The Failure of the New McCarthyism

Yesterday was a big news day. Italy's constitutional overhaul was handily defeated at the polls, prompting premier Matteo Renzi to say that he will tender his resignation today; the Standing Rock Sioux triumphed, at least temporarily, in blocking the Dakota Access Pipeline (DAPL) from being routed beneath a dammed section of the Missouri River; and the Freedom Party underwhelmed Austrian voters, failing to unseat Alexander Van der Bellen in a do-over of last spring's presidential election.

All good news, I would say, though it is a little troubling to read (Jack Healy and Nicholas Fandos, "Army Blocks Drilling of Dakota Access Oil Pipeline") that Dave Archambault is telling all the water protectors to pack up and go home:

“It’s wonderful,” Dave Archambault II, the Standing Rock tribal chairman, told cheering supporters who stood in the melting snow on a mild North Dakota afternoon. “You all did that. Your presence has brought the attention of the world.”

The decision, he said, meant that people no longer had to stay at the camp during North Dakota’s brutal winter. The Corps of Engineers, which manages the land, had ordered it to be closed, but the thousands of protesters had built yurts, tepees and bunkhouses and vowed to hunker down.

“It’s time now that we move forward,” Mr. Archambault said. “We don’t have to stand and endure this hard winter. We can spend the winter with our families.”

Clearly the Army can reverse itself, and is likely to do so, once Trump gets into office. Many are promising to stay camped through the winter. But if the chairman of the tribe wants people to go home, that puts the water protectors at odds with their host.

This victory was won because of the robust numbers the indigenous peoples were able to marshal, the coup de grace being the arrival of the veterans. Now, the camp will shrink, and in a month or two, there will be a nighttime raid, a la NYPD of Occupy Wall Street, and that, very likely, will be that.

An interesting aspect of Renzi's flame-out is that in the run-up to Sunday's referendum he resorted to the Fake News playbook, accusing the "no" camp of spreading Russian-inspired false stories to gain advantage at the polls. Jason Horowitz's "Spread of Fake News Provokes Anxiety in Italy" is case in point (Horowitz is one of the reporters that NYT assigned to do hatchet jobs on Bernie Sanders during the Democratic primary):

As early as April, Mr. Renzi complained privately to his counterparts about Russia meddling in his country’s politics by supporting anti-establishment parties.

In November, he privately discussed the spread of fake news with other European leaders and President Obama at a meeting in Berlin. Mr. Obama forcefully assailed the phenomenon while standing beside Angela Merkel, the German chancellor, who has warned of Russian misinformation campaigns that “could play a role” in her own re-election bid.

Mr. Renzi’s private concerns were relayed by several current and former officials with knowledge of the conversations who were not authorized to speak publicly.

His biggest domestic opponent has been the surging and anti-establishment Five Star Movement, which would benefit most should he lose Sunday’s referendum on streamlining Italy’s bureaucracy.

Laura Boldrini, the speaker of the lower house of Parliament, said she had no information about whether the Five Star Movement trafficked in fake news or promulgated Russian propaganda. But she did say it was a growing problem in Italy.

“Fake news is a critical issue and we can’t ignore it,” she said this week. “We have to act now.”

On Wednesday, Ms. Boldrini met with Richard Allan, Facebook’s vice president of public policy in Europe, to discuss ways Facebook could limit hate speech and fake news on its pages.

“They can’t pretend that they are just a platform,” Ms. Boldrini said. “They are giant media companies.”

Buzzfeed and the Italian newspaper La Stampa recently reported that blogs, social media accounts and websites in Russia connected to the Five Star Movement were spreading fake news harmful to Mr. Renzi across their vast virtual networks.

Russia has long had close relations with Italy, especially under Silvio Berlusconi, the former prime minister and media tycoon who was a personal friend of Mr. Putin.

The story goes on to paint the Five Star Movement (M5S) as Kremlin dupes.

Fake News is a sure sign of the weakness and desperation that has taken hold of the neoliberal ruling class. Absent any proof that dire warnings about Fake News are effective in keeping voters aligned with a bankrupt neoliberal orthodoxy, the New McCarthyism has spread from Washington to Rome and Berlin.

My sense is that the New McCarthyism will soon have to be scrapped. It is not working; worse still, it is generating a significant push-back.

Say Goodbye to the Unipolar World: The End of Neoliberal Orthodoxy as We Know It

This Sunday two big votes will take place in Europe: Italy's constitutional referendum, and a do-over in Austria of last spring's presidential election. A "no" vote in Italy combined with a win by Norbert Hofer and his far-right Freedom Party will provide further proof of a rising populist tide in Europe that is swamping the old, almost completely discredited governing neoliberal orthodoxy.

An editorial yesterday in The New York Times, "Italy's Turn to Vote," pleads with Renzi to stay on as prime minister (he has promised to resign) if the constitutional referendum fails. The failure of the referendum -- which basically does away with the senate, making it easier to ram through structural adjustments in labor and tax law (the standard neoliberal "Washington Consensus" playbook) -- appears to be inevitable.

A piece in The Guardian yesterday, "Italy referendum: all you need to know about Renzi's crunch vote," summarizes:

You seem to be predicting that Renzi is going to lose. Are you sure?No. But almost all of the available polls show Renzi is behind and the country seems to be fed up with him. You never know, though: a whole host of factors, including a simmering scandal in Sicily about M5S, could diminish turnout for no and hand Renzi a victory. He could also get overwhelming support from up to 4 million Italian voters abroad, which could tip the scales in his favour in a close election. It just seems unlikely.

If he does lose and there is a new election, would M5S win?
There is a strong chance M5S could win based on current polls, but it is not a certainty. The party’s lack of experience could give Italians pause. One senator, Francesco Palermo, thinks that whoever wins – including M5S – would be far to the right of Renzi, putting much more pressure on Italy’s relationship with the EU, and probably leading to big changes in the country’s handling of the migration crisis.

Some of Italy’s biggest banks are in bad shape. How will the referendum affect the banking sector?There is increasing alarm that the political upheaval created by a potential no victory would disrupt plans to recapitalise Italy’s most troubled banks, including Banca Monte dei Paschi of Siena. Shares in Italy’s beleaguered banking sector are down more than 20% since Brexit, in large part because investors are worried about the outcome.

The failure of Renzi is an important moment in the collapse of neoliberalism. Renzi was once the great young hope to reanimate hoary neoliberal shibboleths such as "creative destruction," "competitiveness," etc. (See the Council of Foreign Relation's "A Conversation with Matteo Renzi.") If Renzi loses Sunday, coming at the same time that a lamed Obama vacates the White House and that Justin Trudeau has just approved the expansion of a massive pipeline to transport Alberta tar sands to British Columbia, there will be no telegenic pitchman left to front the neoliberal orthodoxy.

What is to be done?

The elite are desperate. They see no path forward. Europe tucked firmly under the wing of the American eagle is how U.S. global hegemony works. Brexit is a slow-motion crisis for Pax Americana; likewise Trump. The New McCarythism and wails about "fake news" are a "back to the future" Hail Mary to keep the revolting masses fenced in on the neoliberal reservation while the media monopoly hemorrhages ad revenue month in and month out. (The only business model that makes sense for the big daily newspapers is government subsidy.)

The bottom will drop out this spring in France. In a way it already has. The Socialists, who hold their presidential primary in January, are kaput. This means that with the nomination of Francois Fillon last Sunday, the runoff will almost certainly feature two candidates -- Fillon and Marine Le Pen -- who favor ending trade sanctions against Russia.

The U.S. engineered coup in Kiev, part of a strategy to block Germany's Ostpolitik integration of Russian into Europe, can be declared a failure. Say goodbye to the unipolar world.

Whose Scalp Next? Italy's Neoliberal Matinee Idol, Matteo Renzi

The Italian constitutional referendum is in a little more than three weeks, December 6. Italy's PM, Matteo Renzi, has vowed to resign if it fails to pass. He has since hedged on that. Renzi wants to centralize power to make it easier to implement labor market reforms and other neoliberal delicacies. His impending defeat will be another body blow to the rapidly disintegrating mainstream political order: This is Crispian Balmer's "Trump's triumph puts Italy's Renzi in difficult position," published yesterday by Reuters:

Donald Trump's unexpected victory in the U.S. presidential election is likely to make it even harder for Italian Prime Minister Matteo Renzi to win a crucial referendum on constitutional reform set for December.

Renzi was one of the few world leaders to publicly endorse Hillary Clinton and Trump's triumph has not only put the Italian premier in a difficult diplomatic position, it has also underlined the rise of anti-elite sentiment around the world.

"This factor is weighing against Renzi because at the moment for many Italians he represents the establishment," said Roberto D'Alimonte, politics professor at Luiss University in Rome. 

Renzi has said he will resign if he loses next month's ballot and was already facing fierce headwinds, with all opposition parties pitted against him and almost every opinion poll over the past two months showing the 'No' camp ahead.

However, a large number of Italians remain undecided, helping to fuel government confidence that the 'Yes' vote will eventually win and stave off a renewed bout of political uncertainty that is feared by the financial markets.

"The Trump win does show that populism continues in 2016 and suggests a 'no' vote in the Italian referendum could be stronger than we assumed," David Zahn, the head of European fixed income at U.S. fund manager Franklin Templeton, told Reuters.

The spread between Italian and German 10-year benchmark bonds was up 7.8 basis points at 1200 GMT at 154.05, the highest level since June when the closely watched gap jumped in the wake of Britain's vote to leave the European Union. 

The constitutional reform proposes drastically curbing the role of the upper house Senate, a move that Renzi says will simplify decision-making and ensure stable government. Opponents say it will make the legislative process more complicated and reduce checks and balances.

"WE ARE THE BARBARIANS!"

Italy's anti-establishment 5-Star Movement currently heads the opinion polls and its founder, Beppe Grillo, hailed Trump's victory, seeing it as a vindication of his own maverick stance.

"It is those who dare, the obstinate, the barbarians who will take the world forward. We are the barbarians! The real idiots, populists and demagogues are the journalists and the establishment intellectuals," Grillo wrote on his blog.

Jumping on the U.S. election bandwagon with an eye to the forthcoming referendum, former prime minister Silvio Berlusconi's Forza Italia (Go Italy!) party put out Tweets saying "In America, they voted NO".

The group's parliamentary leader Renato Brunetta called on Renzi to resign immediately and not even wait until Dec. 4, saying his pro-Clinton stance had weakened Italy's standing.

"From this day forward Matteo Renzi is politically finished, he is a dead man walking," Brunetta said in a statement. "No other European country sided with one of the two contenders like Italy did. Now Renzi must reap the consequences and take responsibility for his bad choices."

Renzi himself offered Trump his congratulations and said Italy's relations with the United States, its NATO ally, were "solid". 

The new U.S. president is due to visit Italy next May when the country hosts the 2017 summit of Group of Seven leaders.