Gordon Campbell on Labour’s next leader, and Putin’s problems

Now that the Labour leadership pageant has finally ground to a halt, the voting (and the guesswork about the likely result) can begin in earnest. At this point, no one really has a clue as to who will be announced as the winner next Tuesday, but the most common speculation around the traps is that Andrew Little seems the most likely victor – if only because of his CV. Little, now 49, has been head of New Zealand largest union (the EPMU) and is a former president of the Labour Party – and he’s generally regarded as having made a fairly good fist of both those jobs. While the affiliated unions and party members do not vote monolithically, they do account for 60% of the vote. Within caucus, Little could also reasonably expect to pick up most of the enemies of the old Anyone But Cunliffe bloc, obviously apart from Nanaia Mahuta.

Wisely, Little has not promised the unions/party anything by way of policy candy beyond the big one – that he will deliver an election victory and is willing to dump anything (goodbye, capital gains tax) that’s likely to get in the way. Getting rid of the Nats is what unions/party members want; policy, shmolicy, just do it. The lingering question mark is what role, if any, the preferences will play, and those preferences are what Grant Robertson will be pinning his hopes upon. For that reason, Little supporters will presumably be ranking Mahuta second and Robertson fourth. The very unlikely (but grimly amusing) outcome would be if tactical voting of this sort inadvertently delivered David Parker the top job.

Despite Little being the most plausible guess, it is still only a guess. For all the talk about party unity, there is one outcome that would torpedo that rhetoric from the outset: namely, if the caucus went in one direction, and the party/unions went in the other, thereby handing the mainstream media a club that they will gleefully use to beat the new leader into the ground. As in… see, even your own caucus don’t want you, how do you propose to unite this irredeemably fractured and fractious organization when the Labour Party and affiliates are at loggerheads with its parliamentary wing etc etc etc.

Is it too much to hope that the Labour caucus will recognize this freight train headed their way next Tuesday, and take their last chance to divert it onto a sidetrack? How? By voting wholeheartedly for the likely winner – thereby giving him or her a solid, unified platform from which to commence the long march back to credibility. If the caucus fails to do so, and selfishly delivers a split decision next Tuesday…. then the “winner” should put them to the sword, and start building now for the election of 2020.

One small piece of housekeeping if Little does emerge as the victor on Tuesday…he either has to be found a winnable seat, or become only a list MP. Little’s track record on the hustings in New Plymouth (he lost to National’s Jonathan Young by 4270 votes in 2011, and by 9778 this year) is not compelling evidence for the argument that as the rest of New Zealand gets to know Andrew Little better, they’ll like him more.

Rumblings in Russia
While no-one is suggesting Russian leader Vladimir Putin’s position is under threat, his sky-high popular approval ratings happen to be based on the very same imperial policies and posturings that are driving the Russian economy into the ground. That’s not sustainable. There is no consensus in the Kremlin on how to respond to the West’s economic sanctions over the Ukraine, or to the global slump in oil prices – a major concern, given that over half of Russia’s revenues come from taxes on oil exports, which in turn get fed through to Putin’s billionaire cronies who run state-owned companies. The oligarchs and their investor friends are busily stashing their goodies elsewhere, while they can. Recently, Russia’s Central Bank reported net capital outflows of $128 billion in 2014, compared to only $61 billion remitted aboard by already nervous investors during 2013.

Those diverting stories from abroad about Putin hitting on China’s First Lady only serve to obscure a considerably less polite tussle for ascendancy being waged at home, on how best to respond to Russia’s stagnating economy. Reportedly, two major factions now exist – one led by Russian Prime Minister Dmitry Medvedev regards Russia’s growing alienation from the global economic system as unsustainable, and is also seeking to pursue market efficiencies within the domestic economy. The other group, which includes Putin’s chief of staff Sergei Ivanov and oil oligarch Igor Sechin support the galloping expansion of state control over the economy.

With the price of oil, Russia’s largest export, at a 27-month low and banks turning to the state for funding, there’s less money to go to the state-owned companies. “The long-running conflict between rival pro-Putin camps has elevated to war,” says Stanislav Belkovsky, a Kremlin adviser during Putin’s first term who now advises Moscow’s Institute for National Strategy, a think tank. “The elite are fighting for a shrinking pool of assets.”

In that fight, Medvedev’s ‘more market’ faction is clearly on the back foot. In August a deputy Economy Minister was fired after complaining on Facebook about the government breaking its promise to privatise pension funds by 2015. In September an oil tycoon called Vladimir Yevtushenkov – a close ally of Medvedev – was put under house arrest in a move against his business empire, which includes the Bashneft oil company and the Sistema telecoms, banking, construction, retailing and insurance conglomerate. The Yevtushenkov case is reminding many observers of Putin’s notorious prosecution (and jailing) more than a decade ago of former oil tycoon and political rival Mikhail Khodorkovsky.

Putin has done his best to reassure investors (a) who are looking nervously say, at the heavily indebted position of Putin crony Igor Sechin’s Rosneft oil conglomerate and (b) who are worried that the moves against the Medvedev faction are indicative of Putin’s intention to further nationalize – and to further isolate – Russia’s economy.

Putin has tried to reassure investors concerned that the case may be a prelude to a wider campaign to regain state assets. He said at a forum in Moscow on Oct. 2 that there won’t be a “mass review” of such privatizations.

As the Business Week report points out, when Putin came to power in 1999, state-owned companies comprised only one third of the Russian economy – now, they account for over half of it. Medvedev himself may not survive the inexorable drive for Putin and his cronies to consume the Russian economy. Plainly, the US-led economic sanctions against Putin for his imperial adventures in the Ukraine are taking their toll. In the short term though, the main losers seem to be the economic rationalists who have been seeking to integrate Russia with the global economy. No one can predict how Putin – whose political capital now depends almost entirely on the flexing of his nationalist muscles abroad – will respond to this ebbing of Russia’s economic fortunes.

Happy Days
I read somewhere that this video for Mr Mitch’s ridiculously titled ‘The Lion, The Bitch and the Bordeaux’ is actually comprised of family footage of the producer, as a child, at the fair. Which adds quite a level of poignancy to it.

In a not dissimilar vein of sun-dazed, drug-phased summer distraction, here’s the short version of ‘Horse Steppin’ by the California based experimentalist Sun Araw. Someone once called his music ‘Kraut-rock influenced retro-futurism’ and that sounds about right. Summer a temps perdu, and all that.