Category Archives: Reviews and Roundups

2012: Big Science’s big year

Global science will make global headlines in 2012, predicts Rolf Heuer, director-general of the European Organisation for Nuclear Research (CERN)

The Economist, Nov 17 2011

In 2012, our understanding of the universe we live in will change for ever. That may sound like a very bold statement, but in reality it is a prediction I could have made just about any year for as far back as I can remember. The reason is that the pace of science has never been as fast as it has been over the past few decades. Thanks to the increasing globalisation of science, helped along incidentally by CERN’s gift of the web to the world in 1993, scientific news travels faster, allowing scientists wherever they may be to pick up a topic and run with it. This is great for science, because no country or region has a monopoly on intellect. Scientific globalisation allows us to tap into genius wherever it may be.

It has also brought incredible practical benefits to society. Almost every aspect of modern life relies on scientific underpinnings, from medicine to it and from agriculture to energy. Even those most esoteric branches of physics, quantum mechanics and relativity, have found their way into our everyday lives. Although few users of mobile phones and GPS systems may realise it, their favourite gadgets rely on the early-20th-century science of the likes of Niels Bohr and Albert Einstein.

And there’s the rub: we as a global society are increasingly dependent on science, yet increasingly ignorant of it. This is not a healthy state of affairs, and it is one that science must address, both by engaging more with the wider world and by pursuing the globalisation of science more vigorously than ever.

We all have important scientific choices to make, and we need to be equipped to make them rationally. Do we vaccinate our children for MMR? Do we pin our banners to the mast of renewable energies, or is nuclear the way to go? These are not easy questions, but the responses we give as individuals and as a society have far-reaching consequences.

The coming year will be an important one for scientific re-engagement with society. But before examining why, it’s always useful to see what lessons can be learned from the past, and the Large Hadron Collider (LHC) provides a useful case study. Originally conceived as a regional facility for Europe, the LHC has evolved into a research machine for the world, built in Europe with contributions from countries around the globe. It has shown what can be done when people from divergent cultures come together to pursue a common goal, and along the way it has captured the popular imagination like no science project since the moon shots of the 1960s.

Experiments will prove or disprove the existence of the Higgs particle

It is fair to say that the LHC is among the most successful international scientific projects of its age, and that’s where the lesson from history lies. The LHC’s host lab, CERN, was established from the outset as an international organisation with governance mechanisms that have stood the test of time and have allowed countries that are not CERN members to invest with confidence. As other fields of science follow their own routes to globalisation, they would do well to look at the CERN model.

In 2011 the directors of all the world’s leading particle-physics labs agreed to work out a global vision for the future development of the field. This vision should ensure that science is carried out at a national or regional level where possible, while avoiding unnecessary duplication of effort and guaranteeing open access to scientists. It should also ensure that projects requiring more substantial resources are established as global from the outset. In 2012 Europe will deliver its input to that vision in the form of a European strategy for particle physics to be presented to decision-makers in Brussels in the autumn.

The answer the world has been waiting for

Meanwhile, across the Atlantic, American particle physicists will be entering a vital phase as the Fermi National Accelerator Laboratory seeks government approval for its next big project. If successful, Fermilab will require international support, joining CERN on a common evolutionary path from regional to global facility. This will not be the first time that American particle physics will have sought international contributions, and again there are lessons from the past. If America is to host international facilities, it needs to put in place funding structures for long-range science that are trusted by all participants.

To conclude where I began, in 2012 the LHC will change our view of the universe. Its experiments will prove or disprove the existence of the Higgs particle, and when they do it will make headlines around the world. That such an esoteric piece of science should have captured the popular imagination is a very good thing. Perhaps it will encourage people to look into the science that they rely on every day, enabling them to make the kind of informed decisions that everyone needs to make about the applications of science. And perhaps it will stimulate governments to look at the cern model as they struggle with the challenge of further scientific globalisation.

2012 could prove an even wilder ride than 2011

A protester stands in front of a burning barricade during a demonstration in Cairo, January 28, 2011. REUTERS/Goran Tomasevic

By Peter Apps, Reuters, Dec 15 2011

The ancient Mayans attached special significance to 2012, possibly the end of time. That has spawned a rush of apocalyptic literature for the holiday season.

But you don’t have to believe the world is about to end to realize that next year contains perhaps the widest range of political risks to the global economy in recent history.

With elections and leadership changes in the most powerful countries, Europe in crisis, ferment in the Middle East and worsening economic hardship driving unrest and discontent everywhere, 2012 could be just as volatile as 2011 if not worse.

The current year may yet carry a sting in its tail, with worries over the euro and jitters over a possible Israeli strike on Iran likely to keep financial markets and policymakers on tenterhooks all the way to the New Year.

More than three years after the collapse of Lehman Brothers prompted the worst financial crash since the Great Depression, economic turmoil looks to be driving political upheaval in what could become a particularly disruptive feedback loop.

Economic stresses — from rising food prices to worsening economic hardship in the developed world — were at the heart of many of 2011’s political stories. As they intensify, political volatility, gridlock, confrontation and conflict — whether domestic or international — look set to worsen.

“It’s going to get worse before it gets better,” said Jonathan Wood, global issues analyst at London-based risk consultancy Control Risks. “If you look at what’s been driving events this year, none of the factors has gone away and many of the economic drivers are still growing.”

Presidential elections in the United States, France and Russia and the dual transition of power at the top of China’s Communist Party will add to the uncertainty. They may make it harder for political leaders to find compromises or push through tough policy choices.


That, many analysts warn, brings with it a mounting risk of political gridlock coming just as the world needs leadership most. The failure of the U.S. Congressional “super committee” to agree on how to reduce the budget deficit may be a sign of things to come domestically in many countries.

President Barack Obama faces a tough re-election bid, whomever the Republicans choose to challenge him, because of a sluggish economy, 8.6 percent unemployment and a squeeze on the middle classes due to fallen home and stock prices.

A fragile global consensus forged at a 2009 summit of leaders of the Group of 20 major economies may be gone for good, replaced by what Ian Bremmer, president of political risk consultancy Eurasia Group, calls a rudderless “G-zero” world.

Top of the list of 2012 risks for many analysts is the unresolved sovereign debt crisis in the euro zone.

If the 17-nation European single currency is to survive in its current form, its members will have to confront harsh economic adjustments and seismic political reform. Last week’s Brussels summit, the 16th since the start of the two-year-old crisis, was billed by some as the last chance to save the euro.

While euro zone leaders and some non-euro states agreed to forge a closer fiscal union with stricter budget discipline, the outcome fell short of guaranteeing the euro’s ultimate survival.

At worst, 2012 could still see a disorderly breakup bringing with it a chain of defaults, bank runs and civil unrest, not to mention a savage global economic shock worse than that of 2008.

Ultimately, however, many believe the euro will endure — although not without colossal strains as it tries to reconcile very different economies such as Germany and Greece.

“The greatest single risk is obviously the euro zone but it might also be the risk that is sorted out the quickest,” says Alastair Newton, a former British government official who is chief political analyst at Japanese bank Nomura.

“But even if that happens then you’re still going to have very low growth and a rise in social unrest in the southern euro zone in particular and across Europe in general. Even in the best case scenario, 2012 looks pretty rough.”

For others, the Middle East remains the most important area to watch for potential disruption to the global economy.

Almost a year after the beginning of the “Arab Spring” democracy movement, the region remains in political flux with untested Islamist parties winning power across north Africa and Syria’s uprising slowly turning towards outright civil war.


After the fall of several veteran Western-backed Arab rulers, the withdrawal of U.S. forces from Iraq is seen as the latest sign of the diminishing influence of Western powers in a region they dominated for some 200 years.

In the resulting vacuum, regional powers such as Turkey, Saudi Arabiaand an isolated and perhaps more erratic Iran appear in increasingly open confrontation.

Western intelligence estimates that Iran is moving closer to a viable nuclear weapon have a shorter timeline, and some analysts say 2012 could be the year when Tehran’s enemies decide to go beyond covert sabotage with a military strike that could spark retaliation against oil supplies in the Gulf.

“The bigger wild card out there is an Israeli attack on Iran’s nuclear facilities and elements of regime control,” says Thomas Barnett, chief strategist of political risk consultancy Wikistrat, saying neither the Israeli nor the Iranian leadership looks inclined to back down. “The setting here is scary… something has got to give in this strategic equation.”

Even if the world avoids a devastating shock such as a Middle East war or a European breakdown, many analysts fear the business of politics and policy-making could become increasingly difficult around the world.

With economic growth slowing and unemployment creeping up, most analysts believe the risks of social unrest will continue to rise across much of the developed and developing world.

“We have all the problems you’d expect from economic hardship. At some stage we will have rising food prices which are always destabilizing and we have a question over whether China will overheat,” says Elizabeth Stephens, head of credit and political risk at London insurance brokers Jardine Lloyd Thompson.

“Even a fall of one or two percentage points of GDP (in China) could be enough to really question social stability if they can’t keep job creation going… We (also) have probable ongoing unrest in Europe and the ongoing transition in the Middle East and North Africa could be quite unstable.”

In the dying days of the year, other long held assumptions of stability have be thrown into question — not least by the rising tide of protest against Russia’s Vladimir Putin. The one certainty for 2012, many believe, is more of the unexpected.

“2011 was a nightmarish year to be a policy maker or an investment portfolio manager but it was a great one to be a political analyst,” says Newton. “I’d certainly expect the same for next year.”


A world in denial of what it knows

By Ray Stubblebine, Reuters (1 Jan 2012)

Secretary of State Colin L. Powell argued before the United Nations Security Council in 2003 for disarming Iraq, holding the kind of vial that could contain anthrax.

COULD there be a single phrase that explains the woes of our time, this dismal age of political miscalculations and deceptions, of reckless and disastrous wars, of financial boom and bust and downright criminality? Maybe there is, and we owe it to Fintan O’Toole. That trenchant Irish commentator is a biographer and theater critic, and a critic also of his country’s crimes and follies, as in his gripping if horrifying book, “Ship of Fools: How Stupidity and Corruption Sank the Celtic Tiger.”

He reminds us of the famous if gnomic saying by Donald H. Rumsfeld, then the United States secretary of defense, that “There are known knowns… there are known unknowns … there are also unknown unknowns.” But the Irish problem, says Mr. O’Toole, was none of the above. It was “unknown knowns.”

What he means is something different from denial, or evasion, irrational exuberance or excess optimism. Unknown knowns were things that were not at all inevitable, and were easily knowable, or indeed known, but which people chose to “unknow.”

Unknown knowns were everywhere, from Wall Street to Brussels, from the Pentagon to Penn State. Ireland merely happened to offer an extreme case, where “everyone knew.” They just chose to forget that they knew — about the way that Irish banks ran wild, how easy credit fueled a monstrous explosion of property prices and speculative house-building. Bertie Ahern, the Irish prime minister at the time of the rapid economic growth, merely boasted, “The boom is getting boomier,” preferring to unknow the truth that booms always go bust.

Beginning in 2008, the skies were lighted up by financial conflagrations, from Lehman Brothers to the Royal Bank of Scotland. These were dramatic enough — but were they unforeseeable or unknowable? What kind of willful obtusity ever suggested that subprime mortgages were a good idea? An intelligent child would have known that there is no good time to lend money to people who obviously can never repay it.

Or recall how we were taken into the Iraq war. That was the origin of Mr. Rumsfeld’s curious words 10 years ago. When he murmured about “things we do not know we don’t know,” he was touching on the unconventional weapons that Saddam Hussein might — or might not — have held.

In a sense, Mr. Rumsfeld was more right than he realized. Those of us who opposed the war may be asked to this day whether we knew what weaponry Iraq possessed, to which the answer is that of course we didn’t. Nor, as it transpired, did President George W. Bush, Vice President Dick Cheney, Mr. Rumsfeld or Prime Minister Tony Blair of Britain.

But that was the wrong question. It should have been not “what weaponry does Saddam Hussein possess?” but “Is Saddam Hussein’s weaponry, whatever it may be, the real reason for the war, or is it a pretext confected after a decision for war had already been taken?” The answer to that was obvious and could have been known to all, but too many people chose to unknow it.

Then there was another unknown known: the likely consequences of an invasion. Shortly before it began, Mr. Blair met President Jacques Chirac of France. As well as reiterating his opposition to the coming war, Mr. Chirac offered the prime minister specific warnings. Mr. Blair and his friends in Washington seemed to think that they would be welcomed with open arms in Iraq, Mr. Chirac said, but that they shouldn’t count on it. It was foolish to think of creating a modern democracy in an artificial country with a divided society like Iraq. And Mr. Chirac asked whether Mr. Blair realized that, by invading Iraq, they might yet precipitate a civil war.

This has been described in a BBC documentary by someone present, Sir Stephen Wall, a Foreign Office man then attached to Downing Street. As the British team was leaving, Mr. Blair turned and said, “Poor old Jacques, he just doesn’t get it,” to which Sir Stephen now adds dryly that he turned out to get it rather better than “we” did.

At that time, Mr. Chirac was reviled in America, and his career has just ended in disgrace, with a court conviction for embezzlement. But who was right about Iraq? All the calamities that followed the invasion were not only foreseeable, they were foreseen. And yet for Mr. Blair, as well as Washington, they were unknown knowns.

One more such, bitter as it is to say so when many people have been ruined, was the Bernard L. Madoff fraud. For years, his investors gratefully and unquestioningly accepted returns that were strictly incredible. Loud warning voices sounded. Harry Markopolos, a former investment officer, exhaustively back-analyzed Mr. Madoff’s supposed figures by computer. He spent nearly nine years repeatedly trying to explain to the Securities and Exchange Commission that these figures were not merely incredible but mathematically impossible. And still the S.E.C. chose to unknow it. Leos Janacek wrote a harrowing opera called “The Makropulos Affair”; Peter Gelb at the Met should commission someone to write “The Markopolos Affair” as a fable for our times.

In a very different kind of scandal, not everyone at Penn State, and certainly not every fan, knew what had happened in the showers. But quite enough was known by people who could have acted. They chose instead to unknow. And so to another classic unknown known, the euro. The recent summit in Brussels turned into a silly melodrama, with a British prime minister, David Cameron this time, once more playing the pantomime villain. But Mr. Cameron was right, if for the wrong reasons, to oppose the European Union’s latest frantic (and doomed) plan to prop up the euro.

If truth be told (but it so rarely is!), the euro cannot work and could never have worked. That is, a single currency embracing countries as diverse in social culture, productivity, work practices and taxation as Germany and Greece, or the Netherlands and Portugal, is economically impossible without much closer fiscal and financial union — which is politically impossible. Anyone could have known that at the time the euro was introduced, but for the rulers of the European Union it was their very own unknown known.

“The Cloud of Unknowing” is a medieval classic of mystical writing, and unknowing still hangs over us. It will be a happier new year if we can dispel some of that cloud, try to unknow less, and know a little more.

Geoffrey Wheatcroft is the author of “The Controversy of Zion,†“The Strange Death of Tory England†and “Yo, Blair!â€

Who owns this mess?

By Mark Allen Miller, NYT (Dec 2, 2011)

Here we are, three years into the global financial crisis, and we’re still flying blind. We don’t even know what we don’t know. What we do know is that we’re stuck in a huge contraction of private credit; no one is making enough loans and investments to expand or start businesses and get the economy growing. The remedies applied by U.S. and European governments tried to treat the symptoms — bad debts, shaky banks, floundering businesses, people losing their homes, rising unemployment, currency wars — and not the disease.

Had those symptoms been the real cause of the crisis, “vulture capitalists” should have swept in by now. They should have spotted the signals that send knowledge of who is in trouble and — following the laws of supply and demand — picked up on the cheap the potentially lucrative remains of the nonperforming assets and transactions, correcting the deficiencies that led to them.

They would have bought a block of old houses and revamped it into a 20-story high-rise with two restaurants and ample parking.

They would have taken over an airline unable to fill its first-class section and rearranged it into a discount, no-frills option with twice the number of seats per plane. That hasn’t happened to any significant degree. Why?

Mechanisms in the United States and Europe to record and signal the crucial knowledge that determines whether it is reasonable to grant private credit — who has the property rights over the assets, equity and liabilities, and therefore holds the risks, and what the opportunities are — are no longer reliable. The knowledge system is broken.

You could say that the knowledge organized by property and transaction records plays the same role in credit that DNA plays in biology: it stores the long-term, measurable information that governs how the different cells of the body come together.

Balance sheets that once clearly signaled facts, allowing outsiders to infer what that company owned — and owed — have too often been mutilated. Some companies in difficult financial situations can legally resort to “off balance sheet accounting”— transferring the bad news to less visible ledgers, called Special Purpose Entities (SPEs) — or to sweeping information regarding their debts into illegible footnotes. When Enron collapsed, it had 3,500 SPEs.

In the United States, mortgages have been bundled into marketable liquid securities, sliced and diced in different ways, robo-signed into so many piles that it is difficult to identify who legally owns some 60 percent of them.

Much of the financing for mortgage bundling came from idiosyncratic financial derivatives that were not recorded in any standardized way. That makes it difficult to locate, value, gauge their risk and find the resources to cover that risk. The estimated notional amount of the world’s derivatives is some $600 trillion — 40 times what the United States produces in one year. That’s a lot of missing knowledge.

Accounting rules now allow companies in certain situations to establish the value of their assets using measurements other than market prices. Countries like Greece and Italy have borrowed through the “repo markets” short-term funds they don’t have to report as loans, making them look more solvent than they are. Knowledge has not only been debased and withheld, but distorted.

Having spent 150 years opening up their feudal, cloistered and nontransparent economies to allow markets to work, certain sectors of the financial industry, and others in governments in the United States and Europe, have devoted the last 15 years to shredding the very reforms that ensured that capitalism had the knowledge to function fairly on a global scale.

Economic activity has been allowed to cross from the rule-bound system of property, where facts and interests are recorded and built into useful knowledge, into the incomplete legal space of global finance, where arbitrary interests trump facts and paper swirls mindlessly.

How can anyone be comfortable extending loans if balance sheets don’t signal all the facts? If those who hold the assets and the risks cannot be easily located? How do you know which banks and countries are solvent, if you cannot determine how many toxic assets they hold; if the legal owners of mortgages can’t be found; if banks can’t clear their books because courts continue to stop foreclosures because titling is unclear; if there is little information on whether those who claim they can cover risk defaults have the assets to do so?

This, then, is not your usual financial crisis. The plummeting economy is the symptom. Diminishing knowledge is the disease. Without property and transaction records that allow us to infer potential benefits and losses, markets can’t work.

That’s what we’re trying to do in emerging markets today — and why we are emerging, from my native Peru to Tanzania, India and China. We are pushing to get people who have never been recorded onto the books, accepting standards so everyone can be held accountable, and thus bring our shadow economies under the rule of law.

In India, for example, the visionary former chief executive of Infosys, Nandan Nilekani, is working with the government to identify and locate every one of that country’s 1.2 billion people so they can earn the trust of businesses and banks.

Tanzania recently created Mkurabita, a program to formally record and update knowledge about assets, moving them from the informal to the formal economy. Starting in l990, my organization, the Institute for Liberty and Democracy, revamped Peru’s property system. Today, we know that informal real estate that was recorded according to law in l997 was on average worth 700 percent more by 2010; compare that to the New York Stock Exchange, which in the same period rose only 79 percent.

Following our reforms in Peru — designed to make enterprises in the shadow economy legally visible — the “Doing Business” project of The World Bank now provides emerging markets with data to help them put similar reforms in place.

Just about every emerging market — even Russia and China — has enacted laws in recent years to record assets and transactions.

We in the emerging markets now have more knowledge about our formal economies than ever before. That’s why the subprime drama that marked the beginning of the crisis in the United States and Europe is unlikely to happen to us.

As tragic as it was that a number of homeowners of modest means couldn’t meet their mortgage payments and some were forced to turn over their houses to their creditors, nonperforming debts estimated to be worth less than a trillion dollars were hardly enough to trigger a historic, persistent credit contraction. But they did, because the credit that was contracting was not anchored in bills and coins but in the knowledge contained in property reporting and signaling systems, which had deteriorated.

When that paper ceases to be reliable, when it no longer functions as a signal for collateral, as an enforceable guarantee, a credible assurance, or a reasonable measure of risk, then — Whoosh! — private credit vanishes. Just as your identity does when you step up to the immigration counter and discover you’ve lost your passport.

That’s what happened when the subprime crisis exploded. The derivatives that financed the nonperforming sub-prime mortgages were rapidly losing value, threatening to cause a run on the banks because there was — and remains— so little property knowledge about them.

When the United States tried to buy and remove them from the market with the Troubled Asset Relief Program (TARP), officials were unable to locate, classify and price them quickly. They too became a victim of the lack of knowledge. The government was forced to improvise, and the money was used instead to increase public credit, lower interest and shore upthe banks. That remedied the symptoms, but the disease remains.

In emerging and transitional markets, after having injected so many bills and coins into our economies in vain, it is easy to understand why there is no credit without knowledge — it’s not only about money.

Close your books, walk down a busy street and you will see that the businesses and the buildings that cannot get significant credit are those in the informal economy, not recorded in the property systems, the unknowables.

Instinctively, we are aware that what we know about the economy is pretty much what we record. Without records, there is no memory, no knowledge — and thus no grounds for trusting the markets.

Restoring order in the West is beyond the purview of specialists in finance, who do not necessarily have the knowledge, the inclination or the incentives to carry out the down-and-dirty job of repairing knowledge systems.

Fixing all this is a political endeavor. Politicians must muster the courage to rise above the narrow focus of financial adjustments and raise the issue of the recession to commanding heights. I am not calling for more or less regulation, or for injecting more money into the economy, or spending less. I am simply proposing to bring the world of finance under the rule of law and shine light into dark and disordered places.

That’s what the bold reformers did to sort out conflicting property claims after the California Gold Rush, to tame the Wild West, to rebuild war-torn Europe, to reassemble Japan’s feudal order into a market economy — and push China toward one — and to open up Eastern Europe after the fall of the Berlin Wall. Markets cannot work without the knowledge that organized property systems produce. That is how capitalism was built.

Once it is clear that this recession is about the organization of knowledge or, more precisely, the lack of organization, Western governments can step in to get the facts. That will allow them to target the disease without getting stuck in the left-versus-right controversy about regulation and government oversight. We need increased truth-telling; increased recognition of what exists and who owns it.

Hernando de Soto is a Peruvian economist who made enough money in Europe to retire before he was 40. Instead he began studying what makes some countries rich and keeps others poor. His advocacy for formal property rights to lift citizens of developing countries from poverty made him an assassination target for Shining Path, a Maoist terrorist group. He has outlived the Shining Path.

Around the world, rage against the elites

By David Ignatius, Washington Post (Oct 15, 2011)

What’s intriguing about the eruption of Occupy Wall Street is that it’s so similar to other populist movements that are demanding change in nearly every major region of the world. You can’t help but wonder if we aren’t seeing, as a delayed reaction to the financial crisis of 2008, a kind of “global spring” of discontent.

Obviously, circumstances differ: The anti-corporate activists gathered in Manhattan’s Zuccotti Park have a different agenda than the demonstrators in Cairo’s Tahrir Square, or this past summer’s rioting street protesters in Britain and Greece, or the anti-corruption marchers in New Delhi. These movements mostly lack leaders or clear ideologies, so they’re hard to categorize.

But the protesters do share some basics: rejection of traditional political elites; a belief that “globalization” benefits the rich more than the masses; anger about intertwined business and political corruption; and the connectedness and empowerment fostered by Facebook and other social media.

This neo-populism is all the more striking because it seems to transcend traditional political boundaries. The Tea Party movement may wear conservative colors, but it arose as a protest against elites in Washington and on Wall Street who were seen to be profiting at the expense of everyday people. Occupy Wall Street comes at these same issues from the left, but the two movements have much in common.

The Arab Spring is the world’s most potent populist movement, sweeping away governments in Tunisia, Egypt and Libya. These uprisings began as leaderless explosions of indignation — blurring the usual lines of capitalist and socialist, Muslim and Christian. These cleavages have returned, especially in Egypt. But the core of the revolution there remains a rage against traditional elites.

Protests in Europe have the same note of mass indignation. In Greece, Italy and even France, you see the anger of the middle class that their debt-enfeebled governments can’t deliver on welfare-state promises. In some countries, such as Britain and Germany, there is unrest, too, among growing immigrant populations that are not tethered to national cultural or political norms.

Even in the boom countries, such as China and India, there is the turmoil that comes with rising expectations. According to China’s Ministry of Public Security, the country experienced 87,000 incidents of popular unrest in 2005. That’s 238 protests a day! The Chinese stopped publishing the number after that, but it surely hasn’t gone down. India, too, has seen a rising tide of protest, symbolized by the mass street marches in the summer that surrounded Anna Hazare’s hunger strike to protest corruption.

It’s a stretch, perhaps, to look for shared themes in such disparate countries. But these movements seem to have a common indignation toward leaders who are failing to maintain social justice along with global economic change.

That’s certainly true in America, where the Tea Party and Occupy Wall Street both rage against a financial elite that stumbled into a ruinous recession — and then got bailed out by a Washington elite that’s in hock to special interests. The Tea Party, especially, tapped the bedrock American mistrust of big banks, which dates to Thomas Jefferson and Andrew Jackson. Growth and prosperity would restore public confidence, as in the past. But this time, the anticipated recovery — and deflation of popular anger — still seems a few years away.

Europe’s neo-populism will surely increase, as countries struggle with painful economic adjustments. Population is declining in most of Europe, which means there will be fewer young workers to pay for the pensions of retirees. To regain competitiveness and solvency, wages and the quality of life will have to decline in many European countries. Meanwhile, according to a recent study by the National Intelligence Council, by 2025 Western Europe’s Muslim population could increase to 25 million to 30 million from the current 15 million to 18 million, causing additional strains. There’s no sign yet of a new European political leadership that can accomplish the necessary rewrite of the social contract.

Much of the world’s neo-populist anger is justified, given the greed and folly of recent years. What worries me is the echo of the 1930s, a similar period of economic change and dislocation. When the traditional business and political leaders seemed to have failed during the downturn of the ’30s, populist indignation veered sharply right and left — toward dangerous movements that expressed national indignation at the point of a gun.

America was lucky then to have had, in President Franklin D. Roosevelt, a charismatic politician who could rehabilitate the center. And now? Not so lucky.


The Guardian does a wonderful picture-a-day interactive



Time as usual wraps it up with a flourish with the Top 10 of Everything 2011

Through The Looking Glass: 2011