If you are an expert in your field you have a good idea of what is going on in that area. That’s how you make a living. Most of us express views about news and events that are outside our area of expertise especially if we think that they might effect us in some way, like politics and economics. The Presidency of the United States of America is one of those things.
Everyone will be talking about the new US administration in America today. Some will be earnest, some dismissive, some joyful, some sad or angry. Irrespective of your emotions or political leanings, its impact will affect you.
While there is uncertainty about the intentions of the new administration, there is a serious question of competence. Few of the appointees have laudable track records of public service or even expertise in the areas for which they are responsible. That has been made clear in the media to such an extent that what has been an amusing diversion – the rise of Trump – has become a sad, frightening reality of bigotry, incompetence, greed and fear-mongering. The track record and rhetoric of those coming to power reveals the values that underpin their behaviour. Those values suggest a regressive intent in numerous areas from education to energy to finance to environment to regulation to international cooperation.
The natural trend to higher values, which are displayed by sophisticated, mature systems, is being set back by political dynamics which remain feudal and, in America at least, potentially incompetent too. Feudal empires of the past rose because they were well administered, whether that be Rome, Mongol, or British, and they failed when the resources to maintain the pyramid of power waned. That is happening to America as oil resources become more difficult to obtain.
Power structures also descend in to chaos when control mechanisms (read bureaucracy and administration) become corrupted, which is occurring rapidly in America now. It is ego that underpins a feudal dynamic. Even with great wealth and privilege, as America and Americans possess, people can feel cheated when their expectations are not met. When advertising and media raise one’s expectations to the realm of fantasy, while one’s appreciation of what you have is ignored, the instinctive reaction is to want more. That is what many voters in the UK and the US wanted when they voted for Brexit and Trump respectively. They voted for change, simply change. They want system change, but chose not to look beyond the election to what kind of change might come. They were attracted by the rhetoric and fanfare and felt affinity with those fanning the flames of discontent.
In America voters have demanded attention to their needs by voting for system change. But the system will not change without people taking responsibility for the consequences of their own rhetoric and behaviour. The new administration is filled with wealthy, elitist, oligarchical, but technically weak, appointees.
This regression to feudalism is also seen emerging around the world as economic power continues to be concentrated in the hands of fewer, larger organisations and resource rich states, which influence laws and peddle favours to accrue assets.
The principal resource that is fought over remains oil. It fuels the emerging affluence in Central Asia, the fighting in the Middle East, the brinkmanship between Russia and the US. China leans on the table of power as it sells cheap labour and offers increasing consumer demand to the world, while trading favours to get access to oil and mineral wealth. Technology and weapons are used by the US, Europe, Russia and China to elicit favours and access to resources in Africa, the Middle East and Central Asia. These dynamics of global economic and political power will continue to be wielded by elites around the world. The US administration is likely to behave in a more mercantile, self-serving way with less interest in global common goods and common welfare because it does not serve the newly appointed representatives.
It seems ironic that we all want the same things, like food, home, friends, entertainment, creativity, peace, and we don’t want others to suffer, yet the global order retains a primitive dynamic. Increasingly people want system change, but have not faced the reality that they must change too.
The alternative to a pyramid of power controlled from the top, is a democratic economy of enlightened (educated) people. That option is barely available. Popular enlightenment of political and economic systems remains only at the edge of institutional systems, where people collaborate to initiate change in the way humanity treats one another, treats the environment and manages global resources. The initiatives of change largely come from social entrepreneurs and philanthropists who invest in salvation for the destitute at home or abroad, in education, in low impact living and clean technologies. We can dream.
So, quickly, what trends can be expected with our new administration in America?
Energy is the driver of human life both at a personal level and a system level. Fossil fuels, especially oil, have been the cause of geopolitical tension for two centuries, allowing the continued expansion of feudal power so that a few global elite own the system. Oil has also allowed the technological and social development of humanity to ignore the laws of nature. The planet is suffering and this impacts human well being in fundamental ways, like access to clean food, water and air, not to mention a stable climate and the pleasures of natural phenomena like wildlife, jungles, and seas, all of which are being decimated to the point of extinction. The incentive to pursue alternatives to fossil fuel will be muted by the vested interests now being appointed to political power.
Sadly, the militant pursuit of oil will continue under the new administration. It will continue to underpin violence in the Middle East and Africa and the growth of armaments. The focus is moving to Central Asia where warlords are building empires which are liable to corruption and criminal activity. These states and oligarchs have not yet entered the military arena, though they might.
The greed for oil and the way it is obtained continues to underpin geopolitical intent. It fuels the rhetoric of terrorism and dictators, democratically elected or not. This is dangerous. Some have gone so far as to put nuclear strikes on the list of possibilities. Do not discount that. In America, greed will probably encourage a muzzling of mainstream media and private dissent of the policies. Unfortunately, resistance by people wanting more open and equitable administration is likely to be violent. Civil unrest is never pretty, never cheap and a sign of regression. It is always the responsibility of the administration, never the fault of the people, but it is always people that get hurt.
Equity markets have already bumped up since the election, buoyed by the expectation of looser regulation, including of the financial sector. The big will get bigger. But risks will increase. They might not crack the market, but there are fundamental weaknesses in the global financial system which have not been addressed. High on the list is the “pension crisis” a massive gap between pension obligations and the ability of funds to pay those liabilities. As pension terms get shaved and more people’s savings are lost, people will become unhappy and the bubble will implode.
The weight of debt in the financial system limits the opportunity to expand credit, though that will be attempted. The foundation of the modern banking system, fractional reserve lending, is close to capacity as approximately 97% of money is now based on debt – the system leverage is high.
Interest rates are low. This is reflective of the excesses that remain from the naughties boom and the ongoing disintegration of systems which makes leverage unattractive. Also, concerns over endemic risk in the financial sector which retains as much corruption and collusion as it did when the Global Financial Crisis struck. But there will be moves to increase interest rates by the new administration. This will make life difficult for most people who still retain large amounts of debt, mostly mortgages, and will make investment difficult for SMEs who still face challenging times. As always, those at the top will reap the greatest rewards.
As the cost of money might rise, the cost of time, or wages, will experience continued downward pressure. Technology is where capitalists want to put their money. Automation is cheaper than people, and it doesn’t talk back. Science and technological advances are worthy, but the edge of science is so far beyond what we need to enrich our lives that new discoveries simply will not help us. And we will not be able to afford the gadgets without income. The answer lies not in more of the same, but in the direction of human enlightenment – that means education.
Education systems are long overdue for a revamp. The traditional system does little to prepare us for life or teach us about the world we live in. The mindset of the education system demands liberation from teaching to refocus on learning, from bureaucracy to creativity, from individual performance to collaboration, from singular focus to the ability to think. There is too much to say about the direction education must go in. Sadly it is likely that the new administration will remove resources from public education let alone improve the system.
In conclusion, if you are part of the establishment or connected to it, by your employment for example, the immediate future may well be bright. For those lower down the pyramid, not so much. The billions at the bottom will continue to be pushed down. The stability of global systems, especially financial and political, is increasingly fragile. The chance to evolve them remains low because few incumbent leaders have the vision or selflessness to change the system. The outlook for nature, for our planet, has not improved. So, if system change is your priority, take a breath, maintain your trust in yourself and be the change that you want to see in the world.