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<\/a><\/p>\nThe West has literally tripped over itself in the first decade of the 21st century.\u00a0 It engineered two financial crises just when the competitive challenge of China was pulling the growth options from under its feet, and shove them to the Far Eastern side.\u00a0 The reversal of fortunes has been abrupt:\u00a0 not only have debt levels skyrocketed but economic growth has slipped away much faster than anticipated. Suddenly the Western liberal democrat model is under severe strain.\u00a0\u00a0 Who thought in the 1990s that the new Century would begin this way?<\/p>\n
It might be premature to talk about Western decline, but Samuel Brittan, the senior economist at the Financial Times, was not far off the mark when he recently reaffirmed in an article \u2018The long foreshadowed decline of Western dominance\u2019.\u00a0\u00a0 A recent editorial from the Straight Times in Hong Kong said this about America\u2019s global influence:\u00a0 ‘At Asia\u2019s table, but not head of it’.\u00a0 \u00a0The western world is still reeling from a solid one-two punch combination, much of it self-inflicted.\u00a0 If the drama played out in the 2000s, the stage was set in the 1990s.<\/p>\n
The train wreck:\u00a0 What went disastrously wrong so fast?<\/b><\/p>\n
The seeds of the past disastrous decade were actually planted in the 1990s decade.\u00a0 In 1989 the fall of the Berlin wall proved the harbinger to the collapse of the Soviet Union two years later, in 1991.\u00a0 Quite suddenly, the West found itself liberated from the cold war wrenches and was left free to rule the roost, literally unchallenged in the free trade world.<\/p>\n
The 1990s \u00a0proved to be a fertile ground for the neo-conservatives, who were taking over from the Thatcher years of the 80s.\u00a0 \u00a0A spate of industries had been deregulated and made competitive for a wide open field of globalisation. \u00a0With the pendulum swinging in their direction. the neo-conservatives of the 1990s \u00a0looked to the next logical step: Deregulation of the financial markets.\u00a0 This turned out to be a step too far, thereby liberating dark forces under cover in financial markets.\u00a0 In the meantime the consumer was drugged by a final credit binge, and governments were under the spell of a high tech bubble.<\/p>\n
In the late 90s, an exuberant West had the confidence to let China join the WTO in 2001, hopeful to nudge China to their side of the post world war liberal order. Naively, we let the genie pop out of the bottle.\u00a0 Ever since that fateful 2001, China has managed to show the Western world the biggest hockey stick of their lifetime in growth, investments, reserves and job creation.\u00a0 In a nutshell, a gargantuan industrial revolution was set in motion and is still running its course at full speed, bellying greater intents than displayed.<\/p>\n
Just as the rapid rise of China would prove a challenge of the tallest order for any government in regular circumstances, the booby traps of the neo conservatives went off in a big bang in 2007-08.\u00a0 Financial crises hit hard, but the timing of the last one was just awful: right in the midst of a losing struggle in the manufacturing landscape. \u00a0The job of recalibrating economic and social policies, let alone coordinating a political response, was made much worse and difficult to handle.<\/p>\n
If leftist governments are known for spending their way to a crisis, as was traditionally done in Latin America and southern Europe, rightist governments are often equally adept at engineering their own financial bubbles.\u00a0 Captains of the right push for deregulation but are quick to abuse their new freedoms.\u00a0 That is the fundamental problem with all those pure market economists: On paper it works, in reality human nature plays havoc.<\/p>\n
The gap between deregulation and speculation is comfortably narrow enough for investment bankers to bridge it. \u00a0\u00a0All terrible financial bubbles are initially set by the fine tinder of speculation and fueled by the gentle breeze of greed. \u00a0Then the whispers of corruption join in the conversation.\u00a0 And soon enough financial momentum builds into a bubble and ends like a tornado, dividing fortunes from wrecks. The mother crisis of 2007-08 was not in any way different from past crises.\u00a0 Historically, the banking sector is known to shoot itself in the foot about every 15 years.\u00a0 However when two financial crises take place within the same decade, calls for imprudence and poor stewardship need to be addressed.<\/p>\n
The middle class caught in the tug of war between\u00a0 Left and Right, East and West<\/b><\/p>\n
In many western states the resulting mess looks like a tangled web of powerful stakeholders:<\/p>\n
–\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Rising inequality has induced political gridlock<\/p>\n
–\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Unions keener to protect workers\u2019 rights and entitlements, untrustful of the guilty right<\/p>\n
–\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 An unrepentant financial sector, dismissive of the unemployed<\/p>\n
–\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Too many politicians mired in the corruption scandals of the recent past bubble<\/p>\n
–\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Political parties still anchored in 20st century dogmatism<\/p>\n
–\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Economic policies limited to budget rationing and spicy austerity.<\/p>\n
–\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Consumers ailing from an indigestion of credit<\/p>\n
For the time being, it is the middle class that pays out for this gridlock between the Left and Right. .\u00a0 For politicians, the middle class becomes the only easy solution to fix the current deficit problems.\u00a0 Like a juicy sausage, the middle class gets sliced off year after year to feed the tax coffers of the piggy state<\/p>\n
Furthermore, the rise of China and the acceleration of technology are stealthily shortening the careers of the middle managers, exactly those forming the spine of the middle class.\u00a0 They just don\u2019t know it, yet.\u00a0 China proclaimed its objective to double its economy within the next 10 years, helped by a rising tide of managers: About 50,000 MBAs are now minted every year in China.\u00a0 They are eager to move into high tech, big companies, and take over export markets.\u00a0 They work harder, cost less and take their job as a privilege, and not as a right, as an expert friend testifies.<\/p>\n
We are facing sweat, more pain and hard choices ahead.\u00a0 A high price to pay for a golden decade wasted.<\/p>\n
Andre Du Sault, \u00a0MBA (LBS), MPA (Harvard)<\/p>\n
<\/p>\n","protected":false},"excerpt":{"rendered":"
Montreal, 29.04.13 The West has literally tripped over itself in the first decade of the 21st century.\u00a0 It engineered two financial crises just when the competitive challenge of China was pulling the growth options from under its feet, and shove them to the Far Eastern side.\u00a0 The reversal of fortunes has been abrupt:\u00a0 not only […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[4,6,7,8],"tags":[],"_links":{"self":[{"href":"https:\/\/sdaconseil.com\/index.php?rest_route=\/wp\/v2\/posts\/341"}],"collection":[{"href":"https:\/\/sdaconseil.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sdaconseil.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sdaconseil.com\/index.php?rest_route=\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/sdaconseil.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=341"}],"version-history":[{"count":2,"href":"https:\/\/sdaconseil.com\/index.php?rest_route=\/wp\/v2\/posts\/341\/revisions"}],"predecessor-version":[{"id":344,"href":"https:\/\/sdaconseil.com\/index.php?rest_route=\/wp\/v2\/posts\/341\/revisions\/344"}],"wp:attachment":[{"href":"https:\/\/sdaconseil.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=341"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sdaconseil.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=341"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sdaconseil.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=341"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}