On the American Dharma of Dynamics, and the Confusion of Symptom with Cause

Harold Macmillan, in response to a journalist when asked what is most likely to blow governments off course, is said to have replied simply: “Events, my dear boy, events”.  That’s true, yet it is not enough. Inherent dynamics are just as an important force in politics – and economics – taking us further in a particular direction, whether originally envisaged, or not, and often with unforeseen consequence.  These consequences can be so disastrous and consuming that often they reverse into the polar opposite dynamic -- in which night longs for day, and day, for the night.

The structure of western economies now are unrecognisably different to the ingrained myth of entrepreneurial ‘can do’ capitalism -- the latter was of course no more ‘real’ per se than the boundary membrane holding that particular collective vision together, sedimented, through time, into a conviction of its own reality.
In America, the belief however, is that the ‘motor’ to its ‘real’ economy has died (its demise, exacerbated, but not caused, by Covid). It has been succeeded by shards of newly imagined financialised and tech resets, scattered throughout élite clusters.

The change has been shocking in its scope, and in the stealth by which it has crept upon us: Asset markets have been severed from any connection to economic returns; valuations in the billions no longer require to be underpinned by any profit at all. Price discovery via market interaction no longer exists. Markets are not free, but Treasury managed; enterprise capitalism is morphed into monopolistic oligarchism; innovation and small businesses have been crushed; inequality is rampant; money printing and debt are no longer limited by any prudent considerations, but rather as an exciting MMT ‘opportunity’ ahead; and interest rates no longer act as the mechanism by which capital is directed to its most effective and productive use.  It is a complete paradigm change.

The point here is that this dynamic has become hegemonic -- there is no escape. However sceptical one may be about its illusory foundations, any attempt by the Authorities to restrain it is likely to make it crash. Global central banks will not – cannot - countenance a market crash.  No, they must take this newly imagined MMT ‘reality’ to its furthest limit, and bear the consequences, which may be ill-starred.  The madness will continue.  We are in a new world in which we are obliged to act as though we are somehow ‘rational amidst the irrational’, until the fever subsides.
But what if US politics (and not just economics) is entering into a similar hegemonic dynamic, a framework which, however irrational some may judge it to be, simply cannot be escaped -- trapping Americans into its institutional structures as tightly as the economy now is trapped by its’ financialist cage?

An opinion columnist in the New York Times suggests that that precisely is where events are heading: towards a powerful political dynamic.  In an OpEd entitled, We have to make the Republican Party Less Dangerous, the author writes:

“In his Inaugural Address on Wednesday, Joe Biden said that after four years of Trumpian chaos … ‘democracy’ had ‘prevailed’. But it might have been better, if inappropriate to the moment, for the new president to have said that democracy had ‘survived’. In so many ways, Donald Trump was a stress test for our democracy. And as we begin to assess the damage from his time in office, it’s clear we did not do especially well.

“Forces we thought would constrain Trump out of simple self-preservation — public opinion and the demands of the election cycle — were of no concern to a president with ironclad loyalty from his base and a multipronged propaganda network at his side.

“Institutions we thought would curb his worst behaviour — the courts, the federal bureaucracy — had a mixed record, enabling his desires, as often as they stymied his most destructive impulses. And Congress, designed to check and challenge a lawless president, struggled to do its job.

“Yes, we held an election, and yes, Trump actually left the White House … But the difference between our reality and one where Trump overturned a narrow result in Biden’s favour is just a few tens of thousands of votes across a handful of states:  If it were Pennsylvania or Arizona alone that meant the difference between victory and defeat, are we so sure that Republican election officials would have resisted the overwhelming pressure of the president and his allies? We were saved, in short, by the point spread. This does not reflect well on American democracy. But it does make clear the source of our dysfunction: the Republican Party. The Republican Party in 2021 is a party in near total thrall to its most radical elements, a party that in the main — as we just witnessed a few weeks ago — does not accept that it can lose elections and seeks to overturn or delegitimize the result when it does. It disseminates false accusations of voter fraud and then uses those accusations to justify voter suppression and disenfranchisement. It feeds lies to its supporters and uses those lies, as Senators Ted Cruz and Josh Hawley did, to challenge the fundamental processes of our democracy.”

When Ray Dalio, the well-known Davos devotee, and CIO of Bridgewater, the world’s biggest investment fund, in recent days suggested that, “We [America] are on the brink of a terrible civil war”, ZeroHedge (a leading US financial web-site), reminded Dalio that more than a decade ago, it had warned, even then, that the Fed's unconstrained monetary lunacy (Quantitative Easing) would eventually result in civil war -- a prediction for which ZeroHedge was much mocked at the time.

Yet it was prescient. The kick-the-can, debt-led response to the 2008 financial crisis of rolling-over ever larger mountains of debt (‘printing’ more money/debt) at zero interest rates, has been responsible for a massive transfer of purchasing power from the 60% to the 1%; responsible for gaping wealth inequalities; for the concentration of the economic means (and political power) in the hands of the oligarchy – in tandem with the incrementally growing stultification of the ‘deplorable’ sector of the economy.  In ZeroHedge’s words of that time, this sector of the American public was being “thrown under the bus by the Federal Reserve”.

In short, the rise of the Deplorable constituency – associated with Trumpism - is not the cause of today’s crisis, but its symptom.  ZeroHedge challenges Dalio to admit this truth.

Then to the other part to the American myth, which is cultural and political: And precisely here is where another seemingly small strategic decision has triggered a quite separate political dynamic -- one that also threatens to become a hegemonic spider’s web from which escape is near impossible.

Just as the financial world’s interests and fortunes are tied to not kicking over the hornets' nest of a catastrophic monetary policy (because it is anyway too late to reverse it), so too, politico-demographic fortunes are tied to not allowing kicking at the hornets’ nest of an identity and gender politics – one committed to the notion of equity, rather than equality in society.

It may seem a tiny shift to emphasising equity over equality -- ‘equity’ – and one applauded by very many, well-meaning persons – yet just as QE (perhaps equally well-meant), has meant ‘death’ to the old American myth of economic opportunity, so the propagation of the politics of ‘equity’ – which is to say, that it is no longer sufficient for America to be, as it were ‘colour-blind’, and equal, but now must be ‘equitable’ – is ‘death’ to the founding US myth of individual freedom.

The demand that white Americans must not only admit to, and apologise, for earlier generations’ contribution to disadvantage and injustice in American history - and to atone for this, by accepting to be discriminated against today, for history’s sake  – guts the hidden assumption underlying the American myth of robust individuality. Historian Walter Russell Mead identifies in his book God and Gold, that the story of Abraham -  absolved of sin by God, and spared the demand to sacrifice his son Isaac, sets-forth abroad, to find his new path – represents the archetypal narrative of America. Russell Mead has argued in that the individualism inherent in British and American religion was instrumental for these states’ rise to global power.

Just as the entrepreneurial motor to the real American economy has been lost to the dynamic of financialism, so WASP America sees the motor of what once made America ‘great’ – rugged individualism – is being lost to the dynamics of woke culture – and sees too, that the Iron Framework of Big Tech, makes kicking at the cultural bee-hive pointless at best -- and dangerous, at worst.

So, a seemingly small shift unleashes a major dynamic. New identities, ‘communities’ and genders are replacing the American ‘nation’ because 75 million Americans have come to believe, at some level, that the imagined kinship of national community cannot any longer exist under the imposition of woke culture. They see themselves thrown under the bus of an incoming cultural tide. Again, Trumpism can be seen as symptom, and not as cause.

This, however -- Trumpism as symptom -- is absolutely not the analysis shared by the NYT OpEd author quoted above:

“We were saved, in short, by the point spread … This does not reflect well on American democracy. But it does make clear the source of our dysfunction: the Republican Party.  The Trump stress test, in other words, has revealed a nearly fatal vulnerability in our democracy — a militant, increasingly anti-democratic Republican Party — for which we may not have a viable solution.

“To even begin to fix American democracy, we have to make the Republican Party less dangerous than it is. The optimal solution would be to build our two-party system into a multiparty one, that splits the radical from the moderate Right and gives the latter a chance to win power without appeal to the former. But this requires fundamental change to the American system of elections, which is to say, it’s not going to happen anytime soon (and may never).

“The only other alternative — the only thing that might force the Republican Party to shift gears — is for the Democratic Party to establish national political dominance of the kind not seen since the heyday of the New Deal coalition … But one thing is certain. The crisis of our democracy is far from over. The most we’ve won, with Trump’s departure, is a respite from chaos - and a chance to make whatever repairs we can manage”.

So, there they are -- the forces of dynamics: Just as the Fed must take its new imagined MMT ‘reality’ to its furthest limit, and bear the consequences, so the Democratic Party and its Big Tech enforcers, must take their new cultural ‘reality’ to the limit, too – with whatever be the consequences.

This is no polemic (by the way). It is not even political, save in the forecast of its possible dénouement.  It’s about the dharma of dynamic forces -- they are what they are. It is their nature.

Conflicts Forum’s Weekly Comment

22 – 29 January 2021