“Our work is never done. The American experiment in self-government gives work and purpose to each generation.” - Barack Obama
Tomorrow is America’s Election Day. Since the beginning of the campaign, the world has constantly been amazed by Trump’s enormities and the fact that he is in fact having significant chances of winning the presidency. But we shouldn’t be surprised: he has been very good at communicating and reaching out to a large number of people throughout America. These people rightfully hold grudges against their government and their elite: jobs have disappeared, Wall Street robbed them and got away clean with their houses, and inequalities are enormous.
President Obama has been a great president, but he was financed by Wall Street and did little to regulate back the financial sector. On the other side, Hillary Clinton is a pure product of the establishment, also financed by large corporations and evolving into an elite brainwashed into years of neoliberalism. Trump, himself part of this elite, skilfully played onto the myth of the self made man opposing the establishment. After three decades of anti-government rhetoric and a devastating Great Financial Crisis, his public is only too receptive.
In 2016, it seems that populism is on the rise globally: Putin and Duterte are receiving praises for their direct actions and strong leadership, while far right parties in Europe are playing on the inertia and inability of established parties to propose a new vision. A ‘fuck you’ attitude seems to grow quietly and gaining traction everywhere.
Last month, the decision of Burundi, South Africa and Gambia to quit the ICC in protest of the double standards of the court is in line with this global uprising against the Western establishment. In Asia, China ignored the ruling of the International Court of Justice regarding the South China Sea. Months later, Philippines’ President Duterte dumped the US, cursed Obama and the UN, and aligned itself with China.
There are probably many explanations for these unconnected events. But the results are here: weak economic growth and poor prospects increase the temptation for populism. The last two decades of America’s domination have seen rapid economic growth thanks to globalization. But now that all parts of the world are choking under high levels of debt, it’s become a free-for-all fight to protect everyone’s domestic market. Idealists’ dreams of a unified planet crumble under the age-old fact that Might makes right.
As Macrobusiness’ Houses and Holes noted in its dire predictions for Australia’s political future, we are now entering a period of uncertainty regarding globalization. There are significant chances of a decline in cross border flows: globalization’s gains were mostly for a tiny minority. As a result, regional trade blocs may form under local hegemons, who will fight for market shares with protectionists actions.
Locally, the rapid rise of new regional powers is decreasing the USA’s relative power. It’s all about concentration of forces, and the USA is already quite stretched trying to police too many locations. Still, the ‘Make America Great Again’ implies the wrong ideas: the USA is still the strongest country in the world. It’s just that other countries have reduced their capability gap.
In fact, besides its broken political process, America has the best prospects economically and strategically. It has the strongest military (though overstretched), good demographics, relatively weak neighbours, plenty of natural resources, and the ability to attract foreign brains. America biggest threat comes from the inside: growing inequalities and the corruption of its political arena.
The rest of the world is weaker, battling survival crisis (EU), being inherently weak (Russia), facing a looming multifaceted crisis (China), battling with big inequalities (LATAM) or too weak to stand up (Africa). It is too bad that neither Presidential candidates can be positive forces to hold together the rest of the world. We hope that Hillary Clinton wins, but have no hope about her bringing about a better world.
Science, General Knowledge & Environment
Putting Wheat in Its Place, Or Why the Green Revolution Wasn’t Quite What It’s Made Out to Be – “Narratives that present the Green Revolution as necessary and successful ignore the context that it was brought around in and the fact that it did not lead to a food-secure India.“
Drug Giant Faced a Reckoning as China Took Aim at Bribery – “The aftershocks of the Glaxo case are still rippling through China. The authorities have unleashed a wave of investigations, putting global companies on the defensive.“
History & Geopolitics
Noam Chomsky: Why It’s a Big Danger to Dismiss the Anger of Trump Voters – “They’re not getting answers. The answers they are getting are not only crazy, but extremely dangerous, so the right response is to ask ourselves, why are we failing to organize these people? There’s nothing partisan about losing money to Wall Street or lacking health insurance; issues at the forefront of protests from both sides for nearly a decade.“
Migrations : quels arguments contre les déclinistes ? – (Hat tip Lao Ho) – “Si cette élite physique de l’Afrique subsaharienne vient en France, elle aura fait preuve d’une motivation quasi surhumaine qui manque parfois ici, elle travaillera d’autant plus, concourra à l’économie nationale et surtout participera directement au maintien des familles sur place en leur envoyant des fonds.“
Australian democracy is in very serious jeopardy – Important – “China is going to need less and less dirt over time as it grows richer and more regionally powerful. And that’s where the recent events in the Philippines and Malaysia are a very important cautionary tale for Australian democracy.”
Hong Kong money laundering and terrorism financing reports hit record high – “Government sources with the knowledge of the unit’s operations said the rise stemmed from a flood of reports lodged by the banking industry after the Hong Kong Monetary Authority enhanced reporting and monitoring requirements.” BUT convictions and assets sized down from 2013.
Finance & Economics
Economic Headwinds for Turkey – “Stratfor Economy Analyst Mark Fleming-Williams examines the confluence of factors aligning to make 2017 a challenging year for the Turkish economy.”
Three Threats to China’s Economy – “China has no easy option for addressing this problem. If the government continues to prop up SOEs, especially “zombie” firms, the concentration of a large number of workers in low-productivity, stagnant SOEs will continue to undermine productivity growth. But if China pursues state-sector restructuring, unemployment will rise.“
How goes Chinese rebalancing? – Great graphs “In short, Chinese rebalancing is proceeding somewhere between slowly and badly. I mean, check out that TFP trend! The obvious corollary is that the great Chinese slowing has far yet to run.“
Done in by Overcapacity, Stagnant World Trade, and China, Korean Shipbuilders Collapse on Top of Taxpayers – “But the shipbuilding industry is special to South Korea, a country whose economy depends on exports. The world’s three largest shipbuilders by erstwhile order volume are Korean […]. In 2015, the industry accounted for 7.1% of South Korea’s manufacturing jobs and 7.6% of exports.”
Picture of the day: Globe photos of the month, October 2016
About Carlito Riego
"Great perfection may appear imperfect, but its usefulness is inexhaustible. Great abundance may appear empty, but its usefulness cannot be exhausted. Great correctness may appear twisted, great skills appear crude, great eloquence appear awkward. Activity conquers cold; inactivity conquers heat. Clear serenity governs the world." - Lao Zi