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The global political economy blues

Remember that global political economy funk I was feeling about ten days ago?  I think Felix Salmon caught it, and caught it bad.  Riffing off of a George Magnus research note for UBS, Salmon thinks that we're currently experiecing, "the most uncertain outlook, in terms of the global political economy, since World War II ended and the era of the welfare state began." 

If you think that's dramatic, consider this paragraph: 

Most fundamentally, what I’m seeing as I look around the world is a massive decrease of trust in the institutions of government. Where those institutions are oppressive and totalitarian, the ability of popular uprisings to bring them down is a joyous and welcome sight. But on the other side of the coin, when I look at rioters in England, I see a huge middle finger being waved at basic norms of lawfulness and civilized society, and an enthusiastic embrace of “going on the rob” as some kind of hugely enjoyable participation sport. The glue holding society together is dissolving, whether it’s made of fear or whether it’s made of enlightened self-interest.

Magnus says something similar in his note, lamenting the "malaise in politics and policymaking," albeit conceding that, "While there is plenty of talk about endgames of war and conflict, muddling through and the rediscovery of good politics are just as, if not more likely."  Walter Russell Mead nods along sagely, while John Sides is more skeptical

In part for reasons proffered here, I'm more sympathetic to Sides than Salmon.  Another reason is that Salmon's gloominess seems to be swamping the data.  Edelman's 2011 Trust Barometer, for example, suggests that Salmon is exaggerating the "massive decrease of trust" across-the-world claim juuust a wee bit.  That survey is not perfect (it's targeted at the top 25% of income-earners).  It's also not all good news -- the advanced industrialized democracies are not strong reservoirs of trust right now.  That said, the increase in trust -- not to mention the continued decrease in crime in kep places --  is broad-based enough to suggest that perception is overwhelming reality. 

I'm not without concerns -- the disconnect at the global economic governance level is pretty disconcerting, and even G-20 optimists are starting to sound like me.  Furthermore, the longer that sluggish growth and anemic job creation persists in the advanced industrialized democracies, the gloomier things get.  If Reinhart and Rogoff are correct,  Salmon is just demonstrating rational expectations. 

Still, given the general suckiness of the global political economy over the past few years, what's striking is not the signs that the world is falling apart, but rather the dogs that haven't barked. 

What do you think? 

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