Cyreenik Says
In 2015 a lot more people have been migrating from Africa and the Middle East into the Eurozone. The numbers are up, the media attention is up, and as the media has been reporting, there is a lot of expense and risk being sustained by these illegal migraters.
Why are they doing this? Why are they doing this now?
People migrate because they think doing so will improve their life. What this current migration indicates is that what these people of Africa and the Middle East are thinking is, "Life is really bad at home, and from what I'm hearing, life is pretty good where I'm heading for." And a lot more are thinking this in 2015 than have been doing so previously.
In the minds of these people this is not just some kind of faint hope, some kind of wishing and dreaming. These people are putting a lot of time, money, risk, and personal inconvenience behind that belief. They are paying thousands of dollars, being passengers on seriously overloaded boats, walking through wildernesses, dodging police and bandits... this is not a pretty journey they are taking! But it seems to be worthwhile to some 270,000 people in just the first half of 2015.
This is a wake up call. It is mostly a wake up call for the places these people are moving from. It means that the governments of the communities that these people are leaving from, "Aren't doing it right." They are not ruling in a way that is satisfactory to many members of their community, particularly the ambitious ones. The unhappy community members are showing this by voting with their feet.
The Eurozone may be getting the headlines, but it is these emigrant communities that need to do the serious changing. They are the ones losing the most.
This 29 Aug 15 Economist article, Looking for a home Asylum-seekers, economic migrants and residents of all stripes fret over their place, provides some more details on what is happening.
This This 3 Sep 15 WSJ article, Photo of Drowned Boy Washed Up on Turkish Beach Hits Hard Details emerge about 3-year-old from Syria who died off Turkish coast by Joe Parkinson, is another example of how this crisis is moving up in profile.
Many people note that the Great Recession of 2008 looks a lot like the Great Depression of 1930. This chilling resemblance explains why The Fed and the Obama Administration were vigorous about enacting programs to moderate the plunge in finance markets and business activities as the magnitude of the 2007 crash became evident. Good for them! These have been more successful than the efforts of Hoover and Roosevelt in the 1930's. But the post-2008 recovery has been anemic world-wide, so the cure has been far from perfect.
What a lot of people don't remember is that there was a 1937-38 relapse, another recession, that was also deep and sharp. This one is easy to forget about when you want to think of Roosevelt as a hero, but it was just as important to the social thinking of the late 1930's as the 1930 crash was. (This 2 Sep 15 WSJ article Hillary Parties Like It’s 1938 by Alan Reynolds is another description of that crash. It talks about how taxes were changed in ways that discouraged investing.)
This recession was important because it was like ripping the scab off a healing wound, and letting lots more bad blood flow again. The bad blood in this case being all the disputing about how to end the recession and get America growing again. (and the rest of the world) When this second crash hit, it meant the recovery wasn't happening! It was Back to Square One time! There was lots of pain, and lots more fear of what the future would bring.
Fast forward to the summer of 2015. It has been seven years since the 2007 crash started. Hmm... And the post-2008 recovery has been anemic, there is still lots to complain about -- very much like the post-1930 recovery in 1937.
As the 1930's progressed, and the economy didn't, many, many people started talking about many, many different plans to solve the Great Depression. Some were political, some were religious, some were economic, some were based on other logic systems, and some were just totally whacked-out. But because the problem wasn't being solved by the conventional means being tried by the various governments at the time, the average people of the various nations of the world got desperate and widened what they would listen to and consider. This was a Time of Nutcases. (my term) One result of this widening of listening was the wide mix of colorful leaders that emerged to become the heroes and villains of World War Two, and then the Cold War.
Donald Trump and Bernie Sander's popularity in the presidential contest during the summer of 2015 could be an indicator that we are now in another Time of Nutcases. The people of America are frustrated that things aren't going better using the existing Fed and Obama Administration solutions, so they are looking around more widely for better solutions. Trump, Sanders and many others are offering something radically different. Many people are thinking, "Could one of these new ideas be a solution that works better?" This is how Trump, Sanders and the many others fit into this 1937-like pattern.
In sum, my pattern-watching is saying to me, "If the current market gyrations in finance and commodities transform into economic declines and spread into a world-wide repeat recession... Watch out! It's 1937 all over again, and what followed that recession, in 1939, was not pleasant... at all!"
If a repeat deep recession does happen, then in the 2017/18 timeframe there could be a lot more violence coming -- there could be some more social revolutions of the 2012 Arab Spring sort.
But part of the pattern is that how the violence comes and how it evolves will be surprising. An example of surprising these days is the high-profile and popularity of ISIS today. Where did that come from?
Surprises are coming.
Update: This 13 Sep 15 WSJ article, British Labour’s Radical Turn The party’s repudiation of Tony Blair’s legacy is dangerous for the West., describes a similar turn in popular sentiment happening in Britain.
From the article, "Jeremy Corbyn makes Vermont Senator Bernie Sanders look moderate in comparison, but America’s Democrats have made their own notable left turn. They’ve moved sharply away from Bill Clinton’s New Democratic policies, a cousin of Blairism, on everything from taxes to trade to energy. In the presidential primaries, Mr. Sanders and Hillary Clinton are running to the left even of President Obama on economic issues."
Update: This 14 Sep 15 WSJ article, Worries Rise Over Global Trade Slump Growth in exports and imports is lagging far behind the pace during past expansions, threatening productivity and living standards by William Mauldin, talks about how feeble world trade growth has been. It is interesting that even without protectionist acts as blatant as the Smoot-Hawley tariff Act of 1930 that crushed trade in the 1930's, trade growth is still feeble in the 2010's.
From the article, "A sharp drop in global trade growth this year is underscoring a disturbing legacy of the financial crisis: Exports and imports of goods are lagging far behind the pace during past expansions, threatening future productivity and living standards.
For the third year in a row, the rate of growth in global trade is set to trail the already sluggish expansion of the world economy, according to data from the World Trade Organization and projections from leading economists. Before the recent slump, the last time trade growth underperformed the rate of an economic expansion was 1985."
Update: Yet another article on the roots of this year's electorate frustration. This 16 Sep 15 WSJ editorial, Incomes and Poverty, 2014 No word from the White House on the latest grim economic data., describes how little improvement in material well-being there has been during the Obama years.
From the article, "Real median household income—the exact halfway point of the earnings distribution—was statistically identical to the 2013 median. The $53,657 for 2014 follows two consecutive years of decline in 2011 and 2012 and remains 6.5% lower than the median in 2007. About the only indicator of well being that hasn’t declined in the Obama recovery are measures of income inequality.
These trends would be less worrisome were there more mobility over time, but the Census data suggest that fewer people are moving up the pay ladder compared to earlier periods. Some 57.1% of households were cemented in the same income quintile between 2009 and 2012."
Another indicator of late-30's style frustration.
The pattern of 1937 is looming.
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