Politics, et Cetera
A publication from The Political Forum, LLC
Wednesday, January 2, 2013
They Said It:
If you could look down from the moon, as Menippus once did, on the countless hordes of mortals, you’d think you saw a swarm of flies or gnats quarrelling amongst themselves, fighting, plotting, stealing, playing, making love, being born, growing old, and dying. It’s hard to believe how much trouble and tragedy this tiny little creature can stir up, short-lived as he is, for sometimes a brief war or an outbreak of plague can carry off and destroy many thousands at once.
Desiderius Erasmus, Praise of Folly, 1509.
FOREIGN POLICY 2013: UGLINESS IN THE AGE OF OBAMA.
It’s that time of year again, time to sit back and take a look at the world and the ugly mess that we humans have made of it. Of virtually all of it, actually. Every corner of the sphere, so to speak. The world and all that dwell therein, as the Psalm goes. There is no place to hide anymore, no port in this global storm, no solace whatsoever. As things stand today, the safest place on planet earth – fi nancially and physically – is a manifestly dysfunctional pseudo-democratic-republic whose leaders are fatuous and self-absorbed, who can’t agree on anything other than that they are underpaid and underappreciated, who seem to be daring the ratings agencies to downgrade the nation’s debt one more time, and who appear bound and determined to force what’s left of the global economy into recession. One wonders if the time has come for a modern day Gibbon to record the glory and the decline of that nation that Lincoln once described as the “last best hope of earth.”
In the second century of the Christian era, the Empire of Rome comprehended the fairest part of the earth, and the most civilised portion of mankind. The frontiers of that extensive monarchy were guarded by ancient renown and disciplined valour. The gentle but powerful influence of laws and manners had gradually cemented the union of the provinces. Their peaceful inhabitants enjoyed and abused the advantages of wealth and luxury. The image of a free constitution was preserved with decent reverence: the Roman senate appeared to possess the sovereign authority, and devolved on the emperors all the executive powers of government. During a happy period (A.D. 98-180) of more than fourscore years, the public administration was conducted by the virtue and abilities of Nerva, Trajan, Hadrian, and the two Antonines. It is the design of this, and of the two succeeding chapters, to describe the prosperous condition of their empire; and afterwards, from the death of Marcus Antoninus, to deduce the most important circumstances of its decline and fall; a revolution which will ever be remembered, and is still felt by the nations of the earth.
But more about that next week . . . in our domestic policy forecast.
In the meantime, we’ll talk about foreign policy. As is our tradition with these forecast pieces, we spent the past couple of weeks looking at last year’s predictions, assessing their accuracy and using them as a jumping off point for this year’s discussion. After doing so, we’re not sure which we fi nd more disconcerting: the fact that every one of our predictions last year proved, more or less, to be accurate; or the fact that we could run much the same piece this year, predicting many of the very same things, with every bit as much accuracy. Europe is a fi scal, economic, and social disaster, just as it was last year. The Middle East is a deadly mess and a proverbial time bomb, ready to blow at any minute, taking the rest of the world with it when it does, just as it was last year. Islamic extremism is once again on the ascendance, spreading far and wide and accumulating wealth and power, just as it was
last year. China’s homicidal cult-leadership is vicious, power-mad, and weaker than it appears, struggling, tottering, and murdering more out of fear than strength, just as it was last year. And Vlad the Impaler, ruling over a nation that will, sooner rather than later, be remembered as “the country formerly known as Russia,” is anxious, desperate to look bold, brash, and virile, even as his realm continues its rapid descent into the dustbin of history, just – say it with us! – as he was last year.
We’re not sure that anyone could completely and satisfactorily explain what all of this means. But we do have a few thoughts. For starters, it means simply that the world is dangerous place. Of course, it has always been so. But the danger waxes and wanes. And right now it’s waning pretty hard, if you’ll pardon the pun. Second, this tells us that the pace of global change is slow. Perhaps the reason why so many of this world’s great men are so surprised when dramatic events take place is because they have been lulled to sleep, grown impatient and neglectful waiting for something, anything to happen. Third, in our estimation, all of this tells us that peace and prosperity do not happen by accident. They require effort, planning, and strategy. Their opposites – death and dearth – are, of course, always with us, but they occur at greater frequency and in more shocking volume in
the absence of leadership, for want of a moral force to encourage and embolden that which Lincoln called “the better angels of our nature.”
Lastly, all of this demonstrates, quite plainly, just how futile the attempt to forecast the future really is. If we can be right and wrong, brilliant and befuddled, accurate and defi cient, all at the same time, then it is clear that the game is not exactly as it appears on the surface. As longtime readers undoubtedly know, this is the point in our forecast introduction when we remind you not to get too bogged down in the specifics of what will follow. As Yogi Bera once said, “It’s tough to make predictions, especially about the future.”
And as such, the “predictions” in this piece – and the one that will follow next week – are not meant to provide guarantees to gamblers. They are, rather, meant to provide rough guidance, a point at which to begin the discussion of events, trends, and ideas, all of which can or will affect the global political climate over the next several months.
And so with that said, we begin . . .
Forecast #1: The Euro is done, kaput, fini. Before the end of the year, the powers that be in Euroland will be forced to admit what the rest of the world already knows, namely that this attempt to forge EUtopia has been as unsuccessful as all previous attempts, with its only saving grace being the comparative lack of bloodshed, which unfortunately is likely due to the same spiritual ennui that makes the Europeans increasingly too demoralized to breed…
If this prediction sounds familiar to some of you, that’s because it is. Not only is this precisely the same thing we predicted last year at this time, but it is precisely the same thing we have been predicting for the past 15 years, ever since the launch of the monetary union. In fact, we put it this way in May 1998.
Psst! You wanna know a secret. The Euro, and the mess it represents, is going to be a social, economic and political catastrophe. Indeed, I think it is probable that the adoption of the Euro will be to 21st century Europe, what the killing of the Archduke Ferdinand was to 20th century Europe; i.e., that point in time when history will record that the unraveling began in earnest.
The “unraveling,” of course, is still underway. And it may go on for some time. There’s no way to tell for sure when the whole thing will collapse. But it certainly will. As we noted last year, there is no reason to expect this to be the year in which this collapse will occur. But then, there’s no reason NOT to expect it either. The end will come, sooner rather than later.
Last year at this time, we, like everyone else in the world, were worried about Greece and Italy and Ireland. Today, those countries and their manifold problems have been shoved to the proverbial back burner, while the smart set worries about Spain and its banks and about France and its nutty Socialist president.
Two weeks ago, the French President and Socialist dead-ender Francois Hollande saw his 2013 budget passed, promising some 20-30 billion euros in new revenue and less than half that in spending cuts, with no reduction in government payrolls. Last week, that budget – or at least the tax portions of it – was rejected by the nation’s highest court, which declared that the proposed hike in taxes “violated equality of treatment for taxpayers.” That’s a kick, isn’t it? In France, of all places, the Socialists, of all people, are cutting budgets, albeit by negligible amounts, while the courts are demanding “fairness” for the rich. All of this suggests that the French pipedream of a Socialist-led “reform” is still just that, a pipedream. But it also suggests that at least the French are capable of grasping, in some fashion or another, economic reality, unlike some governments in the West that want more “stimulus,” of all things, more punitive taxation, of all things, and more fiscal recklessness, of all things. The country of which we speak shall remain nameless – at least until next week!
In terms of secular politics, then, Europe remains a dreadful place. It is mired in recession. The monetary union is mired in delusion and denial. And Germany, the only nation that has any hope of emerging from this mess with its fi nancial dignity intact, faces federal elections this year, in which Chancellor Angela Merkel will face Peer Steinbrück, a formidable, if gaffe-prone, opponent.
But we would be remiss if we failed to mention that there is a ray of hope. Europe, you see, was once known as “Christendom,” which is to say that it is the wellspring (if not the actual birthplace) of Christianity and was, for centuries, the repository of Judeo-Christian morality. And that, in turn, means that “secular politics” is not necessarily all that matters in that part of the world, the best efforts of four centuries of the continent’s “best and brightest” notwithstanding. Which brings us to . . .
Forecast #2: While Europe’s secular leaders continue to beat their heads against the proverbial wall, the continent’s religious leaders – most notably Pope Benedict XVI – will make a strong push to reinvigorate the religious spirit AND the spirit of human liberty in the erstwhile secular and forsaken continent.
Just over four years ago, in these pages, we wrote about Pope Benedict and the daunting task he had set for himself and for his papacy, particularly with respect to Europe. We put it this way:
Pope Benedict XVI has made the restoration of Western religious and culture values one of the preeminent goals of his papacy. A return to respect for and appreciation of every human life; a return to the values of reason and rationalism; a return to the belief that culture matters and that religious values can positively inform the culture, are all interim goals that the Pope has set in his attempt to restore the effi cacy and the allure of the Church and of the values and ideals for which the Church and indeed all of Western civilization stand.
Just over a year ago, we noted that this task had, apparently, left the Pope somewhat discouraged and, more ominously, “exhausted.” How, we wondered, could he not be, given the enormity of the challenge before him?” After all, Europe is probably the most secularized location on the face of the earth. How could the effort to undo this secularism and the damage it has done not destroy a man? Moreover, we noted, press reports had placed the Pope at death’s door, noting his frailty and enervation. We continued:
How could he not be exhausted given that he has spent the better part of his adult life trying desperately to save Europe from itself while Europe seems as determined as ever to ignore its history, to discard its cultural heritage, and to destroy its future in pursuit of a fiction? How could he not be exhausted when he has done everything within his power to confront a global economic melt-down and to shepherd his flock through this melt-down, all the while being undermined by those around him and watching those whom he would help plow deeper and deeper into irredeemable, utopian, socialistic fantasies based on such notions as: money can be borrowed indefinitely; loans need never be repaid; work is optional at best and, in some cases, akin to slavery; and preserving “unity” is far preferable to acknowledging reality?
If the Pope’s intention was – as we all assumed – to redeem the font of Christian civilization, then it’s not hard to see how this process could have exhausted him. As we noted at its outset (and have mentioned several times over the last several weeks) the Euro was, from the beginning, a disastrous and “vast new socialist experiment, built on the rubble of the old, smaller ones that blighted the European landscape.” And yet salvaging this “experiment” has become the preoccupation of nearly the entire continent, with all other concerns – including the practicality of salvaging the experiment – receiving no consideration whatsoever. The smart money still says that any solution will, over the long term, prove just as volatile and unrealistic as the current arrangement, but that will not stop the EUtopians from pursuing such a solution anyway, whatever the cost. How can a frail old man compete with that? And how can the effort not exhaust him completely?
Well . . . as it turns out, the Pope has something in common with Mark Twain, which is to say that the reports of his demise have been greatly exaggerated. Fortunately for us and for the “global community,” Pope Benedict is indeed a worthy successor to St. Peter and thus not as prone to despair as some of the rest of us, which means that while we were fretting, he was working, exhausted or not. And earlier this month, the fruits of some of that work became apparent. Quietly, cautiously, but cheerfully, Pope Benedict met at the Vatican with Joachim Gauck. Who is Joachim Gauck, you ask? Well, he just happens to be the President of Germany. He also happens to be a
former East German Lutheran pastor and erstwhile anti-Communist activist. Gauck spent much of his early adulthood using his pulpit to fight for freedom and human rights and, not coincidentally, to fight against the Soviet-puppets who governed the land of his birth. In many ways, then, Gauck is a man in the same mold as Pope Benedict’s predecessor and friend, the late Pope John Paul II. Peter Berger, the renowned sociologist and religious scholar, recently described Gauck and his life as follows:
Gauck’s formation was much more practical—in the praxis of a Christian in an anti-Christian state. Born in the seaport of Rostock, he was the son of a sea captain, who was arrested by the Soviet occupation forces and spent years in the Gulag. For young Gauck the persecution of his father made him into a committed anti-Communist. He was barred from university studies because of his tainted family background and his own political views (which were well known to the Stasi, the state security agency). Instead he trained as a Lutheran theologian and became pastor of a congregation in provincial Mecklenburg, far to the east. The Protestant church was one of the very few institutions that retained a tightly controlled but nevertheless real autonomy within the Communist society. In this milieu Gauck became an important figure in the cautious resistance movement, which some have called a “Protestant revolution” and which greatly helped the collapse of the Communist regime. (For a short time after that Protestant leaders played an important role in the transition. Then, disappointingly, the Protestant church lost most of its influence and the territory of the former German Democratic Republic returned to its former secularized culture.) Gauck became active in the Social Democratic Party and from 1990 to 2000 he headed the archive of the Stasi, where citizens had access to secret files about themselves (which frequently led to distressing discoveries of betrayal by family members and friends). Gauck published books and articles about the
crimes of Communism. He also wrote in praise of freedom and democracy. In March 2012 he became President, after his predecessor was forced to resign under a cloud. In this new role (as some German secular media observed with a bit of irritation) he continued to be a preacher—though about the virtues of freedom rather than about the Protestant faith.
Why does Gauck matter? Well, he matters for several reasons, not the least of which is because he still considers himself a “theologian,” (despite no longer being a practicing Lutheran minister) who is the President of Germany. He matters as well because he is a motivated and convivial anti-Leftist who understands the importance of liberty and free enterprise in enriching the human experience. Perhaps most notably, he matters because he is an ally for Pope Benedict in his battle to rescue Europe from itself. Berger described the meeting between the two “old Germans” as follows:
The Pope’s private secretary (another German) confi ded to the reporter that the breakfast table had been set up in the traditional manner—with gingerbread (Lebkuchen), a little replica of St. Nikolaus made out of chocolate, nuts, mistletoe branches and an Advent wreath with lit candles. That is, the event took place in a distinctively German setting. The secretary also confided that the Pope had looked forward to the meeting with joyful anticipation; the reporter recounted that the President had expressed similar sentiments to the reporters who accompanied him on the flight to Rome.
The Pope greeted his visitor with “A hearty welcome, Herr Bundespraesident”. The latter responded: “Holy Father, this is a great joy for me. I come as Federal President to greet a compatriot. But above all I come as a human being and as a Christian” . . . [T]his meeting in Rome was a newsworthy event in Germany. It is also newsworthy that the very first foreign trip of the President was to Poland, with whose anti-Communist resistance he had deep ties. The second trip was to Israel, where he spoke of the horrors of the Holocaust and of the moral duty of Germany to help make sure that nothing like it ever recurred (in this connection he mentioned the threat from Iran).
The Pope – an ecumenist at heart – has had and continues to have other allies, of course, but they are nearly all religious figures exclusively. PRESIDENT Gauck breaks that mold. Ironically, Gauck provides Benedict with something he has not had in his efforts to halt Europe’s secular-Leftist drift into despondency and nihilism: a friend in high places, secular high places.
Berger, who is a fellow of the American Academy of Arts and Sciences and who has taught at Boston University and Baruch College, among other places, insists that this meeting and the budding alliance between the Pope and the President are signifi cant for Germany, for ecumenism, and for the broader battle against European nihilism. We tend to agree. And while we share Berger’s skepticism that this alliance will yield any immediate, positive developments with respect to the latter, we nonetheless continue to hope. The world is, as we noted above and will note again below, an ugly place right now. And the alliance between these “two old Germans” may be the one
bright spot this year.
Not that religion will be a “bright spot” everywhere….
Forecast #3: The Middle East and North Africa, already (and still) reeling from the much ballyhooed and yet disastrous “Arab Spring,” will continue to collapse into chaos. By year’s end, Islamists will control nearly the entirety of North Africa and a great portion of the Middle East as well. The two stalwart American allies in the region – Israel and Saudi Arabia – will follow divergent paths through the turmoil, with one not merely surviving, but thriving, while the other nears collapse.
We could bore you with a long recap of last year’s prediction about the Middle East, sprinkling in a handful of long quotes from previous pieces about how the Arab Spring would prove disastrous and how the Obama administration would aid – wittingly or unwittingly – the ascent to power of Islamist extremists in vast swaths of the region. But we suspect you don’t need us to retell the whole sordid tale. In brief, Team Obama played a bad hand in the Middle East, and played it badly, taking a volatile and dangerous situation and allowing it to become a complete and utter catastrophe. By helping to push Mubarak out in Egypt and by supporting Islamist
extremist rebels in Libya, while simultaneously encouraging al Qaeda-affiliated Arabs to leave the sanctuary of Af-Pak and return home, Barack Obama and his crew of “smart diplomats” committed one of the greatest foreign policy blunders in recent memory. Today, much of Mali is under Islamist control; Islamists threaten the stability of Libya; and, of course, the Muslim Brotherhood – progenitors of the murderous Hamas – have near absolute control of the world’s most populous Arab nation.
All of that, unfortunately, is just the beginning. Republicans in Congress and conservatives in the media continue to insist that the Obama administration is hiding something about the attack on Americans in Benghazi last September. They are undoubtedly right, and a great many questions remain unanswered. Perhaps the most important one, though, is likely to remain not only unanswered, but unasked as well, even if the GOP gets as thorough an inquiry as it wants.
We too would like to know who botched the security for the consulate. We would like to know who gave the order to stand-down to American troops, who were ready to come to the aid of the consulate staff. We would like to know what the President knew about what was happening in Benghazi and when he knew it. And we would like to know why the only person thus far punished in this debacle is the Coptic filmmaker whose film didn’t have anything to do with anything.
But above and beyond all of that, we would really like to know what the hell Ambassador Chris Stevens was doing in Benghazi in the first place? Why, pray tell, was he meeting with the Turkish Consul General? Why wasn’t he in Tripoli, at the embassy, where there was security, instead of at the ramshackle consulate in Benghazi?
We know already that the Benghazi location was, in addition to a consulate, a CIA station. We know that a great many of the weapons that the American government provided to the Libyan rebels ended up – again, wittingly or unwittingly – in the hands of al Qaeda affiliated groups. We know as well, that the Turkish government – with whose representative Stevens met the day of his death – had been supporting and arming the Syrian opposition,
including al Qaeda affiliates, and that the Islamist-governed Turks were waging their own mini-war against the Kurds, even those in Syria, under cover of the unrest in Bashar Assad’s bloody kingdom.
So . . . we ask again, what the hell was Ambassador Chris Stevens doing in Benghazi?
Our suspicion is that no one outside of the administration will ever know the answer to that question for sure. It is also our suspicion that the reason that is so – and the reason why the administration was so eager to cover up the whole thing – is because Stevens was there, in collusion with the CIA, to run guns to the Syrian rebels – who just happen to be al Qaeda affi liates themselves. And how would that look, for the Most Wonderful President
Who Ever Lived, the man who led the victory lap when Seal Team 6 killed bin Laden, to be discovered arming al Qaedists? Two months before an election?
Now, as we said, this is only our “suspicion,” although it is a suspicion that is consistent with the available evidence, and with the pattern established during Libyan revolution, and which is shared by countless others, most of whom are smarter than we are.
Whatever the case, what we do know for sure is that the Obama administration has chosen to throw its support behind the “offi cial” Syrian opposition, which it claims is 100% al Qaeda free. Which is simply not true, “bull crap,” as the saying almost goes.
The fact of the matter is that the Obama team is repeating the same mistakes that it made in Libya, which is to say that it is paying lip service to freedom and human rights, while pawning the hard and politically divisive work off on the indigenous opposition, which is riddled with extremists who hate the United States every bit as much as they hate Assad, and maybe more. Not to put too fine a point on it, but this is shockingly callow, lazy, and cowardly. And it is also likely to exacerbate an already very tense situation in a very volatile region.
Before the year is over, we expect the Assad regime to have fallen. And before the Obama presidency is over, we expect the fruits of his callow, lazy, and cowardly approach to the region to be manifest in the form of a
broader Sunni Islamist alliance that runs from Syria to Egypt and right on through North Africa. Moreover, given the threat posed by the Iran-Iraq Shiite alliance and the prospect of a Shiite nuclear bomb in Tehran,
we expect this Pan-Arab Islamist alliance to be actively and aggressively seeking its own WMD, to use against any and all infidels, from the Persians to the Jews to the Brits and to the Americans. Good stuff.
Of course, that’s not the worst of it. Anyone who thinks that the Arab/Islamist rebellions will remain isolated in the non-oil-producing nations is nuts. At some point, the urge to rid themselves of petty tyrants will spill over into oil country as well. And when it does, all hell will break loose.
As we have noted in these pages countless times before, one of the principal conditions for revolution was best explained by the eminent political theorist Ted Robert Gurr. Gurr noted that absolute deprivation is rarely a sufficient cause for revolution and that uprisings are far more generally the result of “Perceived Relative Deprivation,” which is the belief, among the general population, that conditions that were improving have stopped improving, thereby depriving the people of benefi ts they had expected and to which they believed they are entitled. Given this, we’d be leery of placing any long term bets on the disposition of the Royal House of Saud.
One of the most intriguing and foreboding stories we’ve seen in a long time was published just last week (the day after Christmas) by the Financial Times, which reported the following:
Domestic supply constraints are threatening the expansion of the fast-growing $100bn Gulf petrochemicals industry, Saudi Basic Industries Corp has warned.
As rapid population growth and industrialisation send Gulf energy needs soaring, the world’s largest petrochemical maker by market capitalisation is increasingly having to compete for its raw materials such as gas with domestic public electricity and water companies, says Mohamed al-Mady, Sabic chief executive….
The threat to cheap allocations of gas comes as US gas prices have plummeted because of the exploitation of shale gas, making raw materials cheaper for US petrochemical companies and weakening the competitive edge held by Gulf counterparts such as Sabic….
The cyclical Gulf petrochemicals industry is already suffering, as lower prices have coincided with higher raw material costs. Sabic, which has felt softer demand from China, has reported declining profits in every quarter so far this year. In the third quarter net income fell 23 per cent from the year-earlier period; it fell 35 per cent in the second and 5 per cent in the first quarter.
Saudi petrochemical companies are facing global competition. But they are not alone. One of the most important causes of the rise of this competition is the energy revolution that is taking place in the United States, which is to say that the bedrock of the Saudi economy, the energy industry, is also facing a new global competitor.
Estimates suggest that the United States could be both a net exporter of energy and the largest producer of oil in the world by the end of the decade. That will introduce a whole new and previously unexpected variable to the Saudi economic model. And it will introduce a great deal of previously unexpected economic unrest among the Saudi population.
Saudi Arabia is, of course, a typical commodity-based economy. And when the global demand for that commodity shrinks – either through competition or a change in preferences – the people who have grown comfortable with their government’s oil-fi nanced welfare state will suddenly grow uncomfortable. And when the people grow uncomfortable, the princes and sheiks of the House of Saud will want to consider booking their flights to London, post haste.
Interestingly, not all of the nations of the Middle East will suffer because of the coming global energy revolution. As the inimitable Walter Russell Mead noted last summer, the country that is poised to become the biggest winner in the fracking/shale revolution is tiny little Israel, which recently signed development deals with Canadian and Russian companies. To wit:
With trillions of cubic feet of natural gas, and potentially as much as 250 billion barrels of recoverable shale oil, Israel may be on the verge of joining the wealthiest Arab states as a world class energy producer.
We’ll be honest with you, we’ve never exactly been big believers in Karma, but if all of this pans out, we may well have to reconsider. Israel and the United States wind up big winners, while the big losers are the Arab states that have spent the last four decades funding anti-Israel and anti-American Islamo-fascism. How great is that? Of course, that presupposes that the United States continues to defend the existence of Israel. And, with “the one” in White House, that is another question altogether.
Of course, the Gulf States are not the only big losers in the oil revolution, which brings us to . . .
Forecast #4: In the midst of economic turmoil and massive demographic decline, the Russian empire of Vladimir Putin will be shaken to its core. In response, Putin will be tempted to maintain order through what the boys in Faber College’s Delta House would call “a really futile and stupid gesture.”
We’re not sure if you heard, but it is now illegal for American families to adopt Russian orphans. As the Wall Street Journal reported last week:
President Vladimir Putin signed a bill Friday banning U.S. citizens from adopting Russian children, raising tensions with Washington as the Obama Administration is trying to win Moscow’s support to end the war in Syria….
Moscow’s legislation—which also bans U.S.-funded civic groups in the country— puts concrete action to rising Russian complaints, voiced most vehemently by Mr. Putin, that the U.S.’s own human-rights failings give it no credibility to lecture others.
But the adoption ban has exposed Mr. Putin to criticism both internationally and within his own government. Critics allege that the law makes political pawns out of Russian orphans, whose living conditions can be dire and prospects for adoption often slim.
The Russian ban is set to go into effect Jan. 1.
For those of you scoring at home, that’s yesterday. And why is Putin banning U.S. adoptions? Mostly because he can. He can do whatever he wants, after all. And what he wants is to be a pain in the backside.
Additionally, and perhaps more to the point, Putin is aware that many of his fellow countrymen do not think that their nation is a particularly nice place to live and would love to flee to America, just as the erstwhile “lucky” orphans were once allowed to do.
In the two decades since the fall of the Soviet Union, Russia has, amazingly, accomplished what no thinking person thought was possible, i.e., fallen into even steeper decline than it had been in before the fall of communism. The private economy has been strangled in its crib by corruption, criminality, and oil wealth. And the Russian people have, collectively, responded essentially by giving up, by curling up into a metaphorical ball and rocking back-and-forth slowly while waiting for the end to come. And, of course, by drinking a lot of vodka.
The most obvious sign of the Russian people’s descent into desperation can be seen in their country’s birth rate. Indeed, 2012 was the first year since the Soviet Union fell that births outnumbered deaths in Russia.
And while some – including Putin – have argued that the 2012 numbers constitute a sign of Russia’s resurgence, anyone paying any attention at all knows this is hardly the case. Again, the inimitable Walter Russell Mead provides the gory details:
[D]emographers note that the increasein Russian births this year reflects the coming of age of the relatively large generation of Russian millennials. These children of the optimistic perestroika years are now having children. Russia had something of a baby boom in those joyous and optimistic late Soviet days when the doors to a better life seemed to be opening wide. As the privations, lawlessness and social collapse of the ensuing era appeared, Russian women cut back on child bearing and once the echo of the perestroika baby boom fades away, Russia is looking at decades of shrinking numbers of women of child bearing years. The demographic good news is a blip, not a trend.
Much worse from President Putin’s point of view, one suspects, is the question — not addressed in the FT article or mentioned much in polite company in Russia — of just who is having babies in Russia today. Anecdotal evidence suggests strongly that the ethnic Russians are still dying out and that they are having many fewer children proportionately than the many non-Russian nationalities on the territory of the Federation. Muslim nationalities, in particular, may have substantially higher birthrates than Russian speaking Slavs.
Mead continues, noting that “Putin has to know this is true, and has to know something of what it means.” And we can guess what it means that Putin knows what it means (we think).
Vladimir Putin fashions himself a latter-day Peter the Great, believing that he too can take Russia from a backward hellhole to a global power. Additionally, as a former Lieutenant Colonel in the KGB, Putin is bound and determined not to repeat the “mistakes” made by Mikhail Gorbachev which led to the collapse of the last great Russian Empire. What this means, therefore, is that Putin is not going to run the risk of emboldening his opposition by going soft. He is determined to be great and will stop at nothing to achieve greatness. He will continue to “whistle past the graveyard” as Mead puts it with respect to demography, and he will continue to try to convince his people and the world that Russia is a global power.
This is bad news for both Russians and for their immediate neighbors. The man has already engineered the brutal and bloody destruction of Chechnya and the invasion of Georgia. Whether it is bad news for the rest of us remains to be seen. The danger is that Putin will decide that the path to global greatness leads to the thick of the upcoming action in the Middle East. Somehow, that seems inevitable.
And that brings us, at long last to our final prediction, our “out-of-left fi eld” or Black Swan prediction, a low-probability, high-impact event that could genuinely shake up the global order.
Forecast #5: Before the end of the year, a powerful Asian nation will declare war on the United States. And that nation will be . . . Japan!
Now, before we go much further, we should clarify that when we say that Japan will declare war on the United States, we don’t mean that it will literally commence martial hostilities, à la Pearl Harbor. Rather, we believe that it is possible that the Japanese will, after their twenty-year long “lost decade,” grow tired of paying the price for America’s own “lost decade” of fiscal and monetary fecklessness. Indeed, we KNOW that the Japanese are tired of American economic “policy,” if it can be called that. The only question now is what they will do about it. Frankly, we’re not comfortable with the range of answers to that question. Ten days ago, the Wall Street Journal
reinforced our fears:
Japan’s incoming prime minister fired a volley into increasingly tense global currency markets, saying the country must defend itself against attempts by other governments to devalue their currencies by ensuring the yen weakens as well.
Shinzo Abe’s call comes as others including Bank of England Gov. Mervyn King warn that the world’s economicpolicy makers risk becoming embroiled in currency spats that could heighten tensions among countries.
Mr. Abe on Sunday called on Japan’s central bank to resist what he described as moves by the U.S. and Europe to cheapen their currencies and noted that a yen level of around ¥90 to the dollar—it was at ¥84.38 in early Asian trading Monday, down from ¥84.26 late Friday— would support the profi t of Japanese exporters. Tokyo markets were closed on Monday for a holiday.
“Central banks around the world are printing money, supporting their economies and increasing exports. America is the prime example,” said Mr. Abe, referring to the Federal Reserve’s policy of flooding the market with dollars by purchasing massive amounts of Treasury bonds and other assets.
At this point in the global “recovery” a currency war – or several currency wars – would be unhelpful, to put it mildly. Unfortunately, the Japanese may feel that they have no choice. Already, Japan is feeling backed into a corner and isolated from the rest of the world on two fronts: its dispute with China over the Senkakus (Diaoyu) islands and the North Korean nuclear weapons and missile programs.
The United States is supposed to be responsible for defending its purported ally, in large part because the United States was responsible for Japan’s disarmament. Yet, like most of the rest of the world, the Japanese are learning what it means to live in the Age of Obama, which is to say that they are learning to live in an age in which historical American promises mean nothing and in which American allies are far more roughly treated than American enemies. Add to this the ongoing pressure placed upon the Japanese economy by the Obama-Bernanke economic debacle, and it’s not hard to imagine why the incoming Prime Minister – and the people who elected him – might be a little upset and more than a little anxious.
How, exactly, Shinzo Abe will deal with his and his people’s anxiety and unease is anyone’s guess. But it should suffice to say that he will not do so by joining the Cult of Obama. In fact, we guess he’ll do the opposite. What will that mean? Hard to say, but we can’t imagine that it will be particularly nice. In fact, we’d guess it might be rather ugly.
Just like the rest of the world.
Happy New Year, everyone.
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