Jul 20th 2022
EXTRACTS: "We need leaders who will be honest about our problems in the short, medium, and long term. We are becoming poorer than our neighbors, with our per capita growth and productivity lagging behind theirs. We confront surging energy prices, soaring inflation, and public-sector strikes. Our fiscal deficit is uncomfortably high. Our influence is diminished. Far from recognizing these challenges, let alone proposing sensible solutions, the candidates to succeed Johnson are trying to win votes with reckless proposals like ever-larger tax cuts." ----- "There is one exception. Former Chancellor of the Exchequer Rishi Sunak refuses to abandon the notion that expenditure should bear some relationship to revenue. "
Jul 13th 2022
EXTRACT: "Looking ahead, five factors could make today’s energy crisis even worse. First, Putin has opened a second front in the conflict by cutting back on the contracted volumes of natural gas that Russia supplies to Europe. The goal is to prevent Europeans from storing enough supplies for next winter, and to drive prices higher, creating economic hardship and political discord. In his speech in June at the St. Petersburg International Economic Forum, Putin made his reasoning clear: “Social and economic problems worsening in Europe” will “split their societies” and “inevitably lead to populism … and a change of the elites in the short term.” ...... As it is, Germany is now anticipating the need for gas rationing, and its minister for economic affairs, Robert Habeck, warns of a “Lehman-style contagion” (referring to the 2008 financial crisis) if Europe cannot manage today’s energy-induced economic disruptions."
Jul 5th 2022
EXTRACT: "Fortunately, I am not alone in claiming that the survival of democracy in the US is gravely endangered. The American public has been aroused by the decision overturning Roe. But people need to recognize that decision for what it is: part of a carefully laid plan to turn the US into a repressive regime. We must do everything we can to prevent that. This fight ought to include many people who voted for Trump in the past."
Jul 2nd 2022
EXTRACT: "The Israeli philosopher Avishai Margalit described this succinctly in his book On Compromise and Rotten Compromises. In “politics as economics,” material interests are “subject to bargaining, everything is negotiable, whereas in the religious picture, centered on the idea of the holy, the holy is non-negotiable.” This, then, is why politics in the US is now in such a perilous state. More and more, the secular left and the religious right are engaged in a culture war, revolving around sexuality, gender, and race, where politics is no longer negotiable. When that happens, institutions start breaking down, and the stage is set for charismatic demagogues and the politics of violence."
Jul 2nd 2022
EXTRACT: "...EU enlargement is essentially a political decision by member states, based on a multitude of considerations that sometimes include dramatic events. Russia’s war of aggression against Ukraine is such a turning point."
Jun 29th 2022
EXTRACT: "Most market analysts seem to think that central banks will remain hawkish, but I am not so sure. I have argued that they will eventually wimp out and accept higher inflation – followed by stagflation – once a hard landing becomes imminent, because they will be worried about the damage of a recession and a debt trap, owing to an excessive build-up of private and public liabilities after years of low interest rates." ----- "There is ample reason to believe that the next recession will be marked by a severe stagflationary debt crisis. As a share of global GDP, private and public debt levels are much higher today than in the past, having risen from 200% in 1999 to 350% today (with a particularly sharp increase since the start of the pandemic). Under these conditions, rapid normalization of monetary policy and rising interest rates will drive highly leveraged zombie households, companies, financial institutions, and governments into bankruptcy and default."
Jun 28th 2022
EXTRACT: "It is tempting to conclude that today’s central bankers are damned if they do and damned if they don’t. Maybe if they sit tight, they will ride out the storm. Then-Fed Chair Paul Volcker was Public Enemy Number One in the United States in the early 1980s, when he squeezed post-oil-shock inflation out of the system with double-digit interest rates. But in his later years he was revered, and became a national treasure, called on to advise successive presidents in any financial emergency. ----- But central bankers would be wise not to assume that their reputations will automatically recover, and that the status quo ante will be restored. We live in a more disputatious age than the 1980s. Public institutions are more regularly challenged and held to account by far less reverential legislators." ----- "Moreover, former central bankers have joined the chorus of critics. Former Fed Chair Ben Bernanke, breaking the unwritten rule not to reproach one’s successors, has said that today’s Fed made “a mistake” by responding slowly to inflation. And Bailey’s immediate predecessors, Mervyn King and Mark Carney, have weighed in, too, with challenges to the BOE’s policy. The fabric of the central banking fraternity is fraying."
Jun 25th 2022
EXTRACT: "Public opinion in Belarus remains firmly against involvement into the war with Ukraine. Moreover, according to a Chatham House survey, 40% of Belarusians do not support Russia’s war, compared to 32% who do, while around half of those questioned see predominately negative consequences of the war for Belarus (53%) and for themselves (48%). The Belarusian military and security services are also aware of the determined and skilful resistance that Ukrainian forces have put up against Russia and the risks that they would therefore be running if they entered the war against Ukraine. This, in turn, means that the risk to Lukashenko himself remains that he might lose his grip on power, a grip which depends heavily on the loyalty of his armed forces." ---- "Ultimately, Belarus may not be on the brink of being plunged into war quite yet, but its options to avoid such a disaster are narrowing."
Jun 20th 2022
EXTRACT: "Russification (the policy of enforcing Russian culture on populations) appears to be being reinforced by ethnic cleansing. Last month the Ukrainian parliament’s commissioner for human rights, Liudmyla Denisova, informed the United Nations’ High Commissioner for Refugees, Filippo Grandi, that 1.3 million Ukrainians, including 223,000 children, had been forcibly deported to Russia."
Jun 11th 2022
EXTRACT: "If Trump had his way, then Vice-President Pence would have also broken his oath to the constitution and derailed the certification of electoral votes. Our continued existence as a Republic might very well have hung on Pence’s actions that day. The mob’s response was to call for Pence to be hanged, and a noose and scaffold was erected apparently for that very purpose. What was Trump’s reaction when he was told that the mob was calling for Pence’s summary execution? His words were: “Maybe our supporters have the right idea.” Mike Pence “deserves” it."
Jun 10th 2022
EXTRACTS: "Speaking to journalist Sophie Raworth on the BBC’s Sunday Morning show recently, former war crimes prosecutor Sir Howard Morrison, now an advisor to the Ukraine government, highlighted the dangers posed by the negative – often insulting and dehumanising – statements made by some Russian politicians and media personalities about Ukraine and its people." ---- "The conditions and attitudes described by Morrison have existed for centuries: Russians have viewed Ukrainians as inferior since before the Soviet era." ----- "And, as Morrison said, stereotyping and denigrating a people as inferior or lacking agency makes atrocities and looting more likely to happen, as we are seeing in Ukraine."
Jun 9th 2022
EXTRACT: "Unless Russia realises that the west is willing and able to push back, a new, stable security order in Europe will not be possible. Concessions to Russia, by Ukraine or the EU and Nato, are not the way to achieve this. That this has been realised beyond Ukraine’s most ardent supporters in the Baltic states, Poland, the UK and the US is clear from German support for strengthening Nato’s northern flank and a general increase in Nato members’ defence spending."
Jun 8th 2022
EXTRACT: "Highly civilized people can turn into barbarians when demagogues and dictators exploit their fears and trigger their most atavistic instincts. Rape, torture, and massacres often happen when soldiers invade foreign countries. Commanding officers sometimes actively encourage such behavior to terrorize an enemy into submission. And sometimes it occurs when the officer corps loses control and discipline breaks down. Japanese and Germans know this, as do Serbs, Koreans, Americans, Russians, and many others."
Jun 1st 2022
EXTRACTS: "Like Metternich, Kissinger commits the fatal error of believing that a few wise policymakers can impose their will on the world. Worse, he believes they can halt domestically generated change and the power of nationalism. Many years ago, this is what Senator William Fulbright termed the “arrogance of power.” This approach failed in Vietnam, Iraq, and Afghanistan. It is also doomed to fail in Russia and Ukraine." ------ "Not surprisingly, Kissinger misunderstands Russia. He appears to believe that, because Russia has been an “essential part of Europe” for over four centuries, it is therefore fated to remain so for the foreseeable future.The claim is completely at odds with history." ---- "Finally, Kissinger misunderstands the implications of his own analysis for Western relations with Russia. “We are facing,” he said, “a situation now where Russia could alienate itself completely from Europe and seek a permanent alliance elsewhere." ---- "But what’s so bad about Russia’s isolating itself from Europe and becoming a vassal state of China? "
China’s population is about to shrink for the first time since the great famine struck 60 years ago. Here’s what it means for the world
Jun 1st 2022
EXTRACTS: "According to the latest figures from China’s National Bureau of Statistics, China’s population grew from 1.41212 billion to just 1.41260 billion in 2021 – a record low increase of just 480,000, a mere fraction of the annual growth of eight million or so common a decade ago." ----- "China’s total fertility rate (births per woman) was 2.6 in the late 1980s – well above the 2.1 needed to replace deaths. It has been between 1.6 and 1.7 since 1994, and slipped to 1.3 in 2020 and just 1.15 in 2021."
Jun 1st 2022
EXTRACTS: "Casualties are very high. A very conservative estimate of overall Russian losses is that they have lost more troops killed since February 24 than in ten years of fighting in Afghanistan. This implies well over 40,000 men taken out of the fight, including the wounded." ----- "Away from the cauldron of Donbas, Belarus has been rattling its somewhat rusty sabre by deploying troops to its border with Ukraine. This is unlikely to trouble Kyiv. The Belarus president, Alexander Lukashenko, is well aware that he may need them at home to shore up his shaky regime."
May 27th 2022
EXTRACTS: "Monetary policymakers are talking tough nowadays about fighting inflation to head off the risk of it spinning out of control. But that doesn’t mean they won’t eventually wimp out and allow the inflation rate to rise above target. Since hitting the target most likely requires a hard landing, they could end up raising rates and then getting cold feet once that scenario becomes more likely. Moreover, because there is so much private and public debt in the system (348% of GDP globally), interest-rate hikes could trigger a further sharp downturn in bond, stock, and credit markets, giving central banks yet another reason to backpedal." ----- "The historical evidence shows that a soft landing is highly improbable. That leaves either a hard landing and a return to lower inflation, or a stagflationary scenario. Either way, a recession in the next two years is likely."
May 26th 2022
EXTRACT: "No, I am not arguing that Powell needs to replicate Volcker’s tightening campaign. But if the Fed wishes to avoid a replay of the stagflation of the late 1970s and early 1980s, it needs to recognize the extraordinary gulf between Volcker’s 4.4% real interest rate and Powell’s -2.25%. It is delusional to believe that such a wildly accommodative policy trajectory can solve America’s worst inflation problem in a generation."
May 26th 2022
EXTRACT: "It will be critical in this context how China will act and whether it will prioritise its economic interests (continuing trade with Europe and the US) or current ideological preferences (an alliance with Russia that makes the world safe for autocracies)."
‘Wine time Friday’ and invites for 200: five of the most interesting findings from Sue Gray’s partygate report
May 26th 2022
EXTRACT: "The document is full of embarrassing and damming stories of illegal gatherings and bad behaviour. There was “excessive alcohol consumption”, a regular fixture referred to as “wine time Fridays” and altercations between staff. Aides are shown to have left Downing Street after 4am (and not because they had worked into these early hours). Cleaning staff and junior aides were abused, and a Number 10 adviser is on record before the infamous “bring your own booze” party...."