neljapäev, mai 24, 2012

nothing's shocking


Ritual de lo habitual
The most shocking thing about the Reform Party's financing scandal, is that nobody is shocked by it. The Estonians around me believe that the giving of party contributions from unnamed or unknown sources to circumvent laws barring corporate donations to parties has long been an "open secret." So, I suspect another game is being played out behind the awesomely named* Silver Meikar's display of "honesty" -- an internal one among members of the Reform Party.

But nobody is shocked by it. My impression is that the majority of citizens living in Western democracies have an unwavering belief that their political institutions are corrupt, perhaps not as corrupt as in our "large neighbor to the east," but corrupt nonetheless. In the US, it is a variety of monied bogeymen, from the Koch brothers on the right, to George Soros on the left, who are seen as the puppet masters of policy. The UK scandal embroiling Rupert Murdoch's media empire has not shocked us either. In fact, I suspect a great many people believe that the phone hacking scandal is just cover for some deeper injustice committed in the name of wealth and infotainment. The only thing that shocks is how blatant the corruption has become.

What is interesting to watch in Estonia is the degree to which the popular media has covered the scandal, and it has received a lot of attention. My sense is that the popular media is to a large extent in at least covert support of the ruling establishment, which has been, for the past 13 years and in various guises, the liberals and the conservatives. As the first Laar government of 1992 to 1994 established the economic and social outlook of the state, this perspective has come to be seen overtime as the "Estonian" perspective, that is that Estonia by nature supports liberal economic policies and has a conservative national identity, and to question these policies and viewpoints is to, in some way, become opposed to the Estonian ideal.

A critical dilemma has developed in recent months for the status quo. The Estonian Social Democratic Party, led by Sven Mikser, has become the most popular party in the country. This was unthinkable years ago, when the very word "social" would induce Communism-scarred Estonians to nausea. SDE was historically the third or fourth party of Estonian politics, after whatever incarnations the conservatives and liberals found themselves in (Reform, Pro Patria, Res Publica, Union of Pro Patria and Res Publica) and Edgar Savisaar's Centre Party. But financing scandals in the "green monster," as Centre is called, plus internal divisions have torn apart the party, especially this year when many significant members resigned their membership. Centre has never gotten much love from the Estonian media, anyway, which is one of the reasons why Savisaar attempted to build his own media operation. The Centre Party "refugees" have not aligned themselves with any political party since, but SDE has become the only game for anyone who disagrees with the ruling coalition.

With SDE as the rising in Estonian politics, the Estonian media faces an interesting decision. Will it support -- between the lines, of course -- the emerging power, or will it continue to support the status quo, the coalition of the liberals and the conservatives? Will it make a financing scandal surrounding the elite a big deal? Could it use such information to drum up enough opposition to send the leadership into opposition?

As a journalist, I can tell you, it does not hurt to be in the good graces of the regime. You have articles to write, they have messages to send: it's a mutually dependant relationship. I have watched other journalists try to take down the authorities mano-a-mano, but they fail, because one semi-alcoholic reporter is no match for a mayor or minister with an army of salaried henchmen. Even the vaunted Woodward and Bernstein had their whistleblowing "Deep Throat," and so were part of an internal struggle taking place within the Nixon Administration. Yes, they were acting on a mission to "serve the people," but, as journalists, they still became soldiers for the faction that was disgusted with the nation's leadership.

That's why I find this scandal and the attention it has received interesting. Why Silver Meikar? Why now? What else is going on behind the scenes? That's what I want to know.


* Silver Meikar must have one of the best names in Estonian politics, right behind Andrus Ansip, also known as "Undress, Unzip." For those who don't know, it is pronounced "Sil-ver May-kar," which sounds like "Silver maker," as in, "Here is a man who will make you silver," a sort of Bond villain a la Goldfinger. But English speakers unfamiliar with Estonian pronunciation might read the name as "Silver My-kar," as in, "My car silver, you want go for ride?" Either way, a cool name.

31 kommentaari:

Kristopher ütles ...

The amounts are so small...the texture of this scandal so unsophisticated. Reporters have been mapping the lines of influence in the Reform Party for years, with as much enthusiasm and detail as some reporters chart Savisaar's dealings in the Russian cities.

There has to be some proof that some magnate (let's say a hypothetical shipping company boss, for no particular reason) divided a major donation among many rank-and-file members of the Reform Party. It would also help if we knew that the donation was made in exchange for something, and even better if we knew what that something was (let me randomly use the example of residence permits for his friends). Maybe there's a grand unified scandal here.

While the long-term trend is unmistakable, Reform and SocDem are neck and neck, it's not statistically significant to say one is more popular than the other. It's the season for cynicism, so I say because Estonian media are very negative news-driven, they will continue to focus in on Centre and Reform in equal measure. It's hard to imagine the Social Democrats in a scandal themselves right now. No one's on that beat. I think their greatest distinction is that they have been the victim in a fairly stupid Centre scandal. Poor Hannes Rumm! So Mikser will continue to draw off Centre's remaining votes, maybe some IRL people will join. That's not a majority in 2015, though, so what will happen then? I think the next government will be as social democratic as the Andres Tarand government, and the true left, such as it is, will be disgruntled on the back benches.

By the way, good name analysis.

Giustino ütles ...

I think the media has been harder on Savisaar, though he certainly invites it. For SDE, his political demise does create a problem, because they would need a Savisaar-less Centre Party with enough votes to form a left-wing coalition, but Centre is unlikely to get those votes without Edgar. And what will become of the unaffiliated Centre refugees? Iceland had one of these social democrat-liberal coalitions up until the crisis hit, so it is possible. Why aren't there more parties in the Riigikogu? There are eight parties in the riksdagen and eight in the eduskunta. I know there used to be more parties in Eesti, but they all imploded, or spontaneously combusted, or withered and atrophied, had hemorrhage after hemorrhage. Something like that.

Giustino ütles ...

PS. My car silver. You want go for ride?

Marko ütles ...

Kristopher, but the fact of 'small amounts' speaks for itself. Yes, it's just couple of grand, each, but it's like everyone is involved - thus all these 'couple of grand here and there' make up a substantial sum. It's mafia style money laundering and thats whats so scary about the whole incident. It makes it difficult to 'follow the money' and perhaps we'll never know whos the puppet-master in this case. Could be corporate business, but could also be Russian business or whoever. Ilves was right by saying 'national security has been put on line'.

I wonder also, as why Meikar came clean? Was he being blackmailed? As what I can gather this is political suicide. Whistleblowers never get re-elected and they will never participate in future decidion/policy making process of the party. That's it for the poor lad. But why did he do it?

It's up to the media now to shine some light, as the whole affair is likely to 'fade away' as with any other party political cockup in this country.

Liivimaa parim ratsutaja ütles ...

Savisaar going semi-openly to the Russian boyars to ask for pittance (half in cash, please), was pretty transparent action compared to this stuff.

All I can say is, it IS "pättide ja kurjategijate riik".

Liivimaa parim ratsutaja ütles ...

Actually the entire Meikargate reminds me the Super PACs controversy in the U.S.

Aren't the Super PACs similar in terms of "black money" flowing into the politics? It is all legit, nobody worries about quid pro guo bargaining that will likely result from it.

Who are actually controlling these Manchurian Candidates running for presidency right now?

Koch brothers? Putin? Arab sheiks? Mexican drug lords?

And whose money was Meikar laundering? Could they be the suspects named above? You know, trickle down wealth kind of thing ...

Marko ütles ...

Giustino, what about an update to this post with Ilves's Twittergate? Now that's what I call shocking.

Used to really like Ilves, but his reaction to Krugmans blogpost is beyond anything civilised. Or maybe it's common in America to talk this way?

Temesta ütles ...

But it will be good for Ilves, no?
Many Estonians don't like it at all when foreigners criticize their country.

Marko ütles ...

Nope, above all Estonians hate irrational emotionality. It is highly damaging to ones reputation. And what do you mean about 'not being able to take criticism'? There's a difference in being criticised or bullied or bashed. Krugman made a valid point, it was Elves who shot himself in foot.

Marko ütles ...
Autor on selle kommentaari eemaldanud.
Temesta ütles ...

What I mean with 'not being able to take criticism'? Well, Ilves comments are a good example. :)
I have noticed this also in personal discussions and in participation in online discussions. Sometimes people tell me that I don't know what I'm talking about and should be quiet because I'm a foreigner. But I guess you can find that kind of behaviour everywhere but it is striking that in this case it is the president who displays this attitude. Jürgen Ligi also stepped into the discussion, unfortunately with some ad hominem attacks.

Liivimaa parim ratsutaja ütles ...

Apparently Ilves made his posting well past midnight after being wined and dined by his Latvian hosts. The simple truth might be that he had one too many Red Bulls. In his normal state the guy is not that charismatically "winged". I am sure he would have jump on the chance to recall his un-edited utterances. There should be a re-call function on twitter. They could charge extra for that service and mint a pretty coin with that.

Marko ütles ...

I would take this opportunity and apologise for my fellow countryman, Temetsa. There's plenty of male chauvinism in this country and I would make my future acquaintances accordingly. And as it happens some of them make it to big politics.

LPM, there was a press statement this morning saying that the tweet was genuine (kasutatud oli sõna /siiras/ mis saab tähendada ainult seda et nii see oligi nii mõeldud, mis omakorda on äärmiselt kahetsusväärne.). All this chat about being nordic about life, is in my eyes utterly compromised.

Temesta ütles ...

All this chat about being nordic about life, is in my eyes utterly compromised.

Ilves was an important proponent of the idea that Estonia is Nordic but recently it seems he abandonded that idea. On twitter he twice referred to Estonians in this way:
- Let's sh*t on East Europeans.
- We're just dumb and silly East Europeans.

:)

I think all this points to a huge inferiority complex.

Liivimaa parim ratsutaja ütles ...

Look at it this way: after years of trying to unsucessfully sidle up to all these arrogant westerners and nordics plus failed attempts to impress his former Columbia University classmates by singing up for a job as a president of Elbonia he was ready to snap. It became personal. And snap he did. All he needed was a cause. In that sense Krugman was an innocent bystander.

Instead of meaowing, The Lynx has roared.

What happed was some sort of self-discovery. I think Ilves "vennastus" with Latvians really deeply. That profound spiritual experience regurgitated some latent tribal feelings and he jumped at a perceived outside threat. His baltic tribal high was fresh and he needed to mount somebody to quick. Krugman got the first dose of Balti-cum.

This is the new pan-Baltic revivalism. It all started with a train ride from Tartu to Riga.

Maybe he truly is in search of redefining his legacy. If he could create some unity among the Baltics and stop the subservient "kintsukraapimine" of the westerners, he's got it made.

In that, I support him. One day we would not have to downcast our eyes, gulp and explain that our country in located "south of Finland". We'd just say - in the Baltics.

No more apologies.

Marko ütles ...

But it's never been about if we are nordic or not. It was more about Nordic with capital N. And Ilves just blew it. And it's a shame. Being Baltic with capital B would now be on cards but that would mean overlooking decades of hard work that has gone in to. Besides Balts do not overly share our values and our goals where we want to see ourselves in the world. To achieve comfortable level of cooperation with Balts might be harder than with Nordics. We walk different bath at different speeds. That's the problem. Nordics is something we can realistically belong to in near future. Nautical is something we would have to create and then lead and keep on dragging the Balts with us. No I'm not too sure if we have the capacity to do that.

Temesta ütles ...

Marko,

I know we had this discussion before, but for me an important part of the Nordic values are egalitarianism and a good protective welfare state, something that I just don't see in Estonia, at least not in the mainstream. In terms of welfare spending and low taxation, Estonia, Latvia and Lithuania are very similar, while the difference with the Nordic states is very big. In Sweden and Denmark the top income tax rate is close to 60%, in Estonia it is 21%. In Estonia the willingness to take over this part of Nordic values is very low.

Marko ütles ...

But Temetsa, you forget that Estonia is still developing in a sense. We are still building many of the things that the Nordics managed to do in the past. Look at the National Health for example. We started at zero only 20 yzears ago, now it's one of the best, in terms of quality and value, in it's kind in the whole of Europe. Is been built and now all we have to do is maintain it and thus won't be needing such a huge cash injection. That money left over will be spent on something else, trust me the list is long.

Some say that what about infrastructure that the Soviets left behind? That's the thing, nothing was left behind. Even plugsockets with all the electrical wiring was pulled off the walls, loaded on trains and taken back to the Motherland. Estonia looked like Chernobyl in 1991, that's how bad it was. We are still rebuilding a whole country. We can only have welfare state if we can afford it. At the moment we can't, but we are moving towards it.

I mean we could spend that 70 percent now, but that money would come at expense. So what would you propose we should left out? The police? Or x rays for hospitals or computers for schools? Money is the issue here, that's the whole point.

Temesta ütles ...

Don't you think there are people in Estonia who can afford to pay tax rates of 30 or even 40 % ? Some of them could even pay 60%, like in Sweden, and still be rich.
Being less developed is not an excuse as taxation and welfare spending is relative to income and GDP.
And I have said this before: you present this as a practical matter (and probably in the nineties indeed it wasn't possible), but the truth is the parties that were most influental in the last 20 years, Isamaa ja Res Publica and Reform Party are on ideological grounds opposed to the Nordic welfare state.
I respect your wish for Estonia to become Nordic, but the Estonian political elite (and by consequence, a majority of the voters) doesn't seem to share this idea.

Liivimaa parim ratsutaja ütles ...

I am amazed that a Nobel Prize winner does not know how to manipulate a timeline of excel graphs.

Or ... he thinks no one else can.

Goes Krugman: so starting from 2007 I can make a WOW statement and impress the world what a Nobel Prize laureate I am ... Yeah. I am so sexy.

No wonder Lynx flipped his lid seeing this ....

Temesta ütles ...
Autor on selle kommentaari eemaldanud.
Temesta ütles ...

He just wants to show the decline from the peak. What is the problem with that? He publishes a lot of these graphs, including for the US, and he always starts from the peak.

But you want him to show how much Estonia has grown since 91? It cannot be denied that the Estonian economy has grown very well. But is that an excuse for recent weaknesses?

Kristopher ütles ...

Krugman wasn't doing a contract hit on Estonia, he was using Estonia to (in his view) debunk a bit of economic theory. So I think Ilves misread/overreacted. LPR's image of the man snapping is a good one.

Anyway, with regard to Krugman's argument, I say Estonia is way too interconnected with the world that it is ever going to be some kind of scientific laboratory to determine ultimately who was right, Keynes or Friedman. Maybe we can get some graphs on Bhutan or something.... So in that sense the debate is silly.

To this point, the Estonian recovery has thus far been propped up by exports, more specifically processing industry exports, and even more specifically, Ericsson. Now that those markets are sluggish, and you can already see the curve flatten on Krugman's graph, we'll see what will happen.

Has the fact that the Estonian government has been stingy with the public's money helped? Probably, but it's not particularly imaginative.

Temesta ütles ...

"Has the fact that the Estonian government has been stingy with the public's money helped? Probably, but it's not particularly imaginative."

There is a side to this story that is almost never mentioned. Compared with 2008, European subsidies to Estonia doubled, this, next to the measures implemented by the government, helped to reduce the deficit. In 2008 Estonia received 7,4 billion EEK in subsidies, in 2009 the amount increased to 13 billion EEK. For 2010 and 2011 the amounts were 15,4 billion and 17,3 billion EEK. According to numbers provided by the IMF the net transfers to Estonia for these years amount to about 5% of GDP, or 20% of total government expenditures, according to the Estonian ministry of finance. Without this surge in funds Estonia would probably not have reached the deficit limit for the Euro in 2009.

All this is no shame, and I think it is right that richer memberstates support the poorer ones, but it places Estonia not in such a good position to criticize countries like Spain and Greece. If they would receive subsidies worth 5% of GDP their problems wouldn't be so big now. So I think this factor also should be taken into account when considering the recovery of the economy. In fact, it is comparable to a Keynesian stimulus, so it also disproves Krugman's point a bit. :)

http://www.fin.ee/index.php?id=79458

http://www.imf.org/external/pubs/ft/scr/2011/cr11333.pdf (Table 3. Estonia: Summary of General Government Operations, 2001–12)

Marko ütles ...

Oh dear, Temetsa. You're going down on a slippery slope here:).

That was the whole point of Twittergate aswell, apparently one is not supposed to criticise or even provide some statistical data on the matters of economy. It seemes as if we made a transition from Republic to Dutchy, where the Duke says what is true or what is not. Everyone else is just ignorant and anti-Estonian ;).

Temesta ütles ...

Actually some time ago there appeared some articles on ERR news and Baltic Business News that highlighted the role EU structural funds. The article in BBN went even so far as to claim that without this support, the Estonian economy would have suffered from a total meltdown. But it seemed that people/politicians preferred to ignore this and the babble about the undisputed succes of austerity continued undisturbed.

Marko ütles ...

Yes, I'm aware of that. It's funny, isn't it, how the ruling coalition likes to present things from their viewpoint only. Sickening, really, if you ask me.

How come you're so well informed on Estonian matters in the first place? Family connection?

Marko ütles ...

Yes, I'm aware of that. It's funny, isn't it, how the ruling coalition likes to present things from their viewpoint only. Sickening, really, if you ask me.

How come you're so well informed on Estonian matters in the first place? Family connection?

Temesta ütles ...

I have a long relationship with an Estonian girl and recently I also moved to Estonia. Estonian economic developments are very interesting and reading about macroeconomics is one of my hobbies, so it was natural for me to try to find more background information about developments in Estonia.

Liivimaa parim ratsutaja ütles ...

On the topic of shocking (and funny) - there was a good spy story in our local "lepaleheke" today:

http://www.washingtonpost.com/lifestyle/style/fraud-suspect-kevin-richard-halligen-allegedly-posed-as-a-spy-and-cheated-the-elite-on-both-sides-of-the-atlantic/2012/06/09/gJQA3gdwQV_story.html


Check it out. It's like in a movie. A good read.

Mardus ütles ...

@LPR on the WashPost story:

"True Lies", I say.