It’s Boxing Day here in England, a day traditionally reserved for giving presents (Christmas boxes) to the extended family and friends. I was going to take a rest from posting on Syntagma and other sites until January 2, but something is jangling away at me : the upcoming downturn/recession/depression/crash, depending on which view you take. The nasty end of that spectrum is now a real and menacing possibility.

The optimistic view says that Sovereign Wealth Funds — vast reserves of cash held by Gulf oil sheiks and “new economy” developing countries like China — will save world stock markets from collapse. Indeed such funds are buying up wagonloads of equity in some of the biggest Western corporations, Citicorp and Merrill Lynch, for example, and great chunks of Britain’s FTSE 100 companies.

Quite how allowing our biggest companies to be owned and run by a small group of Oriental potentates will look in 10 years time is anyone’s guess. I doubt we will think it such a smart move.

The pessimistic view — which I confess I’m now leaning strongly toward, despite my normally sunny nature — comes from the banks. Never mind the stock markets, look at how the bankers are reacting on the ground.

All banks are now hoarding cash like Ebeneezer Scrooge and virtually ceasing to lend. With house price indices slithering down a slope like novice ice skaters, and inter-bank rates running at around 8 percent, this has become a total banking crisis worldwide, and that has the potential for real evil in our economies.

Japan’s decade-long woes in the 1990s were caused by crises in its overprotected banking system, as were the Far-Eastern “Tiger” economies that collapsed at around the same time.

So how are we all reacting to this worldwide financial mess, now a “perfect storm” according to another banking pundit? Are we hoarding cash like the banks, or are we spend, spend, spending in the post-Christmas sales?

The real crunch comes if we all stop spending, as the Japanese did in 1990. Our economies will then spiral out of control as the High Street suffers and all kinds of businesses lay off staff in droves. Do we protect ourselves first by reining in, or do we support the wider economy? Since there will be little money to spend, the economy will suffer whatever anyone does. It’s a no-win situation from whatever angle you view it.

In retrospect it’s now clear that Alan Greenspan left rates too low for too long and spawned the mad rush to lend to the sub-prime market (Ninja mortgages : no income, no job, no assets). But on top of that, it is also now normal to be permanently in debt and to service it by moving it continuously between lenders engaged in a bitter battle for market share and a bigger slice of the easy action. These lenders are no longer willing to cough up, even if they were in a position to do so.

In Britain, the situation is getting dire. From the UK’s Telegraph : “Tim Congdon, a banking historian at the London School of Economics, said the rot had seeped through the foundations of British lending. … ‘How on earth did the Financial Services Authority let this happen?’ he asks. Worse, changes pushed through by Gordon Brown in 1998 have caused the de facto cash and liquid assets ratio to collapse from post-war levels above 30 per cent to near zero. ‘Brown hadn’t got a clue what he was doing,’ he says.”

And European treaties, like Maastricht, will make matters worse not better, says Ambrose Evans-Pritchard : “Maastricht rules may force the Government to raise taxes or slash spending into a recession. This way lies crucifixion. … Brown has disarmed us on every front.”

Crucifixion is a powerful word, especially at this time of year. “Brown has disarmed us on every front” is a damning indictment of the UK’s new Prime Minister, more particularly because he has just signed us up to another Euro treaty.

I wish Syntagma could bring you a better box on Boxing Day, but I fear it may be much worse than even the news we’re now getting suggests.

Maybe I should have continued with my holiday. See you on January 2.

Syntagma is taking a break over the Christmas holiday. We will be back on Wednesday January 2.

Last Christmas I wrote a post with 10 predictions for blogs and blog networks over the coming year. It was meant to be humorous, so not many came true.

This season it would be difficult to do the same as most of the buzz has disappeared. Top bloggers have gone pro, and startup networks have become serious and less inclined to gossip — except incomprehensibly on Twitter, where it’s like listening to one side of a telephone conversation spoken in code. So I’m not going to do ten predictions this year.

2007 has been the year of unblogging. Blogging about blogging has hit the deadpool. The tedium just turned us off in the end, as it always does.

That’s good. When the medium becomes the message something is out of kilter. To say that A is B is gobbledigook since, if true, there would be no need for B. Now the message is clearly the message and we can all get back to simple basics, i.e. content, and use weblog software for what it was meant to be, an easy way to publish our thoughts online without giving an interminable running commentary.

Has that taken some steam out of the blogosphere? You bet it has. Google spotted this and is currently downgrading all but the very best examples of the blogging art. Money will be much tighter until the next boom, which may be some years away.

Advertisers too are reining in their drive into blogs, converting big downpayments into PayPerClick models. Who can blame them? Goldrushes never last.

So I’m going to make one prediction for 2008. It will be much harder financially for everyone, and only the best will survive. The credit crunch will squeeze out those who haven’t put something by for the hard times, and leave the dabblers stranded.

It’s going to be a long, hard haul, but hey, that’s where the fun is, isn’t it?

Chins up and mind how you grow.

I’ve spent a lot of time this week thinking about Energy Analysis, which is a central part of the Superdemocracy project I’m working on.

Energy Analysis is a different way of viewing how organizations work. Instead of seeing people in particular “jobs” — which are ragbags of roles inherited from earlier empire building and power grabs — we examine the energy flows through the whole unit. We also look at the type of energy involved. This method always points up people placement as the main source of rigidities in any large organized group.

It’s a simple enough procedure, but breaks away from our normal worldview in which people are the natural drivers and shakers of all corporate activity. At first sight, it can leave you a bit disorientated, but think of Google. From the outside, the Googleplex looks like a giant energy plasma instead of a normal corporation, like Microsoft or IBM. And yet even Google has still fully to evolve into a true superdemocratic organism.

Then, out of the blue, a perfect example of an energy-driven corpo landed with a thud in my lap : the European Commission.

Basic background
The EU Commission is a board of quasi civil servants, drawn from the political classes of EU member states, and based in Brussels. Unlike normal secretariats it exercises considerable executive powers by proposing new Europe-wide legislation which eventually becomes legal throughout the community.

It has steadily amassed a lot of influence and control, backed by a tame supreme court which almost always supports the central orthodoxy. Its methodology has been “salami-slicing”, taking power in small increments that they think will not be noticed by busy people, but will accumulate over time into a vast control console for the whole of Europe.

The Commission is widely regarded as a political graveyard for national politicians who see it as western Europe’s equivalent to the Siberian salt mines of the old Soviet Union, where out-of-favour opponents were conveniently deposited. Britain’s commissioner, Peter Mandleson, a friend of Tony Blair, was twice forced out of the British Cabinet for alleged dishonesty. He now controls trade negotiations for all 27 countries in the EU.
/Basic Background

Now just imagine what all that negative energy will do if concentrated in one supranational body given the power to use it.

Naturally, that resentment and loss of status back home will fixate on stripping power from national governments and lodging it in Brussels. This will compensate Commissioners psychologically for the assumed shabby treatment these people had received from national politicians.

In short, the Commission will inevitably become a kind of politburo, hoovering power to the centre and spewing out hundreds of thousands of prescriptive “directives” for the folks back home. It will be job justification and revenge politics writ large by a powerful bunch of losers.

And that’s just what has happened over the past 35 years, ever since the UK joined an inoffensive “Common Market” with “no political or sovereignty implications”. The energy map of the institution predicts perfectly how it has evolved over the decades. It’s also a fact that the Commission’s accounts have not been cleared for 13 years by their own court of auditors on the grounds of massive fraud.

This week a constitution was signed by national politicians which paves the way for yet more power grabs and the downgrading of democratic procedures and accountability.

You would rightly guess that most ordinary people are totally against all this. Indeed, two years ago both France and the Netherlands voted it down in referendums, and Britain would have done the same if allowed to have a say by the slippery Blair and Brown. The constitution has now been repackaged and renamed — an amending treaty. This time they’ve walked away with the whole salami.

So the transition from common market to legal jurisdiction is almost complete, with not a referendum of the people in sight. And it’s all been driven by the energies funnelled into the Commission by short-sighted, short-termist national politicians. Stitch-up is too mild a comment for what has taken place.

This week also sees the 350th anniversary of the Flushing Remonstrance which was issued by English settlers in New Holland, now New York, in protest against religious persecutions by the then Dutch rulers. In retrospect it was the model for all the other Declarations and freedom documents that followed.

So do we need our own Flushing Remonstrance here in western Europe? It would be a good start, but we should also look at the energy makeup of the Brussels Commission and so-called Court of Justice. Then we could get back to free trade and dispense with the futilities of failed politicians.

As Shakespeare put it, we must renounce “the equivocation of the fiend that lies like truth”.

Energy Analysis is a useful tool for that in any organization, especially when aimed at finding the points of maximum competence for the taking of critical decisions. One thing’s for sure, pushing up decisions to Brussels is the worst of all possible worlds — the point of maximum incompetence.

But then we hardly live in a sane universe.