The Magic 8-Ball says…
Posted February 22, 2013on:
Good morning Widdershin friends, here’s hoping this is the nadir of your pessimism for this Friday.
In writing this post, I feel like an E-coli on a cruise ship — I don’t know where to start. Last week I wrote about how essential visioning is to the concept of leadership. This week I thought I would throw out some macro-concepts facing us as we ride this rock around the sun, but getting my arms around these concepts in 800 words or so is much like my ill-fated attempts at hugging an elephant — no matter how smitten or determined I was, both of us were disappointed in the end. In any event, here goes.
Any number of crisis points, both here and abroad, are inextricably bound up in one crumbling fanciful fantasy — the utopian dream of free market globalization under benign U.S. leadership. Globalization is turning out to be not so much a dream, but a languid thirty year hallucination. The fever dream of globalization has a lineage dating back to post-World War II as developmentalism, but for the last thirty years it has been the siren call of both Republicans and Democrats in terms of economic, military, and diplomatic policy.
With the declaration that the Cold War had been won in 1989, we embarked on a full-throated aria for world-wide globalization of Big Macs, Swoosh Gear, and Fast and Furious CDs — all under the guise of the low hanging fruit of expanding markets. At the same time, corporations engaged in an international game of “runaway factories” (think Whack-a-Mole with workers playing the part of the moles) where the first and fastest to the bottom were declared winners. With financial institutions being the biggest beneficiary of globalization since money is fungible, new and exotic forms of wealth creation blossomed like mushrooms on fresh cow piles with the only limitation being the imagination of those who made billions by selling nothing more than speculation through synthetic financial instruments.
Enabled by the sledge hammers on the Berlin Wall, this neoconservative nirvana of globalization would allow the U.S. to create a global semi-imperial hegemony reigning for generations with the emerging nations of BRIC (Brazil, Russia, India, and China) and others recognizing the benefits of a world order stamped “Made in the USA.“ A funny thing happened on the way to this Utopian world — some countries got the script, but decided to ad lib and act in the strangest of fashions. Amazingly, they decided to act in their own self-interest by enacting economic models not tailored by Wall Street, Washington, or even the titans of industry. Imagine that!
Add to this unraveling, 9/11, a $3.0 Trillion war of choice with Iraq that destabilized the Middle East, and the financial collapse of the world economy in 2008, and the obituary of globalization, while not finalized, is well on its way to being written. When you look at the track record of U.S. trade agreements, pushing access for financial institutions and guarantees for monopolies in return for limited tariff concessions on agricultural and low-value industrial goods, it doesn’t take a Wharton MBA to see the intrinsic unevenness of the underlying propositions.
Both under developmentalism and now globalization, the theory was peace, corporate prosperity, and allegiance would follow the breadcrumbs of trade. Turns out, we were only renting the love of these fickle trading partners and in the immortal words of Tina Turner, there are lots of “Private dancers, dancers for money,” in this world.
There is a great example of where this policy of expediency and vampire squid financial largess is heading for the corporate cheerleaders of this “trade before all else” policy. During this year’s World Economic Forum in Davos, Switzerland, there was a strong speech proclaiming, “It was time for rich corporate interests to pick up some of the costs of globalization rather than just reaping the benefits.” In other words, instead of stuffing the riches skimmed by these companies in international tax-free mattresses, these companies would have to start paying some of the freight for their right to conduct business. Who dared utter such anti-conservative blasphemy at Davos — none other than ultra-conservative British Prime Minister David Cameron who is set to take over the presidency of the G-8.
The time frame for this rethinking and retooling is not immediate, perhaps not for another decade, but it is indeed an evolution already underway and it is a monumental change just beyond our always shortsighted horizon. Of course, unrest, military confrontation, cyber-confrontation, another global financial crisis, or wrong-headed, self-inflicted austerity could trigger a much faster transition — like jumping out of an airplane sans parachute and learning to fly on the way down.
With this international retrenchment and the rethinking of austerity policies as European countries stare at double and triple dip recessions, what are we doing? Instead of looking at these looming storm clouds signaling an inevitable course correction in economic, military, and diplomatic policy, we are getting ready to again self-inflict grievous harm to ourselves with wrong-headed, hatchet-like “across the board” cuts when our nascent economic recovery is still fragile.
We crossed the Rubicon in 2011 when, for the first time in modern history, a heady bunch of radical know-nothings actually set out to do harm to the country by threatening to default on the debt ceiling for nothing more than short-term political gain. Instead of beginning to address these real and present dangers for our future, what are we doing — not only putting the brakes on an economic recovery, but throwing out an anchor and dragging our feet to boot.
It’s as if these folks didn’t get dismal enough news from the first look at the Magic 8-Ball and have shaken it again hoping to see if the news can get worse — much worse.
Since I’m ending on such a Danny-downer note, next week I promise some good news by way of unintended consequences and some hypothetical solutions. Stay tuned.
This is an “all skate” open thread.
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