ATTACK ON OUR CAPITOL IN PERSPECTIVE

Nineteen months ago supporters of outgoing president Donald Trump stormed the U.S. Capitol. The mob attempted to stop certification of the Electoral College vote, which would cement the outcome of the 2020 election, one Mr. Trump lost. Thus far, many still believe that the violence represented the worst affront to our constitutional democracy in history. Their perception appears to be substantiated by the overwhelming evidence unearthed by the "January 6 Committee" investigating the attack. Although the assault ranks as an example of one of the most extreme exhibitions of convulsion during a presidential transition, it was, historically, not the only, nor even the worst, instance of belligerent behavior following a contentious election. Nothing is more dangerous and strains our democratic system more acutely than the period of a presidential transition, which runs from election day in November to inauguration day on January 20. This is the time when our government is in limbo, during which our adversaries could attempt to do something nefarious. It is also the time during which a President-Elect prepares to take over the administration of the federal government from a lame-duck incumbent. During this time period political behavior frequently proves to be more intensely quarrelsome, especially after an incumbent loses his or her reelection attempt to a challenger from a different party. Snubs and insults between competing personalities who are still making sense of new realities at this time are not uncommon. Examples are plentiful. Very early in our history as an independent state, during the election of 1800, when our second president, John Adams, ran against his vice president Thomas Jefferson, interaction between the two camps was extremely nasty. The election outcome was inconclusive and ended up in the House of Representatives. Adams lost. Jefferson won after 36 ballots. Distraught over his loss, Adams refused to attend the inauguration of his opponent, and left the Presidential Mansion at 4am on that morning. In 1824, John Quincy Adams defeated Andrew Jackson by managing to collect more electoral votes in the House of Representatives, even though Jackson had actually won more popular and electoral votes. Jackson, being denied victory by the electoral count in the House, called the outcome a "corrupt bargain." Four years later Adams lost against Jackson. While considering the latter's triumph a "hostile takeover," Adams left before the transition took place. An example of contentious behavior during more modern times emerged from the 1952 contest, which elected Dwight Eisenhower. Outgoing president Harry Truman apparently insulted the incoming president by publicly commenting that "the general doesn't know any more about politics than a pig knows about Sunday." Thoroughly offended, Ike subsequently declined to be briefed by Truman. The most consequential political violence following an election resulted from the 1860 election of Abraham Lincoln. Lincoln had won with 39.8% of the vote in a four man race. He competed with Stephen Douglas, John Bell, and John Breckinridge, President James Buchanan's vice president and Lincoln's most significant opponent, who ran on the Southern Democratic ticket. Five weeks after the election seven slave holding states: South Carolina, Mississippi, Florida, Alabama, Louisiana, Georgia and Texas, seceded from the Union to form their own Confederate government. They claimed to be committed to the legitimacy in perpetuity of slavery and to interrupt the peaceful transition of power from a Democrat to a Republican. A joint session of Congress met on February 13, 1861 to count the Electoral College votes needed to certify the result of the election. The New York Times at the time described the atmosphere as one of "tense apprehension" on Capitol Hill. The paper expressed the fear that "the counting of the electoral votes would never be peacefully accomplished." A large police force had been assembled to secure the area and to limit access to the chamber. The certification count would take place among credible threats of murder. Ultimately the process was completed. Breckinridge received all 72 electoral votes from the seceded states. Lincoln and his running mate Hannibal Hamlin each gained 180 votes, exclusively from Northern states - they had not even been on the ballot in ten slave states - with 152 needed to win. While the count took place in Congress, Jefferson Davis was inaugurated in the south. Eight weeks later, on April 12, Confederate guns fired on Fort Sumter in Charleston Harbor, the first shots of what would become a four-year civil war. Lincoln was assassinated six weeks after his second inaugural. None of this is meant to suggest that peaceful transitions are rare. After all, one of the hallmarks of democratic governments is that after an election the losing parties gracefully step aside and accept their fate. Richard Nixon, as Eisenhower's vice president, who lost the 1961 election to John F. Kennedy, had to count Kennedy's disputed electoral votes. He did it, and attended the president-elect's inauguration, seated next to Lyndon Johnson, the incoming V.P.. Al Gore, as President Clinton's vice president, had to read the electoral vote count after the 2000 election, which he lost to George W. Bush. He performed his constitutional duty, and he and his wife rode down Pennsylvania Avenue in a limo with their successors, Dick Cheney and his wife, on inauguration day. And, on January 6, Donald Trump's vice president Mike Pence, under enormous pressure from an uncompromising boss and death threats from a violent mob, showed his constitutional temperament and character when he executed his responsibility. Vice President and Mrs. Pence attended President Biden's inauguration as well. Much of the world displayed shock or glee over the January 6 assault on our Capitol during the transition period following our 2020 election. Our allies especially expressed their concerns about our ability to continue to support leading democratic systems across the globe, at a time when many of their leaders were having difficulties keeping their governments intact and functional. However, with the exception of our civil war, our constitutional system has thus far held together. Civility, character and commitment to democratic norms of our elected officials will be essential to its continued survival. Theo Wierdsma

CLIMATE GOING BERSERK

It has become a familiar horrific sight recently. Images of defeated, devastated people, lamenting that they lost everything: family members, their home, livelihood, family keepsakes, confidence in their future - all evaporated in a few agonizing moments, lost to fire or floods - leaving them uncertain about what to do next. What used to be anomalies, now appear to have become common occurrences. Catastrophic wildfires killed an estimated 3 billion animals in Australia in January of 2020. Perennial fires in California destroyed more than 4 million acres and 10,000 structures, killing 33 and costing over $12.1 billion that same year - the state's worst fire season in history. Calamitous flash floods in Eastern Kentucky and Appalachia already killed 37, while hundreds are still unaccounted for. A monstrous heatwave enveloped much of the globe, but seemingly centered on Western Europe, where most people do not have air conditioning. Temperatures averaged well over 100 degrees across the continent. They reached a lethal 117 degrees in Portugal and killed 2,000 on the Iberian peninsula. What used to be a climatic aberration melted roadways, buckled tarmacs, warped railroad tracks and, in turn, triggered wildfires across Southern Europe, displacing tens of thousands of its residents. Is this evidence of our climate going berserk? No! Believe it or not, it is caused by climate change, long identified, worse than expected, and consequences, perpetually predicted, manifesting much sooner than anticipated. There is convincing evidence that climate change is an existing, constantly evolving phenomenon. Human culpability and the means to confront or combat its consequences, however, have for decades been relegated to a political battleground. It is true, as some assert, that the earth's climate was changing well before humans emerged onto our planet. These changes were driven by large scale processes - like adjustments to the earth's orbit - which took tens of thousands of years to evolve. It was after the start of the Industrial Revolution, during the 1760s, that scientists began to measure detectable global temperature changes resulting from a spike in the release of greenhouse gasses, including carbon dioxide, methane and others. These gasses are trapped in the atmosphere and re-emitted to the earth, causing surface temperatures to increase. Over time the resulting climate change affected global temperature and precipitation patterns, which, in turn, influenced the intensity and, in some cases, the frequency of extreme environmental events, as we have experienced with increasing regularity during the past few years. With all the evidence of extreme climate change surrounding us, probably in perpetuity, it is confounding that there are still those who steadfastly deny that we have a problem. This would not be a serious issue if this group of skeptics remained a fringe element. However, some of the most ardent climate change deniers inhabit positions of significant power. They continue to argue that "climate change is natural and normal - we've seen fluctuations throughout history." The fact is that present climate change is occurring 20 to 50 times faster than the most rapid climate change events in history. Some believe that not all scientists agree that the change is actually happening and, if it does, that humans are the primary cause. Again, facts contradict that belief. More than 99% of scientists confirm that the phenomenon is real. The remaining 1% is likely composed of indecisive politicians that are funded by the fossil fuel industry. Even those that are on the fence claim that asserting a crisis condition is unwarranted, and that plants and animals will adapt to the change. In fact, climate change is happening too rapidly for species to adapt. Climate change accelerates extinction rates. More than one million species are at risk of extinction, and estimates are that dozens of species already go extinct every day. And then there is the prevailing argument that the economic impact of making substantial cuts in greenhouse gas emissions is too large. That we can't afford it. However, the ultimate cost of inaction or limited action to society is far greater than the cost of robust responses to climate change. Delaying action now will necessitate more aggressive action in the future - likely to be much more expensive. The U.S. government is actually already beginning to budget anticipated impacts of climate change at $2 trillion a year. Moreover, financial ramifications and political pressure by the fossil fuel industry aside, the human cost of inaction is overwhelming. A fairly recent study, identified as "the world's largest study of global climate," led by Monash University, one of Australia's leading educational institutions, links 5 million extra deaths a year to abnormal hot and cold temperatures caused by climate change. To be fair, even responsive and responsible legislators have difficulty getting their arms around the problem. Climate change is a global phenomenon, not confined within national boundaries. The mix of means needed to confront and combat its consequences is complex and repelled by entrenched economic and political interests. Alternatives to the use of fossil fuels are slow to develop, and are often ridiculed by some in policy making positions. However, we have already pushed the tipping point of no return for some time. We have no choice but to act. It must be done! A positive indicator emerging from the 2020 pandemic crisis shows us that we can make progress. In April that year, worldwide greenhouse gas emissions dropped 17% below those of previous years, and ended up 8% lower for the entire year, the largest annual drop since the second world war. Theo Wierdsma

WE ARE NOT ALONE

President Biden concedes that his top economic priority is, or ought to be, inflation, currently at 9.1%. Biden, an accomplished politician, frames the discomforting news within a package of positive economic developments: "Unemployment is near historic lows." His administration "cut the federal deficit by 1.7 trillion this year." "Millions of Americans are moving up to better jobs and better pay." "The job market is the strongest it's been since World War Two, adding 8,700,000 new jobs" since he took office. Nevertheless, the president concedes that inflation is a real challenge for American families. However, he suggests that America can tackle inflation from a position of strength unlike any other region in the world. He wants us to recognize that "every country in the world is getting a big bite of this inflation - worse than we are in the vast majority of countries." While it is certainly true that an overwhelming majority of states are suffering significant inflationary pressure, blanket statements that every nation is worse off than we are is a grossly exaggerated assertion. Not only do many comparable economies report various rates of inflation, many differ in the significance of what sectors are mostly impacted. The reported rate of inflation in the 19 states that compose the Eurozone currently averages 8.6%. In Europe as a whole, in part because of individual countries' relative dependence on self-imposed scarcity of Russian fuel, rates run the gamut from 3.4% in Switzerland to 78.62% in Turkey. Aside from these significant outliers, countries that are geographically closer to Russia tend to have notably higher rates of inflation. Ukraine, predictably, comes in at 21.5%, Estonia at 20.1%, Lithuania 18.5%, Poland 15.6%, Hungary 11.7% and so on. While a number of western European states report rates on par with what the U.S. has endured - Spain 10.2%, Belgium 9.65%, and the U.K. 9.1%, Germany and France, respectively the fourth and fifth largest economies in the world, compare positively to our numbers. France, especially, at a "paltry" 5.8% is a statistically shining example. France's rate of inflation illustrates the correlation between energy resources and their effect on domestic malaise. It uses nuclear power, which accounts for 70% of the country's electricity production and 40% of its overall energy consumption. This makes the country less vulnerable to shocks of gas prices. The European Central Bank is actually forecasting that France's inflation rate will drop significantly during the next few years. Switzerland's low inflation rate seems to be partially due to its existing cost of living, which is already very high. Prices for household goods in Switzerland are generally about 60% higher than those averaged in the surrounding European Union countries. Besides, its politicians have aggressively legislated to tackle prices, energy mix and wage restraints. Turkey's inflation is an entirely different issue. Analysts claim that, because of President Recep Tayyip Erdogan's long running unorthodox strategy on monetary policy, inflation rates have soared. Food prices have risen 91.6%, energy costs are off the charts, and economists predict that the situation is bound to get worse. In many Western European countries rates hover around the levels we have experienced recently. However, a number of countries have taken pro-active steps to protect the impact on their citizenry. Some imposed caps on energy prices, or provided rebates for low-income households to offset the cost of gas and diesel. Germany effectively reduced the price of gasoline at the pump and is offering monthly $10. tickets for public transportation. By keeping gas prices at $6.90 per gallon, it effectively undercuts the rest of Europe, where prices fluctuate between $8.50 and $10.00 a gallon. What are we complaining about? Outside of these countries inflation rates are somewhat of a mixed bag. Australia and New Zealand, while experiencing rates historically high for their economies, report considerably lower rates than in the U.S. and E.U. Australia came in at 5.1% year-to-date. New Zealand is now up to 6.9% - a 30 year high. India shows a 7.01% rate. But across Africa the average has soared to 12.2%, not helped by 245% in Sudan and 90% in Zimbabwe. China, the world's 2nd largest economy, has managed to keep its rate under control at an acceptable 2.2%. This remarkable percentage may be due to a plunging domestic demand caused by its zero-Covid policy, and because the country is largely self sufficient in food. The fact that it may have a competitive negotiable advantage on the energy market, as much of the western world is drastically reducing Russian fuel imports, doesn't hurt either. All in all a diverse assortment of outcomes. President Biden is essentially correct. We are not alone. But when we compare our situation to that of the rest of the world, we should be selective, and figure out if some of these economies are adopting strategies we could benefit from. Inflation will likely stick around for some time to come. Former Secretary of the Treasury Larry Summers cautions that inflation rates are unlikely to fall without a significant economic downturn. Fasten your seat belts! Theo Wierdsma