The end of liberal democracy and the American hegemony? hardly

From Unz: Trump’s Brilliant Strategy to Dismember U.S. Dollar Hegemony


And Quillette The Rise of the Ungovernables:



I think Fukuyama is still right and it’s way too premature to say liberal democracy is dying. Brexit was a referendum and represented the will of the people, and hence is consistent with liberal democracy, even if as some argue to an illiberal ends. Fukuyama’s logic is more like “liberal democracy is dying if it’s not used to perpetuate its very existence.”

Also, liberal democracy has a way of fighting back. Brexit has been through so many delays. The failure of Trump to accomplish much legislatively and being forced to make major concessions on immigration, is a ‘win’ for democracy, and much of Trump’s efforts to do anything have been stymied by courts and Congress. The system of checks and balances and distributed power considerably lessens the ability of any one individual to do anything. Fukuyama should be happy about this.

I’ve long been skeptical of the narrative of a supposed right-wing uprising in Europe that threatens liberal democracy. With the exception of Turkey and maybe Hungary, right-wing leaders and parties in Europe have had much less success implementing policy and concentrating power, versus just stirring up sentiment. As discussed in Fukuyama vs. Huntington:

Second, despite the media hype, there is hardly any right-wing uprising in Europe. The media keeps pushing this false narrative that there is a surge in far-right nationalism in Europe. According to Bloomberg, just two countries in Europe could be considered right-wing: Poland and Hungary. However, Orban came into power in 2010, about 5 years before the beginning of the so-called uprising, so he doesn’t count. Erdogan, if we lump Turkey with Europe, again, came into power a decade before the uprising, so he does not count either. One of only a couple right-wing leaders to accede power is the President of Poland, Andrzej Duda, who was elected in 2015. And then there is Taressa May, who botched Brexit and is so ineffectual that she barely counts. The appointment of Pedro Sanchez [of the left-wing Spain Socialist Workers’ Party (PSOE)], who replaced Mariano Rajoy (another left-winger), goes against the narrative of such a populist uprising. Macron in 2017 beat his right-wing rival LePen in a landslide. In 2017, center-left Frank-Walter Steinmeier was elected president of Germany.

In spite of the election of Trump and the the pundit pronouncements of ‘America falling behind’ or ‘the American empire losing power’, there’s scant empirical evidence that the US economic, militaristic, and cultural hegemony has been disrupted or is in decline.

The election of Trump has only made America stronger and more relevant economically, militarily, and culturally. Trump has the power to impose and or threaten sanctions on countries to make them conform to his wishes, and has successful done so with Russia, Saudi Arabia, and Turkey. He has forced China to at least change their trade policies a bit, which no other president has done. In terms of culture, overseas Hollywood sales keep booming, and the Chinese continue to emulate and appropriate American culture (the US-China intellectual and cultural connection), such as by creating their own versions of Disneyland and Starbucks. Undeterred by Trump and complaints about housing shortages, smart foreigners keep buying up the homes in all the expensive areas and sending their kids to America’s top schools and universities. If America was so bad or irrelevant, they [the Chinese] would send their kids elsewhere and appropriate some other culture.

The US, especially since 2011, has pulled way ahead of the rest of the world according to a wide range of economic and social metrics such as strong stock market performance, geopolitical stability, lack of civil unrest, low debt yields, economic stability, high real GDP growth, and strength of currency.

If you just compare each of these data points for any time interval, the US is on top or very close to the top.

The US dollar is as high now as it was when Trump was elected:

If Trump wanted to at least weaken the dollar hegemony he would have to lower interest rates a lot (possibly to zero) in order to make the dollar less attractive relative to foreign currencies, but given that he has no control over fed policy, that is off the table. In terms of domestic policy, tariffs have proven ineffective at weakening the dollar. The conventional narrative by the likes of Peter Schiff and others is that deficit spending is supposed to be bad for the dollar, yet when Trump won and promised massive spending on tax cuts, infrastructure, and defense, the dollar surged in late 2016 and early 2017. The only way for the dollar to fall appreciably like it did in 2002-2008 is if foreign economies outperform the US and or if investors and speculators sell dollars, but I see neither of those happening.

Furthermore, there has been no increase in civil unrest besides the occasional campus protest that gets a lot of attention but is otherwise self-contained. The unrest that is going on in Europe, such as the Yellow Vests protests, is far worse than anything going on in America. Foreign governments and economies have much more instability than that of America.

Generally, IQ, not form of government, is the best predictor of geopolitical stability and economic performance. Some say religion is the answer. Or traditionalism. No, the answer is higher IQ. Silicon Valley is liberal and secular but economically successful due to high IQ. Regarding the combination of religious traditionalism and low IQ, Muslim-majority countries rank among the worst in terms of human rights. All Muslim countries have a human rights rating less than 62%. Low IQ plus secularism gets you Brazil and much of Southern Europe, where there is a lot of social justice, corruption, low economic growth, high inflation, and low productivity.

All over Reddit, there are many people getting rich with stocks and other investments in spite of the insistence by pundits that ‘America is in decline’, or that ‘the stock market is a bubble’, or that ‘there will be crisis and recession’. At any point in history someone can find some justification for why things will get worse. In the 70’s it was overpopulation and global warming. 200 years ago, people feared there would be a horse shortage, because that was the main form of transportation at the time. Now the fear is over vaccines, the national debt, artificial intelligence, and right-wing nationalism. That’s not to say all fear is unwarranted. A Jew living in Germany in the 30’s had much to fear, as did bondholders in the Weimar Republic, but one should not base their investment decisions on outliers, and sometimes history does not repeat even if the narrative seems very convincing and has a lot of similarities.

In 2008, they (the pundits) predicted that the financial crisis would be the start of a new Great Depression, the end of capitalism, and the death of the US hegemony. The opposite happened. In 2016, the media said Trump would cause those same things to happen again, yet every metric, as discussed above, is doing better than ever. They said of Trump:

“He is crazy!”

“He is unstable!”

“Foreign leaders will not work with him/don’t respect him!”

“He will cause a recession!”

“He will cause a nuclear war/WW3!”

“He will be impeached!”

“He’s Hitler 2.0!”

And of course, as we all know, none of those things happened. Pundits and journalists who are wrong need to be called out on it. Otherwise, there is no accountability, and they can keep being wrong with impunity.

[As an addendum, the problem with click-powered journalism is that pundits are paid for generating clicks and pageviews, not for being correct; no such filtering mechanism exisits for accuracy (or it’s very weak). We need a version of Snopes, but not for hoaxes and fake news, but for predictions. Or the Consumer Reports equivalent for pundits, so people can research the track record of said pundit and make a determination much value or weight to assign to his or her commentary. So if Paul Kruamgn says there will be a recession soon, this website will show that Paul Krugman has been wrong many times before, and when he was right.]

Like it or not, by its definition, the status quo tends to prevail. America will keep being dominant, and past trends will continue. The American ‘world order’ may leave a lot to be desired, but I don’t see it going away anytime soon.