The word “protectionism” is on almost everyone’s lips these days. It’s viewed as a bogey word, depicting the worst that could happen.

The fact is, it’s as inevitable as cold weather in winter. In some senses it’s also necessary.

When danger advances, creatures retract to safety. Think of crabs, snails, hedgehogs, wood lice … humans. The flight to safety, as financiers call it, is as natural as autumn rain. It will happen. It is already.

Globalization is fine in the good times. No-one turns away a good deal when there’s no risk, even if it arrives from a far-off country. When we perceive high risk to be involved, we withdraw to what, and whom, we know, in our own communities.

We can’t buck human psychology. We shouldn’t try. Only socialists do that. It wastes precious energy and resources.

The time has come to rebuild our home infrastructure and rethink the way we are governed. Anyone who believes that is not necessary should consider the mechanics of how we operate a variety of our affairs now: The State of the Union.

Latterday protectionism is happening over trade — think U.S. car subsidies — and also in financial markets. Foreign banks have all but pulled out of Britain, leaving massive holes in our ability to borrow commercially and domestically. That is a major part of the problem we face.

Did anyone in the UK with a Post Office savings account know their money was held by the Bank of Ireland? They do now!

We may be lucky that the situation is “only” as rotten as in 1931, especially as 1933 was when the really bad things began — like Major (later General) Patton leading a sabre charge of the U.S. Cavalry against 25,000 starving war veterans in Washington DC. That sort of thing couldn’t occur now, could it? Don’t count on it.

The fact is we’re set on a trajectory that will bring us close to a 1933 scenario. Let’s do ourselves a favour and accept that. We can then set about putting our individual houses in order by retracting to what matters here and now. When the time arrives, we will be prepared for the economic winter to come.

Bleating on about “global solutions” that are never solutions, even in the good times, but merely sticking plaster pretences to save face, is about as counter-productive as it gets.

This is not pessimism, it’s an acceptance of human psychology and having the guts to face up to it. If the worst catches us by surprise, we have only ourselves to blame.

Britain as a nation has always faced the tempests bravely, with fortitude, stoicism and humour. Our leaders need to start preparing the country for a prolonged period of acute discomfort. When we know the worst, the best in us will emerge.

The good news is that when we hit rock bottom, the only option is to rebound.

But will we have rebuilt our public domain by then, so that we can be first onto those bright sunlit uplands?

John Evans

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With a new American President due next week, it’s a bit early to ask the famous question: “How goes the Union, Mr President?”

However, the United Kingdom of Great Britain and Northern Ireland is in a different position. We have a government that has been nearly 12 years in power. So,

How goes the Union, Mr Prime Minister?

Gordon Brown never answers questions, even at PMQs, therefore I will answer for him:

At the close of the first decade of the 21st century, Britain has a two-tier system of economic organization.

First and definitely foremost, the Public Realm, as New Labour likes to call it, is a Command economy. It commands a massive £650billion income from the non-State economy that creates Britain’s prosperity. By common consent much of this money is wasted. It has a tendency to drop off the radar as if it were dumped into landfill sites. No trace of it is ever found again.

One man, Gordon Brown, presides with an iron fist over the Command economy of Britain and has done so for 12 years. He determines its work practices by a mind-numbing system of targets and procedures.

In return, the workforce, some 25 per cent of the overall labour market, gets job security, high salaries, and gold-plated, index-linked pensions paid six or seven years earlier than those of the toilers at the wealth-creating coalface.

The inferior, or private sector, is the milch cow of the Brownian system. It comprises those who work for themselves, for partnerships or joint-stock companies. Latterly, it has seen its much-admired pension funds rifled and ruthlessly downgraded by the Prime Minister personally. Allegedly, like Robert Maxwell before him, he has freely taken from the private pension pots to fund his own agendas and client state.

To make matters worse, the private national prosperity generator has been driven at the pace of a high-performance racing car for almost a decade to feed the lust for money (“resources” as it’s coyly described) of the favoured multitude in the Command economy.

With the private sector now in a state of collapse, the tribe within the Command economy is doubly protected by job security covenants and salaries paid for by massive State borrowings against the future wages and assets of the wealth creators. The children of such folk are already indebted by government to the tune of £17,000 ($25,500) each. The burden will take a generation or more to pay off.

With the UK in economic freefall, the future of both sectors is in doubt. The public sector now needs a milch cow and a golden goose to continue its extravagant destruction of wealth. Only debt and printed money can keep it inflated. These processes show no sign of slowing down, indeed such activity is on the increase.

There’s a great deal more I could tell you about the social state of the country, its sink estates peopled by a primordial underclass, its rubble of an education system, the tattered remnants of its once proud Armed Forces, its broken-beyond-repair Constitution, and its enforced membership of the alien European Union.

But there is only so much bad news we can take, or impart, in one sitting. The nation will take its nuclear revenge when next it is permitted to enter a polling station for a General Election.

And that is the state of the British nation.

John Evans

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One sentence of Barack Obama’s, in a recent speech to cheering supporters, stopped me short in my tracks.

The passage was: “With your support I will win this election, and together we will save the world.”

I can’t guarantee that it’s a verbatim version, but the phase, “we will save the world,” is.

Let’s hope that, if he wins, a more practical and realistic character emerges. The last thing the world needs now is another messianic, emotion-driven President in the White House.

Another James Monroe* — described as a “quiet President,” despite his clear achievements — would do very nicely in the current reduced circumstances.

* James Monroe Facts, from MSN Encarta:
Fifth President of the United States
Birth: April 28, 1758
Death July 4, 1831
Home State: Virginia
Party: Democratic-Republican
Terms In Office: 1817-1821, 1821-1825
Vice President: Daniel D. Tompkins
Significant Acts:
* Ordered the suppression of Seminole uprisings in Florida in 1817.
* Purchased Florida from Spain for the settlement of $5 million in Spanish debt.
* Signed the Missouri Compromise of 1820, which set limits on the expansion of slavery into newly-acquired territories.
* Adopted the policy of setting aside land for Native Americans in the Great Plains.
* Signed a treaty with Russia establishing a boundary to Russian territory in North America.
* Proclaimed the Monroe Doctrine, opposing European intervention in the affairs of nations in the Western Hemisphere.

He certainly leaves the last three Presidents standing.

John Evans

So the American primaries are over. No one can say they were bored.

All that remains of Julius Caesar

In the end a bruised but elevated Barack Obama triumphed deservedly over his street-fighting Moll opponent, Hillary Clinton. Whatever anyone thought of the outcome, it was a bravura spectacle on both sides.

Here’s a quick recap of what I posted here nearly four months ago – this is to allow you to assess Syntagma’s forecasting skills.

America’s Presidential election could be decided by which of the three big isms — racism, sexism and ageism — the country is least susceptible to. [...]

1. Do Americans want the Clintons back in the White House?
I would wager a big cigar they don’t.

2. Is John McCain too old?
The country that re-elected Ronald Reagan is not going to be put off by a man of 70.

3. Will America go with Obama’s left/liberal internationalist agenda?
Apart from a few white supremacists, I don’t think this election will turn specifically on race. Obama cuts across many traditional boundaries in the population and has an intellectual stature that suggests it will not. But in the campaign proper, his policies will be increasingly examined. [...]

In a year that’s made for the Democratic party, its two, admittedly impressive, candidates are likely to eliminate themselves by recent memories of past imperfections on the one hand, and an excessive zeal for the lost world of the sub-Marx master plan on the other. [...]

My guess is that [McCain] will win in a tight finish. But not so tight that we again become absorbed by the hanging chads of Florida.

Well, not too bad so far. We got the Democratic candidate right and I think a tight finish is almost guaranteed, especially as Obama lacks Hillary’s clout in the big swing states.

After the scintillating primary campaigns, I’m more certain than ever of my final prediction — that John McCain will be the next President of the United States. I believe Obama may be also … but in four or eight years.

Whenever I watch Obama speak, I’m reminded of a young Tony Blair before he became British Prime Minister, minus the prancing show pony act. The same certainties are there, the evangelistic language bordering on the biblical, the near-identical belief in the nostrums of left/liberalism.

Still to come for the young(ish) Senator from Illinois is the realization that none of these things work in the end. He should look at Labour Britain after 11 years of Blair and Brown. A wasteland of lost hopes and dreams as substandard politicians, drawn almost exclusively from the student activist class, recognize the awful truth: that life is too complicated to be micro-managed by government. Years of simplistic formulations driven by secondhand idealism, not truth, inevitably end in failure.

So who will be the new American Caesar?

During the coming campaign, I believe America will awaken to the fact that decisions have to be taken at the point of maximum competence — or as near it as possible. And that’s not by a government machine.

McCain may not be perfect, but he surely knows that to be true.

If you add up the major crises now facing the world — rocketing food prices, chronic wars in the Middle East, the credit crunch, high oil and commodity prices, and the slow motion global recession — they can all be traced directly back to September 11, 2001, when a few passenger jets were flown into three strategic American buildings.

That day has taken on an eerie similarity with the murder of Archduke Franz Ferdinand in Sarajavo in 1914, which triggered the conflagration of the First World War. Like the aftermath of that assassination, the reactions to 9/11 were, in retrospect, out of all proportion to the actual historical significance, despite the deep emotional shock it caused. Human reactions are driven by dark psychological currents, not cost-benefit analyses.

Consider the credit crunch. Joseph Stiglitz’s book The Three Trillion Dollar War (reviewed here) argues persuasively that Alan Greenspan’s policy of holding interest rates below optimal levels, for longer than anyone deemed necessary, was aimed at masking the enormous cost of the Iraq war on the American economy. The war was a result of 9/11.

Combined with rising house prices, the loose policy opened the way to a splurge of mortgage lending to the U.S. trailer-park poor, the sub-prime end of the market, and the rather guilty repackaging of it into faux Triple-A assets, which were sold on around the world. From those actions, we now have global economic turmoil hanging over us again.

The wars themselves are widely seen as a catastrophe for America’s reputation around the world, despite the late surge and the silent successes of the British SAS in taking out Al Quaeda leaders in the north. Whether they will inflict the psychological damage of Vietnam is not yet known, but it’s a distinct possibility.

As for commodity and food prices, the fighting in the Middle East drove up the price of oil, now heading to $120 a barrel, which has had a knock-on effect in all other markets, especially food.

In an inflationary environment, merchants tend to hoard their stocks in warehouses, betting on higher prices down the line. It’s a one-way bet right now, so a lot of the world’s grain output is locked away, pushing up prices at an even greater rate and shoving millions into hunger. Those positions will unravel quickly though at the first sign of a price peak, when dealers will dump their stocks on the world food markets. Prices will then drop sharply, revealing the real danger to the world — deflation and slump.

History comes down to us in a highly condensed form in which major events seem to follow each other in rapid succession. In reality they are interspersed by long periods of calm, even small recoveries and bursts of optimism. The underlying trend is still downward though, with much poison yet to unwind in a collapsing spiral of self-reinforcing declines.

The attack on 9/11 will almost certainly become the defining event of the 21st century, setting the tone for the rest, just as Franz Ferdinand’s death led to two world wars, a Great Depression and a cold war, plus the rise of some of the most evil figures in human history.

That’s why I say, 9/11 is still with us. It’s not going away anytime soon.