Commerce and Civilization

Starting around the middle of 2022, I noticed an uptick in articles considering whether the Christmas 2022 retail season would bounce back to pre-COVID levels or above. Second, to COVID concerns was the absolute explosion in adoption of online purchasing and deep global concerns about inflation. Chain Store Age, a professional magazine (print and online) whose audience is corporate decision-makers in the retail space, started off the conversation back in March, 2022, with an analysis of how shopping trends have changed. A survey of 20,000 consumers hosted by the shopping rewards app Shopkick in February 2022 revealed major shifts for in-store and online shopping behavior. 81% of consumers surveyed will wait to purchase until there is a sale or a coupon. 79% will purchase a second brand choice if their favorite brand is sold out.

The traditional shopping frenzy of late October through New Years saw supply chain worries last year. This year, those persist, but there is also the added concern for consumers about widespread inflation. Additionally, supply chain issues haven’t been totally resolved. 77% of shoppers expect at least some items to be “out of stock”. Consumers report starting earlier than ever to shop for their “must have” gifts this year. Multiple surveys, including a deep study by Deloitte, validate the idea that consumers are changing their strategies to get the gifts they want. One-quarter of their purchases will be finished in October. Studies dating from 2010 have found that people derive more happiness from gifts that amount to experience more than gifts which are material. Also in the Deloitte study it showed that millennials value the perceived uniqueness and personalization of experience gifts. The Deloitte study revealed that the number of gifts consumers plan to buy was 9 gifts, in contrast to 16 gifts in 2021.

Despite consumer preoccupation with inflation, Deloitte still found they are planning on spending an average of $1455 this year, which is similar to last year’s expenditure. There were some changes in consumer strategies for saving money. Sales, coupons, and buying slightly used items , are some of the common strategies consumers have used to compete with generally rising prices.

An early December 2022 online article in the English version of the Chinese website Xinhuanet covered man-in-the-street interviews in New York City. The interviews showed some consumer spending trends that are cause for concern. For Example, the two-month period between Thanksgiving and Christmas is typically 20% of the retail industry’s annual sales. One after the other, the interviewees reported that the general inflation of rent, food, gas, and other household costs prevented them from making larger purchases this year. Interestingly enough, the article cites a survey by Michigan State University which stated that consumers were planning on spending $700 for their holiday expenses, a big dip from the past three seasons at $880. The significant gap between the spend per person surveyed by Deloitte ($1455) and Michigan State University ($700) could be due to how the survey subjects were chosen or what questions they were asked. Since there were no publicly available copies of the surveys, it is all speculation.

TriplePundit published a report on purchasing trends for gifting previously owned items. Its report estimated that over $69 billion will be spent on such items. This is also in keeping with a strong uptick in socially responsible consumerism and sustainability (7 out of 10 shoppers report a bias towards purchasing sustainable products). Completely onboard - and sometimes leading this trend - are companies like Patagonia, which has a separate used-clothing option and actively solicits “trade-ins” of their clothes. They boast that “keeping our stuff in use for just nine extra months reduces the combined carbon, water, and waste footprint by 20 – 30%” Save money. Save the planet. What’s not to love about this approach?

In Europe the surveys and the concerns are very similar. Inflation, short stocks of items, cautious outlooks on the future of the economies make this a worldwide story. Reuters focuses on the UK and business concerns of lackluster sales leading into Christmas. Barclaycard reports that almost half of the people surveyed at the end of October planned to spend less this year. Almost 60% said their gifts would be less generous, and a surprising 42% even said they were cutting back on socializing.

A broad CNBC article touched on several European countries as they exited the Black Friday end-of-November shopping surge. In Germany, only 30% of the HDE retailers surveyed said they were satisfied with the purchases. Just over half of the retailers said they were dissatisfied, clearly fearing that shoppers had already completed their purchasing for the holiday season. Holland reported transactions up 12%, but most of those were smaller items at department stores (shoes, clothing, food items). Electronics and furniture were left in the stores. Italian consumer spending got mixed reviews. “Federazione Moda Italia Confcommercio, a trade body for Italian fashion retailers, told Reuters that sales across the sector were down by 10 – 15% compared to last year.” In Milan, also an Italian city that is a megacenter for fashion, the reports were in the opposite direction: “up more than 10%”.

The last topic to consider when evaluating holiday spending trends is analyzing purchasing trends for gift cards. A majority of Americans have unused gift cards. That amounts to $21 billion, spent by someone and offered as a present. A present that hasn’t been used. USA Today shared that, on average, a person has $175 in unspent gift cards, vouchers, and store credit. Don’t think that younger people would appreciate a gift card. Half of millennials and Gen Zers have not spent their gifts. The more income you have, the more likely you will have larger balances on your unused (as of now) gift cards.

The reality of gift cards is: if that is your gift to someone, it may be perceived as impersonal. You might hold onto the gift card for too long, waiting for the right moment to spend it (29% of those surveyed). You might forget where you put it (25% of those surveyed!) If you have some gift cards and can locate them, this season would be a good time to spend them!

By the end of January, we should see updated statistics across the globe to confirm what appears to be the consumer case now. People will buy fewer gifts for fewer family and friends. They will spend at about the same levels as in recent years, but considering inflation, they are buying fewer goods. They will also be buying, both for themselves and others, repurposed items shamelessly and maybe even proudly. Consumerism isn’t dead, but it is taking a more purposeful nap. Perhaps, as global inflation abates, as predicted by the International Monetary Fund to settle at 4.1% in 2024 consumers will feel more empowered to impulse buy and to stock up on items they have wanted for a while. For now, most of the world is being cautious.

Back on November 23rd, the recently deceased Tiran Ferro was bodysnatched from a hospital in the West Bank city of Jenin after a car accident left him on life support. Ferro, 18, was an Israeli-Druze citizen on a trip to the West Bank with a group of Arabic speakers who had previously served in Israel's security forces. Apparently confused for a member of the Israeli security forces himself, a number of Palestinian gunmen took his body from the hospital in an attempt to use his remains to barter for the release of bodies of Palestinians held by the Israeli state. This sparked a fierce set of negotiations, as well as threats from the Druze community and Israel’s government that they would enter Jenin and take Tiran Ferro back by force.

So who are the Druze? Their religion and community are a secret even amongst their own believers and are a bit of a mystery to most outsiders. The religion began when it split off from Islam more than a thousand years ago. The Druze often refer to themselves as the "Muwahideen" (declarers of oneness) even though some Druze people call themselves "Muslim". Typically, the Druze are unitarians and believe in many prophets, including Jesus, John the Baptist, Mohammed, Khidr, Moses, and many others.

Given the fact that Druze history in the Middle East has been marked by incidents of persecution and violence, the community was quick to take up arms in retaliatory self-defense. This was exemplified by the kidnapping of three Palestinians near Hebron on Thursday night in the Druze town of Yarka in the north of the country, which was suspected retaliation for the body snatching of Ferro. The kidnapped Palestinians were taken at gunpoint and dropped outside of Daliyat El Karmel after being stripped of their belongings and moderately beaten. The men were eventually taken to the hospital after they managed to contact emergency services.

On the 24th, people from the local Druze community warned the public that if the body wasn't released, it might be difficult to stop young Druze people from attacking Palestinians in retaliation. Druze protestors also blocked highway 6 and only agreed to leave after the-then public Security Minister Omer Bar Lev asked the spiritual leader of the community Sheikh Muafak Tariff to intervene. As the situation escalated, Jenin’s Mayor Akram Rajoub agreed to help facilitate, saying that he was more worried about a rise in tensions between the Palestinians and the Druze than he was about an IDF operation to reclaim the body. After nearly 24 hours of negotiations, the body was given back to the Ferro family, and Tiran was buried in Daliat El Karmel. In a statement that Thursday, Benny Gantz, who left his job as Israel's Defense Minister shortly thereafter, thanked the Palestinian Authority for their assistance in securing the return of Ferro’s remains:

"I would like to express my appreciation to the Palestinian Authority for its action to return the late Tiran Ferro to his family. This is a basic humanitarian step after a vile and inhuman act. I would like to thank the security forces and all the bodies, leaders and representatives who acted with determination to restore him. My sincere condolences to his family, who showed greatness and leadership in difficult moments," Gantz said.

The incident threatened to ratchet up already boiling tensions between Israel and the Palestinians, but the body's return appeared to defuse that for the time being. More than 130 Palestinians were killed in Israeli-Palestinian fighting in the West Bank and east Jerusalem during 2022, making it the deadliest year since 2006. However as Palestinian discontent rises, the Druze find themselves pulled closer to Israel's orbit.

For years, Druze citizens of Israel have served in the military and other government offices, enjoying a level of protection against persecution that many Druze living outside of Israel do not have access to. The Druze community in Israel is traditionally seen as loyal to the state, and they have become increasingly vocal about their grievances with the Palestinian Authority. The Druze are also heavily invested in Israeli politics, with several Druze members elected to the Knesset.

The pro-Israel sentiment was evident in Druze protests against the Palestinian Authority and its handling of the Druze kidnapping case. In the aftermath of the body snatching, the Druze community has voiced its support for Israel and their appreciation for the swift intervention of the state, which will likely only increase the degree that the Druze prioritize their relationship with Israel over the Palestinian Authority in the near future. In the aftermath of the body snatching, the family of Tiran Ferro voiced its support for Israel and their appreciation for the swift intervention of the state, which will likely only further solidify pro-Israel sentiment within the Druze communities inside Israel's borders.

Over the course of December, Kosovo became a hotspot of conflict in Europe, as local Serbs put up barricades in majority Serb towns, in a protest against several policies of the Kosovo government. The local Kosovan government is viewed by Serbians as illegitimate, and Serbia has maintained de-facto control of North Kosovo and is trying to protect the Serbs living there. To achieve this aim the Serbian government has put pressure on the Kosovo government and European Union (EU) in order to resolve the tensions and was even prepared to go to war in order to protect the Serbs in Kosovo. This brings up the questions: how did this crisis erupt and why did it almost lead to conflict?

The roots of the current crisis in Kosovo run far deeper than the recent tensions. The current crisis between the two countries should be viewed within the historical context of relations between Kosovo and Serbia, which have tended to be quite tense. Serbia and Kosovo were previously part of the same country - Yugoslavia. Serbia was a separate republic in Yugoslavia, while Kosovo was an autonomous region inside Serbia. Kosovo has strong symbolism for Serbs because the famous Battle of Kosovo occurred there. The battle was fought between the mediaeval Kingdom of Serbia and the Ottoman Empire in 1389. While the Serbs were defeated and this led to the Ottoman expansion in Europe, the battle proved costly for the Ottomans. The battle in Kosovo became a folk myth used by Serbs to revive the glory of their kingdom in the future and return to Kosovo. Kosovo was later re-integrated in Serbia, but over time its population became majority Albanian leading to ethnic tensions. This prompted the communist Yugoslavia to grant the region a status of an autonomous province in order to put a stop to the unrest.

The status of Kosovo changed with the rise of Slobodan Milosević who became the president of Serbia in 1989. An ardent nationalist responsible for the breakup of Yugoslavia , he also replaced the leadership in the autonomous region of Kosovo and removed its autonomous status. He justified this move by claiming Kosovo should be a part of Serbia because of its historical symbolism. This policy angered the local Albanian population, which was the largest ethnic group in Kosovo. In 1999, this escalated into what is now called the Kosovo War. The large-scale violence in Kosovo was soon followed by the ethnic cleansing of the Albanian population. This prompted a decisive NATO intervention that conducted a bombing campaign in Serbia, which, alongside diplomatic pressure, forced Serbia to cede and allowed NATO troops to enter Kosovo to stop the ongoing ethnic cleansing. The situation was resolved a few months later by the UN Security Council Resolution 1244. The resolution enabled a foreign military presence in Kosovo and left the political question of Kosovo to be resolved later through a political process. An international peacekeeping force under the supervision of the UN was put in place, which had the task of maintaining order in Kosovo and shortly after Kosovo gained autonomy. Over the following years, despite some violent ethnic clashes occuring, the international presence kept the peace in Kosovo.

The status quo kept by international presence under the UN continued until 2008, when Kosovo declared unilateral independence, a move that was supported by the EU and US. Serbia continues to view this act as illegitimate, up to the present day. Serbia did not even recognize documents issued by Kosovo’s government until this past year, when an agreement was reached in late August. However, Serbia still considers this change as a simple bureaucratic measure that does not bestow formal recognition. In its constitution, Serbia considers Kosovo to be an integral part of Serbia, part of the province of Kosovo and Metohija. Kosovo’s independence is also disputed by many UN members, including Russia, China and five members of the EU, which is why Kosovo is not a UN member state.

In 2013 an agreement between Kosovo and Serbia, mediated by the EU, laid the foundations for the resolution of unsettled problems. However the implementation of the settlements have been progressing at a snail's pace since 2013. One reason for this, is the current government in Serbia; which is led by Aleksandar Vučić, Serbia’s president since 2017. Vucic rules over the country in an authoritarian manner that undermines democratic and liberal principles. He uses Serbian animosity towards Kosovo as a tool to maintain his political support and to stoke nationalist sentiments in Serbia.

The first warning signs during the recent crisis could be observed when Kosovo’s government began to force cars with Serbian licence plates, with names of towns situated in Kosovo, to put up stickers with Kosovo symbols. This policy targeted Serbs living in Kosovo, who refused to change their plates to new Kosovo plates. It was also an act of retaliation against Serbia which forced people with Kosovo plates to replace them with Serbian-issued plates. This escalation was temporarily halted through a compromise sticker solution. However, the decision to implement the compromise sticker solution was delayed from August and pushed off until late November. Kosovo’s government, unsatisfied with the implementation of this measure, responded by forcing the Serbs to switch their plates to Kosovo-issued ones. The local Serbs staged protests and put up blockades in several areas where they formed a majority. When the time came to implement the policy, tensions flared again. This forced the EU to once again intervene and resolve the problem. Another agreement was reached in November 2022, in which Serbia agreed to stop issuing licence plates with Kosovo’s towns and Kosovo would not fine people who use those licence plates.

At the same time, Kosovo’s government has become increasingly confrontational with Serbia in recent years, in an effort to protect its independence from Serbia and force it to accept Kosovo’s existence. Kosovo's current Prime Minister, Albin Kurti, has taken a tougher stance towards Serbia than his predecessors and has demanded there be more reciprocity in policies between the two nations, including administrative matters, such as the problematic licence plates mentioned earlier. Kurti's ultimate goal is for Serbia and the international community to give formal recognition of Kosovo's independence and statehood. Kosovo moved a step closer to this, when it officially submitted their application to join the EU on December 15th, 2022. Kosovo’s move angered Serbia, which sees any formal recognition of Kosovo’s independence as a threat. The Serbian government responded by submitting a request to NATO forces present in Kosovo to deploy a contingent of Serbian troops in Kosovo in accordance with the UNSC resolution 1224, although this request was ignored.

For now it seems that further escalation between the two sides has stopped, but the future for Kosovo still seems uncertain. The potential sparks for future conflicts remain, as long as the local Serb population in Kosovo and the Serbian government remain stubbornly opposed to recognizing Kosovo independence. A possible new crisis could erupt during 2023, although the potential for war is unlikely because of the NATO presence. For both sides to achieve a durable and sustainable peace, many changes must occur in the relationship between Kosovo and Serbia; which appear unlikely to happen for the foreseeable future, with the current leadership in both countries. For now, the EU will likely continue to play an important role in mediating between both sides and determining the speed and implementation of any agreements leading to the normalisation of relations between Kosovo and Serbia.

Drama unfolded in the House of Representatives when they convened to nominate and elect a Speaker. For the first time in one hundred years, the House failed to elect a Speaker on the first ballot. Through the numerous casting of ballots, the Republican opposition to Kevin McCarthy revealed itself to consist of 21 members. This coalition finally unraveled over a period of 4 days from January 3rd to 7th with enough defectors and persons voting present to allow Kevin McCarthy to become the next Speaker of the House on the 15th ballot . (The historic high mark for number of ballots to elect a Speaker is 133 ballots in 1855.) This peeling off of the Republican opposition, which came from members of the House Freedom Caucus, happened due to a deal between McCarthy and his detractors. The staunch opposition from within the GOP towards Kevin McCarthy candidacy for Speaker prompts the question of what caused such a vigorous display against him.

This question gains even more relevance when considering the fact that this is not the first time that Kevin McCarthy has had difficulty in securing the Speakership. Then too, back in 2015 the House Freedom Caucus announced its opposition to giving McCarthy the gavel. That time came off the heels of ouster of John Boehner as Speaker by his fellow Republicans after they filed a motion for him to vacate. Last time though McCarthy withdrew after 24 hours from the race, ultimately paving the way for Paul Ryan to get the gavel. McCarthy did, however, later manage to become the minority leader of the Republicans in the House in 2018 by a secret ballot vote. Put simply, McCarthy has always had to contend with the more conservative wing of the party that views him with suspicion.

One reason that led toward this negative view against the establishment Republican leadership, which McCarthy is a part of, was that a lot of pieces of legislation had been a result of corrupt bargains. The passage of the December 2022 omnibus spending bill through the House and Senate was highly illustrative of this process. The $1.7 trillion spending package, with its voluminous 4,100 pages, was dropped on many Congressmen without adequate time to read the entire bill and was largely the result of insider dealing between Congressional leadership. Many provisions of the deal were also controversial with some conservatives, like Representative Dan Bishop, who denounced the bill’s prohibition of the use of money for border security, among other items. Fiscal conservatives, noting the explosion of the national debt, have long had ire for the spendthrift nature of many bills that Congress has passed. Senator Rand Paul for instance cataloged around $482 billion in waste for one year alone. Some examples of this wasteful spending, included giving over $118,000 to study whether Marvel’s movie villain Thanos would be able to snap his fingers while wearing the Infinity Gauntlet and giving $2.3 million to inject puppies with cocaine. Hence there is much umbrage over the costly “we have to pass the bill so you can find out what is in it” approach, that is at least over a decade long.

Kevin McCarthy, Senator Mitch McConnell, Chairwoman Ronna Romney McDaniel, and the establishment Republican brand are also accused of killing the promised Red Wave of 2022. Such accusations revolved around the lack of their grassroots fundraising efforts and a Republican political machine that was overly reliant on election day turnout, to the Republican leadership of trying to counting the votes for their own leadership races even if this costs them a greater number of total seats held by Republicans in Congress, to a host of other problems. This feeling, that the leadership has sabotaged the representatives that the Republican base wants to put forth, is not new. For instance, Mitch McConnell is rather experienced in crushing and subverting anti-establishmentarian movements, as seen in the case of the Tea Party movement. McConnell is even on record as vowing that “we are going to crush them [Tea Party candidates] everywhere.” Republicans' poor performance in the 2022 midterm elections has led to calls for the leadership to step down and be replaced by fresh blood that is more connected to the Republican base and the public at large. So far, much of the leadership has managed to evade such calls, which has further frustrated the base.

This evasion of responsibility by the leadership has been made possible by the long-term problems of centralization of power in leadership roles. In recent years, both parties have centralized its power in the hands of a few key positions, including the position of Speaker. Conservative members of the House are desirous of restoring the past norms of lawmaking like regular order, where legislation is developed in committee and is subject to open floor amendment. Since the 1970s, regular order has become less and less regular, with previously unorthodox behind-the-scenes maneuvers becoming more common in the legislative process. Former Republican Speaker of the House (from 1998 until 2007), Dennis Hastert, introduced the Hastert Rule, a centralizing measure, that prevented any legislation that did not have support from a majority of one’s fellow party members from coming to a vote. Nancy Pelosi, the previous Democratic Speaker, eliminated the Jeffersonian rule, which allowed any member to bring forward a motion of no-confidence. These and other measures have led to what some call the “Strong Speaker”, where the leadership dominates the pillars of power in the House, by controlling the distribution of election fundraising support, committee assignments, the staffing of the Rules Committee, and by choosing which (as well as when) bills are brought to the floor for a vote.

However, this long-term process of the centralization of power has not fostered a greater public appreciation of Congress. Quite the contrary, public opinion of Congress has declined dramatically during this period. The state of public opinion in 2022 toward Congress was such that only 7 percent of people had a great deal of confidence in that institution. The poll also showed that Republicans in particular, feel less represented by their Congressional leadership than the Democrats. Both McConnell and McCarthy, have their own popularity problems with the GOP base. McConnell is especially hated by Republicans so much so that there are times that there are more Democrats that have a very favorable opinion of McConnel, than Republicans.

The deal between the conservative anti-establishmentarian House Freedom Caucus and Kevin McCarthy was meant to address many of these issues and concerns. Much of the deal revolved around reforms about the rules that the House would operate by. The rules package restored the right for individual members of the House to file a motion to vacate against the Speaker, ended proxy voting, and promised that House members would be afforded a 72-hour period to review bills before they went to the floor for a vote. It also restored the Holman Rule that allowed amendments to government spending. The deal further promised that voting on spending bills would be divided by topic, rather than bundling these items into one omnibus spending bill and also included a pledge from Mccarthy that his Congressional Leadership Fund PAC would stay out of Republican primaries in districts that are considered safe Republican seats. The agreement also granted more seats to the House Freedom Caucus on the Rules Committee, forming a sorely needed subcommittee for investigating the weaponization of the federal government, and agreeing to cap spending at levels from two years ago. This rules package was put to a vote and passed on January 9th with only one Republican, Tony Gonzales, voting against it.

The power of the Speaker of the House has waxed and waned throughout American history. Back in 1910, a similar albeit bipartisan revolt occurred against Republican Speaker Joseph Cannon. Cannon, a conservative standpatter, stood accused of being a virtual dictator of the House and of using his powers to stymie the agenda of the progressives by preventing the House from voting on progressive legislation. Democratic Representative Oscar Underwood proclaimed that “we are fighting a system…that enables the Speaker…to thwart and overthrow the will of the majority membership of this House.” This revolt succeeded in altering the orders of the House and the powers of the Speaker. Nevertheless, Joseph Cannon would remain a powerful and influential figure even after this revolt.

History tends to rhythm rather than repeat. Kevin McCarthy’s endorsement of the reforms package coupled with the successful passage of the package may bring about a more responsive and transparent House. Depending on how he governs the House, he may gain greater respect and popularity among the Republican voter base who presently feel very alienated from the party leadership. Should McCarthy try to revert back to the strong Speaker model or go against the spirit of the deal he will be at serious risk of losing the Speakership as well as any feelings of cautious reconciliation that the Republican base may have toward him. Perhaps the weaker Speakership will allow McCarthy- like it did for Cannon- for good or for ill, to remain a powerful figure within his party.