Wednesday, July 6, 2016

Bombs, Bullets and Bodies

In times of danger, where economic expectations are on a rather clear downward trajectory, human beings resort to circling the wagons within those with similar traits… and push those who are different away. Fear of the unknown – even an unwillingness to explore the unknown (“curiosity killed the cat”) – are atavistic reactions drilled deep into the psyches of most of the animal kingdom.
Drop a large black box into the jungle and watch the animals react to the presence of this new stranger. A pride of cats, a family of apes, etc., etc. will give the intruder wide berth. The alpha male will circle the box with fur standing on edge. The others remain behind at a safe distance. Smaller mammals will just run away until that box has simply become routine. Unless they are solving a dwindling resource problem, animals tend to pursue exploration when those fomenting the reach beyond the normal are secure, having solid “means” and are motivated to advance (versus merely protect) the species. It’s the difference we can see by cornering a big cat versus letting that animal have open and free range. It’s built into the DNA of all animals.
We have a really clear set of assaults on almost every aspect of our daily lives. Here in the United States, we are watching some of our most basic assumptions being ripped asunder. Simple things like solid blue collar “jobs for life” are sliding by the wayside. Mass manufacturing has either migrated overseas or, where it remains or returns to our shores, the values go not to the displaced blue collar workers but to the one percenters who own the automated machines that have taken over that economic activity.
This has pushed more people here in the U.S. into a service economy. Lower levels in the gig economy – from uber drivers and part-time subcontractors – food and hospitality services, construction… to higher end, more remunerative service sector work, particularly in finance where there is serious money to be made. The nation’s best and brightest no longer gravitate toward industries that make stuff. The closest we get is software, particularly social media, where longer-term values are elusive.
Otherwise, we live in what economists call a “funny money economy” where wealth is generated through financial instruments and manipulation. Selling derivatives – financial instruments that represent bets on economic direction – or mergers and acquisitions that take existing companies and place them into new structures that fail to deliver promised results 70% of the time. This trend favors those with the capital at the expense of everyone else… and really does not increase hard dollar values inherent in making stuff. It move money around without adding to knowledge, building or real jobs.
Add dwindling natural resources from global warming into the mix. Fry vast portions of Syria and Iraq into permanently agriculturally-unproductive desert, mirror that process all over the earth, flood other areas into mass destruction, and release millions of formerly-employed/engaged families to fend for themselves without resources or skills. Throw in explosive population growth. Add opportunist players willing to capitalize on these displaced people, human beings who have lost hope or for whom hope is fading, and you turn a bad situation into so much worse.
It’s easy to spot those destructive leaders. They take complex situations with multiple variables, capitalizing on the relative unsophistication of their core constituencies, and promise simple solutions – usually predicated on unquantifiable or unprovable solution-slogans dependent on either religious doctrine or a simple faith in the “truth” they see in the slogans. They search for that “black box” of differences, that unknown variable that they can blame for the malaise threatening their constituency, something or someone that is easy to identify. They argue to cut ties to the “outside” world, an essential argument needed to circle their wagons. They depend heavily on anger, hopelessness and support from the un- and under-educated elements of the society they challenge.
If they deal with that outside world, it takes the form of “differentiation” and “isolation.” If there is a component of aggression towards “others,” it is mostly a show of breast-beating to impress their constituency. And with one last swing of the bat, they almost always represent that whatever they will bring to their defined future has to be better than what exists now… the “nothing left to lose” approach, a value that often defines their constituency’s mood.
This form of leadership defines ISIS, Iran’s Ayatollahs, Russia’s Vladimir Putin, Venezuela’s Nicolás Maduro (Hugo Chávez successor) and the anti-immigrant faction that led the U.K. Brexit “leave” vote. Here in the United States, we see the parallel anti-trade policies, the vituperatives against Mexicans and Muslims and the rather undefined “make America great again” slogans of American populist, Donald Trump, a presidential candidate who sends negative chills down the back of Democrats and Republicans alike. But his track precisely reflects the variables that have given rise to each of the above-noted political rejectionist movements.
Despite pretty clear expert projections of a rather severe, job-cutting, recession resulting from such U.S. unilateral withdrawal from globalization, an economic contraction such as the one experienced in the U.K. immediately after the Brexit vote, Trump has doubled-down on his Brexit parallel of killing international trade agreements as if the United States could cancel those treaties with negative consequences only for the “other side,” a position that makes absolutely no logical sense.
But every Orlando or San Bernardino, every Istanbul airport (pictured above), every conviction of an undocumented Mexican in this country… are simply offered as proof that the scapegoats are responsible and that the rather abstract and undefined slogans will work. And what is the logical linkage to a better life and taking credit for scapegoat blame?
Even if you don’t have lone wolves and lone wolf-packs with ubiquitous access to assault weapons and bomb-making materials (like fertilizer!) in the United States, do you really think that dedicated ISIS attackers – the enemies that pledge to bring bombs, bullets and bodies to our shores – cannot get into this country as easily as drug cartels get heroin across our border (a Mexican wall only makes the product more expensive and lucrative)… if they want to? And exactly how does our economy get better during a trade war? Give me numbers. If you want some objective analysis, look at the calculations from Moody’s in my May 29th Trade Wars blog. If you disagree, show me your calculations – numbers, not mutterings and sloganeering.
I’m Peter Dekom, and I am fearful of a rather solid movement here in the United States that has replaced logic and serious analysis with vague-on-specifics simplistic slogans and raw scapegoating… parallels that have consistently led to powerful economic and political deterioration in just about every region that has reverted to atavistic reactions at the expensive of “thinking.”

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