Has The Wheel Started To Turn?

There may be signs that the populist movement around the world is starting to fray. A few examples.

The recent parliamentary election in Hungary saw Peter Magyar’s centre-right Tisza party win in a landslide. He defeated Victor Orban, who held the position of Prime Minister for sixteen years. With each successive election, Orban took away press freedoms, consolidated power in the civil service, and lined his own pockets along with those of his friends.

Magyar campaigned on a promise to rid the country of Orban’s corruption, democratic reforms (like not filing lawsuits against newspapers or accusing reporters of espionage) and to become more European-focused. Within a few weeks of his election, Magyar removed Orban’s roadblock of a 90 billion Euro loan package to Ukraine. Orban’s fealty to Russia delayed the EU approval of the loan. Magyar quickly took care of this issue. 

Meanwhile, back in the U.S. of A., the business of politics along stratified lines continued. At Donald Trump’s behest, over the last 12 months or so, Republican states were conscripted to redraw their congressional maps, in a process known as “gerrymandering”, to be favourable to Republicans.

How does gerrymandering work? Basically, there’s two ways of doing it. Take an area that has a large number of Democrats. Create a district that contains all of these Democrats in one area. Their votes can’t dilute surrounding areas, giving the Republicans an advantage. This is called “packing” a district.

The other way is to redraw the map by “cracking” areas of voters. Ensure that the number of Democrat voters are smaller than the Republican voters in every district. Redraw the lines to remove high concentrations of Democrats in any given place, to help ensure a Republican victory. 

Redrawing the districts put Republicans up by approximately nine more seats than the Democrats for control of the House of Representatives by the time Texas, Ohio, North Carolina and Missouri were finished.

Except for one thing. Be careful what you wish for. Because in California, Utah and Virginia, the same process netted the Democrats 10 more seats. As usual, in his thoughtful, considered way, Donald Trump once again shot himself in the foot. If he hadn’t started the process, the Republicans would have still held a slim advantage. 

Then, there’s the U.S. and Israel versus Iran war. Someone convinced The Donald that he’d have an easy time getting rid of Iran’s regime and nuclear capabilities with some well placed drones and bombs. But the only thing that bombed was the strategy. Iran closed the Strait of Hormuz, choking off 20-25% of the world’s supply of oil, and giving us the highest pump prices in recent memory. Donald’s popularity has hit a second term low. His 40.5% approval rating is among the lowest in recent memory.

Donald has blockaded the ports in Iran which has slowed their economy, but Iran’s blockade of the Strait has resulted in a stalemate.

Now everyone is on the phone to the White House, including India, China and Japan, who all rely on Middle East oil, to end the blockade and the war. Donald has essentially three wars to fight now. One with his own party who are getting earfuls from their constituents, one with the Democrats (because…Democrats) and with the rest of the world. He's a populist leader with no lead in his pencil to draw any form of plan to get out of this mess.

In the meantime, every Republican voter can thank Trump for the extra $20 it cost to fill their vehicle with gas. Every Democrat that didn’t get off their butts to vote in the last election because, “I don’t know enough about her”…”She has a funny laugh”…”I don’t know what she stands for”…etc can take some of the blame for ensuring this addled old man was elected to what will soon not be the most powerful position on the planet (and there are some five million Democrats in this position).

So strap in folks. The increased price of oil will soon be percolating through the economy. Add an additional third to the cost of every truckload taken everywhere in the world. About 35% of the world’s fertilizer also goes through the Strait of Hormuz. Farmers are already feeling the pinch which inevitability raise the cost of food. By the fall, we’re going to see a round of inflation that may make 2022’s dramatic increase feel like child’s play.

Heck, there’s even a shortage of helium as Qatar had to shut down a major plant because of Iranian attacks. Not only will it be expensive to get your balloons filled, but the industrial uses for helium are wide ranging; from semiconductor production to MRI scans, helium cools this equipment to keep it running properly.

But that’s okay. Trump isn’t in jail. He can keep building his ballroom while the children with which he has surrounded himself in his cabinet continue to blunder.

And as another unintended consequence, interest in electric cars, renewable energy sources and domestic energy security has never been higher. All things on the populist hit list that the economics of high oil prices simply can't fight.

The wheel is turning. Albeit slowly, but it is turning.

Count the turkeys (the ones below, not the ones mentioned above).