Inflation is suddenly back in the developed countries, a phenomenon many thought was something that belonged to the past. A year ago, most central bank governors assured that this was an expected and transitory phenomenon as the developed economies returned to growth after the Covid induced depression in 2020. Now it looks not to be that transitory. So has inflation come to stay?
Politics & Economics - Contents
To Russia’s demand for a stop for NATO’s eastward expansion, NATO General Secretary Jens Stoltenberg has answered that Russia has no say in which countries are becoming members of NATO, a viewpoint that has been repeated by the G7 countries, warning that there will be “massive consequences” for Russia if it intervenes in Ukraine. So Russia’s “red lines” have been rejected, well knowing that this may mean military conflict. What is contradictory is that by defending Ukraine’s right to NATO membership, NATO actually risks throwing Ukraine under the bus. So has NATO decided to sacrifice Ukraine? Or are the Russians bluffing and NATO calling the bluff?
When the US increased the capacity for exporting Liquified Natural Gas (LNG) in 2019, Trump promised a new era where the Europeans would get “freedom gas” instead of the malign Russian gas. Now that Europe is in the middle of a gas crisis with soaring prices, what happened to the freedom gas? Short answer: it went to South-Eastern Asia where prices are better. The gas crisis is a result of EU’s love for spot-markets for energy rather than long term contracts. This implies that they sometimes get very cheap gas and sometimes very expensive gas. Just now, the EU is unfortunately in a period with very expensive gas.
The 2016 US election where Donald Trump defeated Hilary Clinton gave rise to an unprecedented wave of accusations of meddling in the elections. The main culprit was Russia, and the Russian meddling was seen as decisive. If not, how could Hilary lose, despite having almost the whole US establishment and most of the media supporting her? That the US should accuse other countries of meddling in their internal affairs, is quite funny, given that they are the meddlers par excellence, and by the way are proud of it. However, meddling in other countries’ internal affairs is and old, bad habit, and apparently unstoppable. But something should be done to limit it.
A new a multi-polar world is dawning on us. This has implications for all corners of the world, but not least for Europe, the cradle of the two world wars. The dominating powers in Europe are US-lead NATO in the military sphere and EU in the economic and political sphere. According to both, all would be well in Europe had it not been for Russia which is a malign power trying to subdue independent countries, sowing confusion and distrust within the EU and threatening the continent with military invasion. They both need to reconsider and think harder if they are serious about conserving a lasting peace in Europa.
Despite many denials, it is clear that the hegemonic US-lead liberal international order is on its way out. What has to come is necessarily a multi-polar world, with the US as one of the heavy players, but one among several. If you have any doubts, just listen to the chairman of the US Joint Chiefs of Staff, General Mark Milley, declaring that the US is entering a “tripolar” world. It will be very difficult for the US political and military establishment to accept this bitter reality, and a politician accepting it is facing a risk of political demise. This is probably the reason there is so little debate among US politicians about how the US can find a new place in this new, difficult world.
The new catch-word in international politics is “Rule Based International Order”. The narrative is that this order is being challenged from outside by rogue revisionist countries, principally China, Russia and Iran, and from inside by nationalist and populist politicians (Trump, Brexiters, Orban, Marie Le Pen and the like). There is a call to arms to defend/re-establish this threatened Rule-Based Order. However, if we take a closer look, it becomes obvious that the rules are bent or invented to fit the wanted narrative to the extent that you start doubting whether there are any rules at all.
An American researcher made headlines a couple of years ago as she claimed that a study of past experiences showed that non-violent regime-change movements only need to mobilise 3.5% of the population to be successful. That was taken as good news as regime-change can be achieved without need to resort to military force. But what if the majority of the population does not agree with the 3.5%? Is the outcome still democratic? The most recent case is Bolivia.
The economic crisis caused by the new corona virus has in the advanced economies been paid for in the same way as the 2007-2009 Great Financial Crisis: pumping money into the financial sector and increasing public expenditure. Result: more public debt to be paid back in the future, basically by common people. This cannot continue eternally. The next crisis has to be financed otherwise, shifting the burden to those who sit on the cash.