Trouble at home, trouble abroad. Australia is being challenged at a number of levels, but there are some common themes.
Floods, war, and pestilence are all historical inevitabilities, yet every time one of these occurs, for many people it feels as though it is the first time. While their occurrence is inevitable, the difficulty remains in predicting where, when, and the size of the problem.
The Ukraine-Russia war was more predictable than most conflicts. Putin has been beating his chest for quite a while, and the ascent of Joe Biden made it likely that he would see how far he could push the USA.
I've always thought we would need to pay a higher defence premium under Biden as America became a less reliable and capable friend, and that Putin and Xi would put Biden to the test.
As I said in November 2020:
With a self-obsessed US ruled by a near-senile gerontocracy driven by barely post-pubescent revolutionaries like Alexandria Ocasio-Cortez, it's natural that the two great, nuclear-armed mercantilist nations would push against it to see whether they can both achieve long-cherished aims of regaining territory they feel is theirs.
Despite the fatalist air of this conflict, it appears to have caught the West napping. Now, the West is hastily changing the conversation about energy and international trade to cope. The bad thing about 'good times' is that they lure political regimes into forgetting how bad the 'bad times' can be – tempting leaders to luxuriate in a Lotus land of impossible fantasies like The Green New Deal.
The West has had almost 80 years of 'good times' since the second world war. Yes, there have been wars, and economic collapses, but the arc of human advancement has been trending upwards.
This has accelerated in the last 40 years because of the longest-ever bull market in interest rates which has driven assets to historically high prices, encouraged innovation by lowering the cost of speculation, and allowed governments and households (not so much companies) to borrow unprecedented amounts. The result has been an increase in living standards, and turbo-charged perceptions of wealth due to asset price inflation.
The West has also benefited by the outsourcing of manufacturing to low-cost developing countries who have been happy to wear the social cost of lower wages in exchange for the benefits of urbanisation. This, in turn, contributed to deflation in the price of goods, counteracting to some extent stagnate wages in the West.
As a result, we've been able to indulge ourselves with luxury goods and luxury ideas. Some of these ideas involve are; climate change hysteria; Critical Race Theory, intersectionality (and victimology generally); equality of outcome as opposed to equality of opportunity; safetyism; replacing a guilt culture with a shame culture, and empiricism with relativism.
These domestic obsessions are partly responsible for the Ukraine-Russia war. Imagine you are Putin looking at the West and you see a spoilt generation frittering away the wealth of its parents on vanity projects that make it materially, emotionally, and spiritually weaker. Obviously, you would capitalise on this.
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