Free Markets, Free People

Daily Archives: November 21, 2011

Arab "Spring”? Or Arab Fall?

Last week I pointed out how Tunisia is starting the seemingly inevitable slide toward Islamic extremism.

Egypt too has failed to keep the promise of the “Arab Spring” uprising that saw Hosni Mubarak ousted from power.  There the Muslim Brotherhood has gained power and the Army seems intent on keeping power – at least in the short term.  We now are seeing deadly riots again in Tahrir Square in Cairo where the Army is clashing with protesters.  Thus far it is reported that 35 are dead in the three days of those clashes.

The eruption of violence, which began Saturday, reflects the frustration and confusion that has mired Egypt’s revolution since Mubarak fell in February and the military stepped into power.

It comes only a week before Egypt is to begin the first post-Mubarak parliamentary elections, which many have hoped would be a significant landmark in a transition to democracy. Instead, it has been clouded by anger at the military’s top body, the Supreme Council of the Armed Forces, which will continue to rule as head of state even after the vote. Activists accuse the generals of acting increasingly in the same autocratic way as Mubarak’s regime and seeking to cling to power.

The military says it will only hand over power after presidential elections, which it has vaguely said will be held in late 2012 or early 2013. The protesters are demanding an immediate move to civilian rule.

Again, in a country which has no democratic traditions or institutions the “hope” is the parliamentary elections will be “a significant landmark in the transition to democracy” has no foundation in reality.  Right now it appears that the Egyptian people have simply exchanged on boss for another.  And the result of the parliamentary elections, if they’re ever held, may see the ushering in of a third “boss”- the Muslim Brotherhood which has not really promised “secular democracy” if they take the majority in the Egyptian Parliament. Instead it seems clear they intend a steady move toward an Islamic state.

And the traditions of the Islamic state are to pay lip service to “democracy” (see Iran), no secularism (in fact one of the only secular Arab states, Syria, is in deep trouble right now – any guess what may replace that government?) and rule by Islamic law. 

I don’t think that the “spring” most of the initial protesters (and their supporters in the West) were hoping for when they turned out to oppose Mubarak and call for secular democracy.

As usual, it is the most organized and ruthless who will claim power.  Right now that’s the Army.  If and when an election is held and the Muslim Brotherhood takes enough seats to form a government it is likely the Army will reach an agreement with them to somehow share power.  And secular democracy?

No time soon in Egypt, count on it.  And watch Libya carefully as well.

~McQ

Twitter: @McQandO

"…we’re about to face a situation that will destroy our cultural and economic underpinnings…”

For those of you who have not taken the opportunity to listen to this week’s podcast, the above was part of the summation of our situation by Dale Franks. I’d recommend you listen to the whole thing.

No one knows in detail what will happen in the next few years. The number of variables is too high. But the general outline is clear. In the near term, the US and about half a dozen European countries have unsustainable debt curves. That unsustainable debt is going to cause financial catastrophe not in a decade or two, but sometime in the next few years.

Given the interconnected nature of the world’s trade and financial system, that catastrophe is likely to spread rapidly. Even countries whose sins have been modest, such as Germany, will be caught up. Countries who depend on the US and Europe for the money to drive their economies, such as China and India, will be caught up. It’s going to be very, very messy, and a lot of people are going to suffer.

The participants in the podcast all agreed that there isn’t any obvious politically feasible way to reverse course. I agree, and I have a few comments to add.

I see the following as the biggest three groups involved in the political decision making, from largest to smallest, with some overlap among them:

(1.) The "rationally ignorant"* – those who don’t pay that much attention to politics, and have at best a vague understanding that we have a problem. These people, to the extent they think about it at all, believe that shuffling some things around a bit, electing some different people, and passing a few laws will fix whatever is ailing us.

They believe in such a “solution” because that’s the way things have gone their whole lives. Somehow the ruling class has always managed to pull a rabbit out of the hat and keep things humming. They won’t believe this process will fail until it does. 

There are even quite a few Republicans in this category. They can generally be identified by their fixation on finding "the next Reagan".**

(2.) The ones who have some glimmering that there’s a problem, perhaps because they are unemployed, mired in debt, or both, but have a convenient scapegoat in mind. That’s usually "the rich" and "the evil corporations", though for Republicans, it might be Obama, Barney Frank, George Soros, or whoever. Like group 1, they believe it’s easy to fix the problems – just come down on the scapegoat, and everything will work out.

(3.) The "ruling class" as defined by Codevilla. This group is mostly convinced of their own magnificence, and thus believe if the right people are in charge (which usually includes them personally), then they can solve any problems. The ones in this group with enough situational awareness to realize the magnitude of the problem also realize that it’s pointless to do anything significant to try and solve it because that would get them cashiered from the ruling class. So their efforts are in mitigation, obfuscations, and generally stretching things out until they are retired from the game.  

Given this breakdown, we can talk all we want about who the GOP is going to nominate for president, but it really doesn’t matter. We have too big a cohort of people in this country who either believe we don’t really have a serious problem, or think there is a serious problem, but believe the cause is a boogieman of some kind that must be vanquished.

There’s a good reason they believe that. They are kept in the dark by a mainstream legacy press desperate to cover up the failings of the left-leaning governing style preferred by the vast majority of journalists.

In fact, none of the ruling class – which includes the politicians, journalists, academicians, lobbyists, staffers, and the like – has any motivation to tell the harsh truth about the trouble we are in. As I said above, they have a strong disincentive to do so. If they did, the other members of the ruling class would turn on them. They would likely lose their livelihood.

We’re also fighting ingrained culture. We have two generations that have been raised to believe that, ultimately, someone else is responsible for the essentials of their lives. They believe they are supposed to retire in their fifties or early sixties, with a pension followed by Social Security. They believe they are supposed to relinquish concern for healthcare costs when they turn 65. They believe that if things get bad enough in their lives, unemployment, and later welfare, will keep a roof over their head and food on the table. They’ve been trained to believe this by a ruling class that has been assuring them since the 1930s that they have the fundamental right to a soft life.

These people do not want to think about a world where these things are not true. It would be exquisitely painful to worry about those things. So they don’t. They ignore the warnings of the "radicals" who trot out the debt curves and the demographic stats. It’s easy enough to do that – the supposedly smart reporters ignore them too, if they don’t come right out and ridicule them. The abysmally ignorant social scientist cohort produces yet another round of "analysis" purporting to prove everything is OK, or at least would be if those rich people would just give up some more money. The political class assures them that it will be all right if they just keep electing the right people.

This state of affairs has no exit except catastrophe so major and undeniable that it affects most people personally. By then, it is virtually certain that the world financial system is past the point of no return in its current form.

I’ve stopped trying to talk to people around me about what is happening and likely to happen. I would have to spend hours removing the false assumptions they hold before I could even start. Plus, as I mentioned, they don’t want to believe what I need to tell them. It’s just too painful.

We are about to see a crisis that will set back living standards in this country to a level many alive today have never seen. The only reason it probably won’t get down to subsistence level is the technology base that we have. But we’re probably going to see stagnation, crumbling infrastructure, high unemployment, inability for most people to build any significant assets, and possible civil violence if the problem becomes so severe that it starts affecting the food supply (which I hope won’t happen).

I have no idea, and I don’t think anyone else does either, about how we will get through the chaos and what things look on the other side of it. I see three major categories of possible outcomes, and there may be more. But that’s a subject for another post.

(*)When I used the term "rational ignorance" in a comment at Daily Pundit about five years back, Bill Quick picked it up and had some unkind things to say about such people. (Daily Pundit is undergoing a platform change, so I can’t link to the page. It was on June 10, 2006, and I’ll link to it once the site over there is back to normal.) I understand Bill’s take, but unlike him and some other opinionists on the right, I don’t use it pejoratively. I use it the way economists originally intended: simply to mean people who are unwilling to invest the time and cost to become informed about the real underlying state of our political world.

It is expensive to become so informed, and the payoff for any individual is small. The aggregate effects, as we are seeing, may be horrendous. That doesn’t change the underlying economics. A political system that relies on individuals to invest the time to become informed about complex political issues, out of a higher understanding of their civic duty, is as doomed to failure as a system that expects individuals to commit to "from each according to his ability, to each according to his needs". In both cases, such an expectation crashes up against the behavior of real people, i.e., human nature. For me, this is one of the cornerstones of my strong belief in highly limited government – it’s the only form that allows people to not know much about the political world because that world is pretty simple. We just have not figured out how to make limited government stable in the long term in the face of rational ignorance plus plus the cohort of moochers that’s present in every society.

(**)While I grant that Reagan was better than many alternatives, including the pathetic scold he replaced, at best he gave us some breathing space to solve the underlying problems of a decaying welfare state. He didn’t really make much progress in actually solving the long term problem, and his inability to get Democrats to cut spending led to some significant contributions to our debt problems.