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SANDERS: A paranoid world

- The Washington Times - Sunday, January 30, 2011

ANALYSIS/OPINION:

Picture a barred door. On one side is Uncle Sam, bracing his shoulder to keep it shut. On the other side are smaller figures pushing — not too hard — while looking back over their shoulders toward an unseen audience, shouting, "See, I am pushing." That was the world before 2007.

Now picture this: President Obama, replacing Uncle Sam, suddenly opening the door, and all the little people — from Syria's Bashar Assad and France's Nicolas Sarkozy to North Korea's Kim Jong-il and Turkey's Recep Tayyip Erdogan — tumbling in, head over heels, struggling for footholds, chaotically grabbing at one another, a disordered world in microcosm.

The recent bloody riots in Tunisia, Egypt and Algeria are only the beginning of a wave of instability — not only in Arab lands but across the whole so-called "developing" world. A perfect storm brings economic and political destabilization. Even those countries hailed as new world growth centers primed to surpass the West find themselves in trouble.

As with all worldwide currents, the causes are complex and include economic and political factors.

But first and foremost, hanging over everything has been a worldwide intellectual revolution created by growing loss of confidence in the irreplaceable world leader, the United States. The 2007 financial debacle is blamed, rightly or wrongly, on American policy — starting with a housing market swamp still to be drained. Once seen to be the dominant ideology of the 21st century, the "Washington Consensus" — free markets, representative government and open trade — is in shreds.

As if that were not enough, there is the psycho-political sabotage of America's global image wrought by the Obama administration itself. The president's repeated apologies for real and imagined past failings, the self-deprecation of still-overwhelming U.S. economic and political power and confused foreign policy feints have all contributed to declining prestige abroad. And the end of American supremacy calls to mind Aristotle's adage that nature abhors a vacuum.

Without realistic, aggressive American leadership — whatever its failings — the globe's regional players entertain new fantasies. Turks talk of re-establishing the glories of the Ottoman Empire. Tehran's mullahs envision a new Persian Empire dominating the Mideast — and world oil. Moscow tries to re-create the vanished awe of Stalin's Soviet empire. Beijing increasingly is tempted to gamble on restoration of traditional Chinese hegemony in East and South Asia. Individual lunatic religious fanatics wage mayhem for a new caliphate reuniting Islam.

Meanwhile, in the financial world, economic forces create continuing crises. The Federal Reserve's policy of "quantitative easing" (printing money) — marginally successful at best in recharging American domestic markets — is undercutting the value of the world's common currency, the dollar. With investors hesitant in a difficult economic climate, the dollars flow into commodity speculation or seek higher returns in capital-short countries that, unlike America and Europe, do not suffer low returns. The investment inflow is generating inflation — and panic.

A series of natural disasters — in Russia, Australia and Argentina — has clipped grain production. Failures for soy crops in Argentina have produced rising prices in the U.S. and Brazil. America's diversion of a fifth of its corn production into ethanol hasn't helped.

Because of shortages, sugar prices have more than doubled since midsummer last year. Anxious Indonesia has quadrupled its Thai imports, pushing up the price of that staple from Asia's rice bowl. (Even chocolate, not a necessity for some of you, is under siege because of threatened ethnic war in Ivory Coast spreading to all the Gulf of Guinea states.) Despite all the talk of China and India as rising economic superpowers, both regimes have ignored their agricultural sectors, and food prices are rising as a result.

The Food and Agriculture Organization, characteristically as unhelpful as other U.N. organizations, argues that one-seventh of the world's 6.8 billion people suffer from malnutrition. The pinch will grow demonstrably worse in coming months. And it is the rise of food prices that is a principal undercurrent for the growing criticism and violence against long-standing oligarchic regimes. The Arab autocrats may have provided temporary stability but now find themselves detested and bereft of solutions to unemployment, poverty and food scarcities.

I don't know whether psychiatrists believe paranoia can be a product of nutritional deprivation. But it is clear that television, radio and social media such as Twitter and Facebook have spread the word that the developed world eats, and generally eats very well. That can only feed the envy that sets in when human existence turns even more desperate. A Brazilian friend already argues that his country is being intentionally victimized because of its recent rapid economic advance. The truth is his country has entered a new and dangerous period of world economic instability.

Like so many other economies, Brazil — "the land of tomorrow" — now has the Hobson's choice between blocking invading dollars and inflation or slowing growth and risking political consequences from voters demanding more jobs and new political choices.

Sol Sanders, veteran foreign correspondent and analyst, writes weekly on the convergence of international politic, business and economics. He can be reached at solsanders@cox.net.

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