2011 was not a good year. 2010 was also a stinker. 2009 was crap. 2008 crap too. First order trend analysis: things get crappier year by year. It won’t last forever, of course; the sun’ll come out, you can bet your bottom dollar–just not tomorrow, or in the next 365 days after that. Prediction would be too bold a word for these few ideas about 2012. They might not all happen in one year–it could take to, say, 2015 for all the incipient awfulness to materialise in your face, as it were. So, FWIW, here’s the lwo down according to me:
- The Euro will not survive. It is manifestly untenable. The can cannot be kicked further down the road. The next time it is tried the foot will break before the can goes anywhere. The political shenanigans of European leaders to stave off the implosion are just that: shenanigans. European economies will tank hard this year and there will be considerable social unrest as a result. The best that can be said is that the residuum of wealth, low-cost security, and cheap opiates will probably see us through the worst of it until the Baby Boomers have largely died off. The life prospects of today’s under 10s are probably pretty good, the over 40s will be OK too, but everybody in between is going to get hammered. Domestic security will be preoccupied with preventing these righteously pissed-off people from breaking too much stuff.
- China’s economy will slow past its societal stall point as the economic model of paying people to work hard in poor countries to equip poor people working not at all in rich countries with vast quantities of cheap plastic commodities deservedly fails on moral and common sense imperatives. Their economy will tank hard too and already existing social unrest will metastasise in the absence of any plausible political palliatives. Security in the Pacific will be preoccupied with a half-risen China attempting to fill the gap between their people’s expectations and their reality with jingoistic nationalism.
- The ‘Arab Spring’ will achieve the hybridisation of secular authoritarian regimes with extreme religious elements. The inherently unstable resulting governments will only be able to unify on a policy of greater belligerency toward Israel to which they will turn again and again; otherwise both sides, recognising the situation will ultimately collapse, will act accordingly–elements of the old regime will continue stealing everything they can and moving it to places abroad where they may decamp while the new elements will work on building up their control of arsenals.
- The United States can provide no global leadership in dealing with these problems because it is itself broke and tired, its current president is a man devoid of feck, and his opponents are reckless or weird, or reckless and weird.
And what of the UK? I think my oracular abilities diminish the closer I get to home. The scale of our national aggregate indebtedness is so much greater than everyone else’s that if it’s really financial gotterdammerung then we’ll get there first. But then again we’ve got that island thing so, you know, Gunga Galunga!
{ 2 trackbacks }
{ 16 comments… read them below or add one }
I agree with most of your post but you lost me when you opined on the US. While(st) you are correct about our current President Who has been shown to be the incompetent ideologue He is (along with his fellow-traveling minions), I think you paint (twice no less) “the other side” with a roller rather than a portrait painter’s fine sable brush. You also use pejorative yet vague terms to describe “them.”
I can agree without further clarification of your adjectives that Ron Paul is a nutter, but (and I hasten to add I am anti- partisan and no one person now running satisfies all my criteria) I await your exposition as to each of the other parsons still standing as a possible opponent of Our Mighty Leader.
You’re right, his purely ideological support for torture and indefinite detention and unlimited drone strikes in AfPak turn my stomach too.
DB, great post. Tough topic, but bully for you for taking a swing.
CJr: Romney? Cain? Gingrich? Perry? And you need examples, really?
Yes, really.
Hello Ed (the real one). It is good to see you bring your wry sense of humo(u)r into the new year.
Happy New Year David! Without intending to sound too much like Maggy Thatcher: “Cheer up.”
http://www.thecommentator.com/article/655/doom_gloom_why_don_t_we_all_cheer_up_and_get_on_with_it_
I think you’re letting the sensationalist press get you down too much! For the last 4 years we’ve heard nothing but doom and gloom from the newspapers and accompanying commentaries…and yet the world is still here. Sure, times have been tough, are tough and will be tough, and I wouldn’t in anyway suggest that the crunch/recession/crisis has not been incredibly hard on a huge number of undeserving people…
…But the world has muddled through before, and will again. After all, during the Renaissance most of the big player states (France, Britain, and the Habsburgs, etc) defaulted on loans and even declared bankcruptcy fairly regularly, and yet all survived. We’ll do the same, eventually.
If we follow the advice of the Adam Smith Institute which the reporter in the linked Commentator article above cites, then we’ll be well and truly screwed. It was the Adam Smith Institute’s advice on rail privatisation which now means that Britain now has the most expensive rail system per capita in Europe-for only quite marginal real improvement once one factors in the (much hated) but now compulsory health and safety legislation which has in reality probably saved hundred of lives. What is most striking in the current moment is the exhaustion of Western economic thought, with the economic mainstream able only to pivot between Hayekian approaches and a kind of slightly soggy Keynesianism. Neither approach offers a convincing exit strategy from our current problems, and I have no particular desire to relive the whole Thatcher era over again, not least because if we do we really will have no national assets left by the end of it. As for the euro-it might implode, or it might not, but I’d suggest it’s a safe bet that the EU itself is not going to go away as an institutional structure, and if anything else has been demonstrated, it’s actually that the UK has absolutely no real leverage right now. The fact that the UK PM appears to have zero diplomatic skills or talent on the international stage ought to be a source of real worry at a time when the UK economy desperately needs external powers to invest real money rather than merely trade in the City of London’s casino economics. Of course, we could always say stuff Europe and fall back on the mythical saviour of the Commonwealth. The Portuguese I notice recently went grovelling to Angola for economic aid. Maybe we should ask them how that’s working out for them?
Meh, I’m quite happy with the PM’s skills on the international stage. He did the right thing tolerably well. My question is whether he’ll do the right thing domestically, which I think is umm questionable. I really don’t care about the EU whether it lives or dies so long as we are out of it. Surely the Portuguese ought to have been going after the Brazilians not the Angolans? Anyway, I wouldn’t freight the commonwealth with ‘mythical saviour’ status as you have. You think there’s nothing in it but I think you’re terribly wrong. The relationship between Britain and its former colonies–the dominions particularly–is rather different from that of Portugal and her one time imperial possessions. No?
No mainstream political party in the UK is ever going to ‘take us out’ of the EU, so I’m afraid you’ll be disappointed there. In fact the only excuse for Cameron’s recent diplomatic disaster was that it was at least better than being pushed into a referendum-Cameron not having a great deal of courage when it comes to dealing with his own backbenchers it seems. Apart from anything else, the FCO would (rightly in my view) fight against abandoning Europe to Franco-German hegemony tooth and nail, given that it promises absolutely no advantages for UK national interest. Why?
Number one, leaving the EU Common Market for EEA/EFTA simply deprives one of a voice, whilst leaving one still having to obey all the laws and regulations created in Brussels in order to trade there. Norway has oil. Switzerland’s a tax haven. Both have far, far smaller populations than the UK, accounting for their far higher GDPs per capita (and hence relative prosperity). They are not comparable with Britain. And they STILL have to pay into the EU budget comparable to their economies.
Number two, even factoring in and filtering the ‘Rotterdam Effect’, the EU still accounts for AT LEAST 40% of all UK trade, and remains our single most important trading partner. The dominions by contrast-Canada, Australia, India-all have economic giants near enough on their immediate doorstep that make upping trade with the UK a loss making enterprise when one factors in long distance transportation costs. Far from hurling ourselves as far away from Europe diplomatically and politically as possible then, we should actually be looking at how deeper integration-more green technology sharing, economies of scale in energy integration, FINALLY adopting a modern standardised metric system across the board, changing the road system so that UK car manufacturers could produce cars they could actually SELL abroad without conversion, ditto standardising plug sockets-could create the multiple minor ‘force multiplier’ effects that could get all our economies really motoring. The anti-EU brigade ignore the fact that following their preferred path to its logical conclusion would by contrast spell the final death knell of most high-end UK manufacturing-what’s left of it.
On a less peeved note-Happy New Year to all at Kings!
Considering how close we (Australians) are now with China, I think it would be in our best interest to cosy up to the UK and Canada – if the economic downturn does turn into a stalled China, they may be no more useful to us than Europe is. Goodbye commodities trade, hello recession we don’t need to have. So ignore Pericles, David, and come down under…
I fully understand and expect that every major party will continue to twist away from a decision on eu which reflects democratic will. That is why the duty of every citizen is pin them by their spineless little necks until they do. As for integration with eu standards this has done uk economy so much good so far we should just go the whole hog… The truth is the country has already lost much and gained little. It’s a craven bargain and incomprehensibly you want more of it. I don’t. And neither do the majority of voters. Personally I will fight (politically) over the issue and am quite prepared to see this government and every subsequent one wrecked over the matter until it’s dealt with fairly. With respect, if you want to live in holland then export yourself.
Sitting as I do, comfortably in the middle of your bracket of “people who are screwed” I read this with a sense of unease, albeit one I am growing increasingly familiar with.
Personally I think for the UK there is a huge risk of growing social unrest and disruption, which will be exacerbated by the collapse of the Euro and potentially the growing weakness of the Chinese economy. For all Cameron’s bluster, there is no denying that without the Euro the British economy will struggle enormously, at least for a few years until things stabilise. That will lead to vastly increased unemployment, including amongst jobs which have previously been somewhat protected (I think about how much money my team, a small one within my company, bills out as Euros and I shiver a bit to think what would happen if there was even a small disruption in that cashflow).
What I hope is that the coming disruptions in the West (Europe and the US) starts to undermine the idea that if you don’t have a job you’re lazy/stupid. Manifestly the concept of the “job” is undergoing a major change. Companies don’t have to hire as many people, and those smaller numbers can do more work than ever. I can see a time in which my job will be done by a machine, albeit a pretty smart one, with a human being signing off the output. Which means my career is ensuring that I get to keep the job of “sign off guy” to the limited AI systems they replace my colleages with.
Companies with very small headcounts compared to their revenue will become the norm as time goes on, particularly in Western ‘knowledge based’ economies ,and we need to adjust to accept this. The welfare state (I can’t believe I’m going to say this) has never been more important, as the welfare state will become the core of the future, one in which unemployment is the norm, as the requirement for workers does not go up as the economy grows.
I hope that 2012 becomes the year in which we turn a corner as a society and try to start building the foundations for this future society, and even encouraging its emergance if possible.
Chris:
A thoughtful if grim post that could easily apply here in the US and will if we stay on the same trajectory resulting from ideological yet incompetent domestic and international economic policies.
The only point I would sharpen however is that of your related assertions about only lay-abouts not having jobs and that the “welfare state” ( not sure of your precise meaning) will necessarily (and rightly if I understand your position) be the underpinning of our respective “survival.”
I contend that unless we get the economies turning again (and yes by that evil capitalism) our future is very much in doubt. That this is so is starkly apparent given the current object lessons, if not historical ones, showing “socialism” (in the broadest meaning of the term to include and government or collective-centric system) is an abject failure.
Thus, while there needs to be a minimal safety net for the truly deserving (disabled etc), a great deal of trimming of “benefit”",” or more accurately and tellingly now called “entitlements”. Must be made if we will have even a chance of survival. This trimming must also extend to the bloated government bureaucracies that have brought us to the precipice.
David::
I agree with your also insightful post but if the US is included As a former British dominion in terms of a source of potential help I would recommend the Chinese as we are broke and will be for a long time to come.
This is fun. Happy New Year all. I refer readers interested in the accuracy of expert prediction to Philip Tetlock’s book on expert political judgment: http://press.princeton.edu/titles/7959.html
It turns out that dart throwing monkeys have us licked. Still, it pays my mortgage…
Cheer up, everybody. No matter how bad it gets, we still have our senses of humor. And, remember, even if the economy collapses, at home and/or abroad, we’ll still be here to rebuild it. As the WWI ditty proclaimed, “we did it before and we’ll do it again…”
Permanent war is the answer,,,,,,and more libido killing internet porn to cut the birth rate.Oh and maybe a nice armed Japanese robot woman to do my job so I can watch TV.