Thursday, May 11, 2017

Debt: the endgame approaches



Something unusual, something historically significant is going on.

Epochal shifts do occur in history, but they usually only become clear in retrospect. One of my professors had a large print of Seurat's "A Sunday Afternoon on the Island of La Grande Jatte" hanging in his study. It is emblematic of a period (between 1871 and 1914) which came to be known as la belle époch, a time of prosperity and peace and scientific and technological advancement which preceded the horrors of the Great War. Never again would such naïve, unclouded optimism prevail.

Some would say that the post-World War 2 world was such a period. And, perhaps surprisingly in view of the threat of a world-destroying nuclear conflict, there was during those years both optimism and rising prosperity. This time it was not military conflict which broke the spell, however, but rather deep underlying economic and social problems which have only slowly become evident.

I want to focus on two indicators, one economic and one social: the first quantitative, the second qualitative.

The quantitative indicator I am referring to relates to debt-levels, especially government and household debt; boring, I know, but extremely important and relatively easy to grasp. The qualitative indicator relates to levels of trust between different societal groupings and individuals and their relationship to freedom, morality and social cohesion.

Internationally, sovereign debt is at historically very high, if not unprecedented, levels. In the U.S., the national debt currently stands at 20 trillion dollars, or about 100% of GDP. Household debt is also very high, having returned to the levels which preceded the 2008 crisis. Total U.S. debt (public and private) stands currently at about 350% of GDP.

The situation is quite obviously precarious, not least because a continuance of the status quo is dependent on the very low interest rates which the coordinated activity of central banks has engineered. But central banks don't have complete control of interest rates. Longer dated government bonds (seen as indicators of expected inflation, and also as a bellwether of commercial interest rates) will eventually rise, putting severe pressure on highly indebted governments and other borrowers.

Another way of seeing the problem is in terms of the relationship between economic growth and borrowing. Basically, for the last forty years or so, growth has been dependent on increasing levels of borrowing. For the last nine years, loose monetary policy, which has allowed rapidly increasing debt levels, may have forestalled a worldwide recession, but only anaemic growth rates have been achieved. The consequences should be obvious to anyone who thinks about it. There are limits to what borrowing can achieve, and responsible planners realize that levels of sovereign debt are unsustainably high.

In the case of the United States and many other Western countries, the looming problem of unfunded liabilities – especially relating to pensions and social security programs – dwarfs official national debt figures. These promises can never be delivered on, but admitting this would have a high political cost.

There are only two ways out in the longer term: default, or inflating away the debt/liabilities (by money printing). I don't know what the consequences of default (on sovereign debt, say) would be – not good, obviously – but the inflation road is also a dangerous one. Inflation, once it takes hold, is notoriously difficult to contain. Moreover, the sorts of anti-inflationary policies which have succeeded in the past may not be politically possible today.

Already, Western (and Eastern) economies seem to be stalling. Highly indebted households in the U.S. are cutting back on discretionary spending. The endgame – probably beginning with a deflationary crisis which would lead to widespread defaults – may well be approaching. I hope it is, because the longer this debt-based charade continues, the more serious the consequences will be.

No individual or country has a right to a certain standard of living, even if people living in rich countries all too often assume that they do. But, not only can continuing prosperity not be guaranteed, poverty is already with us – even in the still relatively prosperous West. Look at the youth unemployment levels in many European countries, for example. Or the stresses being faced by middle- and lower-income families in America and elsewhere. Or the bleak prospects facing many (most?) retirees.

The loose monetary policies pursued by central banks has had the (presumably unintended) consequence of enriching the few at the expense of the many, as the prices of financial assets and certain categories of real estate have been disproportionately inflated.

Moreover our collective memory of the two World Wars and the Great Depression is now fading. Such knowledge as we have of these times is based more on reading and films than on actual memories or family stories. Having grown up (in the West) during a time of peace and prosperity we might be tempted to assume that what we have experienced is the norm, to see war and poverty as some kind of aberration. But history teaches us otherwise.

Even the years immediately after World War 2 were very tough, especially in Europe. Many areas – including Britain, France, Germany and Scandinavia – were in dire financial straits. The material standard of living was much lower than it is today.

Who is to say, then, that our present levels of prosperity will persist? Why should they? Debt levels strongly suggest that we are living beyond our collective means and have been for some time.

So perhaps the question should be: how can present levels of prosperity persist, given the fact that we have been increasingly dependent on credit and deficit spending by governments to fund our lifestyles?

I will address the (qualitative) question of trust and social cohesion another time.

Saturday, February 4, 2017

Sephardic Jews in England


A correspondent from Florida writes: "... [M]y ancestry includes English people named Abram (and originally Abraham) from the North Meols area. When I took my DNA test there were no Eastern European genes, but there was Iberian."

The area in question (North Meols, Lancashire) is, on the face of it, not a very likely place to find Jewish families, being rural and having Norse connections. But the name Abram/Abraham is usually Jewish and the Iberian DNA supports this.

One of the main points I have made in previous posts is that I believe that the extent of Jewish immigration into Britain, especially from Spain and Portugal, has been seriously underestimated.

There is arguably little surviving documentary evidence of these migrations, but genetic research is providing new data which will enable us to build a much more accurate historical narrative, one which may well change the way many of us perceive our cultural and ethnic identities.

Saturday, December 24, 2016

The culture of rock and roll

Reposted from my Google+ Collection, The Decline of the West...

"[As rock and related forms of music] have become mainstream, the values and attitudes associated with the broader culture of rock and roll have also gained widespread acceptance, changing societies and cultures in subtle or not so subtle ways."

I raised this point in my most recent Electric Agora article but didn't elaborate on it, concentrating more on the music itself and its uneasy relationship with traditional Western musical styles.

Actually I like certain types of rock music, particular songs, etc., but I don't really relate very well to the rock and roll culture. As I said in response to some questions from Dan Kaufman in the comment section of the EA post, I didn't really want the discussion to be focused on my personal views and motivations, etc. but I readily admitted to having contrarian and conservative tendencies. The supposedly rebellious youth culture which I experienced was surprisingly conformist, and I kicked against it – or at least resisted it – to some extent. For example, I have never been interested in experimenting with drugs, and alcohol just makes me feel bad.

Another reason I'm ambivalent about rock is because it has destroyed many local musical traditions and contributed to the erosion of linguistic and geographically-defined cultural diversity. One of the commenters on my article talked about his experiences driving from Amsterdam through France to Italy in the 1980s and 90s and the way there was less and less rock on the car radio the further south you progressed. These regional differences are not so evident today. Rock and derivative forms are everywhere.

Though most rock music is not overtly political, it was from its very origins associated with rebellion and a conscious rejection of tradition. And it is currently being exploited in Europe and elsewhere by the left – and (ironically perhaps) also by the radical right – as a kind of recruiting tool.

Far more significant, however, is the way rock culture has combined with digital technologies to change general values and attitudes. You can't quantify this sort of thing but there is little doubt that the cultural identity of Western countries has been radically changed over recent decades and links to a two-and-a-half-thousand year history have been progressively broken. Who these days is familiar with Greek myths and legends or learns Latin or knows anything much about Western political or cultural or intellectual history? Rock music and the culture of rock and roll may be more of a symptom than a cause but it has undoubtedly played a role in this transformation.

Sunday, October 30, 2016

Signs of cultural decline


I have previously* made reference to Daniel Kaufman's provocative critique of Western self-improvement fads. His key examples related to Werner Erhard's est program and its successors. Having no direct experience with these movements I can't really comment meaningfully though I've noted that – whilst I personally am averse to these sorts of programs – some of the underlying ideas do look at least interesting and are not obviously misguided.

I am in strong agreement, however, with Kaufman's general remarks about cultural impoverishment.

Cited below are the final two paragraphs of his piece which make a number of telling points. I especially like the bit about "broadcasting the obvious". And the notion of these fads being symptomatic of a "national emptiness or sadness" is also worth taking seriously.

This last point (deriving from a perception of a deep and general malaise; cultural decline, if you like) is hard to put into words that don't sound histrionic or at least very subjective, but that doesn't mean that such judgments have no basis in reality.

"Of course, self improvement, in the ordinary sense, is a part of the human condition, and an inability or unwillingness to change or evolve over the course of our lives is undoubtedly problematic. Marriage and parenthood and middle age have led to my changing and developing in myriad ways, as has my relocation from New York to the Lower Midwest. I’ve had to begin paying more attention to my physical condition; to moderate some of my more reactive tendencies; to let more things go, rather than fight them all out; and to give up who knows how many personal prerogatives that I would have insisted upon, when I was younger, single, and childless, roaming the hedonistic mecca that was 1980’s and 90’s Manhattan. There is nothing special about this – indeed, it is boringly common. It isn’t the result of a program or a project or a plan. It requires no explicit philosophy or discipline. There is no need to meditate or visualize or take special views or whatever the hell the current Self-Improvement crowd would like to suggest is necessary. The result is not “enlightenment,” but growing up and eventually, growing old. This means, alas, that there is nothing to tweet or blog about, no reason to set up a website or to write a book chronicling “the journey”… unless, that is, one wants to broadcast to the world the bloody obvious, and why on earth would anyone want to do that?

"It’s depressing to realize that the American memory is so stunted, so addled, that these fads have to be unmasked every decade or so and the same criticisms made over and over again. EST [the program developed by Werner Erhard] came upon hard times and was repackaged, in subsequent decades, into the “Landmark Forum,” which was even more successful than the original. Guru after guru has been revealed to be a crook, a fraud, or a pervert, but the parade of such characters and their mobs of credulous, adoring fans continues on, unabated. That Americans continue to exhibit an unending thirst for this sort of thing suggests that for all that has changed, we still have not escaped the grip of the malaise that arose in the wake of the 1960’s, the collapse of the counterculture, and the disintegration of America’s families. The retreat into cyberspace is only the latest and most radical manifestation of this national emptiness and sadness, and we can expect that as it deepens, the Cult of the Self will only grow stronger, easily overwhelming the few voices that rise up in opposition to it, and with no obvious end in sight."


* See my Google+ collection Language, Logic, Life. I also maintain the collection The Decline of the West: Observations and reflections (which is more political). You can follow all my Google+ activity via my profile or just follow a particular collection.

Friday, October 28, 2016

American exceptionalism and foreign policy

[This is a shortened version of my latest Electric Agora essay.]



I have previously drawn attention to the neoconservative elements of Hillary Clinton’s foreign policy orientation and spoken of the dangers (as I see them) of a resurgence of such policies. At the time I wrote my previous piece on this topic (before the first TV debate), the polls were narrowing and the trend favored Trump. Subsequently, things have not gone well for the Republican campaign.

Assuming Clinton does win, I sincerely hope that she changes tack on foreign policy because – given the epochal changes currently underway in the geopolitical and economic spheres – I just don’t see how neoconservative-style policies, based on an essentially imperial vision of America’s role in the world and coupled with a deeply adversarial approach to Russia and China, could possibly play out in a benign way.

There are different views on this, of course, and I am not entirely sure of my position. On NATO, for example, I tend to the view that it should have been gradually scaled back or unwound after the demise of the USSR and that its expansion eastwards (in spite of assurances given to Gorbachev that this would not happen) and current activities have made the likelihood of large-scale war more rather than less likely. Charles Moore, a British neo-conservative who has a very dark view of Putin’s ultimate intentions, has made a case recently for NATO’s continuing importance in constraining Russia. There is no simple answer here. Perceived weakness and confusion on the part of Western powers will no doubt be exploited by hostile forces. But it is also true that alliances which operate as vehicles for hegemonic powers can be very problematic.

The word ‘realism’ can mean many different things, depending on context. Often it is used rhetorically and lacks substantive meaning. In international affairs, however, it has a generally accepted meaning. It comes in different flavors, but its key defining elements are clear enough. Realism in international relations is associated with strong skepticism about all forms of ideological thinking; an acute awareness of the dangers of the unforeseen consequences of military interventions; and generally modest expectations about what can be achieved on the international front.

As I understand it, there are competing factions within the Obama administration, some (like Obama himself, perhaps) not so committed to neocon-style policies and some more committed to hawkish intervention. I think the election of Hillary Clinton will give comfort to the latter group, and there will be a policy shift in that direction.

Someone asked in the course of the discussion of my earlier piece whether I really thought that the Chiefs of Staff would accept a presidential order to do something likely to trigger war with Russia or China.

It would depend on the circumstances. But it seems obvious enough that to the extent that the US follows neocon-like policies, the prerequisites for a big war (as distinct from more limited, regional conflicts) are more likely to be in place. The worst situations arise when countries fall readily into blocs and particularly if the blocs are very large and very few. We know this from the Cold War. At times we were very close to the brink of a global catastrophe. It would be so, so stupid and reckless to return to such a state of affairs. But many of the neocons seem to want just that.

I happen to think our future is bleak, whatever happens with this election and whatever policies the new administration adopts. But a major nuclear war is by no means inevitable and in my opinion is less likely in a multipolar world in which political leaders see their role more in local and regional than in global and ideological terms.

The Cold War was about power blocs, but it was also about ideology. The old Marxist-Leninist, Maoist and related ideologies have faded from the scene. I say it’s time for all of these overarching narratives to be dropped, including the idea that America has some kind of imperial destiny (or responsibility) to fulfil.

For years I bought into this narrative to some extent. But for a state to fulfil this kind of imperial role effectively, its strength and dominance and underlying economic health must be unquestioned. The state in question must also be widely trusted and respected. Arguably these conditions applied to the United States in the not-too-distant past. But today?

In America – and even to some extent in Britain – both neoconservatism and liberal interventionism are associated with the idea of American exceptionalism: that the United States has a special status amongst the nations, moral as well as military, and that from this status flow certain unique rights and responsibilities relating to global order and governance. In the past this myth has facilitated some very unfortunate actions – and maybe some good ones as well. But in current circumstances it can only be extremely dangerous.

Monday, September 19, 2016

Geopolitics and the US presidential election

"Could fear of Trump rattle Stoics, while fear of death finds no purchase?”

Dwayne Holmes was alluding to self-styled Stoic Massimo Pigliucci's readiness – in the face of the possibility of a Trump presidency – to endorse over-the-top, emotion-driven political analysis. There is certainly a lot of panic in liberal and progressive circles.

Here Holmes summarizes his own take on the upcoming election:

“We are down to haggling over whether it is a moderate pro-business southern Democrat (aka conservative) or extreme right wing ... reality TV star [and] pro-business conservative who sits in the office. Both are hawks (with Trump more blustery but less hawkish) …”

He is right in that Trump is certainly less hawkish in terms of foreign policy. Trump is not a neocon.

On the issue of conservatism and the left/right divide you’d have to say that these terms are getting more difficult to apply in the normal way. This is partly because across the Western world a lot of people – including many traditional conservatives, classical liberals and previously apolitical folk – are becoming disgusted with the status quo and so are voting or threatening to vote for candidates outside the mainstream or otherwise in quite radical ways (e.g. Brexit).

Hillary Rodham was a keen Goldwater supporter before she went to Wellesley College and was introduced to left-wing thought. She wrote her senior thesis on Saul Alinsky. But she certainly seems to have moved away from Alinsky’s ideas (apart perhaps from his ideas on lying). She is a neocon and supported by neocons. But many conservatives now clearly hate the neocons and are strenuously resisting their foreign policy prescriptions.

Why is it that President Dwight D. Eisenhower's prescient warnings about the American military-industrial complex (often now conceptualized in terms of the broader concept of the deep state) are only now becoming mainstream in conservative circles? The reasons are complex but certain things stand out.

For one thing, the recent track record of American interventions has been quite disastrous. But, more importantly, associated with these failures has been a loss of confidence in America's future prospects in terms both of prosperity and (partly as a consequence of this) of geo-strategic power. The centre of gravity of the world's wealth is reverting to a more normal historical pattern, balanced between the Eastern and Western hemispheres. There even seems a real prospect that the West is entering a period not just of relative decline in economic and social terms but of actual decline. And, of course, those overseeing this difficult period – the promoters and implementors of recent and current financial, monetary and foreign policies in the West – have lost or are rapidly losing credibility.

My main concerns regarding this election are geopolitical. Clinton’s general foreign policy orientation (and she has form on this front, remember) strikes me as a greater danger to world peace than Trump’s.

And if she has serious health problems (as appears increasingly likely), that would only add to the danger/instability. I could easily imagine a situation in which, if her health holds out until the election and there are no more ill-timed coughing fits or physical stumblings and she manages to get elected, that she would be not be at all inclined to step aside in favour of the Vice-President even in the face of very serious health concerns.

There is at least one precedent of this happening in America: Woodrow Wilson had a severe stroke and stayed in office. And there have been many cases in other countries. Some occurred in the old Soviet Union. There was, for example, Leonid Brezhnev who had severe arteriosclerosis which affected his speech and other aspects of neurological functioning. His immediate successors were almost as bad but didn't take so long to die.

And then, of course, there was the sad case of the bloated-looking and alcohol-fuelled Boris Yeltsin in post-Soviet Russia.

Clinton would be more Brezhnev than Yeltsin, you'd have to say.

Wednesday, August 31, 2016

No more politics?

[This piece was posted earlier today in my Google+ collection, Social and Political Reflections.]

I'm beginning to question the wisdom of writing about and giving my personal views on politically contentious issues. For one thing, speaking out is socially disadvantageous. In fact, I have more than once lost a good friend because they read something I wrote with which they strongly disagreed.

There is, of course, a downside to most activities. But where, I am wondering, is the upside here? What is the point of my sticking my neck out on political themes? It's not as if I really expect people to be persuaded to my point of view.

On the other hand, it may be that such ideological reflections do have a point and purpose, albeit one which is difficult precisely to discern or define. It may be in fact that they have more significance than just about any other form of discourse because they are centrally concerned with human values (and so with the motive force of human actions). Even if something I say makes only the slightest difference to how you see the world, your subsequent thoughts and actions will be different from how they would have been without that influence, will they not? The difference may be miniscule, but in complex systems – brains, societies – even small differences can sometimes become very significant.

I suspect, however, that contentious values-based issues are best approached obliquely rather than head on. Perhaps very obliquely.

I never was much into polemics (which nonetheless has its place in the scheme of things); my style has been more 'thinking out loud'. Only now I am reconsidering what to 'think out loud' about.

I am usually careful in a casual social context not to be too outspoken. When you talk to a person or group you tailor what you say to that audience, taking account of their responses, etc.. But with written communication, you don't have that kind of control.

When you write something and make it publicly available the audience is largely invisible and its nature unknown. Moreover, you don't usually get a chance to correct misunderstandings or clarify, something which happens as a matter of course in normal conversational exchanges.

A crucial thing about social and political values is that they are largely subjective. We may feel that our point of view is totally compelling. It is compelling to us. But objectively speaking?

Though some aspects of social and political value systems can be set out and objectively assessed, in the end no objective assessment can rank competing systems or – except in the case of hopelessly implausible systems – make definitive judgments. Ideology is just not the sort of thing that can be laid out clearly or definitively assessed.

In the light of these considerations, I am – as an experiment – adopting a new strategy of self-censorship on contentious ideological matters. The intention is to refrain from expressing political views and to keep the focus on the non-ideological side of things.

How will this decision affect my personal sites? It will mean that I will probably be posting mainly to my other general collection – Language, Logic, Life – in preference to this one, and reposting most or all of that material to (the Blogger blog) Language, Life and Logic.

My other blog, Conservative Tendency, finds itself at least for the time being, like this collection, in limbo.