…January 2025

January has brought with it violent storms in Europe, wild fires in California, a new conflict in the DRC, not to mention the continuing war in Ukraine, and a strong sense that somewhere the four riders of the apocalypse are busy saddling up their horses. 

This month also saw the funeral of the former US President, Jimmy Carter. There couldn’t be a greater contrast between the humble Carter, who strove for peace, and the latest president, the convicted felon Donald Trump. At 78, Trump is doing what a lot of elderly men do and revisiting his youth. Unfortunately he’s taking the rest of us with him, back to the division and isolationism, the inflation and instability and the constant threat of nuclear annihilation that we all thought we had left behind in the last century when the cold war ended.

He marked the 80th anniversary of the liberation of Auschwitz by calling for the Palestinian people to be cleaned out of Gaza. Surely we would be better to heed the words of 95-year old survivor, Mindu Hornick, that love not hate is the most powerful force in the world. There have been other genocides before and after, but the industrialised scale of the Holocaust remains truly shocking. Perhaps the lesson that we should draw is the need to live with our neighbours, whether they are Jewish or Palestinian, Hindu or Sikh, Christian or Muslim. 

Meanwhile, the highly respected Lancet medical journal has estimated the death toll due to traumatic injury amongst Palestinians in Gaza from October 2023 to June 2024 at 64,260, which is 40 percent higher than the official figures. Moreover, the Lancet study claims that 59.1 percent were women, children and people over the age of 65. Nonetheless, the one good piece of news from January is the ceasefire in Gaza, and the return of more of the Israeli hostages. 

Following his inauguration, Trump immediately set about rewriting history, freeing those convicted of insurrection in January 2021 as part of his false claims that he won the 2020 election. He has also ordered federal agencies to remove any mention of climate change and diversity, and has cut federal funding on almost all external US aid. 

Indeed, Trump continues to spew lies, almost as naturally as some people breathe. This includes stating that it’s just common sense that diversity programs at the Federal Aviation Authority led directly to a fatal crash between a jet airliner and a military helicopter. Meta, which owns FaceBook and Instagram, has followed X in abandoning fact checkers as we enter a new post-truth reality, led by the people with access to the greatest arsenal in the history of mankind.  Make no mistake – this is an assault on the entire free world, everywhere that is based on the principles of democracy. The freedom to choose our government depends on free access to accurate and unbiased information. This is why most democratic governments, however reluctantly, depend on the fourth estate – the press – to safeguard our freedoms. 

Elsewhere, Elon Musk continues to undermine many democratically elected European governments in an effort to push the continent further to the political right. Given that he is part of Trump’s inner circle and that he heads up the quasi-official Department of Government Efficiency cost cutting body, this indicates that America is now actively interfering in its allies’ domestic politics. The fact that many of those governments still use Musk’s X platform as part of their official communications, proves how weak they are. 

Trump is already making good on his threat to impose punitive tariffs, starting with China, Mexico and Canada, and has continued to threaten other nations as well as the EU. Most economists predict that this will lead to an increase in US inflation over the next few months, which is currently at 2.9 percent. 

Trump has also repeated his threats to take control of the Panama Canal by force, and to take over Greenland. The rest of the world is bracing to see what further turmoil he unleashes. Some of this will turn out to just be posturing as he tests what concessions he can win, but much of it is going to mean drastically increased costs at a time when most economies are still skirting around recession.

Meanwhile, the British government is still running its Christmas panto in which Rachel Reeves plays the Iron Chancellor – a cross between Mother Goose and Pinocchio – stomping around the stage in search of economic growth while the rest of us shout: “It’s behind you.”

Reeves, has been hemmed in by her own inexperience. Her commitment against raising taxes coupled with talking down the economy in her first six months have left her with no room to manoeuvre. All governments have the same options: raise taxes; or cut public services. And all governments take the lazy third option and pin their hopes on economic growth. But growth is cyclical and we are now in a sustained downturn, not helped by armed conflicts, climate change and trade wars. In Britain’s case it’s now generally accepted, as predicted, that Brexit knocked off around 4 percent of GDP, suggesting that the obvious place to look for some sort of economic redemption is to rejoin the EU customs union. 

This is still regarded as politically toxic but support for Brexit has slipped further, with a poll conducted by YouGov to mark the fifth anniversary finding that just 30 percent of Britons now think it was a good idea. And yet, all those venal fools who claimed that Brexit would lead to Britain regaining its sovereignty, are now bleating on that Starmer should rush to prostate himself in front of Trump.   

Luckily Starmer has a cunning plan which involves building a third runway at Heathrow, though with the unfortunate side effect of bulldozing his own environmental plans. Supposedly one of the main benefits of backing the third runway is to demonstrate to international investors that Britain is open to big infrastructure projects. The hope is that the people who have loads of spare money will be too stupid to remember the total f*ck up otherwise known as the HS2 London to Manchester railway, which is now planned to run from West London to somewhere near Birmingham. 

The assumption is that it would take at least 10 years to build the third runway so it’s no use in solving the current problems. And that timeframe ignores all the other infrastructure that’s required, including rerouting the M25 and several rivers, as well as demolishing hundreds of homes. Moreover, combating climate change requires us to cut down on most forms of travel, particularly air travel, both for people and for freight, so increasing airport capacity feels like a backward step. 

Luckily for us, Liz Truss has popped up once again to demonstrate her finely-honed comedy skills, this time by threatening legal action against the prime minister for suggesting that she had crashed the economy during her short but far too long stint in charge. Maybe she has a point as the country is once again experiencing some of the conditions linked to the Truss mini-budget, notably a fall in the value of Sterling agains the dollar and the Euro and a sharp sell-off in government debt. 

In truth, Britain faces significant long term problems, including slow growth, low levels of productivity, and high levels of debt. The country is trapped by its past, by the idea that it is still a major power, which is continually reinforced by the carefully stage managed pageantry around the royal family and the accompanying cult of deference. But in reality Britain has been living beyond its means since the turn of this current century. 

The UK government’s other great plan to rescue the economy is to create a European Silicon Valley between the universities of Cambridge and the other place (AKA Oxford). The underlying problem is that Britain does not have the economy to capitalise on it and will just continue incubating ideas for other countries to take up.

Still, some good news for the government – inflation for December was only 2.5 percent, a slight drop on the 2.6 percent for November. In normal times inflation over 2 percent would be considered bad news. Nonetheless, this tiny bonus proved enough to spark more falls for a cut in base rates. In reality, that depends entirely on the whim of Trump.

The Chinese economy has recorded GDP growth of a mere 5 percent, which is lower than expected and signals a downturn in the Chinese economy though most western countries can only dream of such figures. 

But then most western governments have already spent several years trying to figure out if China represents a business opportunity or a serious military threat. And now they also have to work out if America is still an ally or a hostile actor. If only there was a simple answer, like having an Artificial Intelligence system do the homework for them?

Unfortunately, AI is not always very reliable and does have a tendency to just make things up. Nonetheless, the US bet heavily on being able to dominate the developing AI technology through its ability to manufacture complex chipsets. So the arrival of the Chinese DeepSeek AI has punctured that bubble, wiping around $1 trillion off US stocks by suggesting that a level of AI technology similar to the major US models can be produced with far cheaper chips. Moreover, the timing of the release of DeepSeek, to coincide with Trump’s inauguration was undoubtedly meant as a warning to the US president, just as the Chinese begun celebrating the year of the snake.