Terrorism in the Age of the Market State

I wanted to take a moment to share this with you today. The following comes from Stratfor, the influential subscription service that covers geopolitics in all its many forms. Normally behind a “pay wall”, I have permission to republish, so I am offering it to you as food for thought.

Terrorism in the Age of the Market State
June 19, 2016


Editor’s Note: In 2008, Stratfor contributor and editorial board member Philip Bobbitt, widely considered a leader in the field of international security, published Terror and Consent, which argued that every era of constitutional order is afflicted by its own unique brand of terrorism. Jay Ogilvy, who chairs Stratfor’s editorial board, sat down with Bobbitt to discuss the current incarnation of terrorism in light of the Orlando shootings.

Jay Ogilvy: In my earlier column introducing Philip Bobbitt, I gave much less attention to his book, Terror and Consent, than to two of his other books. For obvious reasons, it’s time we give Terror and Consent the attention it deserves. And it deserves quite a lot. In his cover story review in The New York Times’ “Sunday Book Review,” Niall Ferguson calls it, “quite simply the most profound book to have been written on the subject of American foreign policy since the attacks of 9/11 — indeed, since the end of the cold war.”

Like Bobbitt’s earlier book, The Shield of Achilles, the argument of Terror and Consent is based on his reading of Western history since France’s King Charles VIII invaded Italy in 1494. According to Bobbitt, the centuries since have seen a succession of different constitutional orders, from the Machiavellian princely state, through the dynastic kingly state, the aristocratic territorial state, the imperial state nation and the industrial nation state to what Bobbitt calls the informational market state, which is just now emerging. Each constitutional order has its own epochal war, and the treaties that conclude those wars determine the terms on which the following constitutional order will be built.

What Terror and Consent adds to this already magisterial construction is another column in a vast matrix of correspondences, this time with respect to terrorism. It turns out, not altogether surprisingly once one has caught the Hegelian sweep of Bobbitt’s thinking, that each of the epochs has its own brand of terrorism. Understanding this historicity of terrorism is important for, like those apocryphal generals who always prepare for the last war, we fight yesterday’s terrorism at our peril.

Over the centuries, the nature of terrorism morphs in part because of advances in technology, from knives and pitchforks to weapons of mass destruction. But more profoundly, the nature of terrorism flexes to the structure of each new constitutional order. “In each era, terrorism derives its ideology in reaction to the raison d’etre of the dominant constitutional order, at the same time negating and rejecting that form’s unique ideology but mimicking the form’s structural characteristics.”

So, for example, in the kingly state, the state and the monarch are joined as one: L’etat c’est moi. And the form of terrorism that typifies the era of the kingly state is piracy perpetrated by sea captains who regard themselves, vis-à-vis the states arrayed against them, as enjoying all the sovereignty of kings.

Bobbitt summarizes the relationships between constitutional orders and their corresponding terrorisms as follows:

“So it was that princely states coexisted with fanatically religious mercenaries, kingly states flourished in the golden age of piracy, territorial states vied with the private armies of commercial consortia for overseas revenues and investments, imperial state nations struggled with international anarchists, and nation states attempted to suppress national liberation movements. And so it will be when the market state finds it has generated a terrorism that negates the very individual choice that the State exalts, and puts in service of that negation the networked, decentralized, outsourcing global methods characteristic of the market state itself.”

And so it has come to pass in Orlando. As many commentators have remarked, the choice of a gay bar as the target represented an attack on the kind of individual liberty that is so prized in the market state. As Frank Bruni put it on the op-ed page of The New York Times:

“This was no more an attack just on L.G.B.T. people than the bloodshed at the offices of Charlie Hebdo in Paris was an attack solely on satirists. Both were attacks on freedom itself. Both took aim at societies that, at their best, integrate and celebrate diverse points of view, diverse systems of belief, diverse ways to love.”

Bobbitt acknowledges that these are early days for the market state, which itself could unfold in several different forms. On the very first page of his text, Bobbitt calls out three different wars on terror: “an attempt to preempt attacks by global, networked terrorists; a struggle to prevent the spread of weapons of mass destruction; and the worldwide endeavor to protect civilians from natural catastrophes.” In light of the mass killings by so-called “lone wolf” shooters from Sandy Hook and San Bernardino to Orlando, I asked Professor Bobbitt whether or not we should consider a fourth war against terror.

Here is his reply:

Philip Bobbitt: As we search to find a successful method of preventing terrorist attacks like the one in Orlando, it might be worthwhile to visit one of the common myths that arise in the wake of such atrocities. This is the myth of the “lone wolf.”

Last December, U.S. President Barack Obama observed that,

“… the terrorist threat has evolved into a new phase. As we become better at preventing complex, multifaceted attacks like 9/11, terrorists turned to less complicated acts of violence like the mass shootings that are all too common in our society. It is this type of attack we saw at Fort Hood in 2009, in Chattanooga earlier this year and now San Bernardino.”

This is unquestionably true, and much credit must be given to the FBI and the intelligence services for the fact that the United States has not suffered the kinds of attacks we saw in Paris. We should be very wary, however, about claims — which seem invariably to come quickly after a shooting — that the terrorist was “self-radicalized” and operated essentially alone.

The myth of the lone wolf is that of the killer who is inspired by a terrorist group’s ideology but is not under its operational control. As one commentator put it,

“Because lone wolves operate on their own, their personal agendas often mix with those of the terrorist group they claim to serve. In San Bernardino, the killers struck at a holiday party at the county health department where one of them worked, not exactly the center of the Crusader effort to dominate the Middle East.”

In fact, it seems very unlikely that the San Bernardino murders were the result of the twisted psychological problems of an unhappy couple. The fact that the killings occurred at a civil service office, which might imply a workplace shooting, was actually much more likely to have been a target of opportunity once the imploring calls for action coming from Abu Bakr al-Baghdadi gave the killers an emergency directive to act. This is confirmed by the enormous arsenal amassed by the killers, and the various quotidian acts they undertook in the days before the shooting — buying groceries, getting movie tickets and so on. And, as is almost always the case, once the lives of the killers are scrutinized, we invariably find recent trips to terrorist centers abroad. In the case of Syed Farook and Tashfeen Malik, the San Bernardino shooters, it was Pakistan and Saudi Arabia. In the case of the Chattanooga killer, it was Jordan. In the case of the Boston Marathon terrorists, it was Dagestan. In the case of Omar Mateen, the Orlando mass murderer, it was Saudi Arabia. Moreover, the father of the Chattanooga terrorist was himself on a terrorist watch list. The Tsarnaev brothers were on a watch list and had been interviewed by the FBI. Mateen was interviewed three times by the FBI. His father is a prominent Afghan political figure who urges acceptance of the Taliban. Being on a terrorist watch list, being interviewed by the FBI, traveling through war-torn areas where terrorist groups are prominent: These are not the characteristics of the misfits and loners who attack classrooms. Moreover, following the Islamic State’s recent battlefield setbacks, the Islamic State commander responsible for attacks outside the Middle East called on supporters to carry out killings in the United States during the holy month of Ramadan, which began June 5.

The myth of the lone wolf depends on the comforting distinction between “Islamic State-inspired” and “Islamic State-directed” attacks. The lone wolf, we are told, lacks those links with the terrorist network that would tip off the authorities. In an unfortunate lapse of logic, many people are inclined to conclude that if such links are not immediately apparent, the killer is a lone wolf: Lone wolves lack links, so if a terrorist lacks links, he is a lone wolf.

But the image of the isolated and unhappy youth, mesmerized by messages and violent videos on the Internet, the “self-radicalized” terrorist is an extremely unlikely occurrence. The vast majority of radicalized individuals come into contact with extremist ideology through offline socialization prior to becoming indoctrinated online. The Internet does not, in fact, radicalize in isolation of other factors, and it is not operating on isolated individuals when these people take up violence. Search engines rarely provide links to content that supports Islamist indoctrination. The Internet’s role is less about initiating the radicalization process than acting as a facilitator for educating and indoctrinating people who have already been recruited.

It is comforting to tell ourselves that someone like Mateen is merely hateful and pathetic, and not a component of some grandiose plot.” But it is deeply misleading if the precedents of the past decade are any guide, and it ultimately will be enervating to our strategies. After all, the self-radicalized lone wolf will always get through. What’s the point of expending much energy fruitlessly trying to stop him? And thus, support for more aggressive investigations and surveillance will naturally ebb; what good would they be against the lone wolf?

I was living in London at the time of the 7/7 terrorist attacks. The newspapers the next day were full of assessments and claims that the terrorist group was “local” and had no links with larger terrorist networks abroad. I cautioned at the time that this conclusion was premature, and therefore I was not surprised when the martyrdom videos surfaced. It may be recalled that the fourth member of the terrorist team did not execute his bombing mission on the underground as did the other three. His explosives went off while he was riding some miles away on the upper deck of a bus. Is it really so far-fetched to think that the telephone call to the cellphone that triggered the explosion was made by someone who didn’t want the conspirator to survive? Yet we are discomforted by the possibility of the networks to which these terrorists are attached.

Yesterday, by contrast, a vibrant and popular member of the British Parliament was murdered in her constituency by a deranged man. He seems to have been politically motivated — he reportedly shouted “Britain First” several times during the attack — but he was not politically active. His profile is a familiar one: raised apart from his natural parents, living alone for many years with a grandparent who is now deceased, helpful to neighbors though quiet. One knows the newspaper quotes from relatives: “I am struggling to believe what has happened. He is not violent and is not all that political. I don’t even know who he votes for. He has a history of mental illness.” Or from neighbors: “All this is totally at odds with the man we thought we knew. He was a quiet guy, you would not think it of him. There was no reason to think he would be capable of something like this.” This man, though he committed an act that will have significant political repercussions, was no terrorist. And though he acted alone, he was not the mythical lone wolf. More a wounded creature, I would say. For Americans, the murder of Britain’s Jo Cox is likely to remind us of the attempted killing of U.S. Congresswoman Gabrielle Giffords at a meeting in her constituency. The assassin actually killed six other people in the attack. He had been diagnosed as a paranoid schizophrenic and was only sentenced when the forcible administration of antipsychotic drugs brought him to a state in which the trial judge reversed an earlier ruling and held him competent for trial. What he shared with Cox’s murderer was a generalized if incoherent hatred of government and an apparently nonviolent personality.

Ogilvy: Professor Bobbitt, one more question please: In your book, you devote a great deal of attention to the danger of weapons of mass destruction. Indeed, the prevention of the proliferation of these weapons is one of your three wars on terror. But the weapon of choice in all of the attacks over the past several years is the assault rifle. Would you care to comment?

Bobbitt: These are very different problems, the terrorist malcontent and the wounded loner, though they may raise common policy issues like gun control. Where they really differ, however, is in their future access to weapons of mass destruction, which is one more reason to be wary of the lone wolf myth. The assault rifle was the weapon of choice for both the Giffords assassin and Mateen. But the men who sought to kill a U.S. congresswoman and a British lawmaker were not capable of the planning involved in a quasi-military attack. That wasn’t the case with Mateen. If he had had access to more formidable weapons, weapons a terrorist network could devise and deliver, one can only imagine the destruction he might have caused.

Terrorism in the Age of the Market State is republished with permission of Stratfor.”


This is a personal blog, more of a personal notebook, unadvertised and without promotion. I try to post on a weekly basis, but there is no guarantee. Should you stumble across it and wish to be notified of new posts, just enter your email address at the upper-right of this page. I have no other use for email addresses. Rest assured, yours will be kept private. I also now tweet to share articles and essays that I think are important, but do not have room for here. You are welcome to make comments, if they are on topic and polite. I have no time or space for insults, foul language, or anything I judge to be offensive to readers.

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Genetic Engineering and CRISPR

One of the issues I have dealt with in past posts and remains one of the most important trends that have my attention is genetic engineering. I have found it difficult to provide people who do not follow this trend with a general background of what is involved that is not too technical to understand, too argumentative that it leads to a purely emotional response, or just so “over-simplified” that it offers too little to bother watching. Today, I saw one that I think provides an overview without being too technical, too emotional, or too simplistic, but provides enough information to allow for discussion. It was produced by the BBC’s current affairs television program, Panorama, and I have embedded it below for anyone who is interested.

At this moment, I am buried in other work, so I am not yet ready to post. What I expect to post is also being written for publication elsewhere. When that’s done, I will share it here too. My goal is early next week…knock on wood.

The only other thing I will add today is that, in a couple years, this video will be too far out-of-date to be useful, but that will be then and this is now.

Panorama on CRISPR from Paper Cow on Vimeo.


This is a personal blog, more of a personal notebook, unadvertised and without promotion. I try to post on a weekly basis, but there is no guarantee. Should you stumble across it and wish to be notified of new posts, just enter your email address at the upper-right of this page. I have no other use for email addresses. Rest assured, yours will be kept private. I also now tweet to share articles and essays that I think are important, but do not have room for here. You are welcome to make comments, if they are on topic and polite. I have no time or space for insults, foul language, or anything I judge to be offensive to readers.

Posted in Technology, The Future | 2 Comments

Mediocrity reigns

Mediocre means neither good nor bad, but at best, barely adequate. Mediocre political leadership today means it is not as good as it should be, not as bad as it could be, but given today’s world, not even barely adequate. In recent years, I have said, “Occasions arise that demand great leaders, but great leaders have not risen to the occasion.” Still true today.

This is not a long harangue against some individual leader, party, ideology, or nation. I find this sad state in North America, Europe, and most of the nations that we used to call the “First World” back in the 20th century, plus the majority of today’s “emerging markets” (Brazil, Russia, China, etc.) that are closely tied to the first group not just by trade, but by stock and bond markets.

The other sad truth is that these very nations have an incredible pool of talent that have done, are doing, and will do more to promote global progress, despite the failure of their leadership. Why don’t these relatively younger adults get involved in politics? Why don’t the “best and brightest” bring some of that intelligence and determination to public administration?

I think the answer is simple and obvious. It may sound odd, but it is “easier” to work with the complex technology of genetic engineering, artificial intelligence, virtual reality, autonomous vehicles, and so many other new fields than it is to lead a fractured, frightened public. On a risk/reward basis, there is no competition. Politics is a mud fight with little or nothing to gain for someone who is truly among the “best and brightest”. So they are simply too smart to get into politics. If there were truly great leaders in those nations I mentioned, these people would be there to help make it work, but it isn’t there, so neither are they.

In the past at Future Brief, I have talked about the emergence of a “global community” based not on nationality, but the ability to work above, beyond, and outside borders. The best and brightest are moving in that direction for the simple reason that they are the best and brightest. So far, they have been too smart to make the mistake of jumping into the morass of nation-state politics. They may do that someday, or they may move to another location globally where they are welcome and where leadership focuses on the future, not the past.

They are waiting for the final dying breaths of the 20th century, but they are not wasting their time on killing it off. They are getting ready to be part of something new, exciting, and potentially “dangerous”, but they are risk-takers, the people responsible for human progress throughout history.

I mentioned last week that these essays would be short in comparison to my past style. Each is a “piece” of a much greater puzzle and this is just one of them. There are more to come. Then we can begin the challenge of putting them together and trying to get a sense of where we are now, where we are headed, what we can expect, and what we can do about it.


This is a personal blog, more of a personal notebook, unadvertised and without promotion. I try to post on a weekly basis, but there is no guarantee. Should you stumble across it and wish to be notified of new posts, just enter your email address at the upper-right of this page. I have no other use for email addresses. Rest assured, yours will be kept private. I also now tweet to share articles and essays that I think are important, but do not have room for here. You are welcome to make comments, if they are on topic and polite. I have no time or space for insults, foul language, or anything I judge to be offensive to readers.

Posted in Global analysis, Global politics, The Future | 1 Comment

Is Vladimir Putin on the way out?

There is buzz being generated about an analysis from the European Council on Foreign Relations forecasting the end of Vladimir Putin’s rule. How long does he have left? “In the view of this author, the regime has less than a year”. That is a very strong statement. The paper is only six pages long, not counting two pages that are not part of the actual paper. I think his arguments are very interesting and worth reading.

One of the greatest failures of the 20th century was for a veritable army of analysts, both public and private, academics, advisors, and others whose livelihoods depended on their analysis of the Soviet Union to see that very “union” crumble without recognizing it at the time. I have nothing to be proud of. It was not until December of 1988 when Mikhail Gorbachev spoke at the UN General Assembly that I finally accepted that the Soviet Union was really on the way out. I was not alone.

Russia is clearly in a very weak position and there is no particular reason to think it’s going to get out of it any time soon. This time, I will listen carefully to those who have the background to offer a well-reasoned argument for another “surprise”. Whether it comes out the way the author describes or not, or whether it comes soon or later, this is a paper well-worth reading. Thankfully, it’s not a dull boring academic treatise. It is presented in straight-forward language that any of us can understand.

I will give you a link so you can download your own copy. First, an introduction to the author taken from the paper.

“Nikolay Petrov is a visiting fellow at the European Council on Foreign Relations. He was chair of the Carnegie Moscow Center’s Society and Regions Program. He worked in the Institute of Geography at the Russian Academy of Sciences from 1982 to 2006. He served as chief organiser of the Analysis and Forecast Division in the Supreme Soviet (1991–1992), was an adviser and analyst for the Russian Presidential Administration (1994–1995), and a scholar at the Kennan Institute for Advanced Russian Studies (1993–1994) and the International Foundation for Electoral Systems (1994). From 1996 to 2000, Petrov worked at the Carnegie Moscow Center as a senior consultant and scholar-in-residence. Petrov earned his Ph.D. from Moscow State University.”

The PDF document can be downloaded here.

I have a new post of my own almost ready, but I will wait until tomorrow for that. This is enough for today. I hope you find it of interest.


This is a personal blog, more of a personal notebook, unadvertised and without promotion. I try to post on a weekly basis, but there is no guarantee. Should you stumble across it and wish to be notified of new posts, just enter your email address at the upper-right of this page. I have no other use for email addresses. Rest assured, yours will be kept private. I also now tweet to share articles and essays that I think are important, but do not have room for here. You are welcome to make comments, if they are on topic and polite. I have no time or space for insults, foul language, or anything I judge to be offensive to readers.

Posted in Global analysis, Global politics, The Future | 1 Comment

It’s a Two-Track World. Now, about the Coming Collision…

We live in a two-track world, a Fast Track and a Slow Track, where the tracks seem to run parallel to each other on a day-to-day basis, but we know they will eventually meet and either merge into one track, or collide with each other.  The one I see coming will change future history in ways we can only imagine, but I’m betting on a collision before a merging of the two is possible.

The Fast Track is taken by those deeply excited and involved with the “Singularity”, automation, virtual reality, artificial/machine intelligence, genetic engineering, nanotechnology, autonomous vehicles, and a host of related areas.  In my experience, they are almost uniformly delighted and proud that they are on the Fast Track and look forward to the future with great hope and expectations.  They believe they think exponentially, emphasizing fast change.

The Slow Track is taken by those who spend 98% of their time just trying to keep up with their jobs, families, professions and so forth in the present. Many are not happy with what they have now or the direction we are taking.  Their unhappiness in the US and Europe is obvious.  They are said to think in linear terms which assumes a more gentle growth in the alternative technologies mentioned above.

Those on each track are aware of those on the other.

Fast Track people are a global group where nationality takes a back seat to tech expertise.  Appropriately or not, they tend to ignore the Slow Track because, in their opinion, those people are clueless and much too far behind to make it worthwhile to try to bring them up to speed.  Intentional or otherwise, a certain arrogance marks their work.  I think many of them believe that, by the time the Slow Track catches on to what is happening, they will be impressed by the results and want more.  And if they don’t, then they will be left behind.

Slow track people are not a global group.  Nationality, among other factors, remains important.  They hear from the Fast Track folks more and more, but still sporadically and at a distance.  Often, it relates to their coming loss of employment due to AI and automation.  Or it is their negative reaction to the whole idea of being programmed by their DNA with a lot less “free will” than they like to think they have.  It is important to remember that they are the majority and by a substantial margin. And, by the way, they include many very, very well-educated and “sophisticated” people too, but people whose work is unrelated to the Fast Track’s goals.  They will make their judgment when they have to make it, and if the Fast Track doesn’t appreciate that, they can take a short leap off a very tall cliff.  The majority rules when the majority demands it.  And if they are not dealt with intelligently, they will be the Fast Track’s worst nightmare.

There are two problems with this Fast Track/Slow Track analogy.

Neither track is either faster or slower than the other.  They are both at exactly the same “point in time”, moving in exactly the same direction in time, and moving at exactly the same speed.  The “speed” is just a reflection of what is going on in their heads.  This is something the folks who like to think they are Fast Track seem to sometimes forget.  It’s that arrogance thing again.

The second problem is that we might think the “tracks” run parallel to each other.  But as I mentioned at the outset of this essay, not so.  Whether slowly or suddenly, the two tracks will meet and either merge successfully into one, or provide a spectacular collision.  If I were you, I would place my bet on the collision.

What will bring on this collision?  Well, there will be a number of small collisions, but the Big One that really starts the societal debate can be any of a number of possibilities.  The only qualification is that it is something that smacks people emotionally and which is presented by the Fast Track without taking that very understandable emotional reaction from the Slow Track into consideration.

It could be something along the lines of In Search For Cures, Scientists Create Embryos That Are Both Animal And Human, but more dramatically presented.  Or it could be something along the lines of Soon you will be able to ride in a robo-taxi when both taxi drivers and Uber drivers find themselves without fares, and every other employed driver can start to sweat.  That target date of 2018 is a lot earlier than was being discussed, even a few months ago. 

It could be something that seems small at the time, or something obviously huge, but we all have to wait and see.  I just don’t think we will have to wait that long.

Whatever triggers the collision, it is likely to be based on the failure of Fast Track people to convince Slow Track people that all this is being done for them, not to them.  My experience with people from both tracks, and I am fortunate to have plenty of both, is that this is the real question and it will need to be answered clearly and positively, not just dropped on the public from above as a fait accompli.

A note to my hardly little band of readers!  I have not written much over the last few months, as you know if you have been following Future Brief for awhile.  My problem (it’s a genetic predisposition, I’m sure) is that I try to cover too many points at one time and the essay drags on forever.  So I will return to what this blog was about from the beginning – a personal notebook where I collect ideas that may later be used for publication.  So I expect to post more, but shorter essays (yes, this is a short essay…for me). Think of them as pieces of a much bigger puzzle. I do. Eventually, we can put them together.


This is a personal blog, more of a personal notebook, unadvertised and without promotion. I try to post on a weekly basis, but there is no guarantee. Should you stumble across it and wish to be notified of new posts, just enter your email address at the upper-right of this page. I have no other use for email addresses. Rest assured, yours will be kept private. I also now tweet to share articles and essays that I think are important, but do not have room for here. You are welcome to make comments, if they are on topic and polite. I have no time or space for insults, foul language, or anything I judge to be offensive to readers.

Posted in Global analysis, Technology, The Future | Leave a comment

Letter From Panama

April was a tough month for those of us living in Panama, both Panamanians and expatriate residents like me. The so-called “Panama Papers” became an international sensation. Despite the fact that the “guilty parties” were foreigners, despite the fact that the bulk of their money was placed in various Caribbean nations and not Panama, despite the fact that the Panamanian people did not see a penny of that money (other than the law firm involved), and despite the fact that the law firm had offices in 34 nations, there was also one other fact. The law firm was headquartered in Panama. Thus, the Panama Papers.

As of yesterday, May 5th, we have another “crisis”. I don’t know what foreigners will call it, perhaps the “Waked Affair” after the family accused of the crimes, but here we go again. The story is that a very wealthy investor in Panama has been identified by the US Treasury Department as a money launderer for drug money, probably from our neighbors in Colombia where he is also well-known..  We are talking about a really big investor.  One of his projects, an indoor mall in Panama City, was a $400M project all by itself.  And there is plenty more.  Yesterday, we heard that the US Treasury Department has been investigating him and brought charges against him leading to his arrest and others, as well as jeopardizing his projects, including the mall which was also to house the new Ritz Carlton hotel.  It came as quite a bombshell.  A link to the Treasury Department’s press release will be included at the end of this post.

I want to say first that I see no reason to think there is any connection between the two. This latest scandal results from what I feel confident in saying was a very long and difficult investigation that began when no one was even thinking of any “Panama Papers”. But I have to agree, the timing was terrible! However, such it is. All of us in Panama will have to live with it. Putting emotion aside, let’s take a look at Panama’s growth.

The Growth Story

As the graph below shows clearly, Panama has experienced exceptional economic growth in recent years, expressed here as per-capita GDP. Note how it was “bunched” with other small Latin American nations in 1990, substantially behind the two big “emerging markets” in Latin America – Mexico and Brazil.

In 2006, we separated from our Costa Rican neighbors and headed up. By 2007, we passed Brazil. By 2009, we passed Mexico. Since then, we have left the rest behind and the gap continues to grow. Despite signing tax information sharing agreements with the US in 2011 and other nations on a bilateral basis, thus making Panama less attractive to tax evaders, the growth not only continued, it accelerated. It was during this period that the now-famous Panamanian law firm, Mossack Fonseca, saw its business begin to sharply decline as the Panama Papers attest. In short, Panama’s economic growth was not based on offshore banking. Sorry for the faint image, but the nations on the right from top to bottom are Panama, Mexico, Brazil, Costa Rica, Colombia, Peru, and Ecuador

The impetus for the growth shown above has been the purposeful decisions of various Panamanian administrations since shortly after the turn of the century.

A law passed in 2007, as just one example, made it attractive to large multi-nationals to move their regional offices from elsewhere in Latin America to Panama. So far, 124 firms from Caterpillar to 3M and beyond have done just that, bringing their money and thousands of jobs for Panamanians. Most of them set up operations at Panama Pacifico, a $700M project overseen by Britain’s London & Regional Properties Panama subsidiary with its own airport, free trade zone, and a government office designed to help them set up and operate easily. It has been a great success and continues to grow. In addition, the government is considering expansion of the law to encourage manufacturing operations to relocate here as well.

Beyond efforts like that one, there is the Panama Canal expansion, the creation of a transport, communications, and logistic platform in support of regional and global trade, and a massive increase in greatly improved infrastructure of all kinds that sets it apart from other Latin American nations. Although half or more of Panama’s GDP was derived from agriculture in most of the 20th century, agriculture, livestock, and fishing combined represented only 2.8% of the GDP in 2015. In addition, tourism has exploded in the last decade and its contribution has grown exponentially.

And there is more to come. It is not just the Canal expansion, but other projects of note. One obvious example is a copper mine which will be one of the world’s largest when it is completed in the next couple years. It provides very little to the GDP today while under construction (which is proceeding well), but its contribution will arrive soon enough and it will be significant. The investment being made in this project is even greater than the cost of the Canal expansion.

Enough. If anyone needs more statistics, there are plenty of them. One good site to visit is the National Institute of Statistics and the Census (INEC is the Spanish acronym) at its website where you can find the monthly, quarterly, and annual stats, plus the results of the Population and Housing Census of 2010, the Agricultural Census of 2011, and the National Economic Census of 2012. The real data is available for anyone willing to actually research it, not just guess or emote.

Simply put, Panama passed through the global financial crisis of 2009 without damage. Not only did the nation keep right on growing, but not a single penny of Panamanian taxpayer money had to bail anybody out. Additionally, the recent collapse in commodity prices that has trashed so many other Latin American economies, among others, has benefited us since these commodities are not sold by Panama, they are bought by Panama, and we are all thankful for the low prices. When the copper mine is functioning that may change a bit, but cheap commodities are a big net positive for us now.

The Current Crisis

Okay, let’s get back to the current Waked Affair or whatever it ends up being called. This is more painful as thousands of innocent people here who had absolutely no idea that anything illegal was going on now fear the loss of their jobs. It is not just lawyers at a law firm. That hurts, but we will deal with it and are dealing with it. One thing I appreciate is that yesterday’s surprise also demonstrated that the US government, the Panamanian government, and the Colombian government all cooperated to do what needed to be done. As the news broke, Panama’s Superintendent of Banks moved into the Panamanian bank involved and took control while Colombian authorities arrested one of the primary people charged with these crimes at the airport in Bogota.

As for drugs, Panama doesn’t even grow the coca plant, much less produce and export cocaine or any other illegal drug. We just happen to be stuck between the South American producers and the US consumers.

But let me sum things up by speaking to three groups of people – my neighbors here in Panama, the foreigners who are watching this unfold with us, and specifically those foreigners who choose to be our critics.

Friends and Neighbors

To my friends, business associates, and all the people of Panama, let me sincerely thank you for providing me with a “permanent residency” visa to live and work with you in Panama. You may be surprised to know that I take the word “permanent” seriously. This is my home and I am proud of it, as much today as any day before.

As a permanent resident, I have a responsibility to stand with you at times like this. As a US citizen, I never have hesitated to criticize US policy when I felt it necessary and continue to do so when appropriate. I would do the same here now, or at the very least be silent, if I felt it was necessary, but I do not.

I know many of you feel like Panama is a tennis ball being slapped back and forth by outsiders who do not have a clue about you and your nation. I know that you have long believed that foreigners evading taxation and drug traffickers from outside have used Panama for their own purposes. But you did not and do not have the resources to uncover something as complex as the current money laundering scandal.

Just like the law firm that had offices in 34 nations, Grupo Wisa, the prime target in this case, had operations in Colombia, Guatemala, Belize, Costa Rica, El Salvador, Mexico, Bolivia, Honduras, Nicaragua, and Uruguay. We can only imagine how difficult it was to unravel their operations and find the facts. I encourage you to see this revelation not as an insult, but as a gift. You can use that gift to help drive this money laundering business out of Panama, once and for all.

Above all, do not be ashamed. You have done more than 95+% of nations on this planet in the 21st century to build a dynamic economy based on solid achievement. What has happened in recent weeks is the shedding of the past century’s remaining ties to Panama. Good riddance. You will get through this and I and other expat residents like me from all over the world will have your back.

To Those Outside

As for those from other nations who are hearing about this and wondering if Panama is a dangerous place, full of criminals, nonsense! If you are interested in relocating here, investing here, or both, there is no reason not to follow up on that. A visit here and the opportunity to meet and talk with Panamanians and other expats will demonstrate that this is exactly what it is – a rapidly growing economy based on real effort, not the financial shenanigans of foreigners and a tiny crowd of Panamanians.

To those, especially in the US and Europe, who see this as an opportunity to pretend to be morally and intellectually superior and trash talk Panama, grow up! Look at the mess you’re in.

Europe is just amazing. You are not a mess, you’re a disaster. It is beyond words. You have our sympathies, but there is nothing we can do about it. Good luck to you.

As for those from the Right who think all of us are lazy, shiftless, ignorant people scratching out a living with a hoe and those from the Left who despise the success of our free enterprise economy while socialist economies all over Latin America are in various states of distress or even collapse, give it up. You are wrong.

Honestly, it is pathetic. It was the “advanced economies” of the North Atlantic, both sides, which brought us the great Stock Market Bubble in the early years of this century that lost trillions of dollars for tens of millions of households in their nations and “collateral damage” to many others.

It was the same nations who no sooner burst that bubble than began blowing a second Real Estate Bubble that burst and not only lost trillions of dollars, but left behind other trillions of unpayable debt and the ruined dreams of so many innocent people.

Now we hear those same nations talk about a growing “Debt Bubble” as they face the consequences of failing to meet their problems by trying to buy their way out of them.

The Panamanian people may have been poorly treated by foreigners who used them for their own purposes and by some of their own people as well, but I am watching as they struggle to deal with the fallout as constructively as they can without blaming anyone else. You should try that too.

Your bubble problems were not caused by Panamanians, Mexicans, Muslims, the Freemasons, the Illuminati, Scientology, FEMA, the New World Order, the Federal Reserve, Citibank, Halliburton, Google, the Vatican, Bilderburg, Walmart, the Rothschilds, the Knights Templar, the UN, Skull & Bones, the Bohemian Grove, the Koch Brothers, George Soros, the Trilateral Commission, the Knights of Malta, the Committee on Foreign Relations, Exxon Mobil, the Zionists, the Vril Society, or the Lizard People. You did it to yourselves. Suck it up, get to work, and fast. And for everyone’s sake, don’t let your Debt Bubble blow us all up!

Summing It Up

Next year, I will celebrate my 50th year since I first got on a plane as a new Peace Corps Volunteer off to the Philippines, never dreaming that it would change my life and introduce me to so many wonderful people in so many nations as it has. I have worked as an employee, a manager, or a consultant in various sectors of economic development to public and private agencies, to for-profits and non-profits, in some 45 nations or so, but I stopped counting a long time ago. I am no stranger to the global scene.

Rest assured, there are bad Panamanians, immoral Panamanians, corrupt Panamanians, and others like them; exactly the same as I have seen in every human society in which I have lived and worked. As I say to people coming to Panama to find their “little piece of Paradise”, Paradise is for dead people. For the living, Panama is a great place to live and work. And those bad Panamanians I mention above are vastly outnumbered by really good people with their eyes set on the future and determined to build, not tear down, their society. I wouldn’t trade places with anyone else.

Panama is a genuine democracy and the votes are counted honestly. The press is fee and has been full of political debate and controversy every day since I arrived here in February of 2004. No President can serve two consecutive terms, but since the bad old days of the 1980s and Manuel Noriega, no political party has been returned to power for two consecutive terms. Our current President’s political party is only the third-largest party in the National Assembly where the hooting and hollering goes on constantly. But when the day comes that decisions have to be made, they sit down and work something out. People of the US and Europe, please take note.

One of my greatest joys is to be with an expat who lived in Panama during the 80s or 90s, or earlier and has come back to visit. Their eyes pop out when they see everything that has changed. Even since five years ago, the changes are impossible to miss.

So bring on the scandals or whatever you want to call them! They do not kill us, but they do make all of us, citizens and permanent residents alike, stronger and better.

So come on down, then come back in five years.

To read the US Dept of the Treasury’s press release on this matter, click here.

To read a list of people and entities charged by the Treasury, click here.


This is a personal blog, more of a personal notebook, unadvertised and without promotion. I try to post on a weekly basis, but there is no guarantee. Should you stumble across it and wish to be notified of new posts, just enter your email address at the upper-right of this page. I have no other use for email addresses. Rest assured, yours will be kept private. I also now tweet to share articles and essays that I think are important, but do not have room for here. You are welcome to make comments, if they are on topic and polite. I have no time or space for insults, foul language, or anything I judge to be offensive to readers.

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Stratfor video: The Iranian Military Complex

It has been a long time since I posted due to workload, but this video report from Stratfor is a quick update on Iran and its military activities. It deserves your attention for two minutes. Not good news. It is not yet available at YouTube for embedding, so I will send you directly to Satellite Images: An Iranian Military Complex. It is republished with permission of Stratfor.

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A Killer is on the loose

Right now, today, as you read this, a killer is loose that threatens your life. The murderous cowards of ISIS pale in comparison to this killer and we all need to know about it. It is receiving some attention, but I fear not enough to promote the kind of rapid reaction that is so obviously required. Once in awhile, a touch of panic can be useful.

The one thing it has in common with ISIS is a name that is uninformative in itself and deceptively simple. – MRC-1.  It is only now becoming public and there is coverage from some responsible publications.  However, I fear the coverage is too low-key to promote the sort of immediate action required.  I hope that changes soon.  First, let me give you a basic description of MRC-1 and a few links.

MRC-1 is a new gene.  It has been found in the E. Coli bacteria that causes plenty of trouble already, including killing its host if untreated.  But now, E. Coli  is far more formidable and this gene can spread to the genomes of other bacteria relatively rapdily, salmonella for example.  It was first found in China, but there are indications that it has already spread to Laos and Malaysia, and no reason to expect it to stop there.  The problem is simple.  We have nothing to defend ourselves from it or cure it.

Like so many people, I have long feared the rise of a “killer virus” against which we have no defense or cure and which spreads easily.  But there has always been an alternate route for such a deadly organism and that is a bacterial infection, not a viral infection.  Well, here we go.

I first heard of this new gene today at KurzweilAI.net, Ray Kurzweil’s website.  News sites are beginning to pick the story up.  Here is an article at BBC’s website and another at the English-language version of Deutsche Welle.  These are more than sufficient to get the point across, but they have one “weakness”.  Their presentations are too technical.  Yes, that is a responsible approach under most circumstances, but in this case, it also means less reading, less comprehension, and less demand for action.

Is action really required?  Here are a few quotations from the above sources.

  • Prof Timothy Walsh, who collaborated on the study, from the University of Cardiff, told the BBC News website: “All the key players are now in place to make the post-antibiotic world a reality.  If MCR-1 becomes global, which is a case of when not if, and the gene aligns itself with other antibiotic resistance genes, which is inevitable, then we will have very likely reached the start of the post-antibiotic era. At that point if a patient is seriously ill, say with E. coli, then there is virtually nothing you can do.”
  • Dr. Walsh, “an expert in antibiotic resistance, is best known for his discovery in 2011 of the disease-causing antibiotic-resistant superbug in New Delhi’s drinking water supply” again – “MCR-1 is likely to spread to the rest of the world at an alarming rate unless we take a globally coordinated approach to combat it. In the absence of new antibiotics against resistant gram-negative pathogens, the effect on human health posed by this new gene cannot be underestimated.”
  • “The transfer rate of this resistance gene is ridiculously high, that doesn’t look good,” said Prof Mark Wilcox, from Leeds Teaching Hospitals NHS Trust.  His hospital is now dealing with multiple cases “where we’re struggling to find an antibiotic” every month – an event he describes as being as “rare as hens’ teeth” five years ago.  He said there was no single event that would mark the start of the antibiotic apocalypse, but it was clear “we’re losing the battle”.
  • Prof Laura Piddock, from the campaign group Antibiotic Action, said the same antibiotics “should not be used in veterinary and human medicine”.  She told the BBC News website: “Hopefully the post-antibiotic era is not upon us yet. However, this is a wake-up call to the world.”

For those interested in the actual study, an abstract (and a full copy if you are a subscriber) can be found here.  It was published last Wednesday.

As you read the articles, you will find that considerable emphasis is placed on the misuse of antibiotics.  I agree.  There is also some emphasis on the technical aspects, the sort of thing most of the public will not understand or care about, frankly.  Fine, but it waters down the impact of these findings and, perhaps worst of all, the lack of any real knowledge as to how far this gene-based infection has spread.

Actually, I would expect more on that topic if governments and health agencies were on top of this as, after all, the study wasn’t written and published overnight.  As they write at the Lancet, “The prevalence of mcr-1 was investigated in E coli and Klebsiella pneumoniae strains collected from five provinces between April, 2011, and November, 2014”, so this is something that has been known for awhile, but only now has reached a level that triggers a serious response.

This is science.  It takes time and you need to be sure you have it right before you publish.  And if you are part of the general media, it is best to downplay it or simply ignore it if it is just a possible problem, not a real threat.  There is no need to cause “unnecessary panic”, they might say.  That phrase bothers me in this case.  I have experience with that.

Although my graduate work at Cornell was in nutrition policy planning when I was an active consultant on public health and nutrition problems in the “developing world” of the last century, I was very much concerned with SARS in China back in 2003 when it suddenly appeared in the news.

In those days, I had a blog called Global Angst, no longer in operation, which drew hundreds of daily readers and, as SARS developed, thousands.  I had raised a question about the fatality (mortality) rate of the SARS virus.  Some of the statistical information available in the press didn’t make sense.  The World Health Organization (WHO) was stating that the fatality rate was 4% or less, but stats I had seen indicated it was much higher.   It seemed to be a question of how you determine a fatality rate.  Let me give you a very simple example.

You have 100 cases of a deadly disease.  90 patients are in process, 10 have completed their course.  Two patients have died so far.  You can say that the fatality rate is 2% as only 2 of 100 cases have resulted in death.  Or you can say that, since 90 of them are not yet determined, the rate is 2 out of 10, or 20%.  That’s a pretty big difference.

One man who read my blog wrote me, Dr. Johan Karlberg, both a physician and a PhD, the Director of the Clinical Trials Centre at the Faculty of Medicine of the University of Hong Kong.  He was collecting the real-time stats and publishing them, but very few people were aware of that as his center’s site was not at all well-known.  His stats suggested the fatality rate, as a percentage of those who had completed the course of the disease, was around 16%.

This really upset me.  Global “authorities” were not providing the whole story.  indeed, they were distorting it, so I did my best to spread the word of Dr. Karlberg’s work as far and wide as I could.  He and I began a correspondence by email and phone on the topic, discussing a possible project to deal more effectively with the reality on the ground.  We were concerned that the virus might be easily transferred and thus a true global threat.

As it turned out, that was not the case, so we put the project aside and went our separate ways, but I will always think well of him.  He reported the reality, despite working in what was already part of the PRC which was not interested in bringing any more bad publicity to its failure to alert the world to SARS until it was too big to ignore.  If you remember that period, you will remember how seriously China was criticized on that point.

Some months later, when pushed by journalists, the WHO did finally admit that it had used the lower statistic to avoid “unnecessary panic”. The truth did eventually come out, but if SARS had turned out to be highly infectious, that admission would still haunt WHO today.

I was very much impressed with the professionalism and honesty of Dr. Karlberg 12 years ago and, although he has surely long forgotten me, I have not forgotten him and I am pleased to note that he is now a Vice President of ACRES, the Alliance for Clinical Research Excellence and Safety in Cambridge, Massachusetts.

Forgive me if I feel a twinge of déjà vu today.  Yes, I know.  This is 2015, not 2003.  Yes, the danger has been announced and the articles do express some serious concern, but I am going to be watching it carefully.  “Authorities” have already gotten a bad name for themselves in many nations for their failure to deal with problems before they got out of hand.  We cannot afford that with this deadly threat.

I think the need for considering the worst scenario is extremely urgent.  This is a gene that can spread rapidly to multiple bacteria beyond E. COli, not a virus like SARS that spread slowly and with difficulty from person to person.   MRC-1 has the real potential to be a global disaster.  It deserves not just immediate attention, but the resources required to deal with it immediately too.

Warned of a +potential “perfect storm”, this is not a good time to treat MRC-1 as a “tempest in a teapot”.


This is a personal blog, more of a personal notebook, unadvertised and without promotion. I try to post on a weekly basis, but there is no guarantee. Should you stumble across it and wish to be notified of new posts, just enter your email address at the upper-right of this page. I have no other use for email addresses. Rest assured, yours will be kept private. I also now tweet to share articles and essays that I think are important, but do not have room for here. You are welcome to make comments, if they are on topic and polite. I have no time or space for insults, foul language, or anything I judge to be offensive to readers.

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A Lesson for America from the Frontier

If you were to ask me to identify the most damaging war in American history, it would have to be the war it fought with itself from 1861 to 1865. In retrospect, many argue that the Union was never in danger of losing the war. But at the time, that was not the opinion of everyone, especially those in the developed world of its day.

Although he regretted the words later, more than a few Europeans would have agreed with William Gladstone, Britain’s Chancellor of the Exchequer, in a speech at Newcastle in October of 1862, “We may have our own opinions about slavery; we may be for or against the South; but there is no doubt that Jefferson Davis and other leaders of the South have made an army; they are making, it appears, a navy; and they have made what is more than either – they have made a nation.”

Is no surprise that he felt that way. After all, the United States seemed to be determined to destroy itself. A nation that could clearly be called a frontier market of its time appeared to be collapsing in full view of the global public.

Yet, on January 8, 1863, California’s Governor Leland Stanford ceremoniously broke ground in Sacramento, California, to begin the western end of what was to become America’s transcontinental railroad. As the North and South seemed to be destroying the Union, the East and West were tying it together, reducing the travel time between its two coasts from six months or worse to a single week when it was completed in 1869, built in great part by veterans of both sides of the war.

in the midst of all the death and devastation of the Civil War, Americans continued to build for the future.

Humans love their categories. Today, adjectives like advanced, emerging, and frontier are used to describe economies, as once First, Second, and Third Worlds were used – over-simplifications based on the assumptions of the elites of North America and Europe.

After nearly five decades of working as an advisor to governments in more than 40 nations all over the world, I have found only two categories that are useful in judging which nations have the brightest future.

Once I had settled in and gotten to know some local people, whether taxicab drivers or government ministers, I would choose a quiet moment and raise a simple topic. Tell me about your nation.

Everyone would start with the present, understandably. There was nothing to separate them into categories at first. However, within minutes they would divide and move in two opposite directions.

The first group clearly drew its inspiration from its hopes for the future. Their focus was on what was to be and how to reach it. The second group sought its inspiration from the glories of the past. Their focus was on something they had once had, or thought they did, but could never have again.

As the years passed and I had the opportunity to return to some of these nations or at least continue to monitor their progress, I discovered a simple truism. Those who drew their inspiration from the future had a future and a good one. Those who drew their inspiration from the past failed more often than not.

It wasn’t the size of a nation’s population, its economy, or its stock market that drove the nation’s future. It was the source of their inspiration. Today I am convinced that it is the single most important factor in separating those who will be successful in the future from those who will not. For years, I rejected this as being much too simplistic, but I am now a believer.

Since I first arrived in Panama in 2004 and decided to make it my new home, I have seen two full five-year administrations complete their terms and am currently watching a third administration as it enters its second year. Each administration was led by a man from one of the three major political parties. Since the days of Manuel Noriega in decades past, Panamanians have never re-elected the party in power. Beyond parties, each president has been very different in terms of personality and style.

But they have one thing in common. Despite their differences, all three have had one goal – the stable economic development of the nation.

So it was no surprise to me to read in Standard and Poor’s recent reconfirmation of Panama’s investment grade status the words, “After its first year in office, the Administration of President Juan Carlos Varela has maintained continuity in key economic policies while strengthening the country’s public institutions.” Exactly.

Don’t misunderstand me. Panama is a genuine democracy and it can be seen every day in the newspapers as supporters and opponents of the administration carry on a non-stop debate. The issues are not trivial nor are they simple. Corruption is being addressed as it has never been before. The charges and counter-charges are serious, but the nation remains very stable. On the surface, it may seem that we are as divided here as you are in the US, but that is not really true. Behind all the shoving and shouting of a democracy, there is an underlying current of faith in the future evident to anyone, not just Standard and Poors.

If that sounds easy, it isn’t. The President was elected last year with less than 40% of the vote. His political party’s candidates for the National Assembly received only a little over 20% of the votes, leaving its delegation third in size. And yet legislation is proposed, debated, and passed. Spanish has no single word to fully express the nature of “compromise” as we use it in English, but that hasn’t stopped Panamanians from constructively compromising to get business done. That is the foundation for S&P’s statement.

Safety and stability are foremost in the minds of the great majority of our expatriate residents, not North Americans, but people from other Latin American nations. They did not come here for the beautiful beaches. They have their own. They didn’t come here for the warm weather. They have that too. They didn’t come here for the ancient pre-colonial ruins. There are none. These are people who are familiar with Panama and what it offers in comparison to other nations, including the US – safety for their families, safety for their possessions, a growing private sector, and above all, a stable and friendly environment.

Even Europeans are catching on. In the first seven months of this year, the number of Italians receiving residency visas in Panama was nearly double that of Americans. There is a search for safety and stability in Europe as well.

From the outside, the United States seems to be a nation mired in its past, desperately seeking someone else to blame. But it was not China that was responsible for Americans turning their backs on common sense and driving a stock market to ridiculous heights. It was not immigrants, legal.or illegal, who were responsible for Americans throwing out the book on mortgage lending. We did both to ourselves. Without these two self-inflicted disasters, we would not be in the mess we are in today.

I look on the current political situation in my native nation with genuine dismay. Two things seem to be lacking. The first is taking responsibility for our past. The second is turning our eyes to the future. We can learn a lesson from Panama. We can have our differences, great though they may be, and still remain committed as a nation to a future of growth and prosperity. And when we need to consider compromise to get to that future, we will do it.

Ultimately, I hope someday soon to read that the United States has also “maintained continuity in key economic policies while strengthening the country’s public institutions.”


This is a personal blog, more of a personal notebook, unadvertised and without promotion. I try to post on a weekly basis, but there is no guarantee. Should you stumble across it and wish to be notified of new posts, just enter your email address at the upper-right of this page. I have no other use for email addresses. Rest assured, yours will be kept private. I also now tweet to share articles and essays that I think are important, but do not have room for here. You are welcome to make comments, if they are on topic and polite. I have no time or space for insults, foul language, or anything I judge to be offensive to readers.

Posted in Global analysis, Global politics, US economy, US politics | Leave a comment

George Friedman on: The Crisis of the Well-Crafted Candidate

Those who read this blog probably know that I respect George Friedman and his global analytical firm, Stratfor. Today, he did something he normally refuses to do. He discussed the current US Presidential nomination process. In addition, he has given us permission to republish his essay so you do not need a paid subscription to read it. So, for the second time in a row, I am sharing a Stratfor essay with you. This does not necessarily reflect my own feelings. Those are immaterial at the moment. I provide this as “food for thought”, in the same manner as I read it.

The Crisis of the Well-Crafted Candidate
by George Friedman

For the past several years, I have been writing about the emerging political crisis in Europe. The inability of European mainstream political parties to face the fact that the European Union is not functioning as intended would, I have argued, delegitimize these mainstream parties and bring about the emergence of seemingly exotic challengers. We have seen these parties emerge throughout Europe — most right wing, some left wing, all sharing a sense of the failure of the mainstream. In general, they have not yet taken power, but they have reshaped the dynamics of European politics, as can be seen in the twin crises of the Greek economy and immigration. Borders are being closed, the expulsion of a member taken as a serious option. Things that were unthinkable 10 years ago have become common currency, and European mainstream political parties are reeling.

Something not altogether dissimilar appears to be happening in the United States. The politicians who were expected to be leaders in the race for the Republican Party’s presidential nomination have been, for the moment at least, completely marginalized. Jeb Bush, Marco Rubio and Rand Paul, all considered likely frontrunners, are far behind. Bush in particular had the support of the party’s dominant operatives and was expected to be ahead. Instead, Donald Trump, followed by Carly Fiorina, have substantial leads. In the Democratic Party, Hillary Clinton, the candidate of the Democratic establishment, continues to hold a lead, but Bernie Sanders — senator from Vermont and an avowed Socialist — is not only closing in but leading in New Hampshire and Iowa.

In the Republican Party, Trump — a television personality and billionaire real estate developer who has never held a political post in his life — is not only leading the polls but has been ahead almost from the beginning. Trailing Trump are a former business executive who is a woman, and a renowned neurosurgeon who is black — not something expected in the Republican Party. In the Democratic Party, a Socialist — not a term of endearment to most Americans in the past — has become a serious candidate. There has been much speculation as to what is happening. This is important enough that, although it is not strictly geopolitical, I need to address it, because it could change the United States’ behavior in some potentially significant ways. Even if the old order reasserts itself, and Bush faces Clinton in the general election, something has happened that must be understood.

The Republican Surprise

The most interesting of these figures is, of course, Trump. From the standpoint of conventional American politics he is entirely inappropriate and should not be leading in the polls. He is. What makes him most interesting is that to the extent he has clear policy positions, they are not conservative. He has supported a single-payer — read government — organized health care system. He supports changes in tax policy that would abolish tax breaks for hedge fund managers. In spite of his position on immigration, these two views, and particularly his position on health care, ought to make him anathema to most sectors of the Republican Party. They haven’t.

In my view, the Republicans don’t care about his positions. Politicians have exhausted the electorate by taking policy positions on which they will make policy speeches. To the media, this makes them politically serious. But the fact is that the positions they take during an election matter little. There are three reasons for this. The obvious one is that what politicians promise and what they do are very different things. Second, the way the founders structured the presidency, few presidential policy positions will see the light of day. The president presides. To the extent that he governs, he does so along with Congress and the Supreme Court, neither of which he controls. Finally, policies are what presidents might want to do, but they have little to do with what presidents will do.

George W. Bush never imagined in the campaign of 2000 that his major focus would include a war in Afghanistan. Barack Obama in particular was tremendously adept at making speeches in which all sides could sense that he wanted what they wanted. He was sophisticated in political seduction and in the use of policy positions to facilitate that. When he became president, he was constrained by the constitutional system, by both the domestic and international political reality and by the fact that most of his campaign promises were simply designed to gain votes.

As Trump’s popularity shows, in the Republican Party, the draw of ideology has weakened, as has the attraction of particular policies. What there is a desire for is a person who is prepared to say what he thinks, without apology and without concern for the consequences. In other words, the Republicans are looking for authenticity. This desire is not unique to the Republicans, either. David Axelrod, who was an adviser to Hillary Clinton, was quoted last week as saying she needs to get away from her talking points. What Axelrod meant was that in this environment, her constantly calculated most effective sound bite has become the least effective sound bite. Sanders is a socialist, he has always been a socialist, and he runs as a socialist. Few regard themselves as socialists, but in the Democratic Party, having a candidate who is authentic, who is not running in order to win but who wants to win because of who he is and what he wants, is powerfully seductive.

The Power of Honesty

Trump and Sanders share something important. Neither is prepared to compromise who he is for the office he is running for. When Bill Clinton ran into political trouble, he spoke unapologetically about triangulating his position. What that means, stripped of its jargon, is that he would select positions that would maximize his popularity and support. To put it bluntly, there was nothing he believed in as much as his own political success. You cannot imagine Trump or Sanders triangulating their positions.

Let’s bear in mind that Clinton won re-election. Triangulation worked. And announcing that he was triangulating did not alienate everyone. Clinton represented the high point of successful and open adoption of popular positions. Bush and Obama continued to do it, but it became less and less successful. It is one thing to know you are being conned in a time of relative prosperity and peace, and another thing to know you are being conned when neither prosperity nor peace is certain.

Trump’s success is not rooted in saying things that others secretly agree with. It is rooted in very clearly not caring whether anyone agrees with him or not. He is not particularly knowledgeable in some areas and he says he doesn’t have to be because he will hire people who are knowledgeable. A candidate both admitting limits to his knowledge and asserting that it doesn’t matter because he will develop staff is refreshing in its honesty and states what everyone should know: Presidents don’t know everything. They hire people for that. Trump was expected to collapse in the polls for saying this and other things. He did not. It was not because the public agreed with what he said. It was that the public longed for someone who was authentic. The same could be said for Sanders. He might have been a hippie who wrote ruminations on sex in his 20s, but so what? Sanders had lived not in preparation for running for president, but for the sake of living. We all have things in our past. There can be no “gotcha” from the press if you don’t care what they think.

There is a deep debate over whether you should vote for a candidate for president based on what he believes or based on who he is. I have written on this and made the case for character being more important. Candidates can endlessly declare their beliefs, but apart from the limits of a president’s power, a presidency is not about policies; it is about how a president deals with an invasion of South Korea, Soviet missiles in Cuba or 9/11. There is no policy paper for the unexpected, and the most important thing that will happen in any presidency is the unexpected. The heart of a presidency is character, and the only way to judge a president or a candidate is with an authentic view. That gives voters a chance to judge what a president might do if the unexpected happens. Therefore, why concern yourself with what a president will do if Congress, the Supreme Court and the Islamic State leave him or her alone? They won’t.

There are cycles in politics, and we have reached the end of the cycle in which creating artificial personas will work for candidates. The enthusiasm for Trump is not because of what he believes, but simply because he is prepared to show himself. The same truth works, in different ways, for other improbable candidates, and is ominous for the more conventional ones.

I have written in The Next 100 Years that America operates on a roughly 50-year cycle and that the last cycle ended with Jimmy Carter and the current one began with Ronald Reagan. If I’m right, then we are about 15 years from the end of this cycle, which means that internal problems and tensions will mount. The 2016 election will be most noteworthy because, at least for a while, the most improbable things seemed ordinary. Trump’s status as a credible presidential candidate and Sanders’ potential among the Democrats should startle anyone. I will lay odds that neither will win. But that isn’t the point. The thirst for authenticity is there among the electorate, and it will reshape the political landscape.

The Europeans have to solve crises, and that is the root of their problems. They have less time to worry about authenticity. The United States is not facing Europe’s crisis, so it can approach its crisis in a slower and less urgent way. But the revolt against the triangulated candidate is real and will not go away. We need to take this shift seriously in terms of what kind of presidents there will be in the future and in terms of the periodic crises that affect all countries, including the United States. The desire for political authenticity is not a crisis for America yet. But it is a harbinger of change far more important than a debate between ideological extremes. It is a debate over what makes someone a leader.

The Crisis of the Well-Crafted Candidate is republished with permission of Stratfor.


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