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business newsTen Geopolitical and Economic Predictions for 2010
The actions that global leaders made in 2009 led us here.
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In 2009, a great -- and still growing -- divergence appeared between public statements by leaders and their public performance. The politicized, romanticized theater of increasingly populist “democratic” leaders and media seemed to be of a different planet from activities taking place in the real world.
While a large part of the global population appears still transfixed by words, there's a growing perception that great fissures already rend the global strategic architecture.
This is a trend that will compound during 2010.
There's a widespread belief that the world has “ducked the strategic bullet” of global economic collapse, but this is merely the delusionary euphoria of the severely wounded patient. Severe structural damage has occurred to the key driver of global economic stability: the United States. Most major economies of Western Europe and Asia, although in plight, have been protected in their fall by a complex web of structures and the fact that they weren't, in many respects, as leveraged as the US. Britain and Japan, however, remain leveraged in their debt-to-asset ratio, to a death-defying degree.
All of this has been long in coming, and brought to a speedy climax by the unprecedented recklessness of inflationary spending by President Barack Obama and UK Prime Minister Gordon Brown. The modern world (East and West, but prompted by the West) is at a junction point in a long process of constantly growing -- but poorly defined -- obsession with “rights” (entitlements). This had its origins with the halting, but consistent, rise in global prosperity that began with the early stages of the Second Industrial Revolution (1700-1900).
Thus, a butterfly flutters its wings in 18th Century Britain and a tsunami engulfs the world in the early 21st Century.Managing the now-overwhelming sense of entitlement in what we call modern democracies has become, because of the power of a comprehensive, but ill-informed electorate, an exercise in mob control and an opportunity for populist demagoguery.
Obama’s January 25, 2010 statement that he would now curb government spending was, like most of the statements of the past year, self-serving and had nothing to do with reality. His plan to push through a state-dominated health-care system at a reputed cost in excess of $1 trillion (quite apart from other discussions about a new “stimulus package” of spending) makes a mockery of the pre-election posturing of fiscal moderation (that is, his posturing before the 2008 and the 2010 elections). In any event, a review of the statistics of the US shows that his proposed “freeze” on a small part of government spending would be, compared with his profligacy and reduction of private sector productivity and capital formation ability, a derisory diversion.
Without dwelling, for the purposes of this estimate, on the cumulative impact of ever-broadening the electoral franchise -- which creates an automatic disposition of an electorate to demand increasing benefits without attendant increases in productivity -- the Western economies are probably at a point where they must attempt to create fairly draconian, centralized power structures to rule more by diktat than by “democracy”. That is the only recourse to stem the growing dysfunction of government brought about by the “democratic” necessity to pander to a restive populace.
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