1984 + Bono = Life Imitating Art

By Jeffrey Snider

It was never trade wars. Geopolitics draws the online clicks, real answers were always something else. In a world where populism is the rising political strain, you would think there would be honesty in trying to assess its roots. It would require, however, honest thinking. That’s been in short supply for a very long time.

Last week, CNBC reported the results of its Global CFO Council. It’s a broad list of Chief Financial Officers spanning all industries, therefore companies reaching deep within the global economy. As everyone else, they last were afraid of trade wars when that’s what media companies like CNBC were focused upon groping for answers to 2018’s snowballing disappointments.

Now? 

Flagging demand from consumers is replacing U.S. trade policy as the chief concern in boardrooms around the world, according to a CNBC survey.

Nearly half of the panel, 46%, now say demand is their number one worry. Trade policies? Just 10%. What happened over the past few months?

Collateral. Hierarchy. Eurodollar. Again.

You wouldn’t know it from the media. They still take their views on the economy from Economists, the same people who have a vested interest in steering all discussions away from what should be the biggest story in history. If it keeps going this way, it almost certainly will be.

Instead, we are told everything is being taken seriously. Washington Post columnist Fareed Zakaria has been lambasted since last Thursday for publishing an utterly bizarre attempted justification. The title of the article gives away the agenda.

I wanted to understand Europe’s populism. So I talked to Bono.

Yes, who better to understand the plight of tens of millions of working-class Europeans than U2’s frontman. He’s got it figured out, you see, the very answer lacking in these dark times.

The only way to counter the dark, pessimistic vision being peddled by nationalists and extremists, Bono says, is to have an uplifting, positive vision.

No, no, no. This is exactly the problem. In Europe, as the US, or Brazil and wherever else, people have been told the uplifting, positive vision over and over and over again already. It’s been the other constant to the last decade, alongside eurodollar decay. They just don’t see the happiness – because it isn’t there. Talking even more positive about the increasingly negative will only feed more discontent.

Zakaria’s ridiculous offering is more of the same, an attempt to delegitimize what are legitimate criticisms. The “establishment” increasingly tells us this is as good as it gets; the economy has recovered, at least under their new definitions for recovery, and you are not allowed any dissent. Move along, nothing to see here.

That’s what’s so dangerous about the next downturn that is now just looming over the horizon. What are they going to say next? In late 2017 and actually many months into 2018, ECB officials in particular were speaking with unrestrained enthusiasm about Europe’s economic boom. They’ve quietly toned it down and scaled it back, but that’s only because they hope this is nothing more than a mild slowdown.

Either way, people are going to notice especially in the US where we are led to believe this thing’s really cookin’ this time.

If you are European and last year’s economic boom, which didn’t filter down very far into the real economy, and then out of nowhere without media coverage it just disappears? That’s even more strain on an already strained situation. We just don’t know where the breaking point lies (there isn’t just one).

The reality is harsh. The global economy shrunk and has, so long as the eurodollar remains the global reserve money, no capacity to grow. None. It can only swing back and forth between these unusually low and mild upturns and various degrees of downturn. Europe was lucky in 2015-16 to have experienced the least negativity of the last one – but only because it got the worst of the one before.

It’s not just Europe.

What’s driving populism is incredibly simple. Economic reality is nothing like what the establishment has declared. By taking economics, really Economics, off the table for productive discussion they’ve left people everywhere across the whole political spectrum to seek answers to genuine economic concerns in the increasingly radical. This is not purely right or left; there’s been an increase in popularity for populisms on both sides (not that you’d hear about the other).

Bono’s happy and uplifting songs and speeches don’t get European IP back to 2007 levels; to say nothing of an actual peak consistent with all prior growth trends. Speaking more forcefully positive about what’s uniquely awful (in our modern experience) sends the exact wrong message. Countering populism is really easy; start by simply acknowledging the economic trend went horribly wrong ten years ago and is still nowhere near good enough.

Last year they tried Bono’s way already: 2017 the year of the big boom, globally synchronized and all. Should we then seek to penalize all the people in 2018 and 2019 who rightly wonder what happened to it? It was in all the newspapers, and then nothing. Get with the smiley faces…or else.

There’s a reason George Orwell cleverly began 1984 with the following:

It was a bright cold day in April, and the clocks were striking thirteen.

And 2 + 2 can equal 5. The status quo can easily lose all respect for the truth. There is no boom; there has been no recovery. Heading toward what really looks like another global downturn, there’s going to be a whole lot more very angry people with absolutely nowhere to go for answers.

These same people will instead be told how great it is as the economy falls down, “unexpectedly”, for another instance. This is the perversion of the establishment; the worse it gets, the more bizarrely positive they become. With even wider, toothier and more condescending smiles. Yeah, that’s going pull the world back from the chaos.

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Gary

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