"When people are free to choose, they choose Freedom."
Margaret Thatcher

WORLD 2020

Brave new Covid world

Imperial College London (my former haunt) reports that counties, including the UK, produce half the man-made seismic activity during this Covid-19 outbreak. Also, nature is flourishing, the birds sing more, nitrogen dioxide (NO2) and all forms of pollution have fallen, the skies are bluer, noise is down, our days are brighter and maybe some people cook better and exercise more.

Once we are free to go out again and relieve the strain of isolation, do we really want to return to the old world of hurry-hurry, rush-rush, and die younger, just as long as there is a new car in the drive? Do we want to fly so much just because it costs only £30? In over-crowded planes, from one over-crowded city to another?

We have screwed up the loveliest planet in the universe and all our fellow creatures, perhaps even our fellow-man, just as long as it makes us feel important. Which means we are not important.

Nobody can solve this economic conundrum alone and past theories have been discredited, but maybe something new will emerge from our collective behaviour world-wide - perhaps a world where working from home is seen as superior, not inferior, earning millions is unnecessary, burning the last dregs of fossil fuels is dumb, upmanship is considered stupid, and living longer, younger and healthier is seen as intelligent. But it has to start, not from governments, it must start from inside homes where studying and education are seen as the answer to all our needs, looking after our bodies and brains is our personal, not government, responsibility, and looking after planet earth is put above the materialistic "needs" of an ever-growing population which are just unsustainable.

Already, we have blighted every landscape and every seascape with solar panels and wind turbines because we don't care to visit the outdoor so much, we would rather stay indoors and have the electricity to post photos of our snacks on Facebook and Twitter all day long, before, during or even after work, even before we had to isolate due to covid. With breaks only to organise every scrap of our rubbish and study how to classify and dispose of it for recycling. None of this is 'good for the environment' - all it does is create more space for additional human beings when there are far too many as it is. And it is the environment which produces viruses to kill people when their numbers become an all-devouring plague on planet earth. The environment will always find new ways to kill us when our numbers multiply out of control.

New, much worse viruses will emerge, make no mistake, which will be just as contagious but more lethal, because the planet is trying to tell us something. We cannot have so many people crammed in such a small place. Just look at the total number of deaths at the end of this present crisis in a year or two, and then consider what it really means.

We have been warned.

WORLD October 2019

Only a few days ago, September 2019 (see below), we said that, if Trump harmed America or the world, we would say so. And now he has, and we will.

ALFA has supported most of President Trump's policies but not the man. We had made that clear a number of times in our World editorials. We judge decisions, not personalities.

It is ironic that Trump got it wrong when he opted to follow one of Obama's doctrines, "We cannot be the world's policeman," these words now repeated exactly by Trump just before he pulled US troops out of Northern Syria and allowed Turkey to go in and slaughter more Kurds - as if not enough had been slaughtered already by Saddam Hussein, Syria's Assad, Turkey itself previously, and ISIS.

ALFA will never argue for war or any military operation, we believe that war is murder. What is different about this particular situation is that US troops did not have to do anything to protect the Kurds, just stay there.

Be that as it may, it would be foolish of anyone to comment, let alone judge, any military commander's decisions, and there is enough horror expressed already, both at Trump's decision and at Turkey's bombing of Northern Syria.

What we can do, and what we always do in ALFA editorial pages is analyse the logic of world events, in the same way a neutral observer might comment on a game of chess.

So what about Obama's doctrine, "We cannot be the world's policeman," now echoed by Trump?

A number of things:

Firstly, nobody asked America to be the whole world's policeman, but to show presence in a small number of isolated trouble spots. If the most powerful military force declares openly they will not intervene, not even to support their allies, this will not reduce the number of conflicts but increase them. It gives a green light for anyone to do anything. There are enough evil butchers around the world who seek every opportunity to gain some advantage at the cost of lives - lives they never care about. America tried to stay out of World War II when Hitler was running rampant and this did not avoid war, it made it worse. Obama tried to stay out of Syria, even after his 'red line' on chemical weapons had been crossed, and this led to rampant bombing of entire cities by the Russians and further slaughter by Assad, Hezbollah, Iran, ISIS and al-Qaeda. Words carry more power than guns, especially when backed up by the biggest guns in the world, so US Presidents must be careful never to suggest to dictators they have nothing to fear from them.

The second logical error in that doctrine, 'the world's policeman,' lies it what message this sends, not to tyrants and terrorists so much, but to world powers like Russia and China, and to a lesser extent countries like Iran, and now Turkey. If the US does not want to be our policeman, there are plenty of others who would love to, and look at what they are doing.

Russia jumped into Syria with joy, when Obama refused, so even humanitarian convoys were deliberately bombed, let alone civilians. Russia had previously invaded Georgia and the Ukraine. China is virtually taking over the entire South China Sea, effectively invading Japanese, Vietnamese, Thai and international territory. Iran equally loved 'policing' in Syria and Yemen, even Iraq. Is it really in America's interests that such autocratic powers take on the role of world's policeman?

Thirdly, the words 'cannot' are inappropriate. If America cannot project deterrent power around the globe then who can? Yes, of course America can. When Iraq was invaded, even though wrongly, Gaddafi of Libya rushed to destroy his own weapons of mass destruction without being asked, fearing similar action from US allies. So American deterrence does work, and America CAN be the world's policeman.

Fourthly, we have to clarify what we mean by 'policeman'. What the police do is detect who committed a crime and then bring them before an independent court. When it comes to countries, we do not need any detectives, and there are no disinterested courts. Neither is it possible to arbitrate between, e.g. Suni and Shia muslims who want to kill each other and everyone else who disagrees with them. What 'policeman' would mean in a world context is simply to deter such killing, and to force such fanatics to live with each other, whether they like it or not. Obama's doctrine was a further misunderstanding, therefore, of what it means to be the world's 'policeman'.

Still remembering our view of war as immoral, as above, I have some sympathy with US Presidents who want to bring their troops home, away from harm, especially when the world shows such ingratitude for the loss of American lives. Whenever and wherever there is trouble, whether a World War or a small regional insurgency, it is always American boys who bear a disproportionate loss of blood - and we will not go into the deeper, more complex morality here of the kind of world we live in, or have created for ourselves.

However, giving a green signal for others to do some slaughtering when one could prevent it, was not wise or moral in this case. One senses a gross error of judgement, especially when accompanied by Trump pronouncing that the Kurds did not help at Normandy. Stupid. As we had said elsewhere, how can it be that highly intelligent men are stupid, like Obama or Gordon Brown, the former UK Prime Minister? It seems an illogical contradiction. Oh, yes, they can. Welcome to the human race.

WORLD September 2019

ALFA proven right once again. Under our London editorial page, back in September 2019, we stated our analysis that the UK Supreme Court ruling against Prime Minister Johnson's suspension of Parliament was based more on emotion than law. And we set out why. The judges had felt he was getting too big for his boots and wanted to cut him down. They might also have resented him trying to achieve Brexit against all that opposition, an undemocratic opposition. Maybe, or maybe not, but the strength of words used by her ladyship, the president of the court, game me room to think whatever I liked.

And now, no better admission of the former assumption above than from the lady herself, Lady Hale, the person who delivered the court verdict. In a speech at a girls' schools conference, she mocked Boris Johnson. "Let's hear it for the girlie swots." (Implied meaning too complex to explain here.) A jibe directly at the Prime Minister. Such contempt for a Prime Minister from a judge of the highest court, who should know better. What if Johnson had made a similar jibe at her? Cries of horror would have gone up. This is such a biased, unfair, blindly prejudiced world. Judges thinking they rank higher than the people they serve and their democratic representatives. As an Athenian democrat myself, I shudder, but I am not surprised.

Leaders popular with the public, as Johnson is, have always been despised, even hated, by others who feel overshadowed, outwitted, out-loved, or made to feel inferior. Like Margaret Thatcher was despised and hated despite her popularity, and I can think of many others…

Others, like President Trump, also despised. ALFA does not support Trump or any other politician, we remain strictly neutral, but see our analysis below (World 2018). And now, at the same time as the Court v. Johnson rivalry in the UK, ALFA is proven right about Trump as well: On the very month US unemployment fell to a 50 year low of 3.5%, the Democrats declared impeachment proceedings against him. Such visceral hatred. Of course, what else can you expect from ever-jealous lesser mortals? Has President Trump done anything wrong? I guarantee you, he has. Do I mean the Ukraine / Biden story? No, I mean he is a man like the rest of us, who put our foot in our mouth every other word we speak, who put dirty dishes back in the cupboard and clean ones in the dishwasher, who crack jokes about pretty girls without harming them, who regret ten new things we have done every day.

So never mind all the things Trump has achieved, like standing up to all the bullying, evil dictators of the world and all the other things e.g. economically, (see World 2018 below), there is a whole class who will hate him, always, no matter what.

I am no fan, but I am an objective realist, and when Trump harms America or the world I will say so. But the news right now is different. Both Boris Johnson in the UK and Trump in the USA have gotten perennial problems by the scruff of the neck and are trying to strangle them, because all else has failed. And people love them for that, so, not surprisingly, the pedantic self-appointed intellectual (they think) commentators condemn them out of spite, jealousy and blinkeredness - new word, I know, but isn't it good!

You would expect nothing less from ALFA.

WORLD 2018

At the time of writing, stock markets, especially the US DOW, are soaring to ever-greater heights. There will be a correction, there will be profit-taking, and what goes up must come down to some extent but do read, below, our earlier predictions for past years, and how they have come to pass.

We take a different approach to the long term. Others look at trends, charts and graphs; if only the world were that simple and easy to understand. Pies do not always tell you what is inside, and it is much easier to predict the past than it is to foretell the future.

What is driving the markets to such heights? The world economy is looking good, but apart from that America in particular seems upbeat, and when America does well, the world usually follows. The one new factor that coincides with economic confidence and willingness to invest is President Trump's success in putting his fiscal policy through, and the fact that businesses like his policies. We say businesses, but businesses are human beings driven by the desire to do well, which in turn creates wealth and employment. The number of black people in jobs in the USA is at its highest ever. If Trump is a racist, as some accuse him, those black people must be praying he stays in the White House a bit longer.

Remember 2008, markets crashing and talk of a great depression? If stocks had crashed again after Trump's election, as some had predicted, one gets the impression there would be a lot of smug faces among the so-called liberal elite. And you will not see demonstrators celebrating in the streets now, as we head towards a new era of prosperity. They do not understand the relative importance of things. Some would rather have Trump saying how nice everyone is, than see markets flourish.

It is fair to say that the world's media have presented a much more negative picture of Donald Trump than the view held by those who elected him and others around the world. The dislike from the world's media, including several BBC journalists, is reciprocated, it seems, and Trump has refused to play ball with the media in the same way. However, US Presidents have to make real decisions, often in real time, which affect profoundly the world we live in, whereas the media only have to deal with words.

President Trump is clumsy with words, to say the least. He seems to feel he must add fifty per cent for emphasis every time, in order for his point to be accepted or just understood. The English use the expression OTT, or 'Over The Top,' but Trump is not English and would not understand what this means. He is the opposite of understatement. His pre-planned speeches, on the other hand, show a different man, with views very much within the American Republican tradition, and in that he is not different to Ronald Reagan or either Bush.

And so the media seem unfair in their apparent hostility. Add to that all the minority outcries and demonstrations, as reported by the media, of course, and you get the impression of someone the exact opposite of an electable politician. Same thing had happened with Margaret Thatcher, while she kept winning elections. People with a simple view of the world only like people they like, which today means celebrities who know how to court them with sweet words and politically correct clichés - a very dangerous attitude to extend to electing Presidents or Prime Ministers. Never mind leaders with power to change things for the better, by force, if necessary. They want to have people in office they would like to invite home, not dominant leaders capable of standing up to vested interests, nuclear bullies and world dictators. Therefore, politicians good with words will always have an unfair advantage.

I say unfair because being articulate can be misleading. Trump's predecessor, nice, articulate, learned, charming, intelligent preacher Obama, never spoke one wrong word, but he screwed up the whole world. He said he would not tolerate Assad using chemical weapons in Syria, but then prevaricated, minced his words, and eventually failed to punish the crossing of his own "red line." And so civilians were slaughtered en mass. Obama's failures allowed Russia into Syria effectively siding with Iran to take over the country. The Russians then proceeded to flatten Aleppo and to bomb humanitarian supplies, a war crime. This was a calculated move by Russia, not only to support war criminal Assad and project Russian power into the entire Mediterranean, but also to flood Europe with migrants as a weapon of war against the West. A huge humanitarian problem suddenly confronted all European countries, something Obama's failures were directly responsible for.

Much earlier, the great orator Obama had given a speech in Cairo about Israel and the Palestinians which had left everyone ecstatic - there it was, the perfect solution to everything, why had nobody thought of this before? Shortly afterwards, his policies screwed up the Middle East peace process, allowed the emergence of Islamic State which slaughtered more civilians, and screwed up the whole region, including Iraq, Lebanon and Palestine. Such weakness does not go unnoticed. China proceeded to take over the entire South China Sea and came close to war with Japan, America's ally. After Russia had invaded Georgia, Obama's Secretary of State, Hillary Clinton, told Russia "Let's press the reset button," and so Russia invaded the Ukraine as well. Obama declared "Strategic Patience" on North Korea and they run riot with threats, missiles and with nuclear tests. But Obama smiled nicely and spoke sweet things, so no public outcry in the streets.

Same story with the most dangerous dictatorship in the Muslim world. Whatever you think of the deal on Iran's nuclear program, if you declare in advance that no force will ever be used, you have no negotiating power. The desire to avoid war should always be any President's intention and primary objective, but if you guarantee that to your enemy in advance, he will give you the run around. Now most sanctions have been lifted. We know Iran will have the bomb eventually, albeit postponed by a few years, and then, if anyone lights a match, the whole region will go up in an enormous mushroom. Try avoiding war then.

Putin took advantage of Obama's naivety and determination to get an Iran agreement at all costs and to keep Russia on board for that purpose. During their subsequent Syria 'negotiations' (it was nothing of the kind) Lavrov effectively put a ring through John Kerry's nose and had him jumping on call like a circus monkey. It was so humiliating to watch. Russia and Iran then ended up on the same side in Syria, against the West. That should tell you something about the earlier nuclear deal.

Trump keeps saying, "America first," but it was Obama who had withdrawn America from the world stage. He had not wanted to be "the world's policeman" so now we have the Russians and the Chinese doing that. And just look at what they are doing.

Trump was left to roll back the tide. The tide of illegal immigrants, the tide of Russian and Chinese expansionism and bullying, the tide of North Korea's ballistic nuclear missiles, not to mention the tide of state-sponsored terrorism with our own money from the West. Trump acted immediately Assad used chemical weapons to gas Syrian children. He has put some fear into all of the above, including North Korea for the first time. If Trump is so unpredictable with hiring and firing his own staff, who knows what he might do with his military powers? You might find that uncomfortable, and journalists hate that because they like to know everything in advance so as to write some copy. But if we find that uncomfortable, think how uncomfortable rogue states and other dictators must feel, not knowing what might hit them next. The best weapon against one's enemies is to keep them guessing what your reaction will be.

Being on camera twenty-four hours, seven days, and without such previous experience as Senator, Congressman or Governor, Trump does say things that make you cringe, but being USA President is not all about words, it is about the world we share. It is not about making sense to journalists, it is about putting fear into your enemies. I would not invite Trump home for the weekend as I would Obama and his lovely family, but I would never put Obama in the White House again.

It is interesting how American voters understood that, but the more intelligent word-obsessed media did not. Glory to the Greeks for inventing a system of government, which sticks two fingers up to people like reporters and professional commentators.

WORLD 2015

ALFA has been proven right again in its farsightedness. Contrary to most commentators, we had kept saying (cf. World 2014 article below) that predictions of the East overtaking the West were premature. Now, in the summer of 2015, the Chinese stock market is crashing despite monumental efforts by the Chinese government to interfere.

All markets experience volatility from time to time and the West had its fair share, especially since the financial crisis of 2008. But we look at underlying principles and underlying forces here, rather than trends. Even with all the problems of Greece and the Eurozone, money prefers to invest in Europe and the West.

This is a lesson China needs to learn as it grapples with capitalism, that not even a mighty one-party state can 'buck' the markets. They should have listened to Margaret Thatcher, although one could argue that they have listened to a degree, to have a stock market at all. Which brings us full circle to the analysis set out below (World 2014): Markets need freedom in order to function properly; and you cannot separate capitalism from democracy, despite both their faults.

WORLD 2014

Much of the data in recent years has been interpreted as showing that the American economy and the West in general will be overtaken by the Far East. Indeed, the pace of the Chinese economy and growth in countries like India, Singapore and South Korea, not to mention a healthier looking Japan, are sending all the graphs in one direction.

Graphs do not always continue in the same trend and reports of an American downfall are greatly exaggerated. At the same time, an ever-growing China is by no means a sure thing.

What the USA has, which China does not, is a healthy democratic system, affirmed by the election of its first black president. All democracies have faults and so does America. We can debate what constitutes democracy in the first place and it can be argued there has ever been only one true democracy, in ancient Athens.

In ancient Athens every family had a direct representative in the legislature and government. What we have today is freely elected (every few years) executives who force upon us decisions we often disagree with. We do not have rule by the people, which is what the word democracy means.

Nevertheless, a system of government which freely elects representatives and guarantees certain freedoms translates into a dynamic marketplace when it comes to its economy. By dynamic we do not mean strong (there will always be cycles of strength and weakness, even boom and bust) but a system that can adjust and adapt quickly to the needs of its people.

A free market is nothing, if it is not a system of information, and it is information that suffers first in non-democratic countries like China.

This is exactly the problem China faces. Without democracy, what we have here is a rigid economic system, which will not be able to respond to changes for the needs of its own people, and the graph curves will change direction very sharply at some point.

It is interesting that the conflict between China and Japan on the disputed islands of Senkaku / Diaoyu was exacerbated while both their economies were on the up. Both of those countries have authoritarian traditions in their systems of government which means that both their governments will seek to put certain philosophical "principles" over and above the daily preoccupation of their citizens for a peaceful, prosperous life as expressed in a free market. And so the risk of conflict is rising for both those countries and for the world. So it is not always about how an economy is performing that predicts its future, but a whole host of other factors as well, its system of government being crucial.

Great Britain and its history around the Thatcher era showed the world, if nothing else, that a country will get poorer in the long run when there is more government interference in its free market economy, while it will thrive and get richer when the state stops growing. A few decades later, after the 2008 financial crisis, what happened in Greece and in Great Britain itself added a useful footnote to the same lesson: Even the welfare provisions created for the poor suffer when governments overspend. The intentions may have been honourable, spending may have been for the purpose of welfare, but any government spending represents interference in the free market, and beyond a certain minimal point, it becomes self-defeating. Then, it does not matter how much you tax the rich, it is always the poor who suffer the most when markets are distorted. So in the long run, a free market economy with little interference is the best welfare system in itself.

REGULATION, REGULATION, READ ALL ABOUT IT

A much greater fear for the world economy in the long term is how governments reacted post 2008 and the new measures they put in place, supposedly to prevent another crisis. It seems that, in the rush to prevent a repetition, the world took a huge leap backwards. Even the most democratic, free market economies implemented measures of government intervention worthy of the worst state-run economies. After banks were rescued, the snowball grew and grew. One thing led to another and the mentality of intervention took hold. It has been breathtaking to watch how, day by day, all kinds of businesses were, either coerced or lectured to "do the right thing", as opposed to letting the free market determine what people really wanted, allowing good companies to succeed and those of poor service to suffer. This backward looking 'philosophy' started with the banks but has spread much further, into energy companies and so on. In Great Britain it is also reflected in the famous National Health Service, a state run institution, if ever there was one. Have we all gone back to Soviet methods?

More and more regulation was the war cry. In Europe, banks were lectured to have healthier balance sheets, to take fewer risks, to pay smaller bonuses, to lend more money to businesses and for mortgages - all of them things which banks should do normally in their own self-interest. In Great Britain, energy companies were lectured to reduce their prices out of conscience, an admission, if ever there was one, that there is no free market in energy. Even doctors and nurses in the UK were lectured as to how to be more professional to their patients in the NHS. The European Union has been lecturing countries to cut their deficits. And on the world stage, we hear lectures at the Chinese about how to manage their currency and other similar cries.

All of this is laughable. None of those lectures will have much of an effect, and all of them would have been unnecessary, if market forces were allowed to work freely. Markets are now so heavily distorted, banks, large companies and even hospitals will not do what their customers or patients want. Consumers have lost so much power, and it is government interference, supposedly to protect consumers, which is responsible for this loss of power.

Regulation should never replace the power of the consumer himself to demand direct accountability from his bank, his energy provider, and his doctor. What regulation we do need is just to prevent fraud, prevent trusts and monopolies, and to ensure transparency. Prior to 2008, in so far as various regulatory bodies shared the blame for this crisis, and they did, this was a failure, not of regulation but of regulators. They did not apply the instruments they already had. The rest of the regulation should be done by the consumer directly exercising his freedom to complain face-to-face and to demand answers, to demand recompense, to sue, or to withdraw his custom and put poor performers out of business.

There is no way human nature will change so that businesses deliver what customers want because they have a moral duty. This experiment was done to death for seventy years in the old Soviet bloc. And it failed. So far, we have invented no better system for delivering wealth to ordinary people than a truly free market economy.

WHERE IS WORLD CAPITALISM NOW?

The financial crisis of 2008 was called a failure of the capitalist system. It was, in fact, the success of a system designed to punish bad decisions. People suddenly forgot the many successes of capitalism (and of Thatcherism) over many years, and how those two "isms" brought country after country out of impoverishment and their peoples into freedom. But these successes can only come about if you also punish failure, punish bad decisions and punish poor customer service. Some called it the end of the Thatcher/Reagan era but it was the rushed response by governments that brought the era to an end, and we will regret this in years to come.

The new measures now in place around the world will not prevent another crisis, just as measures after the 1930's crash did not prevent this one. It will be a different crisis next time. Ignorance is bliss. Here we have ignorance of the kind of universe we live in and the mathematics of chaos. A crisis every eighty years is no sign of a bad system, but a very good system. Human beings will never devise anything perfect. If we try to control one aspect too much, we pay a price some other way. Storms or tsunamis (the results of chaos) will always come to an end and calm will return. Yes, there are casualties, but the alternative for us humans is never to build houses where storms are possible, or never to holiday on exotic beaches in case there is a tsunami. If you take no risk, you do not have pain, but no rewards either.

People who try to control the free markets underestimate the number of variables they are dealing with. The variables are, in fact, infinite. There will be another crisis, tomorrow or in a hundred years, but only two things can be predicted with certainty, a) it too will come to an end eventually, and b) it will be different from any crisis of the past.

Most of what governments agreed at the G20 and subsequent forums were measures of panic - never a good time to make long-term decisions. Each measure they put in place then necessitated consequential actions of more controls down the line. The philosophy of freedom and non-interference had changed. The world will pay a heavy price for this knee-jerk reaction. It is not too late to ensure that, in future, any business, including banks, can fail and must fail, if it does not deliver the very best for its customers. There is no greater and no better regulation than the fear of failure. It is an excellent medicine. And after a crisis, it has a healing effect.

DISCLAIMER

The content on these pages does not constitute professional advice, as it does not take account of individual circumstances.