Nicholas Wapshott

There have been some extraordinary headlines in recent days. Here’s the Economist: “The perils of falling inflation.” Here’s the Financial Times: “The eurozone needs to get inflation up again.”

For those with memories of hyper-inflation and “stagflation” in the 1970s, these cogent pleas for higher prices is heresy, an irresponsible clamor for the return of an ever-changing fiscal landscape that led to widespread misery and economic turmoil.

A little history. By the mid-’70s the Western world was engulfed in an inflation typhoon — with prices rising rapidly and out of control. As companies increased prices to keep up with the higher costs of basic raw materials — such as oil, deliberately hiked way beyond the norm by the Organization of the Petroleum Exporting Countries — trade unions demanded higher wages to protect their members’ standard of living. This led to higher costs, and higher prices, and so on.

The world became entangled in an apparently unstoppable upward spiral, like a crazy dog chasing its tail. Governments were blamed for it and broken by it, and new bold champions promising to slaughter the inflation dragon were elected in their place.

President Ronald Reagan here and Margaret Thatcher in Britain largely owed their precipitous rise to voters’ weariness with the curse of inflation. And they both turned to economist Milton Friedman as a savior.

There have been a lot of sighs of relief in Europe lately, where countries like Britain and Spain, long in recession, have finally started to grow. Not by much, nor for long. But such is the political imperative to suggest that all the misery of fiscally tight economic policies was worth the pain that there are tentative claims the worst is now over and, ipso facto, austerity worked.

Hold on a minute. Growth is good. Growth is what allows countries to pay down their national debt by increasing economic activity, putting the unemployed to work and making people prosperous enough to pay taxes. But gross domestic product growth alone is not enough to provide adequate sustained prosperity if it does not also lead to significant job growth.

Take Spain, which has just emerged from two years of recession by posting a third quarter growth rate of 0.1 percent. Technically the Spanish slump is over. But a glance at their job figures shows the country has a long way to go before it can genuinely say it has escaped the diminishing effects of austerity — in the form of tight fiscal policies, public spending cuts and labor and entitlement reforms — imposed indirectly by Germany through the European Union.

Moderate Republicans cannot fathom what has happened to their party.

Once a happy band of no-nonsense, pro-business conservatives, cautious in everything from money to marriage — including their wary response to the onward march of 1960s liberal social values — they were prepared, within reason, to trim their policies to match the voters’ mood. After all, to achieve anything in government you first have to win elections.

But that was before the revival in fundamental conservatism that has turned the GOP from a pragmatic party to a collection of inward-looking ideological tribes. Republicans puzzled by the rise of dogma and division in their party can find answers in a new survey that explains how large the factions are and what they think. They will be surprised by the findings.

The GOP has long been considered a three-legged stool: big business, Southern evangelical Christians and anti-government Westerners. But, largely since the world financial panic of 2008-9, these three have been joined by two new aggressive, popular movements: the Tea Party and the libertarians.

Victories come in many sizes. The Battle of the Little Bighorn, for example, at first seemed an overwhelming win for the Sioux. But it soon became clear their success would not last. Who really won the Alamo? The Mexicans? Try telling that to a Texan. So, who won the Battle of the Shutdown 2013? The conventional view is that the Tea Party Republicans were seen off by the congressional leadership in both parties. Having made their protest, disrupted the nation and cost Americans a great deal in anxiety, time and treasure, they lost the battle — but promise to resume the war another day. Perhaps as early as January.

While moderation appears to have triumphed and dogmatic extremism held at bay, the 800,000 federal workers and those who need their services were the obvious losers of the budget and debt ceiling battle. But so were those who hoped to derail the Affordable Care Act, freeze federal government spending and balance the budget.

A complete audit of the shutdown, however, shows the Tea Partiers suffered a more profound setback than they would like to admit — or perhaps even know. The exact philosophy of the Tea Party is hardly clear, but in as much as there is a manifesto it states: the government is too big and should shrink; government borrowing is out of control and the nation should live within its means; big business executives are unfairly propped up by government even when they make sizable mistakes; the government should stop manipulating the dollar through quantitative easing, and taxes should be reduced but never be raised.

If the federal government fails to pay its bills and the interest on its borrowing by the middle of the month, it is the overwhelming verdict of the nation’s smartest economists that financial mayhem will ensue.

Until this week, no one on either side doubted that. In fact, it was implicit in the Republican case for using the debt ceiling as a lever to cut public spending. Only with the threat of Armageddon in the markets and the prospect of a return to the Crash of 2008 did the Republican bartering made any sense.

Now the looser cannons on the GOP deck have changed their tune. At last count, seven House members and six senators have suggested the government can remain shut down in perpetuity and America can fail to make interest payments on its borrowing and nothing much will happen.

What can we make of the terrible events in Nairobi, where innocent shopping trips turned into a bloodbath? It is usual to think of such horrors as acts of senseless killing. For every civilized person, the slaughter is inexcusable and incomprehensible. But in this case, as in so many others, it is not inexplicable.

The notion of a “clash of civilizations” has gained widespread currency since the September 11 al Qaeda attacks, particularly in the United States, where the idea has not only been used to explain why many young Muslims hate the West but to encourage a general fear and suspicion of all Muslims.

Islamists set out to violently counter the perceived decadence of Western capitalism. Those who use such intolerance to promulgate hatred against Muslims in general do not do justice to the subtlety of the arguments on the “clash of civilizations” made by Bernard Lewis, the Princeton professor who requisitioned the phrase for modern use, and the late Samuel P. Huntington, the Harvard and Columbia academic who came to similar conclusions.

As the nation heads towards a government shutdown and defaulting on its debts, the two battling sides cannot even agree which election they are fighting. Republican presidential hopefuls are jostling for position ahead of the 2016 primaries while President Obama has his eyes on the midterms next year. Both sides insist they will not compromise; yet both sides cannot win.

The president’s blink over Syria has encouraged the GOP. His failure to act resolutely and stand by his promise to punish Bashar al-Assad for gassing his own people suggests that when he declared over the debt ceiling, “I will not negotiate over whether or not America keeps its word and meets its obligations. I will not negotiate over the full faith and credit of the United States,” he may have been bluffing, just like when he said about Syria, “A red line for us is, we start seeing a whole bunch of chemical weapons moving around or being utilized.”

The Republicans who hope to launch their presidential bids by tapping into the energy of the Tea Party, currently obsessing about killing the Affordable Care Act by defunding it, are prepared to call the president’s bluff. For Senator Marco Rubio, whose reputation among Tea Partiers was dimmed by his attempts to broker immigration reform, the debt ceiling showdown at the end of the month is the perfect way to strangle Obamacare before it comes into full force. “I’m in favor of funding the government at the levels that were agreed to last year in the Budget Control Act and not spending a single penny more of hardworking taxpayer dollars on a disaster, which is Obamacare,” he said.

The confusion surrounding the American response to the Syrian government gassing its own people has shocked foreign policy wonks. Here is Richard Haass, President of the Council on Foreign Relations, after the president threw the problem to Congress, then, facing defeat, handed negotiations with Bashar al-Assad to his nemesis Vladimir Putin: “The President has essentially allowed the red line in Syria to be somewhat ignored.” And here is Haass’s final verdict on the president’s dillydallying: “Words like ‘ad-hoc,’ ‘improvised,’ ‘unsteady’ come to mind. This is probably the most undisciplined stretch of foreign policy of his presidency.”

There is little sign the president has yet grasped the cost of contradicting all his top foreign policy advisors. Secretary of State John Kerry, National Security Advisor Susan Rice, and Defense Secretary Chuck Hagel were each asked for advice, then ignored. Obama appears oblivious to the fact that his fumbling over Syria has severely diminished his authority, even among close colleagues and his own party. He is under the impression that marching to the top of Capitol Hill and marching down again and backward flipping on decisive action against a despotic perpetrator of dastardly mass murder is simply a matter of “style.”

He seems to think his real enemies are not Assad, Putin, Ali Khamenei, Iran’s top mullah, and Kim Jong-un, the North Korean tyrant, but “folks here in Washington.” “Had we rolled out something that was very smooth and disciplined and linear [the 'folks in Washington’] would have graded it well, even if it was a disastrous policy,” he told George Stephanopoulos.

There has been a lot of loose talk about the return of isolationism since President Obama asked Congress for permission to degrade Bashar al-Assad’s ability to gas his people. Isolationism hasn’t been a respectable thread of political thinking in America since the surprise Japanese attack on Pearl Harbor made redundant the clamor to keep America out of World War Two.

The isolationists grounded their belief that America had no business interfering in other countries’ affairs in Washington and Jefferson’s warnings not to become entangled in foreign alliances. They scuppered Woodrow Wilson’s attempt to get the Senate to ratify the Treaty of Versailles. And they came to full blossom in 1938-1941, when their hope that the distance from Europe and West Asia could keep America out of Hitler’s war led Charles Lindbergh, Father Charles Coughlin, Joseph Kennedy, and others to make excuses for Nazism. Little wonder that in the last seventy years few have wanted to be thought of as isolationist.

Isolationism was always a combination of ideas. Around its central core — that America was too far away to be attacked and that we enjoy a self-sustaining economy that could, if necessary, prosper without foreign trade — was also an intense dislike of government, a belief that the profiteering defense industry was driving American foreign policy, and a detestation of Wall Street (which often disguised a rich seam of anti-Semitism that even in the Thirties was politically toxic) and the Federal Reserve.

It would be easy to assume that the stirring words of Martin Luther King Jr.’s “I Have a Dream” speech affected Americans most of all. His goading of a nation to live up to the democratic principles of its founders was a sharp display of America’s private grief. The wrongs he set out to right were internal and shaming — American sins that stretched back to the days of slavery. When he rose to speak, King was clearly aiming his remarks at his fellow Americans.

But King’s dignified appeal to the better nature of his countrymen had a resonance far wider than just the United States. When he addressed what he called “the greatest demonstration for freedom in the history of our nation,” he would inadvertently set off a worldwide movement for racial emancipation. Tangible evidence of the long march he set off on 50 years ago can be found in the endless roads and civic facilities around the world to which the name Martin Luther King has been appended — celebrating the American civil rights leader’s universal cry for a more generous and humane world.

Africans found a particularly poignant message in King’s plea for racial tolerance and his declaration that “the life of the Negro is still sadly crippled by the manacles of segregation and the chains of discrimination.” It is no surprise that there is a Martin Luther King Road in Lusaka, Zambia, and a Martin Luther King Street in Mpumalanga, South Africa. King’s appeal to the goodness in Americans and the struggle for black liberation in South Africa led by Nelson Mandela were made of the same cloth.