Belmont Club

The Post Blue World

Avraham Burg, writing in Haaretzargues that Israel should enter into a peace deal with whoever the Palestinians send to talk because the region is morphing into something else. Just what exactly it is morphing into Burg leaves to the imagination.

he French and British mandate agreements that shaped the Middle East are changing dramatically. The artificial Sykes-Picot borders no longer hold. Hundreds of thousands of Syrian refugees are eroding the border between Syria and Jordan. Iraq is breaking into Sunni, Shi’ite and Kurdish entities, while millions of people have settled beyond its borders without permission. It seems a post-Assad Syria will follow Iraq’s path and crumble. The Libya and Sudan we once knew no longer exist, and Turkey is suddenly talking about a future Kurdistan.

All these things fall within the biggest historical framework of all: the return of the empires. The Mideast is again becoming a focal point in the global struggle among major powers that arrive with imperial baggage. They’re quarreling over spheres of influence much larger than their areas of sovereignty. The Iranian Empire aspires to export revolution and expand. Erdogan’s neo-Ottoman Empire uses economic, military and cultural means spanning from Gaza and Cairo to the heart of Africa. Russia is intervening in its backyard as in the old days, its one outlet to a warm-water port. And the United States is still present with large forces, not so much on our behalf but because it’s wary of the others.

None of Burg’s arguments amount to much more than “here goes nothing”. It is as close to the Filipino spirit of bahala na as anything you can ever read in an Israeli opinion paper. In the words of a J Street Tweet. “Burg’s remedy is to move on, leave Auschwitz behind and learn to trust the world and humanity again.”

Of the peace deal itself, the media is saying two predictable things. First, that no further progress is possible unless President Obama gets involved; and second, that President Obama is wary of his own Secretary of State’s proposal because he is afraid it may blow up in his face.

Carney, speaking to reporters before yesterday’s private meeting between Obama and Kerry at the White House, described Obama’s level of optimism about the peace process as “very cautious.” He said Kerry’s July 19 announcement is “an important development, but I don’t want to overstate it or understate it.” ….

Marwan Muasher, who oversees Middle East research at the Carnegie Endowment for International Peace, a Washington policy institute, said for now the White House “does not look prepared to cash in any political chits on the peace process when it feels that the chances of success are very slim.”

Down the road, Muasher said, a deal is unlikely unless Obama becomes more involved….

“We’re at a stage here that represents some positive progress but is not representative of a conclusion of anything,” White House press secretary Jay Carney said.

“The parties are not going to basically bridge the gap without a proactive White House policy — a willingness not just to stand by the proposals but to push or cajole the parties and offer the economic and security guarantees both parties might need,” he said.

It is as if the dog has caught the car and now now doesn’t doesn’t know what to do with it. One possible reason is from Burg’s own argument, which he doesn’t take to it’s logical conclusion. The old order is finished. And that includes everybody. The strongmen of the Middle East, not in the least its own theocratic empires. But the list of the newly kaput includes Washington and Europe as well. The dog doesn’t matter any more, at least it ain’t what it used to. Thus the “Peace Process” no longer means the same thing, even to its proponents, as formerly. How can it in a whole new world?

What is most interesting about the current decline of the West is that it is not half so bad as the catastrophes overtaking other traditional power centers. Europe is sinking faster than America. But the Arab world is sinking faster than Europe. And what matters in the ordering of power is not the absolute but the relative quantities. The Financial Post reports that Europe is counting on the Fed to keep printing money or else it sinks.

The tapering of stimulus by the U.S. Federal Reserve risks reigniting Europe’s debt crisis and pushing weak countries into a “debt-deflation spiral”, the International Monetary Fund has warned….

The report said the onset of a new tightening cycle in the US has already pushed up global bond yields, and this may have further to run. “It could lead to additional, and unhelpful pro-cyclical increases in borrowing costs within the euro area. Financial market stresses could quickly reignite,” it said. …

The report said that it may take years to unwind the credit excesses of the early EMU years. “Historically, almost all of the run-up in household debt tends to be reversed. But in the euro area, the reduction in debt-to-GDP ratios has barely started, and the boom was more pronounced.”

But the Fed is looking gun-shy. Town Hall’s John Ransom wrote: What Ben Bernanke Won’t Say: It’s Over Obama. Richmond Fed President Jeffrey Lacker said very recently that “We must make our exit from the bond-buying program quick”. Although the ostensible reason is the economy’s improvement, that reason is somewhat egregious, since the “improvement” has been led by what CNN calls the “low wage job explosion:”

Some 58% of the jobs created during the recovery have been low-wage positions, according to a new report by the National Employment Law Project. Only 22% have been mid-wage jobs and 20% higher-wage positions. These low-wage jobs pay $13.83 an hour or less.

Within the West this is reflected in the collapse of what Europeans call the “social contract” and what American pundits call the Blue Model. The collapse of Detroit, the layoff of Chicago public school teachers are just the beginning of an inevitable trend. It is not just the external empires which are collapsing but the internal ones as well.  Hollywood is going broke.  Poll after poll shows journalism to be among the least trusted professions in America. The complete madness of the narrative has been underscored by the candidacy of Anthony Weiner and NBC’s decision to launch a miniseries on the life of Hillary Clinton.

What is holding the system up now is not unshakable legitimacy but the lack of an alternative. Once the alternatives to both the collapsing internal and external empires emerge the status quo has no means of support.  But now the vague outlines of an alternative are  coming into view.  The leading edge of the successor system can be glimpsed in the new energy opportunities and the need for higher productivity to take advantage of them. Together they will exert a push and pull which will start to rip the old order apart.

Almost without anyone noticing Canada, the US and Australia have become potential energy superpowers. The Economist writes:

Six years ago a consortium planned to pipe gas from Papua New Guinea across the Torres Strait to Queensland to fill a looming gas shortage in eastern Australia. That was before a gas revolution transformed Queensland itself. The volume of gas drilled from coal seams under the state has more than quadrupled since then …

Australia’s gas boom has prompted forecasts that it will overtake Qatar as the world’s biggest LNG exporter by 2020. But the rise of North America and east Africa as potential rivals and the soaring costs of building liquefaction plants in Australia now worry its gas investors.

Yet projects which were slated for development have been put on hold. The pot of gold has been found, but they can’t dig it out. What is holding Australia back? Why the old system. In Australia’s case it is the cost structure created in the last century.

Former Queensland treasurer and now Nimrod Resources chairman Keith DeLacy said the move was a direct consequence of both the “excessive and intrusive regulatory regime” and the re-regulation of the industrial relations system.

“Our cost structure is getting out of kilter with the rest of the world,” Mr DeLacy said.

Australian Mines and Metals Association chief executive Steve Knott said most of the $250bn worth of mega-projects in the resources industry that were under way had 10-year lead times.

“So the decision on these mega-projects were made pre-carbon tax, pre-mining tax, pre the industrial relations re-regulation that we have seen in recent years,” he said.

Mr Knott said another $400bn of potential resources projects were at risk of being delayed or abandoned because companies believed they could “see a better return on investment in other parts of the world”.

The Greens, the system and the unions. This is not too different from President Obama’s attitude toward the Keystone Pipeline:

In a New York Times interview published Saturday, President Obama came out foursquare against the Keystone XL pipeline, claiming that it would not create jobs. “Republicans have said that this would be a big jobs generator,” Obama said. “There is no evidence that that’s true.” He then blamed Canada for not “doing more” to prevent carbon emissions from oil sands. Obama continued, “I meant what I said; I’m going to evaluate this based on whether or not this is going to significantly contribute to carbon in our atmosphere. And there is no doubt that Canada at the source in those tar sands could potentially be doing more to mitigate carbon release.”

But the energy bonanza will be only temporary, even if the West can muster the political will to actually cash in on it. What will characterize the last industries in the new world are enterprises that haven’t even been mooted yet. And in that respect, the biggest constraint in the developed world is the officially protected system of education. To take one example, a well known personality in the computing industry told me that we were potentially standing before a new phase in computing much larger than the Silicon Era. But he added that the problem was that the U.S. born talent pool was shrinking and atrophying. The secondary school system had become a meaningless credentialing system. This was driving development offshore and increasing dependence on foreign talent. At the very leading edge, “today’s yearly U.S. undergraduate output has has tens, not hundreds of engineers that can make the cut. The new challenges will need thousands. Today we have 10s”

The world is now fully involved in a process of massive change. Not only have the old Mustache Petes of the Middle East gone the way of the dinosaur, so too has the Blue Model. And just as the Middle East is now aflame — and East Asia is now wracked with tension — with the stresses of upheaval, so in its own way is the West doomed to suffer these pangs. President Obama may now suspect what will be increasingly true. He and whatever he represents matters less and less.

Zenpundit brilliantly characterized the state of the administration’s foreign policy in a sardonic piece, “How to Lose a War: A Primer.” He should have titled it, “How to Lose at Everything: Period:”

1. War is the Continuation of Domestic Politics;
2. Policy is the True Fog of War;
3. Strategy is a Constraint to be Avoided;
4. All Lost Wars are based on Self-Deception;
5. Isolate the War and those Fighting it from the People;
6. Complexity= Opacity and Micromanagement= Power
7. Enormous Tail, Tiny Tooth: the Worse the ROI the Better.
8. Cultivate Hatred and Contempt;
9. Protect that Which is Most Unimportant;
10. Level the Playing Field: Paralyze Your Own Tactical Advantages.

That is a description of the status quo that can hardly be bettered. Why it might even describe the “Peace Process” or Afghanistan.

It is the new opportunities and institutions that represent the post-Blue World that will become increasingly. Hard though it may be to imagine, the Middle East may very soon no longer be synonymous with petroleum nor will a lifetime government job be a guarantee of anything in particular. President Obama, in a recent misstatement, was perhaps unwittingly prescient when he called the United States and Europe “developing countries.”

He is more correct than he can imagine. The times are moving past his conception of the “arc of history” into somewhere neither he nor we can clearly see. Yet perhaps one can hazard this guess: the West will prove not a place but a state of mind and an attitude. The Gramscian Left in its attempt to destroy its civilization has not succeeded in destroying it so much as dispersing it, so that its mental outliers fall scattered not only through its original European and American homeland, but in pockets all over the world.

The truth and impulse to progress survive. The systems of tyranny eventually fall behind to be forgotten and fail.

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