers.

Mr. Soros – who once tried to buy OTP – has apologized, but it is by no means clear that others who have shorted OTP in the past will turn tail now that the bank has become a buyer. Instead, with the bank’s loan book under pressure, Mr. Csanyi’s decision to deploy precious capital in such a way has raised as many questions as it has answered.

Two days after Mr. Gyurcsany’s resignation, Mr. Csanyi stood behind his desk in his office, his eyes fixed on a computer screen. OTP’s stock had had a strong opening for a change, despite the political news.

With a grunt of satisfaction, he said, “1,800 forints – that is O.K.” But it was still a far cry from its high of 10,900.

“Our loan portfolio is good,” he added. “There is no reason the stock price is so low.”

All the same, many investors have doubts. Morgan Stanley, in a recent research note, forecast that OTP’s nonperforming loans would reach 15 percent in the next two years and put a big dent in profits. OTP executives accept that nonperforming loans are on the rise, but they insist that the bank’s 15 percent capital cushion and an International Monetary Fund reserve fund provide a sufficient safety net.

OTP is also negotiating a subordinated loan from the European Bank for Reconstruction and Development, a multilateral institution with a mandate to aid eastern Europe. That process has been delayed by concerns that the deepening recession in Hungary would increase OTP’s burden of nonperforming loans.

But the cash is likely to come through. As the country’s largest bank and one of the most active in central Europe, OTP – like Citigroup and Royal Bank of Scotland, and indeed Hungary itself – is just too big to fail.

Unfortunately, there may be no such reprieve for its customers.

In a small walk-up apartment on the outskirts of Budapest, George Ivanyi, a founder of the Association of Bank Loan Victims, does his best to cope with an unceasing flow of Hungarians who have come to seek advice because they can no longer pay their mortgages after the forint’s collapse. Volunteer law students sip Red Bull while they counsel couples, and amid the buzz of activity a perpetually ringing phone goes unanswered.

“I feel the desperation of the people,” Mr. Ivanyi said. “The banks are responsible – but so is the government. They should not have approved these loans.”

One woman, he recounts, was so overwhelmed when the monthly mortgage bill on her Japanese yen-denominated loan from OTP suddenly soared 50 percent that she ingested a dose of rat poison and narrowly escaped death.

OTP executives say they are doing all they can to help customers repay their debts, and the association says OTP has been cooperative in working to devise solutions.

With volunteers too busy to answer the phone, many of those looking for help come in person – like Istvan Rakitovszky, 46, a construction worker who was laid off last fall and can no longer pay his Swiss franc-denominated loan from Raiffeisen Bank, a large Austrian-based bank.

He and his wife bought a small apartment two years ago, but they can no longer keep up the payments. Last week they received a letter from a collection agency saying their house would be repossessed. “I am afraid,” said Mr. Rakitovszky, his face gaunt, his clothes shabby, his eyes far away. “We have two kids. Where will we live?”

Said Sayrafiezadeh: When Skateboards will be Free

Q: So what do you say now when people start ranting about capitalism’s dying days?

A: People have been fucking saying that my whole life. I like my life, and I don’t really want to change. I don’t need society to be dismantled. I don’t want to feel guilty about the things I have. I have a 32-inch high-def flat-screen TV. I fucking love that thing, man.

So says Said Sayrafiezadeh in a New York Magazine interview. His newly published memoir “When Skateboards Will Be Free” recounts his youthful misfortunes as the son of two members of the Socialist Workers Party in Dickensian terms. Like Oliver Twist, he was on the receiving end of Fagin-like parents forcing Marxist politics down his throat while denying him  the constitutional right to own and love consumer goods, including a lowly skateboard.

Said Sayrafiezadeh: David Horowitz wannabe

Now, to my everlasting regret, this is a group that I belonged to for 11 years. As much as I dislike this sect, after reading a longish excerpt from Sayrafiezadeh’s book four years ago I almost felt like rejoining. No matter how much distaste I have for vanguardist posturing, it is dwarfed by men who get erections over a television set.

For reasons having everything to do with this great nation’s ideological insecurities and nothing to do with the book’s literary merits, it has garnered worshipful reviews in two of the most important ruling class newspapers. As befits today’s date, April Fool’s Day, the N.Y. Times review states:

Growing up in Brooklyn and Pittsburgh in the 1970s and ’80s, the author was a good little revolutionary, at least on the outside. When asked by a friend’s father, during the 1979 hostage crisis in Iran, what he thought of the situation, the author automatically replied (the caps are his): “I SUPPORT THE STRUGGLE OF THE IRANIAN WORKERS AND PEASANTS AGAINST U.S. IMPERIALISM.” This is not how you win friends and influence people in Pittsburgh.

Well, of course. To win friends and influence people, you regurgitate the ruling ideology of society, like how big television sets give you an erection or how illegal immigrants are stealing American jobs. Or, better yet, how the dirty Iranians are working feverishly to build nuclear weapons that they can launch against Israel and the U.S. because they hate Americans and their 32 inch television sets and other freedoms.

Movie inspired by Sayrafiezadeh’s memoir

The Washington Post’s Sunday Book Review was just as giddy over the book, although spending fewer words. Here is the review in its totality:

Said Sayrafiezadeh learned early and often the sacrifices — and conflicting principles — that come with being a revolutionary. His mother, a member of the Socialist Workers Party (and sister of “Bang the Drum Slowly” novelist Mark Harris) inflicted her ideology on her son at a young age. In solidarity with the United Farm Workers, she forbade him to eat grapes, leading the 4-year-old Said to steal the fruit, with his mother’s tacit approval, while sporting his “Don’t Eat Grapes” button. “I would stand leisurely in front of the mounds of grapes as if they were a buffet and I was considering my options,” he recalls in “When Skateboards Were Free.” The lesson, he explains, was ingrained: “desire + yearning = theft.” (For his mother, the calculus was more complex: “desire + yearning + theft = revolution.”)

Sayrafiezadeh looks back with wonder, even humor, at the many difficulties he faced in his childhood, the no-grapes rule being the least of them. In one unnerving scene, his mother leaves him in the care of a man she knows only as a fellow party member, who sexually abuses him. Despite his mother’s strong presence, at the center of Sayrafiezadeh’s story is his father, an Iranian math professor and socialist who left the family when Said was an infant and whose infrequent reappearances are marked by political lessons and tough love. But Sayrafiezadeh maintains a generous spirit throughout this eloquent memoir. Over dinner with his father one evening, Said even banters about his own job with one of America’s most successful capitalists, Martha Stewart.

I first ran into Sayrafiezadeh’s memoir when an excerpt appeared in Granta four years ago. It included the business about being molested. I scanned in the Granta article and posted it to a Yahoo mailing devoted to exploring the rather sick politics and culture of the Socialist Workers Party, which you can read here.

You will discover there how the book got its title:

On one occasion I mustered the courage to ask my mother to buy me a skateboard (they were all the rage at the time) and she took me to Sears to have a look. In the middle of the sports department was a bin filled with skateboards in bright bubblegum colours. A sign read $10.99.

‘Once the revolution comes,’ my mother said to me, ‘everyone will have a skateboard, because all skateboards will be free.’ Then she took me by the hand and led me out of the store. I pictured a world of long rolling grassy hills, where it was always summertime and boys skateboarded up and down the slopes.

Now I didn’t know Martha Harris, but I really find it hard to believe that the conversation between the two occurred in exactly this way. There is just something a bit too robotic about her response, calculated to convince the reader that these socialists lacked human feeling and compassion. This is not to speak of the doubt I have over a $10.99 skateboard being beyond her reach. After all, this is not like asking for a pony. But who knows.

All in all, this memoir is geared to the same market niche as David Horowitz’s “Radical Son”. As was the case with the Sayrafiezadeh’s, for Horowitz “Almost all conversation in our household was political, other than what was necessary to advance the business of daily life.” Horowitz was warned off baseball, “a form of capitalist exploitation,” and especially the Yankees, “the ruling class of baseball”. “To root for the Yankees,” as Horowitz did, “was to betray a lack of social consciousness that was unthinkable for people like us.”

Now I don’t object to somebody writing crude caricatures of Marxists if it helps them to sell a book. After all, we have survived 150 years of this kind of mudslinging hardly the worse for wear. As the New York Magazine is anxious to point out to the celebrity author, people have been “ranting about capitalism’s dying days” lately. When millions of people are losing their jobs and their homes, it does tend to make Marxism a bit more trendy than it was when Mr. Sayrafiezadeh was working for Martha Stewart.

Of greater concern to me is the charge of molestation, to which the N.Y. Times refers:

He is molested by a party member, in a scene he typically underplays. (When his mother reports the molestation, a party functionary shrugs and says, “Under capitalism, everyone has problems.”)

So, here we have it. The SWP not only forces children to go without skateboards, it shrugs it shoulders when they are buggered. What trash.

Whatever the faults of the SWP in this period, it would not tolerate child molestation. Male SWP members of long standing were expelled for using violence against their female companions so sexual abuse of a four year old would not go unpunished. This group might have had its problems, but this was not one of them. It is entirely possible that Said Sayrafiezadeh was abused, but it is impossible that such a crime would have been shrugged off using Marxist jargon. This bit of nonsense might appeal to the anti-Communist prejudices of N.Y. Times reviewers, but it is patent nonsense.

If the SWP was guilty of anything, it was turning into such a suffocating cult that the child of two of its members would turn into such a vengeful fabricator. Let’s hope that in the revolutionary party of the future we can create an environment where parents and children can relate to each other normally. I should qualify that by saying as normal as can be expected in bourgeois society, which the revolutionary party has to operate in.