Year End Review 2017 - Part 1

For the last few years, I have set out a series of predictions for the year ahead, and started by reviewing the predictions made in the previous year. This year, I'm doing it slightly differently. I'm going to write a separate post reviewing each of the predictions made last year, so as to examine it in more detail, and I will be writing separate posts for the predictions for next year in the same way, but in order to deal with next year's predictions in more detail, I will be reducing them to six from ten.

The first prediction made for 2017 was,

“As the material conditions continue to impose themselves, the political meat grinder will rein in Trump, Brexit and right-wing populism across the EU.”

I would say that has been a remarkably accurate prediction. Looking at Trump, we have seen his attempts to introduce a ban on Muslim immigration repeatedly struck down in the US Courts. As I went on to say last year,

“Real economic and political power resides in cities, and the larger urban conurbations.”

The consequence of that has also been that the Mayors of these large urban areas have used their power to frustrate Trump on a range of issues, from his attacks on immigrants, to his withdrawal from the Paris Climate Treaty and so on. And, alongside it, Trump has faced investigation into his activities, and those of his election campaign by the FBI, and by Congressional inquiries, and Robert Mueller, appointed as a Special Prosecutor. Trump has seen one of his appointees after another stand down, or be fired, whilst the investigations by the FBI have already led to charges against several of Trump's inner circle, and the rolling over of Mike Flynn, which now threatens to bring the investigation ever closer to Trump's own door, in the year ahead.

The political meat grinder was so successful that it prevented Trump from getting one single piece of legislation passed, of any significance, including the Republicans flagship ambition of repealing Obamacare. Even to get Trump's Tax Bill past Congress, he and the Republicans have had to make tortuous concessions to special interests, although that is a feature of the US legislative process whose essentially corrupt nature, makes all of its legislation a messy hodge-podge to an extent that its a wonder that any of it actually functions.

A similar pattern can be seen with Brexit. May tried to push through her Brexit Bills with scant regard for Parliament, as the Tories knew that any parliamentary scrutiny would not only continually expose the contradictions implicit in Brexit, but would also expose the Tories total unpreparedness for it, and would, thereby, at each stage, lead to an embarrassing series of reversals on their part, as they were pulled up by Parliament. It means weeks were lost, simply engaged in the court cases defending the challenge to that approach, brought by Gina Miller et al. The courts struck down May, in a similar manner to the way US Courts struck down Trump. But, having done so, Labour failed to capitalise on the weapons that had been placed in its hands, but which I will come back to in a later post. The story has been the same over the last year, with repeated parliamentary struggles over Parliamentary sovereignty, in the face of attempts by the executive to disregard it. But, the potential for a hard Brexit now appears dead, and as Stage 2 negotiations on the Transition Period proceed, next year, the exposition of the further contradictions inherent in Brexit are likely to drive inexorably towards a coalition demanding an exit from Brexit.

And, the same has been seen across Europe. The purported threat from right-wing nationalists and populists in the Netherlands, France, Austria and elsewhere fell flat on its face, just as UKIP as the representative of those same forces collapsed in the UK. The latest stitch-up between the conservatives and Freedom Party in Austria, is likely to be short-lived, and will mortally wound the conservatives.  That is not to say that those forces may not have a resurgence. It depends upon the other political forces in those countries, and how they respond to the changing conjuncture. As I said last year,

“Germany and France will have an increasing interest in proposing a large fiscal expansion, and infrastructure programme. Both large economies need to see off the right-wing populists in their own countries, and the danger of the EU fragmenting. Both large economies need to prevent a meltdown of the Italian economy, and Germany in particular, needs the EU economy to grow faster, so as to provide a growing market for its manufactured exports.”

In fact, as I also predicted last year, in the face of all those catastrophists predicting the next recession, or a Long Depression, the global economy has seen a marked increase in growth in the last year, including a significant rise in growth in the EU. That is particularly marked in Germany. But, even the Greek economy is now beginning to grow, despite the idiotic policies of austerity that were imposed on it by conservative governments, and the ECB, in the last few years. A significant factor holding back EU growth, has been the continued policy of QE implemented by the ECB, which acts to keep European bonds, shares and property prices inflated, and thereby sucks liquidity, and potential money-capital out of the real economy. As the US Federal Reserve continued to raise its official interest rates, and to begin to stop replacing bonds as they matured, during the last year, and as even the Bank of England was moved to raise official interest rates, so the ECB begins to look increasingly out of step, and is likely to have to move sharply to get from being well behind the curve, in the coming year.

In fact, what Brexit and the election of Trump has done is to encourage the EU to move more decisively in the direction of further integration, and consolidation of the union.

Forward To Part 2