Advertisements
deglobalization globalization populism Trump

Sunset.

Of populism, hegemony and Western democracy.

One of the great ironies of the Trump presidency is that his “America first” agenda is inherently self-defeating to the extent it weakens traditional U.S. alliances.

U.S. hegemony is at least partially synonymous with Western hegemony, so if you set out to dismantle or otherwise undermine the latter, you by definition undercut the former in the process.

Trump either doesn’t understand that or if he does understand it, then the apparent contradiction in selling a strategy that ultimately weakens the U.S. as something that puts “America first” can only be explained by reference to some manner of leverage someone has over U.S. policy and that “someone” is clearly the Kremlin.

There’s a bit of a chicken-egg problem when it comes to disentangling recent Russian interference in Western democracies and the rise of populism. I’ll quote a couple of recent posts on the way to recapping the backstory here. This is from a January piece:

Trump’s campaign and the Brexit push both leaned heavily on nationalist sentiment and that sentiment itself relied at least in part on a heightened sense of xenophobia. Populist candidates used the influx of refugees from the war-torn Mideast to stoke fears of a coming culture war that, according to these political opportunists, would result in the Islamization of Western Europe.

Obviously, that was a ridiculous proposition, but it resonated thanks in no small part to a steady stream of propaganda. That propaganda push would reach epic levels of absurdity in 2016. For instance, right-wing websites at one point resorted to posting pictures of swimming pool etiquette signs (which, like swimming pool etiquette signs have always done, discouraged horseplay and literal ass-grabbing) as evidence that Muslims couldn’t be trusted around European women. Because no white man has ever grabbed himself a handful of ass at a swimming pool, right?

It didn’t help that journalists, in their zeal to embellish a largely generic tale of radicalization, managed to transform the story of Abdelhamid Abaaoud (the ringleader of the Paris attacks) into the jihadist version of the Keyser Söze legend. He was blown to bits like Wile E. Coyote in the St. Denis suburb north of Paris on November 18, 2015, but the media had already managed to turn him into a larger-than-life character. That, along with the Brussels attacks, allowed the specter of the cell he commanded to hang over European politics for a full year after his death.

Somehow, reason managed to triumph over fear in France and ultimately Marine Le Pen was trounced by Emmanuel Macron in the 2017 presidential election. Weeks earlier, Geert Wilders (the cartoonish xenophobe from the Netherlands) watched as his Party for Freedom put up a lackluster performance in the Dutch elections. As for AfD in Germany, they did manage to become the first far-Right party to enter parliament since … well … since you know. But they remain on the fringe.

Of course it isn’t all xenophobia. Income inequality and the perception that globalization is increasingly harmful to the Western middle class is part and parcel of the narrative.  Recall this from BofAML, out around the time of the Italian elections in March:

Populism has been an all too familiar theme over the last few weeks, with a strong “protest vote” being registered in the Italian general elections and the rumblings of a potential tit-for-tat trade war emerging. The reality is that populism hasn’t disappeared – far from it as Chart 3 shows. At its heart, populism remains a story about righting wealth and income inequality. Note in Chart 4 how well the Italian elections encapsulate this theme: across Italy’s regions,the 5 Star vote share appears to have been strongly correlated to GDP per capita.

Populist

Getting back to the chicken-egg issue with Russia, the Kremlin’s fingerprints have been all over these movements (and this isn’t about Russophobia, it’s just to state the obvious). Here’s a quick recap from another post of mine:

Alleged collusion between the Trump campaign and the Kremlin was part and parcel of a broader effort by Russia to influence political outcomes in Western democracies by capitalizing off the surging popularity of populist candidates and nationalist sentiment in France (Marine Le Pen), Britain (Brexit), the Netherlands (Geert Wilders), Germany (AfD) and of course in the United States.

New researchsuggests a link between automated Twitter bot activity and Trump’s election victory as well as a link between bots and the Brexit vote. Needless to say, that just underscores the notion that Russian social media activity played a role in all of the campaigns mentioned above, from Le Pen, to Wilders, to AfD.

Circling back to the points made here at the outset, Trump is perpetuating the anti-globalization push and as we saw with his abrupt about-face vis-à-vis the trade truce Steve Mnuchin struck with Beijing, is predisposed to reverting to the populist tactics/rhetoric that got him elected at the first suggestion he’s wavering when it comes to pushing that agenda.

It’s not entirely clear what motivates Trump’s demonstrable disdain for Western democracies and multilateralism. There’s a childlike adoration for autocrats and dictators involved, but when it comes to Putin, we of course don’t know whether that’s where it stops or whether Moscow actually has Trump by the balls. It’s entirely possible that most of Trump’s autocratic tendencies can be explained in terms of what happens when ignorance and narcissism collide with power. The fact that he’s now had the opportunity to meet with and speak to autocrats and dictators probably reinforces his misplaced admiration. I realize that’s not a popular characterization among Trump critics who are determined that he’s actually some semblance of evil, but my contention continues to be that he’s an accidental autocrat.

Whatever the case, he is undermining Western hegemony and thereby U.S. hegemony. That, in turn, strengthens Moscow and Beijing. The G-7 summit last weekend was clearly a disaster, Trump’s recent damage control efforts (he posted some ridiculous pictures on Twitter designed to dispel the notion that he didn’t get along with anyone when he was in Canada) notwithstanding.

This is the context for a new note from BNP’s Paul Mortimer-Lee who asks the following question: “Is the sun setting on the West?”

In the opening paragraph, he states the obvious about the G-7 meeting, which is this:

Last week’s G7 summit bordered on farce, with disagreements, bad temper and name calling. At the same time as US President Trump seemed to be set on making enemies of his friends, he appeared to be trying to make friends with his enemies, calling for Russia to be allowed back into the gathering and jetted off early (after arriving late) for a meeting with Kim Jong Un.

Here are some other excerpts from the note, which touches on a lot of the pressing geopolitical issues that need to be resolved sooner rather than later if the West’s current trajectory is to be reversed.

On the North Korea summit:

The outcome of the Trump/Kim summit seemed to be a win for the latter. The US President made a very substantial concession in agreeing to call off joint military exercises with South Korea (without having consulted Seoul, apparently), in return for vague wording that North Korea will work towards denuclearization of the Korean peninsula.

On the risk that things could get worse if economic circumstances deteriorate:

One remarkable thing to note is that the dissonance in western international relations has emerged when economic times are relatively good, when unemployment is low and inflation is under control. This gives us real pause for thought about what might happen when the next downturn comes and unemployment starts to rise. Things could get really nasty and populism could ratchet up sharply.

On the idea that tariffs can solve the problems that have helped stoke populist sentiment:

The overall lack of growth is one of the factors pushing for protectionism – maybe US living standards could rise if tariffs result in an increase in the domestic capital stock and a rise in productivity. But will tariffs work and raise living standards? We are dubious. The US has no spare capacity at the moment – just look at the stories about shortages of truckers, and trucks, and of construction workers. Immigration controls could make worker shortages larger. Tariffs on imported German cars in the US could prompt German manufacturers to produce more cars for the US market in the US, but maybe at the expense of cutting exports of German cars made in the US to the rest of the world. A few producers will win big as a result of tariffs, but millions of consumers and thousands of businesses will lose, likely with a net loss of jobs.

On what actually might help:

Of course, it need not be like this. A further reduction of trade barriers (regulatory as well as tariffs) could help. What is really needed is a concrete plan from western governments on how to raise productivity and investment and to respond to the considerable challenges caused by fast-growing emerging market economies, as well as to respond to income distribution challenges. The pre-crisis solution of bolstering growth by relying on increasing amounts of leverage is simply not tenable.

And finally, on China and Russia:

Vladimir Putin and President Xi must be delighted at the fracturing of the West, which clearly has an impact on the economic and soft power of the various players and questions political and military alliances as well as economic ones. Many great powers and empires in the past failed under the influence of not only external challenges but also of internal divisions. The West seems to be slipping in that direction.

 

Advertisements

5 comments on “Sunset.

  1. “As the world turns” a new soap opera on the new world order network centers around many lies by our deceitful main characters (China, Russia,Japan and star of the show the USA, plus many minor character) Central Bankers using their army of enforcers IMF, WB and the BIS to deliver a final ‘coup-d-gras’ to all of us for the benefit of their new world order.

    No, folks you are not in the club either. All of the rest of us are the pee-ons (pun intended) are responsible for this gigantic debt bomb exploding “on our behalf” all over the world so very rich and powerful people can become even more so.

    We (pee-ons) are on the hook for all of this wonderful malfeasance done on our behalf. Thanks you so much Mr. Greenspan, Mr. Bernanke,Mr Draghi, Mr. Kuroda, Mr. Yang Chin-long, MS.Yellen and the new star of the show MR. Jerome MAGA-nificent Powell for their never-ending support and persistence for truth, justice and the American way. Steal everything you can for as long as you can for our new world order.

    Tired of winning yet?

    The funny part is that our big orange clown thinks he is in the club…..sorry donnie you aren’t and will NEVER be.

    Rome is burning and our new world order is laughing all the way to their banks.

  2. Pingback: Blame Populism | Growth Investing Research

Speak On It

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Skip to toolbar