The process of the world coming together has been irregular at best. It seems reasonable that through it all there would be winners and losers, as we have seen. What is remarkable is how globalism, as a concept and a reality, has divided the developed world. Working people with less access not only feel left behind, in many cases their standard of living is actually slipping.
It seems as though there is a fundamental flaw in globalism. Yet the flaw may be in how we approach not just globalism, but the forces which created it in the first place. What if the process of the world coming together, driven by market forces, is fatally flawed because of our inadequate understanding of marketism?
In short, what if the transition from an industrial world to a market based world is not as seamless as we want to believe?
This time of the year, the holidays bring back memories that allow us to see the world, once again, through the eyes of a child. This is not some sentimental side effect of the rituals we go through, but is in many ways the reason they are important. A few moments spent contemplating this over a swirling mug of cocoa can show that seeing the world through the eyes of a child is actually a vital lesson.
“The first casualty when war comes is the truth.”
– Sen Hiram Johnson (R-CA) (1917)
As Barataria has noted before, the United States appears to be at war. This war, primarily with Putin’s Russia, is a new kind of war with weaponized disinformation and division.
It is important to note, however, that the US is far from the only target, nor is it entirely innocent. More critically there are actors within the US who are exploiting the war for their own benefit – a new kind of war profiteering for a new kind of war. It is easy to compare this to McCarthyism, but the implications are potentially more vast.
The dust continues to settle after the Brexit earthquake. US markets stabilized today, but it appears to be a “dead cat bounce” or a technical upturn as short positions are covered. It comes from the saying that even a dead cat will bounce up one story after falling off a ten story building. It certainly feels like that kind of week, especially if you think about whatever dead animals might account for the ridiculous hair of Donald Trump and/or Boris Johnson.
Then again, it hasn’t been a week yet.
For all the comparisons between this vote and the Trump phenom, they still don’t do this situation justice. People all over the world are recoiling from opening up markets and generally moving closer together. The threat to the EU is far from done as “euroskeptics” on the continent will certainly be emboldened – as will globalskeptics around the world. What has gone wrong?
Has economic freedom been oversold? That was the question asked (and ultimately answered) in a new paper by the research arm of the International Monetary Fund (IMF). The agency is the international “central bank to central banks” which swoops in and provides cash to bail out entire nations – for a price, of course. That price has always been a little bit of austerity for the government and de-regulation all around.
The guiding philosophy goes by a handle which may seem off to many in the United States – Neoliberalism. It was a response to the failure of classical Liberalism, or reduction of state power in favor of free markets, which failed in the last Depression. This depression seems to have been about as kind to the general concept for many of the same reasons.
As always it’s worth talking about in the sense that we are again confronted with the possibility that “everything the experts know is wrong” – a feeling certainly stirred up elections throughout the developed world lately.
For all we complain about low growth and dimming prospects here in the US, it’s a problem that has plagued the developed world. If anything, we’re doing quite well, thank you. Europe is still struggling to get out of the depression, with high unemployment – especially among their youth. China and other developing nations appear to have hit a wall, unable to round the corner and step up to developed nation status.
And then, there is Japan. “Basket Case” doesn’t begin to describe it.
We last checked in with them over three years ago when Shinzo Abe became Prime Minister and instituted what has been called “Abenomics”. Call it “Supply Side” if you want, as it emphasized growth in the money supply and a cheap Yen to stimulate growth in production. Call it “A license to print money by the Bank of Japan (BOJ)” if you’re a cynic.
But the problems in Japan are much more severe – they are demographic and social. Without a wholesale restructuring they are as doomed now as they have been for an entire generation. There’s a lesson here for everyone.
Have you ever wanted to be a pirate? If being free on the high seas has an allure you may want to think again. Today’s pirates don’t have ships or parrots, nor do they take over other ships at sea. They’ve gone bigtime, making a lot more money off of the very lucrative practice of making money disappear even more surely than burying it in the ground.
That’s what has been shown in the “Panama Papers”, a huge stash of 11 million documents taking up about 2.5 terabytes of data. The leak of papers from Panamanian firm Mossack Fonseca is about ten times the size of Edward Snowden’s leak – and none of the secrets revealed are about security.
This is about money. Lots of it.