World View: Cyprus Nears Collapse After EU Issues Ultimatum

World View: Cyprus Nears Collapse After EU Issues Ultimatum

This morning’s key headlines from

  • Barack Obama and the ‘Mideast Roadmap to Peace’
  • Cognitive dissonance and the ‘Mideast Roadmap to Peace’
  • Cyprus nears collapse after EU issues an ultimatum

Barack Obama and the ‘Mideast Roadmap to Peace’

Palestinians protest Obama's visit to Ramallah on Thursday (Getty)
Palestinians protest Obama’s visit to Ramallah on Thursday (Getty)

We’re close to a very important ten-year anniversary that nobody isgoing to remember but me: On May 1, it’s the tenth anniversary ofPresident George Bush’s “Mideast Roadmap to Peace.” I remember itbecause I wrote my first major Generational Dynamics prediction atthat time, explaining why the Roadmap could not succeed. (See“Mideast Roadmap – Will it bring peace?” from 2003)

Listening to President Obama in Jerusalem on Wednesday and in Ramallahon Thursday, it might as well have been George W. Bush. I don’tbelieve that there was a single thing that I heard that wassubstantively different from anything that I would have heard if Bushwere still President.

In particular, Obama had a major reversal in rhetoric regardingsettlements. In the past, he’s called for an end to WestBank settlements. Today, he said only that settlements were anarea of disagreement that would be solved only when the coreissues were resolved — and the core issues were creating acontiguous state of Palestine, and security for Israel.

I did hear some pro-Obama commentators spin this as a “turningpoint” in Mideast peace, which is absurd. There was exactlythe same bubbly spin after Bush revealed his Roadmap to Peace.But the most bubbly time was when Yasser Arafat died in November,2004. The pundits, as well as President Bush, believed thatArafat had been the only person standing in the way of Mideast peace,and there were grins all around, in the belief that Mideast peacewas near. The grins turned into ebullience when Mahmoud Abbaswas elected as Palestinian leader. Ariel Sharon was alsoebullient, and agreed for Israel to withdraw from Gaza. You knowthe rest. There was no Mideast peace, and there have been threeregional wars since then.

To the contrary, a number of Palestinians were protesting PresidentObama’s visit to Ramallah. Some are quoted as saying that PresidentObama is worse than President Bush because Obama had raised everyone’shopes with the Cairo speech in 2009, but has done nothing since then.

Obama made numerous absurd promises when he was running in 2008. Hesaid, “This was the moment when the rise of the oceans began to slowand our planet began to heal.” He said he would be guided by facts,not like President Bush, who was guided by ideology and ignored facts.He would cure global warming, close Guantanamo, become friendly withIran and North Korea, bring a two-state solution to Palestinians andIsraelis, beat the Taliban and al-Qaeda, end the financial crisis,reflate the real estate and stock market bubbles and provide universalhealth care. He has not yet achieved a single one of theseobjectives, and many of them are total failures.

I was not critical of Obama during the 2008 campaign, because Iassumed that his promises were the usual fatuous nonsense typical ofall politicians, and I expected him to become more sensible once theelection ended, assuming he won. But I was shocked when he doubleddown on his predictions after he won. What this showed was that heactually believed the absurd promises he was making. McClatchy

Cognitive dissonance and the ‘Mideast Roadmap to Peace’

The term “cognitive dissonance” refers to the mental problems thatoccur when deeply held beliefs are contradicted by real lifeevents. The literature contains numerous examples of what happens.Some of the most dramatic examples are Christians who adopt thebelief that Jesus Christ will return to earth on a certain day,and then have to deal with the reality when it doesn’t happen.

For example, suppose a group of people believe that Jesus Christ willreturn on July 1, and that true believers will go to heaven, and therest will die. They give their possessions away, and gather on amountaintop, waiting for the return. July 2 comes, and they’re stillon the mountaintop, waiting. At that point, research has shown thatthey don’t abandon their previous beliefs, but they double down onthem and adapt them — they go out and become proselytizers. Wherepreviously they had kept their beliefs secret, and they now claim thatGod has decided to give the world one more chance, and only believerswill survive.

This concept is important in Generational Dynamics theory, becausecognitive dissonance becomes the dominant psychological factor duringa generational Crisis era. After a generational Crisis era ends (suchas the end of WW II), everyone is pretty much united and realisticabout how the world works. Decades later, when the next crisis erabegins, there are opposing political camps that hold ideologies asstrong as those of the religious fanatics who gather on themountaintop. They invest in stocks or make other personal lifecommitments based on their ideological beliefs. As shocks begin tooccur (financial collapses, regional wars, and other generationalchallenged, causing cognitive dissonance.

A country is in a real crisis at this time, because the war iscombined with the mental conflicts that can almost paralyze manypeople, including many leaders. One story that always sticks in mymind is that when Hitler’s Nazis invaded Russia, Stalin went into sucha state of shock that he was unable to function for a few weeks,allowing Hitler to gain valuable time.

President Obama has shown flexibility so far, as one after another ofhis core ideological beliefs have been destroyed by world events. Hisreversal on Israeli settlements is a good example of that.

Inflation rate surges after Nixon imposes wage-price controls on August 15, 1971 (
Inflation rate surges after Nixon imposes wage-price controls on August 15, 1971 (

There is one major example left: Obamacare. I condemned this proposalwhen it was first made because it was a repeat of President Nixon’swage-price controls, which were an economic disaster. Nixon’swage-price controls were supposed to reduce inflation, but insteadinflation surged to historically high levels under the controls.Obamacare was supposed to reduce health care costs, but instead healthcare costs are already surging to historically high levels. Obamacareis shaping up to be as much of an economic disaster as Nixon’swage-price controls. Obama is thoroughly committed to seeingObamacare implemented. The typical cognitive dissonance behavioralpattern indicates that he will do anything that he has the power to doto force Obamacare to be implemented.

I’ve said hundreds of times that it’s a basic principle ofGenerational Dynamics that great events of history are not determinedby politicians or political policy or ideology. They’re determined bygenerational trends that are completely out of control of politicians.The generational trends that I’ve been writing about for years are allcoming to pass, and there’s nothing that Barack Obama or any otherpolitician can do to stop them. NPR

Cyprus nears collapse after EU issues an ultimatum

The generational trends that I’ve been writing about for Europe arealso unstoppable. Cyprus’s government is preparing for the worst,after the EU issued an ultimatum requiring Cyprus to raise 5.8 billioneuros by Monday, or face banking collapse when the European CentralBank cuts off all liquidity to Cypriot banks. The original “Plan A”proposal, now rejected, would have levied taxes on both small andlarge bank depositors. Cyprus has begged Russia for bailout money,but that avenue now appears closed. In a new “Plan B” proposal onThursday, the government proposed to parliament a “solidarity fund”that would bundle state assets, including future gas revenues, as thebasis for an emergency bond issue, likened by JP Morgan to “a nationalfire sale.” Russia is considering the possibility of of investing inthe fund, either taking ownership of the banks, or buying rights tooffshore gas and oil fields. It’s going to be a very tense weekend,and a lot of people are saying that Cyprus might leave the euroon Monday.Reuters

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