Judicious deregulation - or is it time to cut the Gordian Knot?
 The one big worry in the western world is growing civil unrest, which, without corrective elections, is more likely to break out into something close to civil war. Elections would undoubtedly head this off, but sadly, they are painfully distant in the western world. Australia’s next vote is due by September 2028, Canada’s by October 2029, the UK’s by August 2029, and France must wait till April 2027. Only the US midterms are less than a year away, and that election, whatever its outcome, would hardly address problem.
At issue is that the people in charge of the Western world, where the ruling Deep State has been put on the defensive, and would likely be dethroned if elections occur. In response, current rulers have shown themselves willing to employ whatever means comes to hand to avoid defeat at the polls. There are serious suggestions that local council elections in the UK will be cancelled in the spring as administratively "inconvenient" as it looks as looks Nigel Farage's Reform Party is likely to win.
If all this can be kept in hand without serious civil strife - and that's a big if - then it is fair to speculate on how the universe will unfold normally as we enter a new year. Undoubtedly, US tariffs are bound to have a lasting impact on world trade, as indeed will the new cold war that is budding with China, or a hot one with Russia.
What has happened worldwide is that the remnants and relicts of the post World War II Marshall Plan have been blown away by US President Donald J Trump. Sweetheart deals with various countries, that were seriously damaged in the war, were allowed access to US markets while permitted to erect trade barriers against US goods to protect fragile war-torn economies. They also denied American access to their markets until they recovered. But that recovery never seemed to happen as increasingly leftist Western governments allowed the situation to morph into a semi-permanent welfare regime. But then President Donald J Trump arrived, and the name of the new game was reciprocity.
Henceforth, Americans would now make it as easy or as hard to enter US markets as it is easy or hard for US products and services to enter foreign markets. He made this clear to French President Emmanuel Macron in his first term in 2019, when he wanted to be able to sell California wine in France. He wanted Macron to cut the tariff. So sorry, says Macron with a gallic shrug, it is the law. Okay, says Trump, we'll put on a 12 per cent tariff on French wine.
Not surprisingly, Trump had been economical with the truth. Later that year, he imposed a 25 per cent tariff on French wine. Whether this is still the case is uncertain. As these tariff are moves on a chess board, with advances and retreats depending on the state of play. But one thing is certain is that France is more dependent on exporting wine to America than the US depends on California wine sales in France.
That in microcosm is what the tariffs mean in application from the Trump administration. You be nice to me and I'll be nice to you. Or vice versa; it's your choice.
Profit hungry US business found that treating the rest of the world as sheltered workshop entitled to sell in America while banning American products from European and Asian shelves and showrooms was not working. So from the 1980s on, US business outsourced their production offshore where costs were many times lower than they were at home.
While this worked well for business, it was causing social unrest, hollowing out of the American working class, with once prosperous communities thriving alongside busy factories and mills left abandoned and soon in an advanced state of decay.
Hence the Trump phenomenon. It is one that has spread for the same reason throughout Europe.
Barring explosive geo-political events occurring this year, each country will have to sort itself out, exploit what resources it can to make its way in the world in the face of these new circumstances.
What makes such a common sense outcome unlikely is that governments in the western world are set against such a course. When it is plain that fossil fuels are abundant and much in demand worldwide, Canada's, the UK's, France's, Germany's and Australia's governments are wedded to a woke net zero agenda, treating CO2 as a harmful pollutant, when there is much evidence the gas does more good than harm. But these governments are in lockstep and refuse to have substantive discussions on the wisdom of such policies.
There will be a demand to de-regulate, but the regulatory jungle is vast. Space-X tycoon Elon Musk said that he could build a high speed rail system in California faster than he could get permission to build it. And that is one of the many serious problems that thwart progress.
But cutting red tape will involve "trade-offs", according to Thomas Sowell, the Stanford University economist. When one enacts a regulation, he says, one gains a protection but loses a freedom of what one could do before.
Consider the problem of building 3,000-metre third runway at London Heathrow Airport. The first design was presented in 2007 and only recently did the Transport Minister promise to get the job done by 2035. Why does it take 23 years to build the equivalent of a short stretch of highway?
In this case, as in so many others, challenges from environmental groups and local councils have repeatedly stalled progress. Expansion raises concerns about carbon emissions, noise pollution, and biodiversity loss. The courts have even blocked the project in 2020 over climate change obligations. Mental health, quality of life, and property values are major concerns for locals.
It was much the same in the US. It took 13 years for the Port of Savannah to go through a similar environmental trials before they could dredge to 14 metres and become one of the leading ports in America.
Perhaps it is time to ask what is likely to happen in the absence of preventative regulations to see if they prevent more good than harm. There is no point in doing it the slow but sure way, because one would not make a dent in the red tape problem because there is too much of it. Such an approach would only make work for lawyers and accomplish little or nothing. Perhaps, it is time to cut the Gordian knot. |
