By Christian Takushi, Macro Economist – Zurich & Geneva on 21 Dec 2016.
As Germany is rocked by the worse terror attack in decades, this is a summary of long-term thoughts (this strategic editorial from Dec 2016 was updated in Dec 2017 and is relevant for years to come).
For years we have been warning that as a result of strategic errors by European leaders over three decades, Europe’s Security Deterioration may be inexorable. It lays bare that Europe has been led by politicians & administrators that lacked strategic foresight and pushed by lobbying corporate leaders. Europe is in a geo-strategic trap of her own making.
The Liberal Policy Mix that contributed to decimate the Middle Class was silently supported by established Conservative parties in Europe & USA as well (making sense of BREXIT)
There have been independent minds that raised questions about the downsides of an European Integration Process that lacked a clear mandate by the people. Instead of broadly informing the pubic and fostering open discussion, Europe favoured an army of think tanks, universities and institutions that shaped public opinion. I believe that it is healthy for a society to have an open competition of liberal, conservative and independent ideas. I personally follow liberal, conservative and independent thinkers – It is truly enriching. For instance, I watch how Fox News and CNN report a US policy issue. I love to draw my own analysis after checking different sources and comparing with my a-priori analysis. Nevertheless, I find that most people are taking most of their information from the same one newspaper and TV channel – even decision makers.
In my analysis, the overwhelming media dominance by liberal & pro “big business” conservative groups is something that led many voters to accept BREXIT. I think that the condescending way members of the political, academic and business establishments talked to the public simply backfired. A majority of British people rejected the EU, despite all the evident risks and threats. Although well-intentioned, such a dominance of mainstream media and financial media by liberal, pro-globalisation and big business interests was increasingly perceived as intolerant of any criticism. Thus, destroying the very image of “tolerance” they have painstakingly built over 30 years. The excessive effort by the media to shape public opinion (instead of informing the public) and the way it deemed anyone critical of the status quo as fearful, intolerant, racist, uneducated or poor led to the BREXIT fiasco. Had this been avoided, BREXIT may have not taken place.
Western media is now ‘shaping public opinion’ rather than ‘informing the public’
In many Western nations like the USA the media is not only 80% to 90% liberal, it has become more aggressive since Brexit. Sadly, conservative media outlets have responded with a similar bias – tearing down every single liberal policy achievement. That has only contributed to the further erosion of public trust in the Press. Conservatives are not allowed to say anything positive about Obama, just as liberals are not allowed to say anything positive about Trump.
Let us avoid singling out liberal forces in Europe, many of those pro-Big Business groups are the conservative parties. In many ways, Conservative Parties have let down the Middle Class and many of their faithful constituencies. Yes, In Europe, the mass influx of migrants benefitted both the established Liberal and Conservative Parties: Liberal Parties welcomed their new voters, while Conservative Parties secured further support from Big Businesses. The latter benefitted from the cheaper cost of labor induced by migration. Thus, while millions of migrants flooded some European states, thousands of factories and millions of jobs went overseas. Along the way established parties and bigger businesses benefitted. Thus, rather than reforming an almost 40 year old Liberal Policy Mix to address its increasingly visible flaws, the political establishment sought to dominate public opinion.
Europe is in decline and this cannot be explained by the above alone. As usual, many human endeavours begin with great ideals and purposes. The stellar rise of Humanism & Political Correctness may have played a role in suffocating public debate about the shortcomings of our status quo. Excessive Political Correctness has contributed to make many people “hyper sensitive” and unable to deal with ambiguity or criticism. Western European society has de facto eroded the Freedom of Speech for those critical of the status quo. In all fairness, media and politicians seem to be afraid of offending any group of people too. Which is understandable.
A short strategic review
If I may oversimplify the past two decades: Peace seeking leaders dismantled Europe’s strategic military, while enthused eurocrats led an unrelenting EU’s territorial expansion and the erection of a protectionist Fortress Europe (marketed as free trade). All this has weakened Europe’s competitiveness. The results are mixed: While big businesses have benefitted greatly, the middle class has stagnated. Only the most competitive Nordic countries benefitted as the common currency became endemically weaker than their former currencies. The territorial expansion of the EU into the East emboldened Russia’s nationalists, which saw their motherland increasingly encircled. But can the EU defend herself against Russia? No.
In my view, the EU is today by far the most vulnerable major power in the world: economically, politically, militarily and security wise. Unable to defend herself, the EU says it relies on NATO, which is to mean the USA. But NATO – as a growing number of US military leaders view it – is a highly asymmetric defence block. Trump is simply speaking out what many generals don’t dare to say openly.
We should not rule out that Britons may have had more strategic foresight than generally thought. 7 decades after the Battle for England, Britain decided again to defy the Continental Forces stemmed against it. Maybe, because staying bound to a bureaucratic-pseudo democratic EU was a larger leap into the unknown than a messy divorce.
But let no conservative mind get carried away by the disruption theme
Many observers say the wave of populism will sweep from the UK and USA over to Europe – something I disagree with. The political landscapes in Europe will be shaken (we think the AfD could get 12-20% of the votes), but not as consensus sees it. The rise of the Far Right will force all other mainstream parties to rally behind the EU Agenda. Thus, as the Far Right grows, the EU is likely to be more emboldened on her liberal course.
Voters in France and Germany may be tired of 4 decades of liberal policies, but …
The result of Europe’s Policy Mix has led to the destruction of vast segments of Europe’s Middle Class with the subsequent Political Polarisation and growing systemic risks to Political Stability. The explosion in regulation in the name of customer protection did the rest in advancing big oligopolies. Oddly, many Europeans believe that the European Union is a bedrock of Democracy and Free Trade. But in many ways the EU is undemocratic and unaccountable. Additionally, the EU’s hailed Free Trade is actually a mix of Protectionism and Managed Trade.
European citizens can’t simply blame their leaders, though. The untold truth is that most European citizens on the continent are too risk-averse to induce a political change – this being specially true of Germany and France. On the one hand, many have become too dependent on an ever growing State and State-run pensions & programs. On the other hand, Europeans like the “protection” that the EU promises them.
Troubling developments: News Bias and Fake News
I personally see the risk of excessive information warfare from the left and the right. Even governments and state media are participating in this troublesome development. We should not mind that state media is dominant in Europe – at federal and regional levels, but can state sponsored media be truly independent? I see Fake News and News Bias as worrisome developments. Fake news by groups on the far left and far right are not making the democratic process healthier. Mainstream media is now warning people about Fake News, and rightly so, but it fails to address its own subtle systematic News Bias – which in my opinion is not much less dangerous.
Our research shows that while there are extremist minorities at work in Europe, millions of normal citizens wish simply a course correction or normalisation.
Even in the aftermath of the tragic terror attacks in France, Belgium and now Germany, European leaders’ diagnosis scratches only the surface
- What Islamist terrorists want is to take away our Freedoms
- If we integrate immigrants better, then home-grown terrorism would vanish
- Lack of economic opportunities are main driver of Radical of Islam
They are not wrong, but they fail to address the main causes. As a result, Europe’s economic, military and security deterioration will gather pace. I ascertain that Religion is by far the most underestimated and misunderstood geopolitical factor of our time.
Daring to look out into the Future of Europe
While our research points to a slow-motion deterioration of the EU and its eventual implosion, we see the rise of a European Super State or Federation in the long run. What the experts won’t tell you: The best friend of Berlin-Paris-Brussels is ongoing crises: EU leaders need unending crises to weaken the national states and to induce them to freely hand over their sovereignties in exchange for bail-outs and protection. The migrant crisis is a good example of this strategy of more Integration through the back door. This is straightforward geopolitical-macroeconomic reasoning (I reject to work with conspiracy theories).
Just like the United Nations, the European Union is not as unprofessional or incapable as many critics say. They are quite a genius indeed. The EU simply allows crises to rise and simmer, because this helps them achieve their undeclared goal: Power Concentration. A legitimate goal. What I criticise as an independent analyst is that they don’t openly talk about it. nor would they let citizens vote over it. It sounds better to say: all we want is Unity and Freedom. With most people following the narrative of mainstream media and others reading only superficial Social Media “bits”, the EU and UN are making good progress towards their respective goals of Power Concentration.
After promoting millions of immigrants to move countries, removing borders, weakening the Rule of Law and allowing big firms to become gigantic Oligopolies, the EU will tell you that individual nation states can’t cope with today’s challenges. Thus, overwhelmed nation states have to come together into Super States, of which the EU is the first one. In a not too distant future, individual nation states may exist only on paper.
Christian Takushi MA UZH, Macro Economist & Geopolitical Strategist, 21 Dec 2016, Zurich-Geneva, Switzerland.
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