The Gambler

 

If I Said You Had A Beautiful Body

 

Forget Dubai, Most Arab States Are Weak & Violent, 66% of People in West Asia Are Poor

 

Why Has Imran Plunged Pakistan Into Political Instability?

 

Ukrainians pay the price for America's drive to remove Putin

 

The state of Pakistan: Isn't the support for BJP similar?

Fahd Hussain in The Dawn

Imran Khan’s supporters can see no wrong in what he says or does. We have witnessed this phenomenon unfurl itself like a lazy python these last few years, but more so with greater intensity during Khan’s pre- and post-ouster days. On display is a textbook case of blind devotion. Such devotion entails a deliberate — or perhaps subconscious — suspension of critical thinking. Only mass hysteria can explain absolute rejection of facts and a willing embrace of free-flying rhetoric untethered by verifiable information.

And yet, does this really make sense?

Bounce this explanation off actual people around you — friends, families, acquaintances — and you start to feel uncomfortable with the laziness of the explanation.

On your left, for instance, is the professor with a doctorate in natural sciences from one of the top universities in the world, someone whose entire educational foundation and career is based on the power of empirical evidence and scientific rationalism — and here he is hysterically arguing why the PTI deputy speaker’s violation of the constitution is no big deal. On your right is the top executive of a multinational company with an MBA from an Ivy League school, someone whose training and practice of craft is based on hard data crunched with power of sharp logic — and here he is frothing at the mouth in delirium while yelling that the Joe Biden administration actually conspired with the entire top leadership of the PDM to topple Imran Khan. 

These are rational people, you remind yourself. You have known them for years, and admired them for their academic and professional achievements — perhaps even been motivated by their pursuit of success — and yet you see them experiencing a strange quasi-psychedelic meltdown in full public glare. It just does not add up.

It is not just these metaphorical persons — resembling many real ones in all our lives, as it so happens — but hundreds of thousands of Pakistanis from all walks of life locked inside a massive groupthink spurred by sweeping generalisations dressed up as political narrative. No argument, no logic and no rationale — no, nothing makes sense, and nothing is acceptable or even worth considering if it does not gel perfectly with their preconceived notions.

What we are witnessing is a seminal moment in our political evolution — progressive or regressive is a matter of personal perspective — and this moment is situated bang in the centre of a social and political transformation so impactful that it could define the shape of our society for the years ahead.

In an acutely polarised environment, it is easy to pass judgement on those sitting across the fence. Most of us yield to this temptation. When we do, we help reinforce caricatures that have little resemblance to people around us, and these fail to explain why people believe what they believe.

So why do such a large number of people believe what they believe even when overwhelming evidence points towards the opposite conclusion? In our context, this may be due in part to the visceral politicisation of the national discourse and the deep personal loathing of rivals that the PTI has injected into what should otherwise be a contest of ideas and ideologies. At the heart of this is the revulsion against the system because it has not really delivered what it exists to deliver: improving the lives of citizens through protection of rights and provision of services. It is therefore easy and convenient to blame the system, and in turn all those institutions that constitute the system as a whole.

Imran Khan has modelled himself well as the anti-system crusader. He insists very persuasively that he has neither been co-opted nor corrupted by the system; that when he says he wants to change this system, it implies that there is nothing sacrosanct about the system, or for that matter, about the exalted institutions that make up the system. He has been able to establish this narrative successfully because the central theme of his narrative is, in fact, true: the system has not delivered.

But the argument is only half done here. The other half is perhaps even more crucial — diagnosing why it has not delivered. It is here that Imran Khan goes off tangent. And he does so not just in terms of his solutions, but his own shockingly weak performance as the prime minister who had it all but could not do much with it. In fact, after nearly four years in power, and having precious little to show for them, Imran has for all practical purposes joined the long line of those who are, in fact, responsible for the sad reality that the system has not delivered.

But someone forgot to break this news to the PTI supporters.

In essence then, if Pakistani society wants to row itself back from this stage where the electorate is at war with itself on a battlefield littered with semi-truths, partial facts and outright lies, it will need to face up to a bitter fact: what we see unfolding in front of us is the contamination of decades of social and educational decay injected with deadly and potent steroids of propaganda, brainwashing and ‘otherisation’ of anyone who looks, speaks, acts or believes differently.

Those social studies books you read in school and thought you would outgrow — well, now you know how wrong you were?

In this cesspool, everyone points fingers at everyone else when no one really has the right to do so. Seven decades of wrong governance laced with wrong priorities and fuelled by wrong policies have led us to a stage today where traditional parties cannot stomach the aspirations of a new generation, and new parties cannot digest the requirements of what constitutes governance, statecraft and institutional equilibrium within a democratic society.

And you thought holding elections was our biggest problem today. Be afraid. Be very afraid.

Beware the rich persons’ savings glut

Since the 1990s, the private share of national wealth has soared while public wealth has shrunk writes Gillian Tett in The FT

This week, as western governments pondered sending aircraft to Ukraine, the Kyiv government embarked on a novel financing step: it launched a website #buymeafighterjet to crowdsource donations for jets from the world’s mega-rich. 

Once that might have seemed a laughably bizarre thing to do. But today it no longer appears quite so odd. Never mind the fact that events in Ukraine show we live in a world where networks, not institutions, wield power; today the ultra wealthy increasingly wield riches and power, with some billionaires controlling budgets comparable to those of small countries. 

And while it is unclear whether #buymeafighterjet will deliver planes, the symbolism is worth noting. It highlights a trend that deserves far more attention from economists and political scientists alike — and in spheres that have nothing to do with war. 

Consider one radically different context: this week’s World Economic Outlook report from the IMF. The message in this tome that grabbed most attention this week was that the world faces rising inflation, high debt and stalling growth — stagflation, in other words, although the IMF tactfully downplays that term. 

But on page 62 of the report there was also an intriguing little sidebar about the “Saving Glut of the Rich”. A decade ago, the concept of a “savings glut” was something usually discussed in relation to China. When market interest rates plunged in the early 21st century, economists argued that rates were being suppressed because emerging market countries were recycling their vast export earnings into the financial system. 

Or, as Ben Bernanke, former Federal Reserve chair, wrote in 2015: “A global excess of desired saving over desired investment, emanating in large part from China and other Asian emerging market economies and oil producers like Saudi Arabia,” had created a “global savings glut”. 

But, this week, the IMF highlighted another, little-noticed contributing issue: the ultra-rich. It pointed out that a “substantial rise in saving at the very top of the income distribution in the United States over the past four decades . . . has coincided with rising household indebtedness concentrated among lower-income households and rising income inequality”. 

And while economists used to look at this through an American lens, “the phenomenon may not be limited to the United States”, the Fund notes. It seems to be global. And since the rich cannot possibly spend all their wealth — unlike the poor, who usually do — this savings glut has almost certainly “contributed to the secular decline of the natural rate of interest”. 

Moreover, while the IMF downplays this, the actions of western central banks have made the pattern worse. Years of quantitative easing have raised the value of assets held by the rich, thus expanding inequality — and with it the rich persons’ savings glut. 

How much has this affected rates? In truth, no one knows, not least because information about this shadowy world of ultra wealth is sparse. Or, as the World Inequality Laboratory notes in its 2022 report: “We live in a data-abundant world and yet we lack basic information about inequality.” 

Furthermore, western central bankers have limited incentive to study these issues too publicly, since many feel privately embarrassed that quantitative easing has made inequality worse. 

But one sign of the trend can be found in the 2022 Wealth Inequality Index report: not only have the richest 1 per cent across the world apparently taken 38 per cent of all wealth gains since the mid 1990s, but also the private share of national wealth has soared, while public wealth has shrunk. 

Another striking clue emanates from reports collated by Campden consultants, experts on the family office ecosystem. In 2019, they calculated that there were 7,300-odd family offices in the world, controlling $6tn in funds, a 38 per cent increase from 2017. Between 2020 and 2021, during the latest wave of QE, funds under management increased on average by 61 per cent. 

It is possible that this trend in inequality will slow if QE — and with it asset inflation — comes to an end in 2022 and beyond. Or maybe not — as the IMF report also points out, a world of stagflation risks and rising rates is one that will hurt the indebted poor far more than it will the rich. 

Either way, the pattern deserves far more debate among economists and political scientists. We need to know, for example, whether ultra-wealthy funds will step in to buy assets like Treasuries as central banks wind down QE. 

The way family offices are contributing to a secular shift from public capital markets to private ones should get more attention — particularly since economists such as Mohamed El-Erian predict that this will accelerate in the wake of Russia’s invasion of Ukraine. 

We also need to pay more attention to governance issues. The expanding private pots are generating innovative forms of philanthropy (which is good). But they can also subvert democracy via dark money donations (which is bad). Either way, #buymeafighterjet is one tiny symbol of an increasingly networked but unequal world. We ignore this at our peril.