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Godfree Roberts's avatar

A more balkanized word, potentially split along a democratic/authoritarian axis???

The world's three leading democracies are Switzerland, China, and Singapore, judged on six democratic axes: formal, elective, popular, procedural, operational and substantive.

Looking closer, we find that the US fails to score in any category, while China scores well in all.

1. Formally, the US Constitution never mentions ‘democracy’ (the Founders hated it) and China’s Constitution mentions it 32 times.

2. Electively, China has bigger, more transparent elections than the US. China’s are supervised and certified by The Carter Center, which also runs China’s election website.

3. Popularly, China has a twenty percent higher voter participation than the USA (62% to 52%), suggesting that more Chinese voters think their vote counts.

4. Procedurally, China uses a public, democratic process to appoint senior officials and approve all legislation. (American presidential candidates are chosen by wealthy backers and appointed by an unelected group of people called the Electoral College which nobody understands).

5. Operationally, American presidents operate like like medieval monarchs. They hire and fire all senior officials and frequently order citizens kidnapped, tortured, imprisoned and assassinated without consulting anyone. They can secretly ban 50,000 people from flying on airlines without explanation and take the country to war at any time, for any reason. No Chinese leader–including Mao–could do any of those things. They have to vote on everything, democratically.

6. Substantively, China’s government policies produce democratic outcomes. Ninety-six percent of Chinese voters approve the government’s policies and eighty-three percent say China is being run for their benefit rather than for the benefit of a special group (only thirty-eight percent of Americans think this of their country).

Making matters worse is the fact that the US is the world's leading authoritarian nation. Where else but in an authoritarian country does the leader have the sole power to:

* Hire and fire the country's 5,000 top officials.

* Declare war. Frequently.

* Issue 300,000 national security letters (administrative subpoenas with gag orders that enjoin recipients from ever divulging they’ve been served);

* Control information at all times under his National Security and Emergency Preparedness Communications Functions.

* Torture, kidnap and kill anyone, anywhere, at will.

* Secretly ban 50,000 citizens from flying–and refusing to explain why.

* Imprison 2,000,000 citizens without trial.

* Execute 1,000 citizens each year prior to arrest.

* Kill 1,000 foreign civilians every day since 1951

* Massacre its own men, women and children for their beliefs

* Assassinate its own citizens abroad, for their beliefs.

* Repeatedly bomb and kill minority citizens from the air. (https://www.theguardian.com/world/2001/mar/02/duncancampbell) (https://www.theguardian.com/us-news/2020/may/10/move-1985-bombing-reconciliation-philadelphia).

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Geoffrey G's avatar

The last time we were told to “Sell Hubris; Buy Humiliation” it was 2016 and that would have been an absolutely awful investment strategy.

Not saying it’s wrong this time, too, but is it really now different enough to stick?

And why should the implications of higher inflation, less globalization, etc. support the “Buy Humiliation” strategy? I can think of many reasons why EU, Japan, and EM equities won’t outperform (as they haven’t been) in such an environment, for example, despite overvaluations in the US.

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