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Cyreenik Says

January 2017 issues

Another pattern of history emerges: Surprise presidents and talk of secession

Abraham Lincoln was a surprise candidate in the 1860 election. The Republican Party had formed just six years earlier. He was surprising and scary and there was lots of talk of secession. Fast forward to 2016 and we have Donald Trump as a surprise candidate. He is surprising and scary and there is lots of talk of secession.

The differences in the pattern are:

o that The South was the center of secession talk in 1860 and California is the center of secession talk in 2016

o economic times were a lot rougher in 1860 -- the whole world was enduring a bank panic that started in 1857.

o The South put their money where their mouth was

It will be interesting to see how California culture and politics evolve in response to these widely held feelings of unhappiness and fearfulness that are powering this secession sentiment. Something will be different, there will be change. The big question at this point is of what sort? A decade from now what is going to be California's equivalent to, "Hee Haw! The South will rise again!"

I came up with, "The Bear Republic can't bear The Republic."

This 28 Jan 17 WSJ article is about Calexit, Backers of California Seceding From the U.S. Get a Go-Ahead Group, energized by Donald Trump’s election, can start collecting signatures, but a ‘Calexit’ would require amending the nation’s Constitution by Alejandro Lazo.

Globalization: The times they are a changing

This 28 Jan 17 Economist article, The multinational company is in trouble Global firms are surprisingly vulnerable to attack, describes a big and significant change in how the world is doing business. These days the locals are doing better than the globals. The interesting part is this is a pattern. This pattern also happened in the 1970's.

From the article, "Multinational companies, the agents behind global integration, were already in retreat well before the populist revolts of 2016. Their financial performance has slipped so that they are no longer outstripping local firms. Many seem to have exhausted their ability to cut costs and taxes and to out-think their local competitors. Mr Trump’s broadsides are aimed at companies that are surprisingly vulnerable and, in many cases, are already heading home. The impact on global commerce will be profound.

Central to the rise of the global firm was its claim to be a superior moneymaking machine. That claim lies in tatters. In the past five years the profits of multinationals have dropped by 25%. Returns on capital have slipped to their lowest in two decades."

This is describing a big change in how business is being done. It reminds me a lot of the rise-and-fall of the conglomerate business model in the 1970's. That business style rose when buying a business and installing a minicomputer to automate the accounting brought big profits. These were the days when DEC was a shining star in the computer world. The fall came when everyone got into this computerizing trend and it was no longer a profitable advantage -- then the clunkiness of mixing so many diverse kinds of businesses became an expensive disadvantage.

Is globalization going through the same transition? Is this globalizing advantage now something that everyone can take advantage of so the having a conglomerate of many businesses is now clunky?

This could explain the transition.

The Trump Era theme of "SURPRISE!" continues

It is only Day Two of the Official Trump Era and the big surprises continue. This time it is a million-strong Woman's March taking place in many cities around the US and the world. In Washington DC the protesting marchers on Saturday far outnumbered the celebrators on Friday, Inaugural Day. The protests were huge gatherings of peaceful people. I'm reminded of Woodstock back in 1969.

Yes, this is promising to be an interesting upcoming four years, and perhaps four more years. We may be living in interesting times.

Another trickle of talk about the right issue: Follow ISIS's Money

Finally, a second article in a year on one of the vital elements of sustaining ISIS: where it gets its money. This should be a much hotter topic that car bombs and videos of executions, but it rarely gets covered.

This 19 Jan 17 WSJ article, Islamic State Steps Up Oil and Gas Sales to Assad Regime U.S., European officials say the sales are providing the militant group with desperately needed cash by Benoit Faucon and Ahmed Al Omran, talks about the important issue that is being routinely ignored: where ISIS gets its money from.

From the article, "Oil and gas sales to Mr. Assad’s regime are now Islamic State’s largest source of funds, replacing revenue the group once collected from tolls on the transit of goods and taxes on wages within its territory, the officials said. Their information comes from the monitoring of oil-truck traffic routes, which have changed from carrying oil to Turkey and Iraq to transporting it to Syria."

Like any other cultural movement ISIS needs money to operate. If its enemies are more diligent about cutting off its money, it will wither away faster. This is why this topic should get much higher profile.

Tunisia's mess: Demonstrating the importance of feeling enfranchised

This 18 Jan 16 Economist article, Jihadists returning home to Tunisia, talks about the difficult times Tunisia is having getting the country organized after the Arab Spring unrest and maintaining its new democracy.

From the article, "“IF BEN GUERDANE had been located next to Falluja, we would have liberated Iraq.” So (reportedly) said Abu Musab al-Zarqawi, the leader of al-Qaeda in Iraq, before he was killed a decade ago. He was referring reverentially to a town in south-eastern Tunisia that is one of the world’s biggest exporters of jihadists. No place better epitomises the challenges facing Tunisia’s government as it tries to consolidate a wobbly democracy six years after the revolution that toppled the old dictatorship."

The article goes on to describe the unrest currently roiling the nation.

My analysis: At the heart of this unrest, and of Tunisia's unwitting generous contribution to the jihadist movements around the world, is the lack of feeling enfranchised among Tunisian youth.

Again from the article, "But the jobless rate of 15% is higher than it was before the revolution. The rate for youngsters and those in the countryside is higher still. This is partly because a series of terrorist attacks has driven away tourists and foreign investors."

All this unrest, and supporting unrest elsewhere, is a symptom of Tunisian youth feeling deeply disenfranchised. This is the root problem. This is what must be addressed to restore Tunisia to being a peaceful and orderly society.

The change in car ownership is coming

As I have forecast over the last several years, the transition to driverless cars is going to dramatically change both how people think about cars and how they are owned. The industry leaders connected with the transition are now also commenting on this change. One example of this is the following article. The change in technology in driverless cars is dramatic, and the change in how people think about cars as they become ubiquitous is going to be equally dramatic.

This 9 Jan 17 WSJ article, Self-Driving Cars Will Be More Disruptive Than Electric Ones Does autonomous technology herald peak car? by Stephen Wilmot, discusses how car ownership is going to change as driverless cars become more widespread.

From the article, "Dispensing with drivers will radically reduce the cost of taxi services, boosting demand for what is increasingly called “mobility as a service” at the expense of individual car ownership. More people will use fewer cars, upsetting the current relationship between drivers and their cars.

The most basic question is: If individuals stop buying cars, who will? Software specialists like Uber don’t seem obvious candidates. Neil Campling of brokerage Northern Trust speculates that fleets will eventually be floated on the stock exchange."

Don't like a surprise: Deny it!

The year 2016 was filled with political surprises -- Brexit and Trump winning being two of the highest profile.

What has been an interesting aftermath to these surprises is watching how hard it has been for many commentators on these events to admit they were surprised by them. What comes out instead of "Gosh! That was a surprise." is denial in various forms. As one example, in the US there are lots of commentators saying the election was stolen from Hillary by the electoral college voting process -- "She won the popular vote. She should have won!" articles. This kind of thinking doesn't recognize that the Hillary team was just as aware of how the electoral college process works as the Donald team, and just as surprised as the Republican establishment that Trump got the Republican nomination in the first place. This whining about the popular vote thinking is denial-of-surprise thinking.

What this does explain is a mystery I have written about in my Profit from History book: the mystery of how little weight is given to surprise in the telling of history in history books. If even contemporary writers aren't willing to admit surprise, it's not surprising that historical writers don't want to talk about it either.

 

 

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