Geopolitics of Emotions - Dominique Moisi

Emotions are not just individual feelings , but also collective  spirits  that define the ways different cultures and countries respond to the future based on its past experiences, explains Dominique Moisi, professor of Harvard and Sorbonne in his thought-provoking book "Geopolitics of Emotions: How Cultures of Fear, Humiliation and Hope are Reshaping the World".

Analyzing the pushback against globalization after the Great Recession of 2008 in different countries, Moisi made a significant observation:

"If democracies are losing faith in democratic models, and if autocratic regimes are supported in their antidemocratic practices by their combination of high economic growth and political stability, it is the Western world that suffers most from this evolution. the primary reason that today’s globalizing world is the ideal fertile ground for the blossoming or even the explosion of emotions is that globalization causes insecurity and raises the question of identity. Identity is strongly linked with confidence, and in turn confidence, or the lack thereof, is expressed in emotions—in particular, those of fear, hope, and humiliation."

Social emotions  condition the ways different cultures and regions react to events, see the future and interpret their past. Cunning populist politicians ride on social emotions to advance their own careers by responding to the swings of social moods.

Moisi describes three main kinds of social emotions: fear, hope and humiliation : 

•  Fear is the absence of confidence. If your life is dominated by fear, you are apprehensive about the present and expect the future to become ever more dangerous.

•  Hope, by contrast, is an expression of confidence; it is based on the conviction that today is better than yesterday and that tomorrow will be better than today.

• Humiliation is the injured confidence of those who have lost hope in the future; your lack of hope is the fault of others, who have treated you badly in the past. When the contrast between your idealized and glorious "

If we draw a map of the world, we can easily see how emerging Asia -China, India, Southeast- have a hopeful view and attitude towards the future. All the energy of their societies are focused in moving ahead and they are confident that they can improve their lot with effort and using their talent. They view globalization as an opportunity.

Developed countries such as those in Western Europe and the United States' politics are dominated by fear. They want to part ways (Brexit, Cataxit) , build walls (US) or cut immigration. They see globalization as a menace to their standard of living, wages and culture.

The Middle East is dominated by humiliation, a feeling that they have lost their cultural dignity and independence, that their better days are in the remote past of the times of the Prophet and the Califate. Humiliation breeds hatred as people see foreigners and even those embracing change and moving upwards as exploiters and feel victims excluded from the benefits. Latin Americans felt humiliated by the debt crash of the 1990s and turned similarly to angry rhetoric and populist solutions -from Chavez "bolivarian socialism" to Argentina's "kirchnerism".

Social emotions, explains Moisi, can also mix and coexist, creating conflicts inside each society: prosperous and military powerful Israel sits in the middle of poorly governed, low income, backward-moving neighbors. Arabs' anger and humiliation after their successive military defeats and their poor economic performance is corresponded with reactions of understandable fear by prosperous and otherwise hopeful Israelis.

US' Appalachia and rust belt regions voted for Trump -a successful millionaire with a populist platform and angry rhetorics- on the promise of bringing back the jobs and "make America great again". Those living in out-of-London Britain voted for a populist Brexit to stop immigration that they feel as a double menace to their jobs and their security.

Populist politicians pander to humiliation with a promise to "bring back" a glorious past (Califate, coal mining jobs, a more homogeneous community) and pointing to "enemies of the people": elites, "cosmopolitans", "bureaucrats" , promising to "drain the swamp" and kill the evil hydra of the "deep state". Or destroy Israel. Or re-establish El-Andaluz and the 7th century Caliphate. 

Emotions can be created by economic crises and also provoke them, by adopting self-defeating policies such as rising tariffs or leaving the EU. Or a multi-cultural country -as in the case of Spain or Iraq-

Self-fulfilling prophecies are particularly hard to avoid, especially for those living inside strong swings of social emotions. For those dominated by fear or humiliation, wars and decay might be also the path of least resistance. For those cultures dominated by hope, success is more likely and failure easier to overcome. 

Steering societies away from self-damaging populist "temper tantrums" in times of social fear of humiliation requires not just leadership, but statesmanship.

It took an FDR or a Churchill to instill hope in countries humiliated by economic Depression and fearing the military machine of Fascist and Communist invaders. Or a Nelson Mandela or a Mahatma Gandhi to overpower humiliation and bring together deeply divided societies.

The current leadership clearly doesn't make that cut.

US Debt Bomb III: "Is this time different" ?

As it is  often the case with populism -and Sebastian Edwards explains in his conference about the long and dramatic experience of Latin American countries with it - , US might be entering a debt-default crisis stage. That might be what is behind the sustained hike in the 10-year bonds and interest rates on US debt.

Unlike what happens with populism in the developing world, in US there are not one but two populist parties: the Democrats practice "Left" wing populism inflating entitlements to get minorities' votes and Republicans do the "Right" wing version subsidizing Wall Street and the military-industrial complex with tax cuts. Both policies -deeply ingrained in the parties' platforms- are predicated in increasing spending.

The arguments -or excuses- for either side are that public spending creates jobs and fuels demand (a distorted version of Keynes' -who warned  against debt and justified public spending only for short periods of time-) (the Left wing argument) or that low taxes attract investment and create jobs. Notice that "jobs" is the key populist word here.

The invariable result of the swings between tax cuts and spending is the growth of the national debt, now reaching 20 trillion dollars, a level that goes over the 100 % of US GDP  (104 % to be precise)

and would put any other country in imminent risk of default, as economist Kenneth Roggoff and  Carmen Reinhardt explain in their study of 500 years of debt, "This Time is Different"

Alan Simpson and Erskine Bowles produced a detailed and uncontested diagnostic of the debt problem created with these two-sided seesaw that both parties are using to chop down our shared economic tree. They recommended both spending cuts (in defense and social entitlements) and tax hikes to return the runaway deficit to sustainable levels. 

Simpson used his gift for the vernacular to describe the reception they got as"the one that you get when you fart at a garden wedding". Both Obama and the Republicans promise to act on it and they did. They both stop talking about Simpson-Bowles.

Populists politicians might brag when the stock market goes up -much as a rooster bragging about bringing sunrise- only to fall silent when the inevitable "correction" comes back and erases paper gains.

Now, the "correction" menaces to erase more than previous gains with record falls that bring stock values below what they were 2 years ago, making all Americans feel the pinch in their savings -which in turn can aggravate the crisis by depressing consumption-.

The real bad news is that the cause of this continued fall and two serious symptoms: higher 10-year rates (which baloon the existing 20 trillion debt) and inflation (which hits cost of living for millions). That combination costed Jimmy Carter and Gerald Ford their presidencies, and took a disciplined Fed years of high rates and dreaded "austerity".

If the current trend continues to unfold, the first openly populist president since Jackson will face the challenge of managing an era of austerity. Looking at how other populist leaders did it in Latin America - Maduro, Kirchner, Rousseff- it might not be easy