Another good read this week from George Friedman, adding to our comprehension of why we are seeing Trumps and Brexits. Remember, the point is to understand what is actually happening, not simply what is convenient and comfortable. A few key excerpts:
“Since the 1980s, nations and economies have grown substantially more interdependent. This was cheered wildly when it happened, but what it created was a forest fire with no fire breaks. Interdependence in production and consumption – international trade coupled with the consequences of financial dislocation – was not confined to any one country. It became a global phenomenon. The irrationality of the idea that free trade and the free flow of money is essential to economic well-being was that any failure of the system meant that there was no place to hide. If everything rose together, everything fell together as well.”
“The issue that has been raised by 2008 is the importance of nations and the primacy of a national leadership to protect the interests of the nation as a whole and not the global system or the interests of the financial community. The re-emergence of nationalism is the logical outcome of the failure of interdependence. Part of the assumption of the pre-2008 ideology was that aggregate economic growth benefits everyone. Post-2008 ideology is that stagnation is paid for by the middle and lower classes. And this leads to a political showdown.”
