History will remember us

In my first ever post, I remarked that Brexit was just one event in a much more significant era:

“the Brexit saga … was yet another major global development that could make this period in time – and my youth – one the most (academically) fascinating economic and political periods in the last century”

And this week, another thing happened – President Trump. The implications – social, economic, political, environmental – are truly global.

This period in time is really starting to become reminiscent of 100 years ago:

THEN - the assassination of Franz Ferdinand (the Archduke of Austro-Hungary) caused war between Serbia and Austro-Hungary (even though the assassin was arguably just a rebel and not acting on behalf of the Serbian government), triggering World War I
NOW – the 9-11 terrorist attacks triggered the US invasion of Iraq, even though Iraq had nothing to do with it

THEN – WWI was supposed to settle long-held tensions in Europe, but just buried them temporarily, with Germany harbouring resentment for the next 20 years
NOW – the Iraq war was supposed to defeat terrorism, but ended up creating ISIS

THEN – the ‘Roaring 20s’ came to a dramatic end with the 1929 stock market crash and subsequent Great Depression
NOW – the ‘Great Moderation’, characterised by low global inflation and strong global growth, ended spectacularly with the biggest crash since the Depression, and the subsequent Global Financial Crisis

THEN – national governments stubbornly keeping their economies attached to the Gold Standard of fixed exchange rates resulted in countries being impotent to bring themselves out of the Depression for the best part of a decade
NOW – the Federal Reserve drops interest rates to zero and floods the markets with liquidity, preventing a Depression-scale event in the US, but inadequate fiscal stimulus resulted in a recovery that was weaker and took longer than it had to, causing long term uncertainty and hardship. Moreover, delayed monetary stimulus and misguided austerity in Europe caused a true repetition of a Depression-scale event across the Atlantic.

THEN – isolationism takes hold, with countries turning away from the world and focusing inwards, causing protectionism and trade wars that only served to make the global situation worse
NOW – Brexit, Donald Trump and extreme right isolationist groups across Europe and Australia threaten to once again pull the world apart

THEN – World War II
NOW – ???

We’re going to be teaching our grandkids about these years. How will we want this history lesson to end?