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"Change Is As Necessary As It Is Impossible": Deutsche Bank Explains Why The World Is At A...

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The following brief essay, from Deutsche Bank credit derivatives expert Aleksandar Kocic of all people, provides one of the best summaries why the current politics system is fracturing with every passing day. As Kocic puts it, the most likely origin of the anti-global sentiment expressed in the past year, in the UK with Brexit and in the US with Donald Trump, is the result of a "buildup of discontent due to failure to develop a convincing response to economic slowdown in the last years." According to the DB strategist, having been repeatedly ignored for years as central banks took the reins in hopes of fixing the global economy, only to leave a world that is vastly better for the 1% and starkly worse for everyone else, "this has recently emerged as the main theme of public discourse." More relevant, however, to the current presidential campaign, is the dead-end which as Kocic frames it, show "to what extent the Change is as necessary as it is politically impossible."

 

And while Kocic does not explicitly phrase it, the reality is that it is indeed globalization - with its focus on "global economic interests" - that has left ordinary people, affected by local issues, disenchanted and increasingly angry, to wit: "The underlying problem can be traced back to the fact that economic interests have become increasingly global while politics, the ability to decide, remained passionately local and, as such, unable to operate effectively at the planetary level."

 

Finally, on the topic of the culprit, not even the Deutsche Bank strategist can mask who is responsible: "global oligarchies."

 

Politics is viewed as a problem, instead of a solution while social costs caused by this state of affairs are being recognized and articulated by the emerging populist wings,
whose main novelty has been their hostility to global oligarchies.

 

The resulting, and very angry, popular response to these oligarchies, is the reason why Sanders (on the left) and Trump (on the right) have emerged, in the process unleashing "a “transverse” direction which represents the antagonism between the local and the global."

 

* * *

 

His full note is below.

 

The price of dissensus

 

 

 

Anti-global sentiment
has been the loudest message of the current presidential campaign in the US.
The most likely origin has been a buildup a buildup of discontent due to failure to develop a convincing response to economic slowdown in the last years
. This has recently emerged as the main theme of public discourse. Current presidential campaign has highlighted to what extent the
Change is as necessary as it is politically impossible.

 

 

 

The underlying problem can be traced back to the fact that economic interests have become increasingly global while politics, the ability to decide, remained passionately local and, as such, unable to operate effectively at the planetary level.

 

 

 

Power to act has been moving away to the politically uncontrollable, global space and political institutions have become irrelevant to the life problems. In that configuration, growth comes at social costs. Impotence of politics reinforces dominance of the global which undermines political power further.
As a consequence, mainstream parties are being blamed for bad economic situations and losing their power and public support. Their representatives, both left and right, are seen as representing interests of global capital and are perceived as defenders of status quo.

 

 

 

Politics is viewed as a problem, instead of a solution while social costs caused by this state of affairs are being recognized and articulated by the emerging populist wings, whose main novelty has been their hostility to global oligarchies.
These parties have been gaining traction in these elections. The erosion of cohesion within the mainstream parties has been causing political reorganizations that transcend traditional division into political left and right.

 

 

 

The political landscape is no longer one-dimensional. Political manifold has developed a more complicated topology. In addition to the left and right,
there is a “transverse” direction which represents the antagonism between the local and the global. This is illustrated in Fig 1. Double red lines represent antagonisms. The three corners are labeled metaphorically by the political representatives who had highest visibility during the campaign.

 

 

 

transversality_0.jpg

 

 

 

Relative position of the three political expressions are no longer defined by the modes of proposed social organization (left/right),
but also where they stand relative to the global capital interests
. The two populist wings are opposed in terms of their preferred mode of social organization,
but are unified in terms of their opposition to global capital as well as to the political center which is aligned with it
. Although the elections are most likely to be won by the centrist party,
the voice of the populist wings have been sufficiently loud that they could no longer be ignored
. In all likelihood, the new administration will be facing even more fractured consensus than before where higher level of compromise and different alliances will have to be forged --
if that is not done in the first four years, the problem will return potentially even bigger in the next elections
. The concessions are expected to have protectionist overtones while compromises and alliances are expected to be made in the context of fiscal policy.

LnbexuAt_MQ

 

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