“Events, dear boy, events.”
Harold Macmillan, UK Prime Minister 1957 to 1963, when asked what was the greatest challenge for a statesman
What Mattered this Week
Over the summer I and the team at Tellimer have been busy: we launched Scriber, the creator stack for financial writers - that I am using to write this - and are just about to launch Parsel Enterprise, which very accurately extracts and digitizes data from pdfs (I have been using it to manage invoices, but it is really designed to digitize whole industrial processes; it is the equivalent of me using a Lamborghini to pick up some milk).
Anyway, it means I have not written my usual geopolitics or business essay, but have collected some thoughts on significant events of the last fortnight. Please let me know if you like this format; I may well use it from time to time; email@example.com.
The Fed in a (Jackson) Hole
I can’t help recalling the repeated claims of Fed Chair Powell and his predecessor, Janet Yellen, that inflation was “transitory” following the Covid-19 lockdowns and would soon abate as the US and global economy recovered. They may claim they didn’t know Russia would invade Ukraine (the CIA really should have told them - they most likely did in fact), but the get together of global central banks at the weekend has once again spooked markets as the Fed now admits that inflation is the main enemy and anything must be done to defeat it. It seems that Powell will raise rates until the US - and therefore global - economy is on the ragged edge of a full blown recession, mortgages are defaulted and unemployment goes up. Not happy metrics to hope for.
The Death of Gorbachev
Mikhail Gorbachev, former General Secretary of the Soviet Communist Party has died aged 91. Those of us who lived through any of the Cold War era will remember the transformative impact of the last Soviet leader: before his premiership the USSR was a feared dark power, full armed with nuclear weapons that could destroy the World, lurking the other side of the Iron Curtain and engaged in dangerous espionage and war via proxies. By the end of his time the Soviet Union and its communist experiment was ended, the Cold War was over and such was the sense of the significance that American thinker Francis Fukuyama predicted that liberal, enlightened capitalism was now accepted as the only really fair way to run society - what he described as the “end of history”. We all felt that Armageddon had been averted.
Although much of what Gorbachev achieved has now been undone by the chaos of the USSR’s collapse in the 1990’s and the actions of President Putin, he still ranks as a great man to me, and I would guess many of my generation.
Pakistan once again suffers from huge and destructive flooding. Many will remember the terrible floods and landslides of 2011, following a record breaking heatwave in Central Asia, Russia and Ukraine in 2010, that led to riots and the Arab Spring. It has happened again, with melting snow and monsoon-like rain. Unfortunately Pakistan’s government seems as unprepared as it was last time, despite making more progress in its rehabilitation with the IMF. Combined with droughts in Europe and China, this is a hellish vision of the future of global warming.
Sanna Marin, the youthful modernising Prime Minister of Finland has been in hot water for parting with celebrity friends. It would be easy to dismiss a young woman letting her hair down with friends as understandable decompression from a stressful job, but there are a couple of genuine political issues for PM Marin to worry about: (i) The Finns remain socially conservative; Marin wasn’t with a group of old mates, she was with celebs and posing an dancing for the camera: the Finns like a drinker but don’t appreciate a show off, and (ii) Finland has a 1,340 km land border with Russia; earlier in the year Marin made the decision to end Finland’s post-War neutrality and join NATO, which is a big - and bold - call. Underneath Marin’s charm, good looks and fondness for a party, she is must be tough.
Nigerian Japa Wave
Nigeria is a huge and diverse country with a massive amount of potential and many very smart and well educated people within its near 200 million population. Somewhat worryingly for the government, significant numbers of the most ambitious, clever and young people are starting to leave Nigeria for opportunities in foreign countries, in what is being called the “Japa Wave”. Japa is Nigerian slag for “run away swiftly”, as the young escape nearly 20% inflation and more than 30% unemployment. Nigerians have always had a broad diaspora, and there have been migration waves before. The UK is still a favorite for education and Canada is growing as a destination for work. It might feel bad for many of us sitting in the G7 right now, but everyone else thinks we are in a stronger spot.
The Conservative Party selects the next UK Prime Minister
On the subject of Great Men, I had the privilege of meeting former Prime Minister Harold Macmillan (he subsequently became the Earl of Stockton), when I was a child: he was dining with my grandparents and I was allowed to stay up to meet him. Macmillan apologized for the weakness of his handshake when he was introduced and explained that it was because of being shot through the wrist while assaulting German trenches in the Great War.
Looking at the choice the Conservative Party is making for its next leader - and therefore the UK’s next Prime Minister - between “unimaginative” Rishi Sunak and “unguided missile” Liz Truss (not my quotes - rather alarmingly descriptions from people who know them), I cannot help reflect that British politicians used to to be made of rather sterner stuff.