There was precious little in the way of noteworthy events in 2014. Outside of a bit of Russian saber rattling, it’s hard to see where anything that happened will make a good and memorable inflection point for history. Not really any posts to drape time upon this year.
The civil war in Syria dragged on. It is officially now a stalemate. I think it’s safe to say that Syria as it was once known, with those clearly drawn borderlines, no longer exists. Maybe it never really did exist, except in the minds of cartographers and perhaps Churchill, much as we are discovering about Iraq.
A new brand of militant Islam arose in the Levant, in the power vacuum left by America’s withdrawal from Iraq and the Assad regime’s retreat into a few selected enclaves. But this was hardly remarkable. Militant, i.e., anti-Western Islam, is remarkable for how unremarkable it is. It seems a latent feature of the Arab psyche, a sort of self-loathing they carry with them everywhere. Arab culture gave rise to Western culture. It was Arabia’s classical liberalism that planted the seed for the European Enlightenment and liberal democracy that followed. Now they seem not to like its expression so much. But that’s not the real reason for ISIS. The real reason is that power abhors a vacuum, and there is no state in the Levant strong enough to project its power much outside of the major urban centers. So there is a power grab underway in the hinterlands, something as old as the concept of the nation-state. The Scots and British fought incessant wars for half a millennia on their frontiers before quitting out of exhaustion more than anything else. The battle for the Levant will eventually exhaust itself, too. Maybe in less than half a millennium. That would be progress, no?
Russia proved that Western power is neither inevitable nor ubiquitous nor even much projectable along the Eastern European frontier. Projecting power requires boots on the ground, and there is no Western will to put boots on the ground in Ukraine or elsewhere along the border regions of the old Soviet Union. Vladimir Putin is dangerously aware that the West lacks the stomach for projecting force (economic sanctions don’t count—it takes little courage to order people to quit trading with someone—and sanctions are anyways rarely enforceable or enforced), and has acted accordingly, going just as far as he thinks he can without provoking Western powers into a military confrontation. If there is anything significant that happened in the world this year, it is that Russia declared the end to the end of history by annexing Crimea and fighting Ukraine in clashes along its border. And it shouldn’t be forgot, Russia has still got nukes sufficient to summarily end civilization as we know it.
Lest there be any doubt of the West’s relentless pussification, just recall that someone shot down a civilian jetliner flying in Ukrainian airspace and the West did nothing. If it’s not about making craft beer from homegrown organic hops while wearing skinny jeans rolled up at the bottom with a black shirt and a bushy, unkempt beard, then the hipsters can’t be made to care. Russia’s Putin is rather like an Arab Islamist in his capacity to grasp the weak underbelly of the West. Hipsters drunk on high gravity beer and obsessed with which color beanie is cool this season are hardly likely to mount much of a defense against military provocations from the East.
2014 was a year of continued growth in the reliance of financial markets on the kindness of strangers, namely, the Federal Reserve Board of Governors. Prices for every sort of financial asset—stocks, bonds, real estate—everything, have gone up, and by enormous amounts. The Dow Jones Industrial Average, for example, started the year at about 16,500. It ended the year above 18,000. And this follows a year when it was up by even more than this one—it has enjoyed a nearly 50% return over the course of the last two years. Don’t fight the Fed. It’s not a cliché for nothing.
But one day the Fed’s punch bowl will lose its kick. Eventually there will be a reckoning. Every last financial idea in the world can’t be the most brilliant thing ever to come down the pike, as the Fed’s whitewashing liquidity makes everything appear about now. It may be Dow 36,000 before the Fed is through, but the economic fundamentals haven’t changed. The developed world is already rich and is growing old. The developing world is only haltingly able to afford the middle class lifestyle that members of the Dow, and other Western companies, specialize in providing, and it too is growing old with declining fertility. No financial instrument can grow to the sky; the member companies of the Dow Industrials do not print money; they provide goods and services that are valuable, but are only where they are financially because of financial system manipulations by the Fed and other central banks.
China is not growing nearly as fast as it was, this much is clear. No one really knows how much China grows, either inside or outside of the Middle Kingdom, but it seems certain, if only by dint of the late year crash in commodities prices, that China is slowing sharply. From midyear, the commodities indexes have generally lost about a third in value, and the losses are lately accelerating. Something is up, but apparently the stock and bond market wizards think they can ignore commodities prices. Perhaps for now.
I don’t think there will be a general crash in the financial markets this year. Instead there will be misplaced euphoria, with market participants in a state similar to that of the revelers in Moscow during the Napoleonic wars who refused to worry about the French artillery bombardment inching its way closer to the city center. Everything is popping. Valuations are becoming absurd, but they aren’t absurd enough yet. I can see the euphoria lasting another year and a half or so, until it finally becomes time to consider who next will be broken as the US president. Markets of all types have become uber sensitive to political vagaries and uncertainties, and this next presidential election ought to be a doozy so far as that goes. I thought the world would sort of end by the end of 2012, what with the Mayan calendar (he, he) and what I thought would harken the end of Obama’s one and only term.
Obviously, I was wrong. Timing is impossible to get right except with the luck of a blind squirrel, and my political instincts are lacking. But this I know—every last weakness that was exposed when the tide went out in the Great Recession is still extant. Nothing has been resolved; instead it has all been exacerbated. Sentiment will turn, and hard, again soon. Such is the cyclical nature of things. There is no such thing as progress. There is only relentless cycling. The only question is the timing, and that I don’t know, and neither does anyone else.
The world seems remarkably similar to the last era of globalization, the fin de siècle, before World War One, when the sun never set on the British Empire, and goods and services from all corners of the globe could be had on the streets of every cosmopolitan city in the West. The first World War harkened the beginning of the West’s relative decline, punctuated a hundred years later by the Great Recession, which marked the beginning of its insolvency. The West, including the US, is broke. Sort of like a pregnancy in its early stages, the insolvency doesn’t show just yet, at least not in the US, but it’s only a matter of time. Greece is very obviously broke and it’s showing. But the rest of Europe is bankrupt too, even if less obviously. Bereft of new ideas and burdened with sclerotic institutions, aging populations and massive legacy liabilities, you can stick a fork in Western Europe, it’s done. The US is closely behind, but will last longer because of its more liberal immigration policies. Japan is past done. It’s burnt. Since the Meiji Restoration and Japan’s rapid modernization, it has always been a trendsetter. And is again. Japan beat the West to the economic stagnation punch two decades ago, and no amount of Abenomical tinkering will change the long-term reality.
Germany will likely be the only country left standing in Europe once the dust settles and the smoke clears from all the bankrupts. Germany has been quietly but deliberately doing through currency union what it failed to do with panzers and blitzkrieg. This Reich might last a few more than the twelve or so years of the last thousand-year Reich.
The problem with economics is that all of the reigning economic theories (e.g., monetarism; Keynesianism) were developed under the assumption that populations never get old and start declining. But it turns out that assuming continual population growth and vitality was a mistake. Populations don’t continue to incessantly grow. Human populations are subject to the same general rules and limitations on growth as apply to every other living organism. The reasons for declining population growth rates, or even outright population declines, are complicated enough to be impossible to explain in a few curt sentences, so I won’t try here.
Progress from here is doubtful, or at least is until the Fed’s funny money policies finally fail. Progress requires change, and the Fed pulled out all the stops to make sure nothing changed at all because of the financial crisis. And so nothing has. In fact, things are more stable than just no change—the Fed has engineered things to where change has only one direction—up. Prices go up. Employment goes up. Demand goes up. Nothing ever changes except in the desired direction. Through the oracle of the US Federal Reserve, we humans have become gods, controlling the Fates. Even temperature has a one-way trajectory. But oil prices, among a host of other commodities, have crashed. And the Fed couldn’t prevent it. In fact, the Fed caused it, because oil prices were artificially high because of its policies and once the supply overhang grew too great, there was nothing for them to do but crash. Because fighting declines in prices when prices want to decline always ends with prices declining more than they initially wanted to decline. Artificially high prices caused by Fed policies cause oversupply, which ultimately yields prices lower than the ones the Fed was trying to avoid. This is real simple, real-world economics. The Fed caused the boom in the North Dakota oil fields. And it is causing the bust. Don’t fight the Fed, but protect yourself from its prevarications if you can. And remember, as powerful as the Fed is, it can’t fight markets. Markets for goods and services are determined by human needs and desires, which in aggregate are determined by demography. Over the long run, demand is highly resistant to manipulation through the simple expedient of monetary policy. And the long run is always just around the corner, until it arrives.
But maybe things really are different this time around. Maybe “Stock prices have reached what looks like a permanently high plateau”, as Irving Fisher, America’s most famous economist of the time, observed of the US stock market three days prior to its crash in October of 1929. Fisher might have been right, had he had a Federal Reserve Board of Governors to back him up. Or, he might have still been wrong, but for reasons other than those resolvable by simple cash infusions.
The Zeitgeist in the markets for financial assets seems like that Pharrell song of the year, “Happy”. But happy is not a sustainable state of affairs. Happiness is the feeling that arises from having reached some goal. It is transitory. New goals must be conjured and conquered after the glow fades. The real happiness is in the striving, not in the achieving, but it is the rare human or human institution who understands as much. If the markets are happy today, they’ll be sad tomorrow, because from happy, there is no way to go but down. And the Fed isn’t like the Coke factory. It doesn’t manufacture happiness.
The culture at large seems not so happy as the financial markets. People seem restless and vaguely unsettled for nonobvious reasons. The year saw riots and demonstrations over black guys getting killed by cops, but they all seemed a bit contrived in feeling, and opportunistic in execution. Today’s outrage seems banal and ritualistic. There is little real passion. The experience feels bland, like eating leftovers without really being hungry.
People in all times have needed something to believe in. They have always needed to consider that they were a part of something bigger than themselves. For our hunter gatherer ancestors, there was no question of what the bigger something was and what was its purpose; the bigger something was the clan and its purpose was survival, and each person had a role to play in ensuring its success. Our ancestors in hunter gatherer clans didn’t suffer existential angst. Ten thousand years and an agricultural, industrial and information revolution later, and things aren’t so clear. Liberal democracy mainly affords rights to the individual, for whom the state is now the caretaker from cradle to grave. Not only are clans no longer necessary, neither are families. Existential angst and ennui have accordingly become endemic, as people are no longer bound, one with the other, in a life and death struggle to survive. Whole philosophies have developed around resolving the quandaries presented by lives without an obvious purpose (e.g., Sartre’s Existentialism).
After a period of widespread acceptance of national socialism and communism, few now ascribe to the various theologies and philosophies constructed for reconciling our hunter gatherer genes with the modern environments in which they must exist. People today succor their tribalism by rooting for their favorite sports team, or by joining clubs of like-minded people. But the impulse, the craving, to be part of a larger organization that binds one to another in a life and death survival struggle, hasn’t died. It has just gone dormant, later to return, probably when least expected. War is the most common expression of the urge. But not the piddling wars that Iraq and Afghanistan represent. For the West, accustomed to putting on quite extravagant displays of barbarism, only a full-scale, worldwide conflagration would satiate the urge. Each passing year without an existentially-affirming conflagration amplifies the possibility that there will be one. Outside of hunger and thirst there is no greater human desire than that one’s life be meaningful and purposeful. And life’s purpose is never more clearly ascertainable than when it is endangered. So a major war could be in the offing, just for the cleansing of existential angst and dispensing of ennui that it would provide.
It might be objected that the world is so tightly bound economically that there is no way any country could find it advantageous to instigate a war. Which is exactly what people were saying about the world in 1914.
In the absence of war, there will always be the latest, greatest tech gadgetry to imbue life with meaning and purpose. But Steve Jobs is still dead, and tech gadgetry needs a cultish leader’s endorsement if it is to be used as a religious talisman. Elon Musk desperately wants to be the next Jobs, but really, only a few dunderheads care about electric cars and fewer still care about going ‘round in near-Earth orbit. It is really very difficult to see much in the way of transformative technology coming down the pike anytime soon. We may well beat our iPhones into swords.
There were some good sports stories in 2014. The Seattle Seahawks won a Super Bowl by doing what Roger Goodell is determined to stamp out—playing defense and running the ball. The Seahawks shut down Peyton Manning, Goodell’s patron saint of pass-happy football, along the way of crushing the Broncos in the Super Bowl. I like Manning, but really dislike Goodell, both for his relentless tinkering with the game to make it more pass-friendly, and for his awkward pretention that the NFL is somehow responsible for resolving social ills. It’s not, Mr. Goodell. It’s just a football league, and not a flag football league, but a full-contact football league. Let’s keep it that way.
The San Antonio Spurs showed how a bit of international competition could pose a grave risk to American hegemony. It did so only metaphorically, on the basketball court (even as basketball is not a metaphor for really anything), fielding a team comprised of players from all over the world that, in the finals, whipped a team full of the best available homegrown talent. The several powers arising in Europe (Germany and Russia, e.g.) and Asia (India and China, e.g.) and Africa (South Africa and Nigeria, e.g.) could readily form coalitions to rival the US in power, just as the Spurs formed an international basketball coalition good enough to win a third of the NBA’s titles over the last fifteen years. For now, the world seems content to let the US provide civilization’s muscle. It won’t likely always be thus. Russia, for one, seems to be chafing under the strain of America’s assertion of hegemony (like in Ukraine) over places where it really shouldn’t have hegemony.
My Crimson Tide college football team has so far had its best season since Nick Saban’s arrival as coach. Alabama was fun to watch this year because of the new quarterback, Blake Sims’, indefatigable spirit. The guy waited five years for a shot to play quarterback and made the most of it. He actually commandeered game-winning comebacks in at least three instances, something which Alabama almost never does. Alabama either beats you by a bundle, or loses going away. It never comes back from a deficit to win in dramatic fashion. Not until this year. It’s what has made watching so much fun and left me wondering why Sims wasn’t starting last year.
Predictions are hard, especially about the future, but just for fun, I’ll try a few.
My first prediction is that there will be no progress made in relieving the world of the terrible year-end scourge known as Christmas and New Year’s, or simply the Holidays. I bet a year from now we will be recovering from having done it all again. We refuse to learn.
Second, there won’t be a cure or preventative developed for Ebola, malaria, the common cold, the flu, diabetes, cancer, ALS, autism, ADHD, cardiovascular disease, or any other of a litany of diseases. We think we live in the age of medical miracles, but how much progress, except in having figured out that germs cause disease, has really been made in improving the human condition through medical science? We still have opium, which we’ve had since long before the germ theory of disease, and given that no one has figured out how to cure any of these scourges, at least we can still alleviate the suffering. But don’t count on any breakthroughs in medical science this year. Or the next. Or the next. There might be an occasional improvement in the treatment of pathologies, but it will be random (and more likely among orphan diseases and conditions than more general afflictions), as the low-hanging fruit has all been picked. Like the celebration of the Holidays will undoubtedly continue, there will be no progress in medicine.
Third, Einstein’s General Theory of Relativity won’t be rethought or abandoned, even though the contortions necessary to make it plausible now require that over 95% of the universe be invisible and undetectable (and Einstein chortled at the thought of an ether, specifically developing his Special Theory to prove it didn’t exist, but what is Dark Matter and Energy, except another word for ether?). There will be at least one team of physicists who will claim to have detected conclusive evidence of Dark Matter or Dark Energy, using of course, multi-billion dollar particle accelerators for the task, but like all else in astrophysics, there won’t be anyone to question their conclusions except other astrophysicists, all of whom are fully vested in burnishing Einstein’s legacy; all of whom will express marvel at the elegant simplicity of the equations of General Relativity along the way of ratifying the findings.
There is an apparent need in the world for a mad-scientist-looking fellow to explain the cosmos to us. During the first half of the twentieth century, the role was played by Einstein. During the second half and into the new millennium, it has been assumed by Stephen Hawking. But would anyone have paid Hawking any attention had he not been afflicted with ALS? The ALS gives cache and a certain exoticism to his views. After all, a person with ALS eventually becomes something of a disembodied brain, a solely thinking entity. Einstein had the crazy hair and the dark black orbs for eyes, both of which he intentionally accentuated for effect. Hawking has ALS, which undoubtedly wasn’t intentional, but which he has played well. In any event, we won’t know anything more about the cosmos by the end of 2015 than we know now. And what we actually know about how this universe is constructed and what it is made of is precious, precious little. But I predict that you won’t hear anything like that from any physicists, not in the coming year or in any other.
Fourth, no matter what sort of weather afflicts the North American portion of the northern hemisphere this year, extreme or bland, it will be blamed on Climate Change, the newly-adopted appellation for the mythical god that controls our fate through manipulating the planet’s temperature, but like the Federal Reserve manipulates prices, only in an upward trajectory, apparently to punish us for our original sin of existence. Winter storms, summer droughts, floods, hurricanes, tornadoes, or just bland, everyday sort of weather—you name it, it will be the result of Climate Change. The anthropogenic global warming acolytes didn’t much think through, not unlike the ancient Hebrews, the attributes of their god. If Climate Change causes everything, then it causes nothing. If it explains everything, then it explains nothing. Just like Yahweh.
Fifth, there will be progress of a sort, in federal governance. Not much of anything will be decided upon in Washington that doesn’t absolutely require a decision. The Republican Congress and the Democratic President will clash horns relentlessly, but it will be all sound and fury, signifying nothing. The risk to the republic will only manifest in the event of cordial agreement between the parties, which will mean they have either decided that collusion in fleecing the citizens holds more potential gains for them than bitter fighting, or that there really are threats to the republic that require their unity to meet. In the meantime, the enmity between the parties will actually constitute the purpose for the government, not just an incident of its existence.
Sixth, perhaps not by the end of the new year, but soon enough, Taylor Swift will own her own network of radio and television stations dedicated solely to broadcasting the songs and images and video of Taylor Swift. She’ll eventually buy Oprah, just so she can own everything. Bank on this one.
Seventh, there won’t be any progress made towards legalizing, or even de-criminalizing, marijuana in my home state of Alabama. Alabama hates any and every government intrusion in economic affairs (or at least its electorate acts as if it does; in actuality, its capitalists like to bend government to its will just as much as any other). It however loves government intrusions into the personal affairs of its citizens. So there will be no lessening of marijuana smoking restrictions. People who smoke the demon weed, or waste their money playing the lottery (in other states), or who just get drunk and fornicate in the privacy of their own homes, will officially remain pariahs in Alabama for the foreseeable future. I’m rather proud to be an Alabama pariah. I’ll let you guess for which cardinal sin.
Eighth, along similar lines, Birmingham’s local news outlets will spend again this year roughly a fourth of their newscasts or news pages discussing its Civil Rights history, heavily skewed towards acknowledging again (and again, and again) the contributions of what few courageous soldiers of the movement remain alive. Those pioneers will be lionized as above reproach, even if the daddy of one of the four girls blown up in that horrible bombing of the 16th Street Baptist Church rots in a federal penitentiary for having taken bribes as a member of the Jefferson County Commission. Birmingham will never get over its racist past because it doesn’t want to.
Ninth, American football will not decline in popularity.
Tenth, neither the Canadian nor the Mexican government will launch an invasion of the United States. They’ll let their citizens continue to do that on their own.
And a bonus prediction–the federal government will not decrease in size, power or writ, or reduce its claim on the nation’s resources. Not even a little bit. Not this year. Not ever.