Friday, January 30, 2015

The Europe of Brussels is Dead

Populism both right and left is on the rise in Europe. The headline is dramatic but not unusual among the populist leaders of Europe. It was from Matteo Salvini of Italy’s Northern League.

The dramatic victory of Greece’s left wing Syriza Party highlights the growing clout of anti-establishment and nationalist populism in Europe. The party leader, forty-year old Alexis Tsipras used a variety of slogans around “our national humiliation will be over.” Expect all left and right wing populist parties to take heart that the EU is now in trouble.

Populism is a label that describes a variety of political movements of both the right and left. It is a philosophy characterized by anti-establishment rhetoric and a claimed respect for the common sense views of the public. Populism is not aligned with traditional parties, partisan ideologies or mainstream solutions and polices. But it has become the dominant European political force at the moment and is challenging most of Europe’s governments and established politicians and parties.

Wednesday, January 28, 2015

Populist Left Takes Command of Greece

The stunning victory of left wing Syriza party and its charismatic young leader Alexis Tsipras (40-years old) is the result of five years of austerity and massive loss of personal and national Greek wealth.

Although pre-election polls showed the Syriza was going to win, late momentum got them close enough to a majority to easily form a government (joined with right wing, anti-austerity ANEL Party that won 13 seats).

Those same pre-election polls showed that most voters are not in favor of leaving the EU or the euro,
Greek Prime Minister Alexis Tsipras
nor are they nearly as far left as Syriza and most of its new parliamentary members. What the public wanted is a tough negotiator for a new deal with Brussels and Berlin (technically must deal with ECB, IMF and EC).

Tsipras ran a very brief and smart campaign using basic populist themes with anti-establishment and nationalist slogans. He also affectively rallied the left.
  • Our national humiliation will be over soon.
  • History is knocking at our door.
  • The time of the left has come.
  • Our common future in Europe is not the future of austerity, it is future of democracy, solidarity and cooperation.
  • Hope is coming. The opposition are merchants of fear.
  • The vicious cycle of austerity is over. 
The Guardian: Tsipras declares end to 'vicious cycle of austerity' after Syriza wins Greek election – as it happened
Reuters: Greek leftist leader Tsipras scores victory over austerity
HuffPost Exclusive: Greece Pre-Election Poll
The Guardian: Syriza stretches poll lead as Greek election campaign ends
The Economist: The euro’s next crisis

Tuesday, January 27, 2015

Two Governments in Washington

The President’s State of the Union address and Speaker Boehner’s invitation to Benjamin Netanyahu to address a joint session of Congress underscore an entirely new level of dysfunctionality in Washington. We now have two distinct governments in Washington, each with its separate elections, constituencies and agendas.

The White House and Congress operate on different political planes. The White House dominates a presidential electorate, the Republican Congress is mostly a product of the 2010 and 2014 mid-term elections. For Democrats, their base is concentrated in large cities, especially on the two coasts, and in college campuses and communities of color. And Republicans win much of the broad interior, more rural areas and the Anglo population, especially among the white and blue collar working class. Democrats focus on such issues as global warming and income equality, and Republicans focus on energy independence and economic growth. They are at odds on international policy, such as negotiations with Iran.

President Obama offered no recognition of the devastating loss his party suffered in 2014--from state legislatures to the U.S. Senate, culminating in a blow to the Democratic Party not seen since 1928 pre-Roosevelt levels of power. Obama does not believe they were his losses. In fact, the White House believes Democrats would have been better served in last fall’s campaigns to have embraced Obama and his policies, such as the Affordable Care Act. Tellingly, he joked near the end of the speech that he has won two national elections (running on his issues and supported by more than half the electorate).

It was difficult to find any interest in passing legislation in Obama’s tone or substance. His speech was essentially addressed to his core constituents and those establishment Democratic officeholders running 2016. Any of the greater public who wanted relief from the gridlock were provided some bromides toward the end of the speech but little recognition of the problem or strategy to address it.

The Speaker’s invitation to Netanyahu highlights that Congress and the President both now have their own foreign and domestic policies. Congress’ first legislation will be the Keystone XL Pipeline, which Obama has already promised to veto.

Both sides know that the basic functions of government need to continue or the public gets very hostile, but the existence of two very separate governments will likely continue until the public concern about dysfunction reaches crisis proportions.

Monday, January 26, 2015

Geopolitical Risk in 2015

All is well in Colorado. The economy is booming, unemployment is down and tax revenues are substantial. But, as Governor Hickenlooper recounted in his inaugural address, all sorts of unanticipated events could darken our bright outlook.

The following seven concerns are geopolitical risks that loom over Colorado’s tranquility in 2015.

Weather – Colorado has been especially subject to extreme weather, ranging from the 500-year drought in 2002 accompanied by devastating and reoccurring fires, to the 100-year flood in 2013.

Economy – The U.S. and Colorado economies in 2015 appear to be in sustained recoveries, but a host of worldwide factors could produce volatility and make a new downturn possible. In the short run, the 50 percent drop in oil price is disruptive. While a substantial longer-term benefit is expected, a worldwide recession could mask it.

Oil’s freefall is partially caused by the decline in demand. The drop in demand can be traced to a number of economic strains internationally, including: Parts of Europe are in or near recession and price deflation; oil producing countries face deficits and defaults; China and emerging markets are slowing; and Japan’s takeoff continues to stall. The EU’s economic troubles are helping fuel a major political challenge to the concept of a union.

Neither the U.S. nor Colorado can maintain prosperity if the world economies decline.

Political Turmoil – The first weeks in the new year have highlighted the political turmoil and national crisis that three determined people with Kalashnikov rifles can cause. France came to a stop and now will spend hundreds of millions of dollars in new security procedures and hardware. Also, Putin is not be through with causing political turmoil in the Ukraine and Central Europe.

Political Gridlock – The October 2013 partial shutdown of Washington D.C. demonstrated how fragile the federal behemoth is to polarized politics in this era. In Colorado, the TABOR tax-limitation amendment is a form of constitutionally mandated gridlock, which has both advocates and opponents.

Social Turbulence – Ferguson is an example of the power of a local incident rapidly gaining national and international attention to the detriment of local establishments and solutions.

Populism – Anti-establishment and anti-immigration parties are on the rise in Europe and are threatening the survival of the EU experiment. In the U.S., the rapid emergence of the Tea Party and Occupy movements show how quickly new social groupings can disrupt normal political and economic activity. In Colorado, an anti-fracking movement continues to threaten one of the state’s leading industries and the Democratic Party establishment.

Tech Disruption – Much of the geopolitical risk described in this post was aided and abetted, and in some cases, launched by social media and new mobile communication devices. The world has borne witness to the power of widespread access to communication--both its magnificence and its malfeasance. Meanwhile, if hackers have their way, they can seriously harm national security and the way many of us now conduct business.

Friday, January 23, 2015

New Leaders for 2015

Leaders from around the world are creating opportunities and problems for the global community. The start of 2015 highly focused on the world’s economy, with slowdowns in Europe, emerging markets, China and Japan. Terror, especially Islamic inspired, dominated January news.

Eleven leaders listed below will be important to the main themes in 2015.  Some are newly installed (Widodo, Modi, Sisi), some recently re-elected (Abe, Erdogan, Rousseff). Many are presenting new populist, nationalist and authoritarian approaches to their constituents and neighbors. One is just trying to maintain the system in which her country thrives (Merkel).

Thursday, January 22, 2015

State of the Union – Public Skeptical About Compromise

Although it’s important for leaders of both political parties to appear reasonable and open to compromise, the public is skeptical,

  • New WSJ/NBC News poll reports most common word selected to describe the State of the Union is “divided” (40%). About half the public rate both President Obama (45%) and GOP in Congress (55%) as “too stubborn.”
  • Pew Research finds 71% believe Republicans and Democrats will “bicker and oppose one another more than usual.” Only 22% say they will “work together more.” (In 2009 as Obama took office, only 30% predicted partisan bickering.)
  • Pew Research reported in December only 44% expect Obama to cooperate with GOP next two years and only 28% expect GOP to cooperate (after the 2006 Democratic takeover, 48% said newly empowered Democrats would cooperate with Bush.)

Wednesday, January 21, 2015

Obama’s State of the Union – Major Issues

No single U.S. problem dominates public opinion as President Obama delivered his last State of the Union speech before the race to replace him heads to Iowa (Iowa caucus Jan. 18),. Satisfaction with direction of the country as Obama speaks has improved, up 9 points since December (32% today, up from 21%).

The uptick in the economy has finally caused the public to move the economy to second place and jobs and unemployment to fourth place on the latest Gallup poll (Jan. 2, 2015). Dissatisfaction with government is the top issue, with health care and immigration in fourth and fifth place.

In Gallup’s open-ended question, “terrorism” was not mentioned. When a list is provided to respondents to rank their priorities, terrorism is first. See Obama’s State of the Union – Terrorism.