The Democrats, The Wilderness & the Affinity Between Statism & U.S. Business

During a crisis, if one possesses a sufficient enough grasp of identity, you turn outward not inward.  When the Republican’s lose bad they return from the wilderness stronger; having profound moral, political sources, the Republican party hardly suffers from renewal after a devastating loss.  The same cannot be said of the Democratic party.  The wilderness beckons and the turn isn’t so much inward as militant, archaic and bitter.  This will not end until they confront their own enduring sources.  My guess is the Democratic party will not return to leadership for at least a decade.

The 2008 Democratic win created a storm of controversy over legacy.  Immediately upon inauguration pliable allies of the left sought to mark a near permanent ascendancy.  Then it happened.  Obama-no-drama doesn’t do politics.  For anyone who makes a living off political craft, Obama’s grasp of his office left him and the milieu of D.C. wanting.

The sources the left used during Obama’s reign was palpable; it sought the outright expropriation of civil society.  It wasn’t that regulation was overdone.  The regulatory regime was used to accomplish what our Constitutional Republic refused to do, namely bend to majority rule in the executive.  If old wags in D.C. could talk they would have revealed what everyone else knew, but was afraid to say:  the political sources of the new left was alloyed outside the American Revolution.

Their is no way to address this problem, for the Democratic party seeks power in realist, Machiavellian terms.

And so do all the rent seekers that dominate the American political economy!

If we’ve learned anything since 2008, is this:  we don’t live in the land of freedom.  We live in an era of unmittigated militant equality.  A time that few really know how to handle.  A Tocqueville or Solzhenitsyn knows this terrain, the rest of us are to busy earning a living to find any place to resist the onslaught. What 2008 and the post-recovery period reveal is that American entrepreneurialism seeks a near permanent comity with the statism of the left.

The main culprit of the financial meltdown was Wall Streets compensation culture and the fair housing acts of Congress which sought to whipsaw entire financial, business fiefdoms as proxies of the progressive movement.

Obama did the same with Health care; get the hospitals, States and entire industries on board, then hammer away on expropriating civil society.

We’re a long way from Alexander Hamilton’s idea of having the federal government guarantee the full payment of its debt, thus establishing the unquestioned credit of the United States.  This was sharply criticized as rewarding evil speculators, but hostility toward the financial community has a very long history.

Even a cursory reading of Hayek’s ‘extended order’ reveals complexity on a magnitude unimaginable.  The role of finance in contemporary modern economy remains irreplaceable. How else can one explain the benefits we enjoy from the democratization of capital.

In distinguishing between finance and the politics of political economy, we forget how the degeneration of the U.S. political economy began.  It started in 1969, when an investment bank named Donaldson, Lufkin & Jenrette sold equity to the public.  All previous investment banks were partnerships whose capital originated from the net worth of the individual partners.  They assumed moderate risk only because investment failure may endanger their own life savings.  However, once a firms capital was increased by debt and equity financing (by other people’s money), the moral, ethical foundation of finance and its role in the U.S. political economy shifted.

Once these formidable institutions went public, they engendered a risk-reward culture that aimed for one thing:  the big, year end, annual bonus.

Just ask Bear Stearns or Lehman Brothers:  when they folded up, executive portfolio’s were capitalized with more than 30 parts debt to 1 part equity.  Know what that’s called?  Gambling.

Excessive leverage has sustained perverted incentives.  Equity holders got all the gain, debt holders were fleeced.

How does this get fixed?  It gets addressed politically.

By addressing the ethically bankrupted compensation system of taking big bets with other peoples money while avoiding accountability; we begin by returning to a compensation system that resembles a partnership culture.  We should require that Wall Street firms put their entire net worth on the line, their co-op apartments, their summer homes, art work and numerous other cash vaults in banks; all should be fodder for creditors.

Does anyone really believe that Congress and the SEC is capable of producing less burdensome regulations with a new compensation structure that penalizes bad behavior with permitting finance to do what it does best:  allocate capital for high return.

Don’t hold your breath.  Remember Shakespeare:  when the King is dying the clowns cash in.

2a

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The Secular Stag is Gone, Lawrence Summers Call Your Office

This blog has tackled the cynicism animating most financial economists desire or need to evade intellectual, even moral responsibility for the collapse of confidence the American Republic has for the Federal Reserve and Congress to extract the Republic from the mires of statism that began in 2008.  Anyone worth reading has evidenced that soaring confidence trick a new election has wrought.  This is significant, but not for the usual reasons, for central banks around the globe are exhausted, inept and moored to an archaic Keynesian field manual.  Then again professionals get paid to work, not think.  If anything, the election of a Republican in November has slayed the secular stagnation thesis of Lawrence Summers.

The evasion was only noted by those not alloyed to Keynesian thought.  Any working professional knew that public confidence in team Obama is the source for chronically weak growth.  We’re living in an age of self-induced hysteria; the source of American growth is the American people, not technocrats ensconced away in field offices throughout D.C.

What we need to remember is that good times don’t indicate sound health.  This is lost in the current round of animal spirits running through Dow Jones & Company.

Since 2008, we’ve had a jobless recovery, funneling more credit to American households will not suffice.  We need tax and regulatory reform or the Republic is going over a cliff.

We don’t need credit expansion.  We don’t need new capital projects, nor large debt ridden public investment schemes.  If the U.S. don’t want to be identified as an emerging economy, we need to do something about taxes, regulations and permit working citizens to get to equity-capital formation.  What every emerging economy is witnessing now is surging capital outflows racked to raising interest rates.  Capital flight is coming home, but that will not provide the stimulus needed for Congressional leadership to reform the policy architecture providing growth.  Every other struggling nation is hoping to quietly install capital controls, wait for F.D.I. and build up their foreign exchange reserves.

The next several months will be difficult for nation states who tied their own monetary policy to the Fed.

Remember Nixon’s Treasury Secretary John Connally’s fiscal epithet “its our money, but its your problem”. 

john-b-connally-caricature-1971-politicards-single-swap-card-dd495a7c6d76a9f30702328ef93225df

Richard Nixon’s Treasury Secretary

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Sinn Fein & Unification of Ireland

The Brexit will not be violent, except on England’s periphery;  the Continents fault lines actually run in England’s rear.  This was evidenced in the 1921 when London was forced to partition Ireland while seeking to redress Germany’s rise, fearing any flanking option by superior Continental powers, England’s own Elizabethan foreign policy of tying down Catholic Emperors deep into the Hanoverian Teutonic highlands worked until the beginning of the 20th century.  The partitioning of Ireland would only serve England’s interests so long as India was subjugated.  Fixed exchange rates, Imperial rule and large colonial exports all ended with the interwar years.  The small wars of former dependencies truly rocked Paris (Algerian War of Independence, Vietnam. . ) London (partitioning of India, Pakistan), but nothing eviscerated England more than The Troubles, the I.R.A. and the ethno-nationalist war of separatism that became the partitioning of Ireland.

Although the Thirty Years War is the global context for understanding this rivalry, it fares that Tutor policy would find its true resonance with Victoria.  The hijacking of Dutch Orangemen with Presbyterian Scots in England’s north were the proxies serving Whitehall since Henry VIII.  The ambitions of indigenous Irish would be frustrated throughout the late 19th early 20th centuries until Thatcher, where Soviet policy of splitting the Atlantic Alliance would presage a satanic turn inward, here the I.R.A. would embody a truly Republican threat that every British Monarch warned of since Henry’s rule.

Why is this important today?

The northern Presbyterian Scots-Irish (Orangemen) has really been abandoned by Westminster, because of it, they now feel like besieged settlers.  The recent elections held in Northern Ireland  have brought Sinn Fein (the I.R.A. political wing) within one parliamentary seat of dominance.

The Unionists (the Presbyterian Scots Irish-Orangemen) are led by the Democratic Unionist Party, lost their overall majority they’ve held since the partition of Ireland in 1921.  Turnout was huge and both sides scored large increases in voter registration, but Sinn Fein is now about to clench what was denied Charles Parnell.

Although Westminster permitted a reduction in the number of parliamentary seats from 108 to 90, this contributed to a lowering of tally’s for the Democratic Unionist Party & the Ulster Unionists; Sinn Fein (the I.R.A. nationalist party) surged throughout the campaign.

Sinn Fein’s President Gerry Adams said “the notion of a permanent or perpetual unionist majority has been demolished.”

The northern Protestants are abandoned, weak, divided and fearful of having to recognize that they’ve simply been out maneuvered.  Westminster wants political devolution to continue, effectively abandoning direct rule from England.

A new political landscape is emerging from the partition.  Time has been on the side of Irish nationalist terror.3a

(To eliminate any confusion, the picture above isn’t an IRA terrorist, its an Orangeman seeking revenge through public terror, execution of Catholic civilians.  Those who wear the masks in northern Ireland are the minorities!!  This insight is lost on American’s.)

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Iran’s Satanic Mullahs Use Religion

There are a handful of Persian specialists who truly understand the theocratic, political nature of the Iranian regime.  Amir Taheri is one of them.  Abbas Milani at Hoover is another.  Both men understand the relation between expressed autocratic power and the need for legitimacy, for the social, geopolitical undercurrent of the Iranian regime is permanently weak.  The west struggles with these admonitions, for we’re constantly seeking to validate an illusive, non-existent reality in Iranian political life:  moderates.

The regime, by its very nature has executed any/all counter-revolutionary classes.  There aren’t any moderates left.  Why is the term used?  Its sole criteria is discerned from the animus of propaganda Tehran weaves as it engages those outside its orbit; its a measuring tool the Mullahs use to gauge favorable sycophants that reside throughout the west.  Anyone with real knowledge of Iran knows just how Satanic these clowns are.

With the death of Akbar Hashemi Rafsanjani in January, Khamenei (the Supreme autocratic ruler) is seeking to paper over Iran’s Constitutional mechanism for choosing a successor.  What the west refuses to acknowledge is that the Assembly of Experts has never really been responsible for choosing the Supreme Guide.  Let’s review.

Iran’s previous leader Seyyed Mohammed Katami claimed for years that the regime in Tehran never used the Assembly of Experts to choose Iranian leadership.

By any measure, Iran’s first Supreme Guide was Ayatollah Ruhallah Khomeini, but he was never voted in by the Assembly of Experts, he simply overwhelmed all opposition, murdering everyone who challenged him.  Khomeini declared himself Imam and acted as if he had divine mandate.  Historically, the Iranian regime is secular that uses a religious mandate.  For the Mullahs in Iran, the mosque has been annexed by the State and those that wish to rule autocratically.  Logically, the Supreme Guide isn’t the top Mullah either.

Even the Ayatollah Khomeini had extremely limited, cursory understanding of Persian and Arabic, meaning he never attained any rank within the Shi’ite clerical hierarchy.  He simply arrived and set up a theocratic regime resembling Stalin.

The race is on to choose Iran’s current leader.  By any measure, the regime in Iran is weak, divided and Satanic; something that happened 100 years ago in Russia.

We’re failing if we don’t take the fight to these clowns.

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What Arnold Toynbee Taught McDonalds; Is the Church Listening

Arnold Toynbee wrote his magisterial twelve volumes A Study of History beginning on a train ride through Thrace (Macedonia) arriving at Istanbul.  This was long before the beginning of the First World War, a time of sound money, where the book remained the fulcrum of learning and the idea of the nation state stolid.  Riding for weeks on the Orient Express out of Paris, he would arrive at Istanbul seeking to resolve an ambitious agenda: the rise and fall of Civilizations.  Here’s what he discerned.

For Toynbee, the sole criteria of growth is self determination.

For Roman Catholics, we call this moral agency.  For those with a literary turn of mind, its a bildungsroman.  For any ethicists out there who read this blog, the reality is termed the specificity of Christian ethics.  Why is this significant?

We’ve simply lost the meaning of humanness, because we no longer conceive of human life as being in constant relation with God.  By abandoning sacramental realism for positivist autonomy, we’ve permitted our entire lives to be shaped mechanically.

What does this have to do with McDonalds?

Having lost over 500 million orders over five years has bludgeoned management to close franchises, reduce levels of management, effectively bringing executive leadership closer to customers; but even changing how its meals are cooked, the marketing alone hasn’t delivered anything.

By any standard, McDonald’s has failed.

When Thomas E. Ricks wrote The Generals he wanted to examine why a private who drops a rifle is severely punished, but a General losing a war isn’t.

Because we live in an age of digital disruption, old silos have fallen apart; we’re now autonomous nomads living without an informing center.  What digital life procured is the unity of labor and capital.  This isn’t something that our current social, political institutions can handle.  This means we’re returning to an earth, a social ecosystem without hierarchies.

For McDonald’s it means returning to what you do best:  it means affirming your identity. If you’re lucky to have had the ability to discern IT.  Chasing new customers with new extended product lines broke McDonald’s.  Now they’re focusing on core customers.

Time will tell IF this strategy works.  McDonald’s has little time to fail anymore, having the world’s best, most aggressive marketing will help management discern through tacit leadership, what works.

The Pentagon actually has less time.  Possessing greater consequences, we’re witnessing collapsing hierarchies throughout procurement.  Even the Army has decided that advanced infantry will remain the apex of war.  This wasn’t always the case, in the 50’s through September 11, nuclear missiles and aerial dog fights supplanted both counter-insurgency doctrine and infantry.  The U.S. Army is now witnessing the complete total collapse of previous domains.

Regarding vocations to the Church, is Rome listening.  Here’s a hint:  a besieged mentality cannot overcome the need to sustain an un-interrupted tradition.  I suggest a reading of Toynbee or a trip to McDonald’s for those charged with procuring vocations.  If McDonald’s and the Pentagon can procure, so can those charged with vocations.

Don’t plan on the clerics getting it right.

McDonald’s latest commercial on the Big Mac 2017.

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McKinsey Study on ‘Short-Termism’: Nice But Inadequate

McKinsey works well within the strict confines of corporate culture; its myopic mores and clearly defined silos.  Although it presents its material holistically, it rarely trains its top faculties synoptically.  That’s because McKinsey’s top people are secular, they’ve never had to think outside the commanding heights of modernity; put another way, McKinsey cannot, will not strive to uncover the moral foundations of liberty.  More Hayek and Tocqueville, less Keynes.  Until McKinsey begins to articulate sources outside its dominant secular framework, it cannot hope to secure the kind of strategic clarity its clients seek.

Its latest research on economic growth and short-termism remains indicative of this problem.  How can one ignore the mounting (monetarist-Austrian) school of thought that fiscal policy has on reality.  Are McKinse-ites capable of discerning deeper competing theoretical trends in economics?  Why haven’t they been assimilated into Robert Bartley’s Seven Fat Years.  My guess is McKinsey doesn’t work outside dominant secular modes of thought; it will need to, if it is to secure strong intellectual, moral sources to ground its findings.

The past decade witnessed collapsing frameworks that underwrote hidebound central banks.  They tried zero interest rate policies, quantitative easing, and hosts of other tricks to conjure growth.  NOTHING.  Except for government and education, these clowns would have been shown the door.  Seeking the excuse of weather, earthquakes (Japan), secular stagnation, debt hangovers, demography etc. . . have exhausted the credibility of once vaunted institutions.

Why did it never occur to McKinsey to look at the social impact of confiscatory taxation?

Why does the average share in the S&P 500 index change hands every 200 days?  Why ignore the profound truth bestowed upon the followers of John Bogle, that the entire structure of contemporary finance is rent-seeking.  Wait, it gets worse.  Why is financialization easier than real growth.  Because what matters is the perception of growth evidenced on paper.  How do we know this?

The entire S&P 500 index shows that even the best companies with cash flow operate on slim margins; for every dollar of operating cashflow, companies spend 44 cents on capital investment (labor costs) and 56 cents on buy-backs and dividends.  Their gaming the books!

And their doing it because America isn’t the land of capital, equity formation anymore.  Our political economy is harnessed to the barrel of neoliberal thought, a parasite of government intervention that openly seeks the expropriation of civil society.

What did McKinsey show:  they revealed that any company that invests very little in its capital stock, cuts costs to boost marginal (paper/accounting) growth, does lots of buy-backs, books sales before payment or raids quarterly forecasts, exhibit fiscal trends of un-sustainability.

Here’s the truth:  the state of the U.S. economy is bad.  Really bad.  Our citizenry is exhausted, our industrial policy of depreciation has failed, our currency (although growing now) remains weak and we continue to permit Washington D.C. to expropriate the very source of renewal, our capital stock.

McKinsey needs to examine what underwrites our political economy.  It needs to talk politically about why the greatest nation on earth is on its knees.  Unless we examine the politics of our current fiscal state, we’re left listening to useful idiots like Lawrence Summers explain away our heritage.

McKinsey, call your office.

1q

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Hayek 2.0: A Supply Side Revolution Begins

If you’re a supply sider, monetarist or nominal GDP target economist, we’re about to enter familiar territory that, frankly, should never have been abandoned.  The reality is, its not 2017 but 1973 and Congress, the media and entire swaths of the professional ‘chatter class’ is about to reboot Reagan’s fiscal agenda except this time the opposition acknowledges familiar terrain; this kind of strength may endure but it will not help them win over future voters.  Multinational companies housed in the U.S. are bracing for major tax reform that will enable them to expense options immediately instead of drawing out lengthly depreciation dates; a bill that favors equity over debt and an environment that openly fosters liberty.  As we enter March, we need to brace for impact because the culture wars are about to heat up.

The U.S. dollar has experienced its sharpest rise ever since the lows of 2011.  Treasury yields have risen to nearly 2.5% and capital flows are increasing.  Even global financial and credit markets have exploded in size; the greenback, unlike the yuan, is more pivotal than ever.  This is evidenced in witnessing the surge the dollar has become in foreign financing.  We’re no longer seeing U.S. pension funds purchase foreign U.S. denominated debt, but the reverse in capital flows back to the U.S. is testing the resolve of foreign central banks.

A stronger greenback is reversing a cycle that began with ZIRP.  With zero interest rate policy plying money abroad in search of interest, it has returned with a vengeance; we’re witnessing foreigners husbanding local currencies to finance rising costs, as capital flows out, assets prices fall.  The result:  capital markets and indigenous credit markets are more dependent on the fortunes of the U.S. economy than every before.  The truth is:  we’re carrying everyone.  The downside:  authoritarian nation states like Turkey and Russia have large foreign denominated debt, mostly in short term T-bills.

It isn’t all good news for us either.  We should anticipate a widening of our trade deficit, only to be offset with massive capital inflows, low inflation, high productivity and social mobility.  Its happened before, it can happen again this spring.

The trick is to wade into currency arbitrate, carry trades or covered-interest-parity knowing full well that currency volatility is now unhinged from market fundamentals.  This was previously fixed with the Plaza Accord, but the underlying geopolitical rhetoric of the past two years has killed off any possibility of having an accord today.

The gloves are off, and the dominant political parties in D.C. are reaching for total reform of our tax code for growth; we’re moving toward a full scale downsizing of Keynesian ideology.

2q

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Mexican Trade Fears ARE REAL

When the President of Mexico considers his strategic position, he’ll notice something outside the raging Mexican nationalism that currently animates much of the population, he’ll notice a plunging peso and the consequent fear of losing out to a stronger, more versatile American partner.  This will not be an easy ride for any Mexican executive, but I countenance that even a strong leader like Augustin Carsten’s and his tenure at the Mexican Central Bank possesses limited manuvering regarding carry trades, floating exchange regimes, and volatile geopolitics.  This can end very badly for Mexico.

The peso has always been used by global financial institutions as the primary instrument for hedging, especially regarding emerging markets and variable risks associated with the developing world.  Why?  Well, the peso is by far the most liquid emerging market currency; one with few restrictions on trading.  The peso moves alongside the dollar and a few other major currencies, it also historically keeps apace with fluctuations in nominal policy movements by the U.S. Federal Reserve as well as nominal interest rates and commodities.

In recent months though, President Trump’s aggressive rhetoric have decoupled the peso from solid market fundamentals.  Although historically tied to Mexico’s stable export dependent economy, it now floats unanchored.   This isn’t good for either the U.S. nor Mexico.

As it now stands, interventions to prop up the peso have failed, instead of providing a floor to anchor or underwrite currencies associated with emerging markets, the Mexican peso has fallen nearly 6% in January alone.  This kind of volatility is eroding the peso’s appeal and effectiveness as a hedge in emerging markets.

If “the Donald” as done anything, he’s promoted currency manipulation.

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Germany’s Current Account Surplus

We often forget that Germany (like the rest of Europe) is integrated or fused in a way that makes analysis of baskets of currencies difficult.  Here’s what I mean:  if Germany was to trade using its former Deutsche-mark and not the Euro, its currency rate or parity was register smaller imbalances. As of February 09th, Germany registered the world’s largest current account surplus, beating China.  Germany’s mercantilist policy of favoring Euro-denominated exports permits it to use a weak currency.

For team Trump, this is another reason to distain both our rules based economic order, the European Union and NATO, all remain bulwarks for German national consciousness. If anything, Asian geopolitical consciousness is far more agile than European. We simply don’t have viable replacements for the E.U. or NATO.  If Putin were to accept reform the Russian political economy out from its authoritarian trajectory, it is possible that market based solutions in Moscow could alleviate Germany’s dominant current account surplus by linking historical competitive animus between Moscow and Berlin.

As it stands now, Berlin really has a savings glut, investment gaps and wide swings in its VAT indices.  As it is with Japanese domestic industries, these are non-starters for Germany.

In the end, European nation states are going to have to begin reforming themselves and competing; this means ending the subsidies, the monopolies and the overt accommodative monetary policy that has only sought velocity at the expense of competitiveness.

Get ready for nationalism and volatility, a redo of 1973.  Is Volcker & Taylor ready for Bretton-Woods II?

3w

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The State of European Political Economy

When Francis Fukuyama stated that there was no higher form of historical development than the Western social democratic state, many laughed.  I actually lost my breadth laughing.  But when a person thinks in isolation or outside any sound dominant tradition (Leo Strauss, Harry Jaffa etc. . . ) you find yourself like Francis did, alone defending a filament that entirely misses both the moral foundations of liberty and the theological foundations of culture.  Being trained in the technique of political science akin to positivism renders one unable to discern nor defend the synoptic whole.  But then again, what else is tenure for??

Like the early 1970’s, the United States went through a profound crisis of mediocre leadership aggravated by the twin shock of the 1973 Yom Kippur War and its aftermath in the OPEC crisis; all of which was enveloped in the closing of the ‘gold window’ and the removal of fixed exchange rate regimes.  The whole thing would not be resolved until the early 1980’s under Reagan and Volcker.

With new influences at work in new arrangements, new forms of geopolitical, monetary, fiduciary underwriting, the world fractured in 1973 and the cleavages rent many of the formal institutions of government.  Its happening today, but the fault lines aren’t fracturing like they did in past decades.  Today’s shocks are the result of social, technological, demographic, even cultural changes that don’t register in positivist tones.

When the coachman of Europe, Prince Klemens von Metternich, sought to end the rule of egalitarian romantic revolutionary movements throughout Europe, he only had to conjoin a Concert of Europe.  Given a certain equanimity in the social base of European Christian civilization, a comity was easily reached and Napoleon thwarted.  What does one do to harness a reply to foreign influences that run outside the mores of ones culture.  When monetary, fiscal and instruments of war are useless in thwarting or assimilating an enemy, how does one command a center for harness, when there is no center to speak of.

When Bismark was dismissed after 28 years of service by the 31 year old German Emperor Wilhelm II, who could measure that Germany was fatefully placed in dangerously incapable hands?  Fearing encirclement in World War I and the twin enormities of both hyperinflation and social darwinism, the German volk happily invited a gotterdammerung worthy of any Greek tragedy.  It fell to the Americans to finally fix that Prussian menace.  Ditto for Japan and Russia.

The American’s are being called again now, to distant lands; we should remember Washington’s admonition of alliances and monsters abroad.  For if Germany, Japan, Russia and hosts of other first world nation states fell upon an altar of sacrifice under a democratic banner, the same could happen to the American’s.

We should also remember the achievements wrought under a Truman, Eisenhower, Kennedy or Reagan.  It isn’t all blackballing and violence.  Wasn’t the greatest European act of statesmanship prior to John Paul II, Adenauer’s rejection of Stalin’s offer of reunification in exchange for neutrality.  Even still, with Bismarck, Germany was hobbled by fractious divisions of its politics inviting a profound ambivalence of German ambitions that plays out today.  With Merkel, the moral, strategic condition of inferiority still afflicts Germany.

This Teutonic ambivalence plays out today between the Social Democrats & Christian Democrats.  Embedded deeply within the components of these coalitions are divided and dysfunctional national ambitions that cannot be reconciled.  As of this writing, the German political condition is unstable and untenable.  Merkel has squandered her ambition and strength in the admission of Syrian refugees; her profound delay in realizing how untenable her policy was, is fatal.

No matter what happens in the immediate German elections, it will take another generation of those born long after Merkel (1954) to ease Germany through the vacuum left by an imploding Third Reich.

The French Republic remains in a far more dangerous position than Germany.

The Platonic idealism animating the French Republic has found a home in jihadi Islam.  To stir the French out of their cynicism and impractical nature will require the very horrors jihadi’s are imposing upon the French Republic.  What the French need is a national goal of imaginative grandeur.  This isn’t something impossible for the French to conceive, but for Paris to conceive of it, it will need to contain, and evenly break the overt socialist tendencies that paralyze French politics.

Remember when De Gaulle took over a France mired in failed counterinsurgency in an imploding Algeria and failed Indochina.  De Gaulle gave strong leadership, a new currency and nuclear weapons.  He cut Algeria loose and worked with the American’s in Indochina under the pretense of holding firm to any German advance in the western Atlantic.

The French have never really recovered from the bombshell of Solzhenitsyn’s Gulag Archipelago nor Arthur Koestler’s Darkness at Noon.  Even still, the French have never taken appeals to national interest seriously.  For France to succeed in the near future, it must find a way out of a self-imposed socialist malaise.  Without addressing France’s paralyzing ennui, it is in permanent decline.

England has never recovered from the near suicidal defenestration of Thatcher in 1990.

When she was elected in 1979, the IMF had England in receivership with strict currency controls.  The top income tax rate was 98% with an unimaginably high corporate rate of 70%.  British industrial relations is where Maggie sought to lay her ax and her reputation.  It was a gamble, and she won big.  All this galvanized her stalwart positioning in the Falkland island dispute, only to strengthen Reagan’s ‘wobbly knees‘ in his own near fatal grasp of Soviet adventures in Afghanistan & Central America.  None of this was foreordained, and there remains much in contention socially and related to tax policy and its relation to deficits etc. . . In all, “we win they lose” won the day.  No one should expect that calculation to succeed again.

The west today is at an interregnum of weak leadership.  November of 2016 marked a profound fault line that Americans will not accept decline and have moved to upend an un-regenerative, reek seeking political class.

What Lincoln and others knew may come truth again:  the American’s are a warrior class and openly seek confrontation in a culture war whose patrimony is discerned in the American experiment that is liberty in equality.

4a

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