November 17, 2018

Geopolitics Trumps the Markets

“That crashing sound you heard in world markets last week wasn’t just a correction. It was the sound of the end of an age.

During the long era of relatively stable international relations that succeeded the Cold War, markets enjoyed an environment uniquely conducive to economic growth. The U.S. faced no peer competitors, and the most important great powers generally (if sometimes selectively) supported Washington’s emphasis on opening markets and reducing barriers to investment and trade. The positive-sum logic of economics trumped zero-sum international politics in the halls of power world-wide.

The results were extraordinary. Between 1990 and 2017, world-wide gross domestic product rose from $23.4 trillion to $80.1 trillion, the value of world trade grew even faster, more than a billion people escaped poverty, and infant-mortality rates decreased by more than 50%. The number of people with telephone service grew roughly 10-fold.

This hiatus from history was, by most measures of human flourishing, a glorious era. Now it has come to an end, or at least a pause, and the world is beginning to see what that means.

During the Obama administration, foreign-policy observers began to speak of “the return of geopolitics”—the idea that the international arena was increasingly defined by competition among strategic rivals. Russia, China and Iran were “revisionist” powers that aimed to upend the post-Cold War era of American dominance. These powers enjoyed growing success, particularly during President Obama’s second term. By the time Mr. Trump took office, there was little doubt a much more challenging geopolitical environment had taken shape.

For the most part, business leaders and investors paid little attention to such chatter; the basic elements of economic globalization appeared firmly in place. Russia, the most obvious challenger to the geopolitical order, was an insignificant and diminishing player economically. And China, notwithstanding its rapid economic growth and its anxiety about American military power, was unlikely to challenge the economic basis of its own success. Geopolitics might have been back, but that wasn’t an issue for markets.”

Read more

JJ Best Of The Web

"You are being watched. Right now, cookies are tracking which websites you visit and what you click on while you’re there. Your smartphone is logging your location."

"The US placed sanctions on 17 Saudis on Thursday as punishment for their alleged involvement in the murder of Saudi journalist and US resident Jamal Khashoggi... according to experts, the move doesn’t go far enough to reprimand the kingdom."

"If the slow-motion crisis that is Gaza ever has a turning point, then this week’s deal between Prime Minister Benjamin Netanyahu’s government, or what’s left of it, and Hamas leaders, under siege, is what the turning would look like."

"Nicholas Parisi's new biography, 'Rod Serling: His Life, Work, and Imagination,' fails to present a complete picture of the legendary screenwriter who did his best work outside the TV show that made him famous."

"Nearly a year after the tax cut, economic growth has accelerated. Wage growth has not. Companies are buying back stock and business investment is a mixed bag."

"By shifting accents, Australian expatriates are seen to be shifting class and status, indicating a sense of superiority to those who remain in Australia. The quickly acquired faux-British accent in particular has been associated with pretension..."

"Denim, usually in the form of the humble pair of jeans, is arguably the world’s most popular fabric. Over the years, it’s been worn by everyone from supermodels to soccer moms."

"Capitalism disadvantages women along several axes. The dawn of the industrial revolution enshrined a division of labor that largely confined them to the domestic sphere."

"In the past five or so years, hosting a Thanksgiving meal among friends a week before the actual holiday has become a standard part of the celebration for many young adults."

"Are these business owners trying to keep out certain customers? What about children? Or people who are paid in cash, or others who, for whatever reason, can’t or won’t open a bank account..."

"Humanity is on the verge of a weighty achievement. On Friday, representatives of more than 60 nations will convene in Versailles, France, to approve a new definition for the kilogram."

"...the more modern form of the movement has its roots in late 19th-century Europe... The sole focus of some missions based in England and the U.S. was the conversion of the Jews to Christianity..."