Will this year’s G7 meeting be the one that goes into the history clips in the years to come? You know the ones I’m talking about: from the old World War I packages; jerky footage of King George and the Kaiser yukking it up together on a yacht somewhere. Oh look, it’s the Tsar! He’s here too! What fun they’re having! What could possibly go wrong?
Not yet, probably. Maybe there’s a few years to go yet. For quite a while the G7 has been a political soap opera, in which we scrutinise the photos and read the gossip about wives and partners. Originally designed to coordinate a uniform group of “advanced” non-communist economies, so that their civil activity integrated well with NATO under the leadership of the US-UK Atlantic alliance, the group’s coherence has been stretched to the limit by global change. Is China an advanced economy or a developing one, or both? Is France an advanced economy or a basket case running on global receipts from its transnationals? And so on.
In recent years, the thing became a stage for the Dubya-Sarkozy-Berlusconi clown show; mildly populist leaders still working within the neoliberal global frame. Turns out they were just the curtain raiser.
So Donald Trump’s determination to punk the event for the second year running is, in one way, simply leaning on the stress lines, pushing the thing to pop. Last year he skipped the final communique, making clear that the alliance had de facto broken up; Macron confirmed that this year by skipping the communique altogether to deprive Trump of a chance to short it. So he went one further — spruiked for Russia, pitched his own Florida resorts as next year’s venue, and backed Brazil’s brown-punk reaction to the Amazon fires.
Had this been in the service of American dominance, that would have been comprehensible. But Trump trashed the US too, musing aloud whether the whole trade war with China had been a mistake, attacking his own Federal Reserve, demanding a 1% rate cut and the return of quantitative easing, extensively denigrating president Obama in front of the world. Trump’s addled fan base will still mutter things like “ahhhhh five-dimensional chess” and “crazy like a fox!”, but his centre-right boosters will be cringing anew. Not enough to actually come out and offer an accurate assessment of his impact. But the mainstream right would rather talk about anything else other than Trump.
The Atlantic alliance and its leadership of NATO is all about the mystique of power and moral authority, ultimately stemming from WWII. While Trump undermines one side of the Atlantic arch, his Beano cartoon version Boris Johnson is wearing away at the other — pushing the UK to a multidimensional constitutional crisis which would ease the way for referenda in Ireland and Scotland on reunification and separation respectively.
This is a tad punk too. Boris is establishment enough to know that the Atlantic arch needs to have a United Kingdom at its base on one side to be even slightly plausible. But he has put himself at the head of a Brexit army who have a continuity with radical, anti-expansive strands of English politics, going back to the English Civil War. Boris is banking on the possibility that he can take the UK out of the EU, and lock in a Brest-Litovsk style trade deal with the US which will use American demands to do what the UK right lacks the political strength to do: break up the NHS, suppress labour conditions carried over from the EU social compact, and become Greece to America’s Rome — counsellor and governor, the permanent fantasy of UK leaders.
Punk, as I say, on both sides. But the paradox of punk — which is a general style in any human endeavour, from politics to music — is that it consumes the inherited traditions from which it draws its energy. Punk is Dionysian, ecstatic. The appeal of Trump and Bolsonaro is the gleeful energy to say screw it all. Trash Macron’s wife, let the fires give Brazil a Brazilian and take the party back to my place! The political fantasy capital is all but consumed.
That may prove fateful because of the simultaneous meeting in Jackson Hole, Wyoming, of global bankers, an annual convocation organised by the Kansas City Federal Reserve branch — reports of which read like the cheerful communiqués between diplomatic missions. Everyone begins with a testament to the strength of the US economy before going on to a different aspect of an interlocking problem (i.e. that Trump’s trade war is destroying global confidence at the same time as interest rates are already bumping along the ground).
Negative interest rates, a novelty a few years ago, are now dipping so low, that central money supplies must be quietly offering capital at -3%, then offered to mortgage and other buyers at -1%. The bond yield curve is inverted — ugh have to start thinking about bonds again — so the markets are effectively shorting the global system that Trump has been trashing in Biarritz.
Trump has run the US like a business competing with China. He’s avoided the asymmetry: if these are businesses, then the US is the high street bank and China is the discount store. The former that starts to run like the latter has the capacity to take both down — which is why, at Jackson Hole, they have been quietly talking about the hastened end of a global dollar reserve system.
Greenspan was punk. Powell not. The Kaiser was punk. Churchill was punk. Lenin was punk. Should all this come apart, there will be no footage available. In the meantime please enjoy the sights and sounds from sunny Biarritz.