North American stock markets are booming. The conventional wisdom is that -- economically -- happy days are here again. But Joseph Ingram isn't so optimistic. The election of Donald Trump and the rise of European authoritarians cast dark shadows:
Both Trump’s election and the June Brexit vote in Britain are fueling the growth of European populist movements. Combined with his skepticism as to the European Union’s desirability — a sentiment he apparently shares with Russian President Vladimir Putin — these movements constitute an existential threat to its existence, the break-up of which would surely result in the end of the liberal international order that we have known for the past seventy years.
The consequence would be a leap into an abyss of policy chaos, adversarial trade and geo-strategic relationships (including among former allies) and an instability that likely would produce a global recession — or worse. President Trump’s tiffs with the leaders of two of the U.S.’s closest allies — the Prime Minister of Australia and the President of Mexico — are a sign of things to come, as was this week’s meeting of European leaders in Malta.
Things do not bode well for the world economy:
To successfully counter these ominous trends will require economic policies that seek to promote the interests of the many rather than the few. Obscene gaps in income must be narrowed. The task of pressing governments to adopt such policies needs to be animated by a popular response — not one seen as elitist, nor driven by any particular political party or ideology. Nor should the response be inspired by failed neo-liberal or neo-Marxist policies of the past.
The concerns of organized labour, rural communities, small towns and the young will need to be addressed directly, thereby shifting the impact of public policy away from the asymmetric benefits it has been extending to the corporate sector and its elites. Governments also will need to consider limits on the application of new technologies that risk creating massive structural unemployment or destructive de-industrialization.
Trump's cabinet of billionaires makes it clear that what is needed will not be delivered. And his deregulation of Wall Street suggests that history will repeat itself:
It will be equally important to remind people that the deregulation of the financial and industrial sectors now advocated by President Trump’s government, and many of Europe’s populists, is what brought the U.S. economy double-digit unemployment, a housing crisis, a critically weakened financial system and the great recession of 2008.
The fools are in charge.