Patriotism vs. Globalism in 2020: A Country Is at Stake

Given the extraordinary pace of events in America and the world this year, it is not hard to imagine that a bystander — perhaps a bug-eyed alien who has been following the series "The Earth" — would be pleased with the dynamics of the show.  But he also would be puzzled at the rapid twists of the plot.  The U.S., for example, enters a 2020 season in all its might and glory, with the strong economy, where unemployment for everyone is low, where reduced taxes and regulations promise further growth, and the basic indices of economic activity spell "victory" for the funny-looking guy who made it happen.  Then — BAM! — a "deadly virus" hits — eh, unimpressive...the mortality rate would have been much higher for the sake of the show; 2 percent is a rookie number (would be even lower if the infected were not placed in the nursing homes).  Nonetheless, America goes into lockdown, losing trillions of dollars.  Unemployment soars.  Then — BAM! — massive protests accompanied by rioting, looting, arson, vandalism, and sheer violence erupt as a response to the incident of police brutality.  The whole system is declared evil and beyond repair.  The crime rate soars.  American flags are burned — not in Iran or North Korea, but in Washington, D.C.  Some parts of the country that were the envy of the world look like a war zone.  Whoa, a startled viewer would think — what just happened?

What is happening is that November gets closer, and the country finds itself in a situation that may be described with a mathematical catastrophe theory used to study discontinuous processes.  An example of a discontinuous process would be an arched bridge to which more and more weight is added.  At first, little effect is seen as the weight on the bridge is increased — the bridge begins to bend almost imperceptibly.  At a certain point, however, enough weight is added to the bridge that it collapses.  A sudden change in a discontinuous process is called a catastrophe. 

The American model right now has one active variable, the economic model, and one active parameter, a necessity to choose one out of two courses of its development.  Speaking scientifically, we have reached a divergence point that requires a system to follow one of the two possible paths that are mutually exclusive.  At this point, both of them are equally probable, and the system "freezes" — to land on one of the paths, it needs a push.  It is difficult to accurately prognosticate the system's behavior at this point, but one can model it.  Once the choice is made, the return to the divergence point is impossible — if you stand before the abyss, you may either walk around it or take a step into it.

Which paths lie before America?  The first one is presented — and has been practiced for the last 20 years — by the globalism aimed to secure America's leading place in monopolar world.  The main tools of it are supranational entities such as international organizations, multinational corporations, and financial institutions like the IMF and the World Bank.  Even though globalization has been pictured by academia and media as an endless pool of growth, opportunities, and progress, it has been marked by substantial shortcomings.  For example, under the new regime of enhanced financial mobility and power, with greater volatility of financial markets and increased risk, real interest rates have risen substantially.  This has discouraged long-term investment in new plants and equipment and stimulated spending on the re-equipment of old facilities along with a large volume of essentially financial transactions — mergers, buybacks of stocks, financial maneuvers, and speculative activities.  This explains why overall productivity growth in the member-countries of the Organization for Economic Co-operation and Development fell.  So did gross fixed investment, and so did GDP growth.  But the elites have done well despite the slackened productivity.  Because globalization has helped keep wages down, while increasing real interest rates, the upper 5 percent of households have been able to skim off a large fraction of the reduced productivity gains, thereby permitting elite incomes and stock market values to rise rapidly.  For the multinational corporations that shaped foreign policy by engaging in lobbyism, globalization has also been great.  One of their main objectives that they achieved was cheaper labor sources.  Labor is often cheapest, and least prone to cause employer problems, in authoritarian states.  Capital moves to such friendly investment climes, shifting resources from the more expensive to the less costly locale.  (That is why the MNCs have vocally opposed the Trump administration's escalation of trade tensions, tightening of immigration restrictions, and disruption of global value chains.)

For the global majority, globalization has been a whole different story.  Income inequality rose markedly both within and among countries.  In the United States, despite a great increase in productivity thanks to new technologies, inequality rose.  Underemployment, job insecurity, benefit loss — all increased

The Trump administration disdains globalization and practices a healthy and much needed protectionism.  It withdrew from free trade and other deals and viciously attacked globalization structures nurtured by the previous administrations: U.N., NATO, WTO, International Criminal Court, and now WHO, which proved shockingly unprofessional and frankly hostile to the U.S. interests.

If Trump gets four more years as a president, he may get to the holy of holies of the economic globalism — the IMF and the World Bank — which will undoubtedly face a debt crisis due to the downfall of the world economy.  Ironically, the COVID-19 hysteria that became an act of desperation for the Democrats — whether it was a projected event or a natural crisis that would have been a shame to waste — now plays against the global financial leviathan and its masters.  According to none other than George Soros, the COVID-19 pandemic is a one-two financial punch for developing economies.  Not only has it put extraordinary pressure on budgets worldwide, but it has also caused a sharp exodus of capital from emerging markets.  JPMorgan Chase & Co. predicts that 1 in 5 emerging-market countries will default on their debt obligations — meaning that the core banks may collapse.  If some federal reserve banks fail, the government may nationalize them — but no doubt Trump would not save them, as Obama did in 2008.  That would fatally undermine the economic foundation of the Democrats for good; that's why Trump's victory is not an option for them.

If Biden wins, he, as a true O'Biden-Bama Democrat, will have to save the failing banking system by unprecedentedly increasing the national debt in a weakened economy.  The previous model that balanced emission with trade deals would not be possible to execute in a severely damaged global economy.  That is why Biden's victory would lead to a delayed catastrophe, but with lower chances of surviving it, because the condition of the country will deteriorate — his leftist policies will make sure of it.

The choice we as a country will make in November is clear: Trump and patriotism or Biden and globalism.  Development or decline.  It is just that simple.

Follow Veronika Kyrylenko, Ph.D. on Twitter or LinkedIn.

Image: Fox News via YouTube.

Given the extraordinary pace of events in America and the world this year, it is not hard to imagine that a bystander — perhaps a bug-eyed alien who has been following the series "The Earth" — would be pleased with the dynamics of the show.  But he also would be puzzled at the rapid twists of the plot.  The U.S., for example, enters a 2020 season in all its might and glory, with the strong economy, where unemployment for everyone is low, where reduced taxes and regulations promise further growth, and the basic indices of economic activity spell "victory" for the funny-looking guy who made it happen.  Then — BAM! — a "deadly virus" hits — eh, unimpressive...the mortality rate would have been much higher for the sake of the show; 2 percent is a rookie number (would be even lower if the infected were not placed in the nursing homes).  Nonetheless, America goes into lockdown, losing trillions of dollars.  Unemployment soars.  Then — BAM! — massive protests accompanied by rioting, looting, arson, vandalism, and sheer violence erupt as a response to the incident of police brutality.  The whole system is declared evil and beyond repair.  The crime rate soars.  American flags are burned — not in Iran or North Korea, but in Washington, D.C.  Some parts of the country that were the envy of the world look like a war zone.  Whoa, a startled viewer would think — what just happened?

What is happening is that November gets closer, and the country finds itself in a situation that may be described with a mathematical catastrophe theory used to study discontinuous processes.  An example of a discontinuous process would be an arched bridge to which more and more weight is added.  At first, little effect is seen as the weight on the bridge is increased — the bridge begins to bend almost imperceptibly.  At a certain point, however, enough weight is added to the bridge that it collapses.  A sudden change in a discontinuous process is called a catastrophe. 

The American model right now has one active variable, the economic model, and one active parameter, a necessity to choose one out of two courses of its development.  Speaking scientifically, we have reached a divergence point that requires a system to follow one of the two possible paths that are mutually exclusive.  At this point, both of them are equally probable, and the system "freezes" — to land on one of the paths, it needs a push.  It is difficult to accurately prognosticate the system's behavior at this point, but one can model it.  Once the choice is made, the return to the divergence point is impossible — if you stand before the abyss, you may either walk around it or take a step into it.

Which paths lie before America?  The first one is presented — and has been practiced for the last 20 years — by the globalism aimed to secure America's leading place in monopolar world.  The main tools of it are supranational entities such as international organizations, multinational corporations, and financial institutions like the IMF and the World Bank.  Even though globalization has been pictured by academia and media as an endless pool of growth, opportunities, and progress, it has been marked by substantial shortcomings.  For example, under the new regime of enhanced financial mobility and power, with greater volatility of financial markets and increased risk, real interest rates have risen substantially.  This has discouraged long-term investment in new plants and equipment and stimulated spending on the re-equipment of old facilities along with a large volume of essentially financial transactions — mergers, buybacks of stocks, financial maneuvers, and speculative activities.  This explains why overall productivity growth in the member-countries of the Organization for Economic Co-operation and Development fell.  So did gross fixed investment, and so did GDP growth.  But the elites have done well despite the slackened productivity.  Because globalization has helped keep wages down, while increasing real interest rates, the upper 5 percent of households have been able to skim off a large fraction of the reduced productivity gains, thereby permitting elite incomes and stock market values to rise rapidly.  For the multinational corporations that shaped foreign policy by engaging in lobbyism, globalization has also been great.  One of their main objectives that they achieved was cheaper labor sources.  Labor is often cheapest, and least prone to cause employer problems, in authoritarian states.  Capital moves to such friendly investment climes, shifting resources from the more expensive to the less costly locale.  (That is why the MNCs have vocally opposed the Trump administration's escalation of trade tensions, tightening of immigration restrictions, and disruption of global value chains.)

For the global majority, globalization has been a whole different story.  Income inequality rose markedly both within and among countries.  In the United States, despite a great increase in productivity thanks to new technologies, inequality rose.  Underemployment, job insecurity, benefit loss — all increased

The Trump administration disdains globalization and practices a healthy and much needed protectionism.  It withdrew from free trade and other deals and viciously attacked globalization structures nurtured by the previous administrations: U.N., NATO, WTO, International Criminal Court, and now WHO, which proved shockingly unprofessional and frankly hostile to the U.S. interests.

If Trump gets four more years as a president, he may get to the holy of holies of the economic globalism — the IMF and the World Bank — which will undoubtedly face a debt crisis due to the downfall of the world economy.  Ironically, the COVID-19 hysteria that became an act of desperation for the Democrats — whether it was a projected event or a natural crisis that would have been a shame to waste — now plays against the global financial leviathan and its masters.  According to none other than George Soros, the COVID-19 pandemic is a one-two financial punch for developing economies.  Not only has it put extraordinary pressure on budgets worldwide, but it has also caused a sharp exodus of capital from emerging markets.  JPMorgan Chase & Co. predicts that 1 in 5 emerging-market countries will default on their debt obligations — meaning that the core banks may collapse.  If some federal reserve banks fail, the government may nationalize them — but no doubt Trump would not save them, as Obama did in 2008.  That would fatally undermine the economic foundation of the Democrats for good; that's why Trump's victory is not an option for them.

If Biden wins, he, as a true O'Biden-Bama Democrat, will have to save the failing banking system by unprecedentedly increasing the national debt in a weakened economy.  The previous model that balanced emission with trade deals would not be possible to execute in a severely damaged global economy.  That is why Biden's victory would lead to a delayed catastrophe, but with lower chances of surviving it, because the condition of the country will deteriorate — his leftist policies will make sure of it.

The choice we as a country will make in November is clear: Trump and patriotism or Biden and globalism.  Development or decline.  It is just that simple.

Follow Veronika Kyrylenko, Ph.D. on Twitter or LinkedIn.

Image: Fox News via YouTube.