Saturday, October 15, 2022

We're Heading for a Stagflationary Crisis Unlike Anything We've Ever Seen

Opinion by Nouriel Roubini - Thursday


Inflation is back, and it is rising sharply, especially over the past year, owing to a mix of both demand and supply factors. This rise in inflation may not be a short-term phenomenon: the Great Moderation of the past three decades may be over, and we may be entering a new era of Great Stagflationary Instability.

Unless you are middle-aged and gray-haired, you probably hadn’t heard about the term stagflation until very recently. You may have barely heard about inflation. For a long time, until 2021, inflation—the increase in prices year to year—was below the advanced economies’ central banks’ target of 2%. Usually inflation is associated with high economic growth. When aggregate demand for goods, services, and labor is strong, coupled with positive animal spirits, optimism about the future, and possibly loose monetary and fiscal policies, you get stronger than potential economic growth and higher than target inflation. Firms are able to set higher prices because demand outstrips supply, and workers receive higher wages given a low unemployment rate. In recessions, on the other hand, you have low aggregate demand below the potential supply of goods, which leads to a slack in labor and goods markets, with ensuing low inflation or even deflation: prices go down as consumers’ spending declines. Stagflation is a term that refers to high inflation that happens at the same time as stagnation of growth or outright recession.

But sometimes the shocks hitting the economy, rather than coming from changing demand, can come from the supply side: an oil-price shock, say, or a rise in food or other commodity prices. When that happens, energy and production costs rise, contributing to lower growth in countries that import that fuel or food. As a result, you can get a slowdown of growth, or even a recession, while inflation remains high. If the response to this negative supply shock is loose monetary and fiscal policy—banks setting low interest rates to encourage borrowing—to prevent the slowdown in growth, you feed the inflation flames by stimulating rather than cooling demand for goods and labor. Then you end up with persistent stag-flation: a recession with high inflation.

In the 1970s we had a decade of stagflation as two negative oil shocks and the wrong policy response led to inflation and recession. The first shock was triggered by the oil embargo against the U.S. and the West following the 1973 October War between Israel and the Arab states. The second shock was triggered by the 1979 Islamic revolution in Iran. In both cases a spike in oil prices caused a spike in inflation and a recession in the oil-importing economies of the West. The inflation was fed by the policy response to the shock because central banks did not rapidly tighten and impose strong monetary and fiscal policy to contain the inflation. So we ended up with double-digit inflation and a severe recession that doomed the presidencies of Gerald Ford and Jimmy Carter. It took a painful double-dip recession in 1980 and again in 1981–1982 to break the back of inflation when Fed Chairman Paul Volcker raised the interest rates to double-digit levels.

Coming after the stagflation of the 1970s and early 1980s, the Great Moderation was characterized by low inflation in advanced economies; relatively stable and robust economic growth, with short and shallow recessions; low and falling bond yields (and thus positive returns on bonds), owing to the secular fall in inflation; and sharply rising values of risky assets such as U.S. and global equities.

This extended period of low inflation is usually explained by central banks’ move to credible inflation-targeting policies after the loose monetary policies of the 1970s, and governments’ adherence to relatively conservative fiscal policies (with meaningful stimulus coming only during recessions). But more important than demand-side policies were the many positive supply shocks, which increased potential growth and reduced production costs, thus keeping inflation in check.

During the post–Cold War era of hyper-globalization, China, Russia, India, and other emerging-market economies became more integrated in the world economy, supplying it with low-cost goods, services, energy, and commodities. Large-scale migration from the poor Global South to the rich North kept a lid on wages in advanced economies; technological innovations reduced the costs of producing many goods and services; and relative geopolitical stability after the fall of the Iron Curtain allowed for an efficient allocation of production to the least costly locations without worries about investment security.

The Great Moderation started to crack during the 2008 global financial crisis and then finally broke during the 2020 COVID-19 recession. In both cases there were severe recessions and financial stresses, but inflation initially remained low given demand shocks; thus, loose monetary, fiscal, and credit policies prevented deflation from setting in more persistently.

But this time it’s different, as inflation has been rising since 2021, and many serious and important questions are now emerging and being debated by economists, policymakers, and investors. What is the nature of the current inflation? How persistent will it be? Is it driven by bad policies—loose monetary and fiscal policies—or bad negative aggregate supply shocks? Will the attempt of central banks to fight inflation lead to a soft landing or a hard landing? And if the latter, will this be a short and shallow recession or a more severe and protracted one? Will central banks remain committed to fight inflation, or will they blink and wimp out and cause persistent long-term inflation? Is the era of Great Moderation over? And what will be the market consequence of a return to inflation and stagflation?



U.S. Federal Reserve Board Chairman Jerome Powell and U.S. Treasury Secretary Janet Yellen listen during a meeting with the Treasury Department's Financial Stability Oversight Council at the U.S. Treasury Department on October 03, 2022 in Washington, DC. 
Anna Moneymaker-Getty Images

First question: Will the rise in inflation in most advanced economies be temporary or more persistent? This debate has raged for the past year, but now it is largely settled: “Team Persistent” won, and “Team Transitory”—which included most central banks and fiscal authorities—has now admitted to having been mistaken.

The second question is whether the increase in inflation was driven more by bad policies (i.e., excessive aggregate demand because of excessively loose monetary, credit, and fiscal policies), or by bad luck (stagflationary negative aggregate supply shocks including the initial COVID-19 lockdowns, supply-chain bottlenecks, a reduced U.S. labor supply, the impact of Russia’s war in Ukraine on commodity prices, and China’s zero-COVID policy). While both demand and supply factors were in the mix, it is now widely recognized that supply factors have played an increasingly decisive role. This matters because supply-driven inflation is stagflationary and thus increases the risk of a hard landing (increased unemployment and potentially a recession) when monetary policy is tightened.

That leads directly to the third question: Will monetary-policy tightening by the U.S. Federal Reserve and other major central banks bring a hard landing (recession) or a soft landing (growth slowdown without a recession)? Until recently, most central banks and most of Wall Street were in “Team Soft Landing.” But the consensus has rapidly shifted, with even Fed Chair Jerome Powell recognizing that a recession is possible and that a soft landing will be “very challenging.”

Will the coming recession be mild and short-lived, or will it be more severe and characterized by deep financial distress?

A model used by the Federal Reserve Bank of New York shows a high probability of a hard landing, and the Bank of England has expressed similar views. Several prominent Wall Street institutions have now decided that a recession is their baseline scenario (the most likely outcome if all other variables are held constant). Indeed, in the past 60 years of U.S. history, whenever inflation has been above 5%—it is now above 8%—and the unemployment rate below 5%—it is now 3.7%—any attempt by the Fed to bring inflation down to target has caused a hard landing. So, unfortunately, a hard landing is much more likely than a soft landing in the U.S. and most other advanced economies.

The Fourth question: Are we in a recession already? In both the U.S. and Europe, forward-looking indicators of economic activity and business and consumer confidence are heading sharply south. The U.S. has already had two consecutive quarters of negative economic growth in the first half of this year, but job creation was robust, so we weren’t yet in a formal recession. But now the labor market is softening, and thus a recession is likely by year’s end in the U.S. and other advanced economies.

Now that a hard landing is becoming a baseline for more analysts, a new fourth question is emerging: Will the coming recession be mild and short-lived, or will it be more severe and characterized by deep financial distress? Most of those who have come late and grudgingly to the hard-landing baseline still contend that any recession will be shallow and brief. They argue that today’s financial imbalances are not as severe as those in the run-up to the 2008 global financial crisis, and that the risk of a recession with a severe debt and financial crisis is therefore low. But this view is dangerously naive.

Related video: Their answer to inflation? Keep pushing forward
Duration 3:34

There is ample reason to believe the next recession will be marked by a severe stagflationary debt crisis. As a share of global GDP, private and public debt levels are much higher today than in the past, having risen from 200% in 1999 to 350% today. Under these conditions, rapid normalization of monetary policy and rising interest rates will drive highly leveraged households, companies, financial institutions, and governments into bankruptcy and default.

When confronting stagflationary shocks, a central bank must tighten its policy stance even as the economy heads toward a recession. The situation today is thus fundamentally different from the global financial crisis or the early months of the pandemic, when central banks could ease monetary policy aggressively in response to falling aggregate demand and deflationary pressure. The space for fiscal expansion will also be more limited this time, and public debts are becoming unsustainable.

Moreover, because today’s higher inflation is a global phenomenon, most central banks are tightening at the same time, thereby increasing the probability of a synchronized global recession. This tightening is already having an effect: bubbles are deflating everywhere—including in public and private equity, real estate, housing, meme stocks, crypto, SPACs, bonds, and credit instruments. Real and financial wealth is falling, and debt and debt-servicing ratios are rising.

Thus, the next crisis will not be like its predecessors. In the 1970s, we had stagflation but no massive debt crises, because debt levels were low. After 2008, we had a debt crisis followed by low inflation or deflation, because the credit crunch had generated a negative demand shock. Today, we face supply shocks in a context of much higher debt levels, implying that we are heading for a combination of 1970s-style stagflation and 2008-style debt crises—that is, a stagflationary debt crisis.

The fifth question is whether a hard landing would weaken central banks’ hawkish resolve on inflation. If they stop their policy tightening once a hard landing becomes likely, we can expect a persistent rise in inflation and either economic overheating (above-target inflation and above-potential growth) or stagflation (above-target inflation and a recession), depending on whether demand shocks or supply shocks are dominant.

Indeed, while currently the debate is on soft vs. hard landing and how severe the hard landing will be, that assumes that central banks that are now talking hawkishly will stick to their commitment to return to 2% regardless of whether that policy response leads to a soft or hard landing. Most market analysts seem to think that central banks will remain hawkish, but I am not so sure. There is a chance that central banks will wimp out and blink, and not be willing to fight inflation. In this case the Great Moderation of the past 30 years may be over, and we may enter a new era of Great Inflationary/Stagflationary Instability fed by negative supply shocks and policymakers—as in the 1970s—being unwilling to fight the rising inflation.

On the demand side, loose and unconventional monetary, fiscal, and credit policies have become not a bug but rather a feature. Between today’s surging stocks of private and public debts (as a share of GDP) and the huge unfunded liabilities of pay-as-you-go social-security and health systems, both the private and public sectors face growing financial risks. Central banks are thus locked in a “debt trap”: any attempt to normalize monetary policy will cause debt-servicing burdens to spike, leading to massive insolvencies and cascading financial crises.

With governments unable to reduce high debts and deficits by spending less or raising revenues, those that can borrow in their own currency will increasingly resort to the “inflation tax”: relying on unexpected price growth to wipe out long-term nominal liabilities at fixed rates.

Early signs of wimping out are already discernible in the U.K. Faced with the market reaction to the new government’s reckless fiscal stimulus, the Bank of England has launched an emergency quantitative-easing (QE) program to buy up government bonds (the yields on which have spiked).

Monetary policy is increasingly subject to fiscal capture. Central banks will talk tough, but there is good reason to doubt their willingness to do whatever it takes to return inflation to its target rate in a world of excessive debt with risks of an economic and financial crash.



Shell gas station 6101 W Olympic Blvd, Los Angeles, CA 90048, on Thursday, Sept. 29, 2022 in Los Angeles, CA. The Los Angeles County average price rose 15.3 cents to $6.261, its highest amount since July 6, according to figures from the AAA and Oil Price Information Service. It has risen for 27 consecutive days, increasing $1.015, including 14.9 cents Wednesday. It is 67.4 cents more than one week ago, 98.2 cents higher than one month ago, and $1.852 greater than one year ago. 
Gary Coronado-Los Angeles Times/ Getty Images

On the supply side, the backlash against hyper-globalization has been gaining momentum, creating opportunities for populist, nativist, and protectionist politicians. Public anger over stark income and wealth inequalities also has been building, leading to more policies to support workers and the “left behind.” However well intentioned, these policies are now contributing to a dangerous spiral of wage-price inflation.

Making matters worse, renewed protectionism (from both the left and the right) has restricted trade and the movement of capital. Political tensions, both within and between countries, are driving a process of reshoring. Political resistance to immigration has curtailed the global movement of people, putting additional upward pressure on wages. National-security and strategic considerations have further restricted flows of technology, data, and information.

This balkanization of the global economy is deeply stagflationary, and it is coinciding with demographic aging, not just in developed countries but also in large emerging economies such as China. Because young people tend to produce and save, whereas older people spend down their savings, this trend also is stagflationary.

The same is true of today’s geo-political turmoil. Russia’s war in Ukraine, and the West’s response to it, has disrupted the trade of energy, food, fertilizers, industrial metals, and other commodities. The Western decoupling from China is accelerating across all dimensions of trade (goods, services, capital, labor, technology, data, and information). Other strategic rivals to the West may soon add to the havoc. Iran’s crossing the nuclear-weapons threshold would likely provoke military strikes by Israel or even the U.S., triggering a massive oil shock.

Now that the U.S. dollar has been fully weaponized for strategic and national-security purposes, its position as the main global reserve currency may begin to decline, and a weaker dollar would of course add to the inflationary pressures. A frictionless world trading system requires a frictionless financial system. But sweeping primary and secondary sanctions against Russia have thrown sand into this well-oiled machine, massively increasing the transaction costs of trade.

On top of it all, climate change, too, is stagflationary. Droughts, heat waves, hurricanes, and other disasters are increasingly disrupting economic activity and threatening harvests (thus driving up food prices). At the same time, demands for decarbonization have led to underinvestment in fossil-fuel capacity before investment in renewables has reached the point where they can make up the difference. Today’s large energy-price spikes were inevitable.

Pandemics will also be a persistent threat, lending further momentum to protectionist policies as countries rush to hoard critical supplies of food, medicines, and other essential goods. After 2½ years of COVID-19, we now have monkeypox.

Finally, cyberwarfare remains an underappreciated threat to economic activity and even public safety. Firms and governments will either face more stagflationary disruptions to production, or they will have to spend a fortune on cyber-security. Either way, costs will rise.

Thus, as in the 1970s, persistent and repeated negative supply shocks will combine with loose monetary, fiscal, and credit policies to produce stagflation. Moreover, high debt ratios will create the conditions for stag-flationary debt crises; i.e., the worst of the 1970s and the worst of the post-global-financial-crisis period.

That leads to a final question: How will financial markets and asset prices—equities and bonds—perform in an era of rising inflation and return to stagflation? It is likely that both components of any traditional asset portfolio—long-term bonds and U.S. and global equities—will suffer, potentially incurring massive losses. Losses will occur on bond portfolios, as rising inflation increases bond yields and reduces their prices. And inflation is also bad for equities, as rising interest rates hurt the valuation of firms’ stock. By 1982, at the peak of the stagflation decade, the price-to-earning ratio of S&P 500 firms was down to 8; today it is closer to 20. The risk today is a protracted and more severe bear market. Indeed, for the first time in decades, a 60/40 portfolio of equities and bonds has suffered massive losses in 2022, as bond yields have surged while equities have gone into a bear market. Investors need to find assets that will hedge them against inflation, political and geopolitical risks, and environmental damage: these include short-term government bonds and inflation-indexed bonds, gold and other precious metals, and real estate that is resilient to environmental damage.

The decade ahead may well be a Stagflationary Debt Crisis the likes of which we’ve never seen before.

Adapted from MegaThreats: Ten Dangerous Trends That Imperil Our Future, and How to Survive Them, published by Little Brown on October 18th

Russia and the West are still working together in space

The International Space Station represents one of the only collaborative projects between Russia and the West that hasn't been abandoned. Here's why.

Anna Kikina is the first Russian astronaut to launch on an American rocket in 20 years

The war in Ukraine has put a halt to most of Russia’s political, scientific and academic collaboration with the West.

But one project continues moving forward despite the conflict: Last week, Anna Kikina became the first Russian astronaut to launch on an American rocket in 20 years — and the only cosmonaut to ever board a SpaceX vessel. 

Kikina is headed to the International Space Station (ISS), where she will live for over four months as a member of the SpaceX Crew-5 mission. Her presence aboard the mission was announced in July as the result of a crew swap that put a NASA astronaut on a Russian flight to the ISS.

The ISS is a 25-year-old space collaboration between the US, Russia, Canada, the European Union and Japan that has long been seen as an emblem of successful post-Cold War relations. It is one of the few projects Russia and the West have continued working together on since Russia’s February invasion of Ukraine. 

Space environment lab

The ISS is the largest space station in low Earth orbit and represents the longest human presence in space — over 20 years. It is largely used as a space environment lab where thousands of experiments in astronomy, physics and microbiology have been conducted over the past two decades.

The module itself is made up of two parts: One is manufactured and operated by Russia, while the other is manufactured and operated by the US, with support from the other partner countries. 

Russia has responsibility over the part of the station that keeps it in orbit.

Russia helps the ISS stay in orbit

An extra push

The ISS exists in a state of free fall, creating the sensation of weightlessness or "microgravity", which refers to the fact that gravity aboard is never exactly zero. Everything with mass, like the Earth, the Sun, the space station itself and the astronauts, exerts a gravitational pull.

The station is able to stay in orbit because it circles the Earth quickly enough to compensate for being in a state of free fall. It moves at a speed of almost 8 km per second (5 miles per second) — more than 20 times the speed of a 9mm bullet.

Although this swift velocity is usually enough to keep the station afloat, sometimes it loses altitude and requires an extra push to stay at its normal 400 km (250 miles) above Earth. The Russian module provides that boost.

"Both countries are needed for operations, the Russians for propulsion, the Americans for power. We will continue to have a very professional relationship between cosmonauts and astronauts to keep this station alive," NASA administrator Bill Nelson said in an interview with Der Spiegel International in July.

Science aboard the ISS

The state of free fall differs from the state of gravity we experience on Earth. Strange things happen aboard the ISS — the water on astronauts’ toothbrushes forms bubbles, a sneeze can knock them back and a candle's flame appears perfectly round.

Most of the science conducted aboard the station, which revolves around Earth 16 times a day, is focused on understanding how long-haul space flights impact astronauts’ health.

This knowledge is critical for the design of longer crewed missions — to Mars, for example.

Through experiments conducted aboard the ISS, scientists have learned that bones lose density in microgravity, and that astronauts have to work out two hours daily just to keep their muscle mass.

NASA's famous Twin Study taught scientists important lessons about how space affects the length of telomeres — the end tips of chromosomes that could play a role in lifespan, the immune system and gene expression.

For this joint US-Russia experiment, researchers studied two identical twins, both now retired astronauts. Scott Kelly was on board the ISS for about 11 months with cosmonaut Mikhail Kornienko, while his brother Mark stayed on Earth.

Former astronaut Scott Kelly (R) stands face-to-face with his twin brother, 

former astronaut Mark Kelly (L). The two took part in NASA's Twin Study.

And it’s not only about astronaut health. Other projects, like the Aquamembrane water recycling experiment, could also help people on Earth. Using "forward osmosis" water filtering technology, astronauts were able to purify urine to drinking water. This technology is quicker than the alternative currently being used on Earth, called "reverse osmosis", and could have big implications for water-scarce areas in the future. 

Plans for the future

Roscosmos president Yuri Borisov said in July that Russia plans to pull out of the ISS in 2024 to launch its own space station. 

But according to NASA's Administrator Bill Nelson, they haven't received any official decision from Russia, and Sergei Krikalev, head of human space programs at Roscosmos, said that the collaboration might be extended past 2024 in a press briefing before the Crew-5 launch.

The US has pledged to continue until the end of the decade: US President Biden signed the CHIPS Act in early August, which extends NASA's involvement with the ISS six years, to 2030.

Are there any alternatives?

Whether the ISS could continue without Russia is unclear. 

Northrop Grumman's Cygnus spacecraft managed to successfully give a necessary stabilizing boost to the station earlier this summer, which could offer an alternative. Cygnus is one of NASA's commercial spacecraft partners together with SpaceX Dragon.

But disentangling the Russian module from the US module will take time and money, and no plans have been announced so far.

When it comes to the astronauts and cosmonauts aboard, the conflict on the ground came as a surprise when it erupted earlier this year, according to German European Space Agency astronaut Matthias Mauer. He spoke candidly on a German space podcast after landing back on Earth in May after over 170 days aboard the ISS.

"We addressed it very quickly and actively. And yes, all six or seven up there immediately agreed, the Russian colleagues, the American colleagues — nobody could understand what was happening down there," said Mauer, in an hr-iNFO podcast called "WeltraumWagner". 

Football in Iran: Where women have a history of protesting

Women in Iran have taken the lead in recent protests, but it's not the first time they have defied the regime. For years, female football fans have disguised themselves as members of the opposite sex to attend matches

Female football fans in Iran have been protesting for years. 

But now it's about more than just football.

The bravery of women in Iran in standing up to a repressive regime in recent weeks has been noted around the world.

Protesters have taken to the streets up and down the country in response to the death of Jina Mahsa Amini in police custody in September after she was arrested by the so-called morality police for "unsuitable attire."

It wasn't the only loss of life. According to a Norwegian-based human rights group, at least 185 people have since been killed across the country.

"There is a lot of rage and anger because of the killing of innocent people, and the frustration that we feel at our inability to do anything about it," says Leyli, a female football supporter who knows from first-hand experience what it is like to run the risk of defying authorities in the Islamic Republic of Iran.

In 2017, when her team, Persepolis, won the title for the first time in nine years, she smuggled herself into the stadium for the final game of the season.

"I liked Persepolis because it was the people's club and I feel and still think their values are different from others. This club is not just part of me, it's my whole life," Leyli says, using a pseudonym to protect her identity.

"I wanted to see the trophy in the hands of the captain, Jalal Hosseini, and nothing could prevent me. I thought that maybe this moment would never be repeated again and maybe I would not be alive when they opened the stadium gates to women."

Whether from the forced wearing of hijabs or being banned from attending sporting events, women have felt the full force of state repression since the 1979 Islamic Revolution.

And Leyli, a football fan since watching legendary Iran striker Farshad Pious play his last game for Persepolis in 1997, had to watch World Cup qualifiers, Asian Champions League finals or big domestic league matches, on television.

But by 2017, that was something that she could no longer accept.

Football is popular in Iran but crowds are traditionally exclusively male

Leyli's disguise

"I wanted to be there at any cost and I just asked myself, 'Why can't I go? Why don't they let us enter stadiums?' It is based on nothing except rotten beliefs. It's disrespectful to limit what women can do through coercion." 

So she did the only thing that she thought she could do to get inside the massive Azadi Stadium, the iconic arena which seats 100,000 (male) spectators: she dressed as a boy, putting layers and layers on to disguise her female form.

"It wasn't easy at all," she recalls. "I wore lots of clothes to make it less obvious. I had to put on make-up, too. I was worried that it wasn't good enough to fool the police."

After a trip across the city to get to the stadium hours before kick-off, to make sure of a ticket, there was another issue. "I really didn't want to go to the bathroom in the stadium so I could not even drink anything."

There was the constant threat of being discovered by security guards or secret police who were placed among the crowd. "I was scared, a lot. I didn't know what would happen if they had discovered that I was not a boy and what my penalty would be."

For the first time since the Islamic Revolution, 500 women were allowed 

\to enter the Azadi Stadium for a match, including this Esteghlal fan.

Taking a Risk

Leyli's concerns were not unfounded, as a tragic incident two years later showed.

In March 2019, Sahar Khodayari, a female supporter of Persepolis' local rivals Esteghlal, was caught watching her team inside the stadium. Upon learning she could face six months in prison, Khodayari killed herself in front of the Islamic Revolutionary Court building.

She became known as "Blue Girl," in reference to Esteghlal's club colors.

Other women imprisoned for watching football include Forough Alaei, Zahra Khoshnavaz, Leili Maleki and Hedieh Marvasti, who were only released in 2019 after their families paid US $11,000.

Leyli went to games alone as she felt it was safer to do so. "When you go to the stadium dressed as a boy, there's no point having a friend with you because you can't speak, otherwise they could discover who you really are from your voice," she explains.

"And you can't support each other anyway if you get caught so it's better to be alone."

Pressure brings change, for a while

Over the years, pressure from world governing body FIFA and groups such as Open Stadiums has seemed to make a difference.

When the new league season kicked off in August this year, the authorities allowed a limited number of women into a separate section at the Azadi Stadium.

On August 31, Leyli was present as Persepolis beat Sanat Naft 2-0 — for the first time not dressed as a boy, but cheering along with everyone else.

"It felt very different," she said. "At first, I didn't believe that I could go there just wearing my own clothes. It was so strange that I even forgot to take photos and videos."

Now, the gates are locked again, though for men too this time, with authorities preoccupied with the ongoing protests.

For Leyli, for the first time in years, football doesn't feel that important.  "We don't know what will happen."

Edited by Matt Ford

  • Date 12.10.2022
How can architecture combat homelessness?

Rising homelessness is a worldwide problem that has been exacerbated by the pandemic. An exhibition in Hamburg is looking at how to deal with the crisis.



Homeless people inside Westminster underground station in March 2020


According to United Nations estimates, 1.6 billion people worldwide currently live in inadequate housing or have no fixed abode. The COVID pandemic has shown how quickly people slip into unemployment through no fault of their own and ultimately end up on the streets.

The traveling exhibition "Who's Next? Homelessness, Architecture and the City" is dedicated to this global issue which is forcing governments to act.

After opening at the Architecture Museum of the Technical University of Munich in 2021, the exhibition now comes to Hamburg's Museum of Arts and Crafts (Museum für Kunst und Gewerbe, MKG), opening October 14.

"Homelessness is a global problem," says curator Daniel Talesnik. "But with our exhibition we wanted to understand in more detail how individual cities deal with this challenge."

The show therefore looks comparatively at the ways mega-cities such as New York, Mumbai, Santiago de Chile, Moscow and Tokyo are dealing with the crisis. While in Chile the state is fighting homelessness with loans for rents, for example, in Moscow, the problem is completely ignored.

Using documentary films and photo essays, the exhibition portrays the harsh reality of homelessness on the ground, but also shows innovative social housing models to provoke thinking about solutions.


LIVING WITHOUT HOUSING
A tent camp for the unhoused in San Francisco
The camp on Fulton Street in San Francisco was created at the start of the COVID pandemic amid worsening homelessness. Unhoused people can pitch their tents here on marked grids around the Pioneer Monument, which stands just outside City Hall. The city has provided sanitary facilities and a mobile phone charging station. Unofficial figures put the number of unhoused people currently at 16,000.
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How can architecture help?

According to UN estimates, some 15 million people are forcibly displaced from their homes every year. Increasingly, young people are at risk of becoming homeless. For these reasons, the United Nations adopted the first resolution on homelessness in February 2020, calling on governments to take swift and decisive countermeasures.

The causes of homelessness are complex and can relate to trauma, unemployment, drug addiction or mental illness. One thing is clear: people sleeping on the streets are a symptom of inequality and extreme social division.

Housing market speculation leading to skyrocketing rents and home prices, in addition to a lack of social housing, is leaving some people with no choice but to shelter in parks or under bridges — and through no fault of their own.

Homeless people sleep in a temporary parking lot shelter in Las Vegas marked for social distancing to help slow the spread of COVID-19, in March 2020


The pandemic has worsened unhoused people's already precarious living situation, concludes the Bundesarbeitsgemeinschaft Wohnungslosenhilfe e. V. (Federal Association for Assistance to the Homeless).

This is where architectural and urban planning solutions are gradually being adopted. The difficulty of isolating during the pandemic among people sleeping rough has been addressed in cities like San Francisco where, as the exhibition shows, legal tent camps were set up in grids and sanitary facilities were provided.

The exhibition includes several examples of innovative shelters for unhoused people, including Holmes Road Studios in London, a shelter for former drug and alcohol addicts made up of cottage studios that were designed by Peter Barber Architects.

"We don't see architecture as a savior or the only discipline that can solve the problem. It can only help alleviate people's situation. Because as such, this is a social problem, more than that, it's a systemic problem," said Daniel Talesnik.

ZIONIST SLANDER

What are the antisemitism claims linked to Nobel Prize winner Annie Ernaux?

The 2022 laureate for the Nobel Prize for literature has supported the anti-Israel boycott movement, BDS, on many occasions. Is Annie Ernaux antisemitic or simply a vocal critic of Israel's policies?

Nobel Prize winner Annie Ernaux

Just a few days after being showered with praise for winning the Nobel Prize for literature, French author  Annie Ernaux is now making headlines for her "dark side," as German tabloid paper Bild put it. News magazine Spiegel also reports on accusations of antisemitism, based on an initial article in the Israeli Jerusalem Post, which reveals Ernaux's closeness with the BDS movement.

An acronym for "Boycott, Divestment, Sanctions," the BDS movement aims to put Israel under international pressure to end the occupation of the Palestinian territories.

BDS activists accuse Israel of colonialism and compare it to South Africa during apartheid. They are therefore trying to isolate the country economically, culturally and politically.

Those who accuse BDS of being antisemitic point to statements of leading activists who deny Israel's right to exist, such as: "Definitely, most definitely, we oppose a Jewish state in any part of Palestine," said BDS co-founder, Omar Barghouti.

One of the most prominent supporters of the movement is Roger Waters.

Ernaux supports BDS views

The Jerusalem Post reports that in 2018, Annie Ernaux signed a letter with 80 other cultural figures stating that the Israeli state was represented too positively in the French media. "It is a moral obligation for any person of conscience to refuse the normalization of relations with the State of Israel," the letter said.

Barbara Vinken: Ernaux cannot be called antisemitic

Again, in May 2019, Ernaux and more than 100 other French artists signed a letter demanding a boycott of the Eurovision Song Contest, taking place in  Tel Aviv that year. They called upon French TV broadcasters to abstain from airing the popular competition.

Two years later, Ernaux signed "A Letter Against Apartheid," in which Israel was compared to South Africa's apartheid regime. The letter denounced Israel's politics in the Gaza strip as well as Israeli attacks on Arabs and Palestinians. In its article on the Nobel Prize-winning author, the Jerusalem Post claims that the letter does not give proper background on who initiated tensions that led to fierce fighting in May 2021.

BDS has a wide network

Ernaux's political views, including her close support for BDS, are not a secret in France, says Barbara Vinken, professor for French literature at the Ludwig Maximilian University in Munich. In France, people accept her views as freedom of opinion.

"But one needs to probably also think that in other countries, the BDS has more support than it has with us [in Germany], also among intellectuals. We in Germany have a special position because of our history, and rightly so. It is clear that we are extremely sensitive towards this issue."

The Jerusalem Post also accuses Ernaux of supporting the call for the pardon for Georges Abdallah, a Lebanese communist, who murdered an American officer and an Israeli diplomat. A BDS letter about Abdallah's case, which Ernaux also signed, describes the murdered persons as "active Mossad and CIA agents" and Abdallah as "committed to the Palestinian people and against colonization."

But beyond Ernaux, a French-Jewish union for peace also stood for Abdallah at the time, Vinken told German broadcaster Deutschlandfunk. The campaigns "were definitely supported by a really broad and also Jewish public," she said.

Mirna Funk is critical toward Ernaux's support of the BDS movement

'No indication of antisemitism' in her works

According to Vinken, Ernaux is condemning Israeli politics in the Palestinian territories; in principle, she stands for an opinion that can evoke popular agreement. There is no reason to accuse the author of antisemitism, Vinken says.

"There is nothing in her work indicating antisemitism," the literature professor said. To turn a public personality's statements against a certain policy into a "death sentence" is unacceptable, she added, referring to the negative press Ernaux has received in Germany and Israel over the last days.

Berlin-based author Mirna Funk has a different opinion, though. The Jewish writer considers BDS to be unambiguously antisemitic. "And I also find people supporting the BDS politically dangerous," she told DW.

Funk is not alone in her opinion. The German Bundestag has also decided in a May 2019 resolution that the Boycott, Divestment, Sanctions campaign against Israel is antisemitic.

Anyone receiving the Nobel Prize and stepping into the public limelight must also accept that people will engage with their political position, argued Funk: "The same happened with [Peter] Handke."

The Austrian author, who received the Nobel Prize in literature in 2019, expressed solidarity for Serbia during the Yugoslavian conflict and according to critics, trivialized the war crimes perpetrated by Serbian forces.

Ideologies of the suppressors and the suppressed

Like many BDS supporters, Ernaux's political positions are linked to her own background. She grew up in a small place in Normandy, where her parents ran a village shop. Ernaux was the first in her lower middle-class family to complete university.

Until her retirement, she worked as a teacher and used her free time to write about her life: Poverty during her youth, her unwanted pregnancy and her abortion, which was illegal at the time. She also wrote about her sister, who died as a young child, before Annie was born.

Ernaux was always committed to the causes of the left.

"In leftist ideology, one assumes that every relationship, whether personal or political, is based on power relations between the suppressors and the suppressed," Mirna Funk said. The problem between Palestinians and Israelis is therefore interpreted this way too. "From the Palestinian side, one has understood for decades how to stylize the Palestinian as the underdog and that has functioned wonderfully well in the leftist sphere."

Boycotting Ernaux is not an option

Nevertheless, Funk would still read Ernaux's books. "Even if Ernaux supports BDS, I am not in favor of boycotting [her]. I think it is very, very important to separate artistic performance from the artist herself."

Ernaux is a BDS supporter, but one must make a distinction between artists creating work that is independent of their political positions and artists who are directly producing propaganda material, Funk emphasized.

"Ernaux has not published books on Israelis and Zionists and Jews, but about her own world," Funk said. "Still, one needs to consider that she represents political positions, which can be criticized. But that is the multi-dimensionality of every person. And I think it is very important to be able to tolerate that contradiction."

Among her various political stands, Annie Ernaux applauds the courage of Iranian women currently protesting the regime and also condemns Putin's war on Ukraine.

Reacting to her prestigious award, Ernaux said that she saw it as an invitation to continue her struggle against injustice worldwide: "To get the Nobel Prize means to continue my responsibility," she stated, adding that she felt responsible to be open towards the path the world may take.

This article was originally published in German. It was translated by Manasi Gopalakrishnan.

Update: The article was modified on October 12, 2022, after its publication, to include a quote by a BDS co-founder, and now specifies which conflict is referred to in "A Letter Against Apartheid."

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  • Date 11.10.2022

Pakistan: Why Swat locals are angry with both the military and the Taliban

A deadly attack on a school van in Pakistan's Swat Valley has sparked fears of a resurgence in Taliban activity in the region. Thousands have protested against the possible return of a militant presence to Swat.

Thousands protest in Swat after a gunman opened fire on a school van, 

killing the driver and critically injuring a child

Pakistan's Swat Valley was once ruled by the Taliban, who imposed a ban on education for women among other retrogressive measures.

The region — in the northwestern province of Khyber Pakhtunkhwa that borders Afghanistan — is perhaps better known for being the hometown of Nobel peace laureate Malala Yousafzai, who was 15 years old when Taliban militants shot and wounded her a decade ago.

Malala had been campaigning for girls' right to education in Swat and was a vocal critic of Islamic extremists. The Taliban said in 2012 that she had been attacked for promoting "secularism."

The Swat Valley had been a stronghold for the Tehreek-e-Taliban Pakistan (TTP) — the Pakistani Taliban group that is not directly connected to its Afghan counterpart but shares a similar ideology — which had been the focus of a 2009 military offensive to flush out militants from the area.

Taliban returns to former stronghold

Pashtun nationalists and other political parties in the area now accuse the government of holding clandestine talks with the militants and fear this could plunge the picturesque area into a reign of terror.

Many in Pakistan oppose the government's negotiations with the TTP. The group was responsible for attacking a military-run school in Peshawar in 2014, laying siege and killing 132 schoolchildren.

The government dismissed recent concerns of a significant TTP presence in the region.

But last month, suspected militants fired on a police party in the valley, fueling speculation that the militant group, which aims to set up an Islamist state in Pakistan, had returned to the area.

And the Taliban claimed responsibility for a September bomb attack that killed Idrees Khan, a local pro-government militia chief, along with two police officers, two private guards, and three laborers in the Swat region, local police told French news agency AFP.

Simmering anger then boiled over into widespread protests following a deadly assault on a school van earlier this week. One protest lasted for over 40 hours.

The attacks coincided with a visit by Malala Yousufzai to her home country to meet with victims of the devastating monsoon floods in Pakistan's southern province of Sindh.

The TTP was responsible for an attack on a military-run school in Peshawar in 2014

Factors fueling frustration

Marwat Salam, a 26-year-old resident of the Swat's Matta area, said that people are furious over the government's inaction. People feel that their leaders are either supporting the Taliban or are afraid of them, which perhaps explains why the government has not taken any concrete action, Salam told DW.

The government's lackluster response has created anxiety, particularly among women, she told DW.

She added that she had studied at university, completing a masters in psychology, but she feared her sisters and cousins might not continue their education if the Taliban returns.

"People had to leave their homes in the past and were not helped by the government, and now the government again is turning a blind eye to the activity of militants, which is fueling frustration against the government," Salam added.

Bibi Hasina, a 45-year old nurse working at a local hospital, said that the school van attack sent a shiver down people's spines, reminding everyone of the turbulent days of the past.

"The people of Swat protested against it, because they are worried about their children, their families, their businesses and their safety," Hasina said.

A sense of betrayal

The 2009 anti-militant offensive forced over a million people to leave their homes and take refuge in various parts of the country. They were only allowed to return when the operation ended a few months later.

Idris Ali Shah, who lives in Matta, said that the people of Swat were furious because they had been given contradictory information.

Malala Yousufzai speaks with women and children about facing 

the tough situation with courage

Firstly, they were assured that the militants had been eliminated during the offensive, he told DW, but then people witnessed a wave of targeted killings that included 800 political workers and peace activists.

"We were told these were ruthless terrorists and now the same are being engaged in talks without even taking the people into confidence," Shah said. "Then the reports of extortion, threats and militants' presence were all ignored. So, the disappointment with the government and the state is natural."

What is at risk?

Businesses have been booming in Swat since the end of the 2009 operation. Local and overseas tourists have also started visiting the valley, prompting people to set up new hotels and other attractions for the fresh influx of visitors.

People have invested millions or possibly billions of rupees into businesses, construction of houses, markets and other places, pointed out Sarfraz Khan, former head of the Area Study Center of Peshawar University and a Swat native.

Now this is all at risk, he told DW, adding the government is doing nothing to nab those militants who are apparently hurling threats at people over the phone, demanding extortion. He told DW that lawmakers from the ruling Pakistan Tehreek-e-Insaf (PTI) "have paid extortion and the government still did not take any action."

Misleading claims?

The army media wing last month admitted that the presence of "a small number of armed men on a few mountain tops between Swat and Dir has been observed."

However, it strongly rejected claims that the armed men had run amok.

"Apparently, these individuals sneaked in from Afghanistan to resettle in their native areas. A close watch is being maintained on their limited presence and movement in mountains," the army said in a statement.

"A misperception about the alleged presence of a large number of proscribed organization TTP's armed members in Swat Valley has been created on social media. After confirmation on the ground, these reports have been found to be grossly exaggerated and misleading," the statement added.

But security analysts say that TTP fighters feel emboldened by the Afghan Taliban's return to power in Afghanistan in August 2021.

The 'Pashtun Spring'

Some critics believe that Pashtun nationalists are trying to exploit every opportunity to defame the army.

At the core of the anti-militant and anti-army protests in Pakistan's northwestern region is the Pashtun Tahafuz Movement (PTM), an anti-war group. Pakistani authorities have long accused liberal Pashtun groups, including the PTM, of destabilizing the country.

The PTM has gained considerable strength in the past five years, drawing tens of thousands of people to its protest rallies. Its supporters are critical of both the Taliban and the Pakistani military, which they say has ravaged Pashtun areas in both Afghanistan and Pakistan. 

Aziz Ullah Khan, a provincial law maker from Swat, told DW that it was propaganda that the army or security forces were bringing back the Taliban.

"The army offered tremendous sacrifices to flush out militants from Swat and other parts of the country. If Swat has peace today, it is all because of these sacrifices," he said, adding that some elements are spreading malicious propaganda against the army which should be condemned.


LIFE IN AFGHANISTAN UNDER THE TALIBAN
New but old dress code
Although it is not yet mandatory for women to wear a burqa, many do so out of fear of reprisals. This Afghan woman is visiting a local market with her children. There is a large supply of second-hand clothes as many refugees have left their clothes behind.
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'No anger against the government'

Khan rejected that people of Swat are fed up with the government.

"I am from the provincial government and roaming about the entire valley. I did not witness any anger against the government and security forces," Khan said.

He also refuted claims that militants are present in the scenic valley.

"I can take you to every part of Swat and you will not find any militants at all. This is just propaganda. Some criminal elements did give extortion calls using the name of the Taliban, but they were nabbed and no PTI leader or lawmaker paid any extortion," added Khan.

Edited by: Keith Walker

Date 14.10.2022