A common belief still exists that the U.S. has permanently lost its position as a global manufacturing powerhouse, which had become the basis of its global industrial prominence in the wake of the “great 1930's depression.” Its amazing comeback as the “World War II arsenal of democracy,” as well as the golden post war years that led the American industrial giant to grow dramatically, also led the rebuilding of the destruction wrought by Germany and Japan, with the advent of the Marshall Plan.
After reaching a peak in the production of raw materials (steel, copper, aluminum, oil, etc.) in the 1950's, the U.S. experienced a massive manufacturing drop-off in the early 1970's as Japan, Germany, and China, primarily, emerged as the world’s new leaders in a wide range of industrial componentry; as well as such finished goods as aircraft, office supplies, and an endless list of products that had comprised not only America’s goods-producing revenues, but had provided millions of employees in the production and service sectors with well-paying jobs.
This narrative had gotten so bad in the waning years of the Twentieth Century that the thousands of closed factories and shuttered steel mills had graphically been pictorialized by critics as America turned into a nation of “hamburger flippers and insurance salesmen.”
Although such extreme “cartooning” was a ludicrous exaggeration, it underwrote the fact that heavy industry, which had been the backbone of America’s industrial rise, had migrated to Southeast Asia, Latin America, even Europe and the Middle East, thereby creating a void that was growing larger as America was on its way to doubling its population from 160 million to 320 million in the last 65 years.
But although the hundreds of thousands, if not millions of mass production jobs may be gone forever, buttressed by the fact that manufacturing percentage has dropped from 25% to 8% of total employment in the past 40 years, productivity is at an all-time high and still accelerating.
With robotics and other forms of superior technology combining with America’s availability of low cost natural gas, it is highly possible that America will not only bring back product categories now being manufactured overseas, but will also be in a position to be competitive, cost-wise, with China, Mexico, and other nations’ home-made production categories.
Even now, major U.S. chemical conglomerates are bringing production facilities back to the U.S., due to the world’s lowest natural gas costs, while Japanese, German, and South Korean automotive companies are expanding their assembly operations in the Southeast and Midwest. This gives them the double benefit of low cost production, while in the “back yard” of their dealers and clientele.
While much of the current downturn of educational high school and college learning levels can be attributed to today’s pervasive “on-line” mentality, and lack of independent research, the increasing power of America’s teachers’ unions— the American Federation of Teachers, and the National Education Association, are using their record-high billions of dollars of union dues, as well as their control of educational interpretation, as a means of reshaping the meaning of the U.S. Constitution, the Bill of Rights, and historical interpretation, as a means of imposing their views on the emerging younger generation.
While the imposition of political power was once the purview of such industrial unions as the United Auto Workers, US Steelworkers, and the United Mine Workers, the American nation’s teachers’ union now has the upper hand through the union check-off system, as well as the control of what is taught in the classrooms.
It has become increasingly obvious that such major educational courses as history, traditional American values, and political science have become a medium for propounding a re-interpretation of America’s role as the world’s most powerful global econo/military leader and arbiter of international issues.
By combining its multi-billions of dollars to help elect politicians that mirror the “left wing” political propaganda as the only righteous direction for the nation’s multi-million graduates to follow, this could have political consequences. Those budding students, that still retain the conservative and traditional respect for the Constitution, and the Bill of Rights that guaranteed the independent thinking of previous emerging generations will be hard-pressed to retain more conservative points of view.
The billions of left-wing supporting dollars that support the educational monies flowing into the coffers of the Democrat Party are undergirded by the punitive grading system meted out by a majority of teachers, who are responsible for the direction of young and impressionable minds. Term and theme papers that don’t agree may find a punitive grading system as a means of punishing those students who have the courage to maintain minds of their own.
As future America looks forward to a return of traditional educational leadership to give emerging students an independent path to follow, the powerful Teachers’ Unions make sure that their billions of union dues and the power of punishment to those rejecting their misleading philosophies, will act as a growing barrier to making this happen.
While the U.S. is in the throes of reevaluating its role in a world that once admired America’s role as world arbiter, the confrontation with a propagandistic education system may become a critical showdown in future presidential elections.
From December 11, 1941, when Germany declared war on the United States, ending 23 years of “isolationism,” which encompassed a rejection of the post World War I League of Nations (the precursor of the United Nations), the U.S. was considered both the physical, as well as psychological standard bearer of justice, defense, and advocacy, on which the world depended to keep it from falling apart.
After securing the defeat of Fascism, rebuilding Japan and Germany into bastions of democracy, and protecting the world at large from being overrun by Soviet Communism during the lengthy Cold War, the world, friend and foe alike, came to depend on the U.S. to provide both economic and military balance.
The brief moment of relief provided by the collapse of the Soviet Union in 1990, and U.S. leadership against an outburst of Islamic Jihadism led by Al-Qaeda in Afghanistan, Saddam Hussein in Iraq, and the rise of the Mullahs in Iran, America’s military and economic strength appeared to insure a new period of economic world growth, with the weakening of post-Soviet Russia and the commitment to an amazing economic awakening in China.
This hopeful fantasy came to an end with the combination of the “great financial recession,” combined with America’s abdication of its tradition of balanced governmental/business/independent strength. This independent and unique success of privately-owned independent businesses and technology provided the 65-year world example with leadership and protection provided by an American nation, that opened its doors to people the world over, while doubling its population to 320 million from the mid-20th century, and to this very day.
But, while bringing the “Cold War” to a close, following the defeat of Fascism, while holding the Soviet Union at bay, the U.S. is now faced with the paradox of the greatest economic and technological potential that the civilized world has ever witnessed; while seemingly losing its way of leadership by example, at home, and abandonment against new dark forces abroad, such as extremist Islamic Jihadism that seems on a new march of attempted global destruction.
At this point in time, world history is waiting to see if the U.S. will renew its 20th century vigor and values, or whether it will slip back into a self-defeating isolationism that came close to seeing the world overrun by the merciless forces of statist dictatorship. This came close to triumphing over the previous continuity of civilized progress and economic opportunity, led by the U.S.A.
As the 2015 calendar year comes ever nearer, there is increasing concern that either Germany and/or China will not deliver the outsized gains to assure a solid 3% plus to what is currently expected to be a brightening global comeback momentum to the world’s gross domestic product of goods and services. Each of these world members of the GDP economic leadership quartet have tended to generate positive results since the end of the “great financial recession,” keeping world growth figures positive, even if at a relatively low ebb. The U.S., the acknowledged world leader, although disappointingly slow, has kept the total world GDP picture consistently positive.
However, with a relatively weak 2014 nearing an end, both Germany and China, singularly or collectively, may be inhibiting even these modest objectives, for the following reasons:
1) Germany. While an increasing amount of German production is finding more hospitable production capability elsewhere, such as surging German automotive production in the U.S., Germany’s almost universal commitment to renewable energy objectives is adding huge cost to electric usage for heating and air conditioning. This is subsidized by the government, and proving to be far less effective and more costly, than its previous combination of coal, oil, nuclear, and natural gas. The tight time conversion limitations set by the Merkel government are generating greater than expected costs per production unit, plus higher per capita taxes. These are being passed on to domestic production, which is beginning to cut sharply into its export competitiveness. This has already cut domestic factory production orders in the recent past, which may result in the German nation’s flat, or even recessionary GDP status for fiscal 2015.
2) China. This Southeast Asian economic miracle achievement has been a disproportionate buyer of global commodities such as coal, oil, copper, iron ore, natural gas, and agricultural products. In addition, China has imported a huge amount of equipment and supplemental products to implement its unprecedented expansion. This has provided the world economy with a disproportionately heavy lift, increasingly available in the past 20 some years, since this purchasing surge really took off.
As China’s has been repositioning its 1.4 billion population into industrial/commercial locations to new cities being built in sparsely populated central and eastern China, a huge amount of commodities and equipment were being made available to make this happen. Therefore, China has become the world’s largest importer, as well as one of its most prolific exporters. But, even so, Beijing has added trillions to its debt, despite the fact that its current monetary surplus has passed the $4 trillion mark.
While approaching the U.S. as a strong runnerup in gross domestic product of goods and services, on a purchasing power parity basis, China has also accumulated a runaway deficit, (sound familiar?) approximating an annual GDP growth percentage well above 150%. Part of this is due to a singular President, Xi Jinping, who is reevaluating China’s mounting debt. This will likely bring China’s annual GDP increase down to the 4-5% GDP range, far below the 7.5% previously anticipated.
Adding Germany and China to relatively low level global GDP growth will likely detract from a world GDP total, expected to be in the 3.5% growth range for the coming year.
Ask most anyone, except Cuban expatriates and their descendants, why the U.S. eschews any formal relationship with Havana, and you’ll get a shrug of the shoulders.
With NAFTA partners Canada and Mexico enjoying good economic, if not friendly, political relations with the 12 million populated island 90 miles off the coast of Florida’s Key West, the U.S. retains a deep freeze with Cuba, equivalent to that of North Korea, Iran, and Syria. Although dating back to the 1959 Castro brothers’ led takeover of Cuba, it was precipitated by their nationalizing foreign-held properties and corporations not exactly unique in many other nations with which the U.S. maintains relations. This led to the Castros embracing the Soviet Union, with which the U.S. was then at the depth of the Cold War.
While the political animosities toward Cuba have been kept at white heat by the large, growing, and influential Cuban expatriate element, concentrated in Florida, the economic benefits of business relationships costing the U.S. have been enjoyed by Mexico, Venezuela, and a variety of European and Central American economies. Remarkably, the major subsidies granted by the former Soviet Union, including practically all of the nation’s oil needs, have been replaced by Caracas, which has been trading off with Cuba’s remarkable proficient medical sector, while superior skills have even liberally used by Latin America’s ruling classes.
With younger brother, Raul Castro, now in charge at an aging 83, increasing private sector elements relating to tourism, middle class professionals, and sugar cane-dominated agricultural exports have increased Cuba’s gross domestic product per capita to near $7,000 per head. This is equivalent to over $12,000 for purchasing power parity, relatively high among Latin American nations.
Although U.S.-based group and individual trips to Cuba have become increasingly easier to implement lately, an approval by relevant U.S. government agencies, direct contact and trade are still forbidden, due to the bi-national freeze that has existed between the two nations for almost 56 years.
Although trade normalization between the U.S. and Cuba could prove beneficial to both nations, the political stigma involved, even to America’s free-wheeling politically independent President Obama, would find such a risk too great to undertake at this time. A potential political backlash would likely be the result.
However, it’s a safe bet that the eventual passing from the scene of Raul Castro’s dictatorship would open up a new era of recognition that would prove increasingly beneficial economically for both parties concerned.
By any measure of national strength and viability, Turkey represents one of the strongest, most economically stable, and critically positioned nation geographically positioned in the gradually deteriorating Middle East. It even has a minor foothold in Eastern Europe, Adrianople.
Turkey is not found acceptable to the European Union, due to its dominant Islamism, although that is not officially given as the reason for the exclusion.
Founded by strongman Mustafa Kemal Ataturk, who developed a solid military foundation, after the breakup of the Ottoman Empire, as penance for choosing to be part of the German-Austria-Hungary central powers in World War I, Ataturk, as he was called by his devotees, chose to build modern Turkey into a Western-style modern state.
That nation had achieved the most economically balanced, and populist (80 million) state in this critical region, transcending Eurasia and controlling the Dardanelles, the gateway between the Black Sea and the Mediterranean.
But this leadership has been superseded by ardent Islamist, President Erdogan, who has chosen the path of Sunni Islamism as the future of Turkey.
Although a charter member of NATO, and an active UN ally in the defense of South Korea (1950-1953), Turkey, under Recep Tayyip Erdogan, has broken the secular grip of its previous military/political power, aligning itself with Hamas, Hezbollah, and the terrorist elements of Iran, increasingly confronting his former Middle East best friend, the U.S.A., and displaying overt hostility toward Israel.
Most recently, it has forsaken its restive Kurdish minority (15% of its total population), whose brethren in Syria and Iraq have come under the deadly assault of the ISIS terrorists on the Turkish border. Forsaking its NATO responsibilities, the Turks have allowed the Kurdish residents of the Syrian/Turkish border area to be overrun, and largely massacred by ISIS terrorists, which the Turkish Army could easily have vanquished in open battle.
It’s a geopolitical irony that, while once Islamist Egypt has chosen to confront and eliminate its Islamist extremists (the Moslem Brotherhood), the once Western-oriented and comparatively stable Turkey has forsaken the North American Treaty Organization, and turned its back on its former NATO partnership, while also leaving its Kurdish minority to the mercies of the extreme brutality of the budding ISIS Caliphate. ISIS is attacking even the Turkish Kurds which are, at best, only tolerated by the Erdogan dictatorship in Ankara.
The news that Jeff Bezos’ “Amazon” has opened its first “physical store” in New York City is not a digression from the pioneer of digital business transactions, but another opportunity to focus on the massive evolution that the “Amazon” founder has introduced to the world of rapid online availability.
While future stores will likely be few and far between, they will wisely represent an optimum expansion of a brand name— Amazon— that has become as significant as Microsoft, Apple, Facebook, Google, or Twitter. Bezos is wisely recognizing that even in a world of digital business dominance, there will always be shopping malls, book stores, and factory outlets, catering to those that still cherish the personal and visual product analysis that dominated the overwhelming world of retail purchasing not too many years ago.
By maintaining even a residual portion in the increasingly shrinking world of shopping malls, food complexes, and clothing stores, etc., the personal sociability, as well as the tangible product contact, will always have a sizable following, no matter how convenient and cost-effective the online, impersonal mail order system becomes in the forthcoming years ahead.
Without the “Amazon Expedient,” there would have been no “Alibaba” in China, which is a natural implementation of a system already proven in the U.S.; but ready made for the world’s largest population, and the vastly impersonal nature of a society that never experienced the transitory retail evolution that eventually produced the “Bezos bonanza,” which is in the process of rapidly revolutionizing an American consumer/retail system. This will increasingly “evolutionize” the way the world’s leading retail system has epitomized the fulfillment of its countless millions.
If one were to peer into the crystal ball of the world’s retail future, the combination of the old and the new that “Amazon” is now crafting will be as historically significant as Thomas Edison’s light bulb, and Henry Ford’s automotive breakthrough for the developed world’s customers.
Since China hit its historically unprecedented economic stride just 25 years ago, the world has become increasingly dependent on the “China miracle” to become the economic driver that the rest of the world depends on. Even more, this dynamic has spread to much of the rest of Southeast Asia.
China’s teeming populace (1.4 billion/20% of the world) has doubled that which existed at the time of the 1989 Tiananmen Square rebellion, which was brutally crushed by the arbitrarily unforgiving Chinese/Communist monolith that brooked no opposition from its expanding millions.
Xi Jinping, the most recently selected maximum Chinese ruler, doesn’t believe in the collective leadership of Deng Xiaoping, the modern progenitor of China’s stupendous growth in the mid 1980's. Instead, Xi fashions himself more in the mode of Mao Tse-tung, the original Chi-Comm dictator, who brooked no opposition after crushing nationalist warlord Chiang Kai-shek in a two-year civil war in 1949.
While the average high single digit percentage growth in China’s evolution from abysmal agrarian survival to an approaching world leader, living in modern homes, driving modern cars, and reveling in life-styles previously limited to Western-style populaces, the rest of the world was happy to benefit from the current economic success of the Chinese miracle, without questioning the heavy hand of government-driven oppression. The 1989 “Tiananmen Square” uprising was crushed by government tanks, which killed thousands, but was tolerated by the rest of the world’s billions benefitting from China’s economic success.
The so-called enlightened and advanced world population is more interested in the massive economic uplift that the Chinese provided than worrying about the brutality visited on those courageous Hong Kong adversaries. They are only questioning the heavy hand visited upon them by the Beijing-emanating central power, after the British gave up its 97-year lease to the Communist government peacefully in the late 1990's.
Enlightened nations, such as Australia, etc., whose coal and iron ore are absorbed by the gigantic maw of China’s economic appetite, are more concerned with the well-being derived from China’s unquenchable demand for their natural resources than confronting the crushing of Hong Kong’s timid request for the autonomy promised to them at the time of the British handover, some 20 years ago.
Although most of the hype regarding U.S. natural gas potential is related to Central and Western Europe’s dependence on Russia’s pipeline monopoly, and the possibility of replacing this dependence eventually with liquid natural gas (LNG), the time factor involved in making this evolution practicable could still be up to five or ten years in the making.
Currently, government approval has been rendered to a half dozen port facilities necessary to begin these exports in earnest— not to mention the conversion equipment to instigate the evolution from the gaseous to the liquid state. However, to put the impressive potential of liquid natural gas into perspective, its global volume usage is practically unlimited, with coal the main power generator for electric utilities still being used worldwide.
Even China, the world’s largest user of coal for power generating purposes, is now seeking to cut back, as its major metropolitan areas are asphyxiating from industrial coal use, but natural gas is not yet in ample supply for replacement. To make the liquid natural gas case even more cogent is the fact that natural gas is the only meaningful replacement for power generated coal use throughout the world. While the U.S.’s ongoing price hangs in around $4 per million British thermal units (BTUs), prices in such diverse major industrial nations (United Kingdom, Japan, Germany, and most of Western and Central Europe) range from $9 to more than $10 per million BTU’s.
As exports weren’t enough justification for a “full-court press” on LNG development, domestic U.S. production and consumption holds forth almost unlimited opportunities.
In the past six years, the outburst of natural gas released, along with shale-processed crude oil, is now no longer flared off, but contained as feed stock for major chemical producers. Several of these have returned their production facilities from overseas back to the U.S., due to the lower manufacturing cost that cheap U.S.-provided natural gas surpluses provide.
Added to this demand is the forced conversion from coal to natural gas by America’s far-reaching utility systems, which are required to eliminate coal in utility plants under construction, and on the drawing board. This alone will greatly increase natural gas demand domestically in the foreseeable future. The U.S. Energy Information Agency, which is normally conservative in its future demand speculation, projects expected future natural gas demand to mandate a minimum 5% increase over today’s usage in 2015 alone. But this may only be the beginning, if all other aspects of natural gas potential mentioned herein, emerge by the next year as expected.
While Africa has exceeded the world’s five other continents in distressing developments in the areas of health problems, civil strife, economic underdevelopment, and foreign exploitation, little note is given to its reaching the one billion population mark, middle-class development pace, and value added to its gross domestic product of goods and services underlying the surfeit of bad news, surpassing that of the world’s other major sectors.
What is even more remarkable is the growing economic development in key major areas throughout the continent that never make headline news in the international media. Unquestionably, the breakup of once North Africa’s dictatorially-led governments in Egypt, Algeria, Libya, Tunisia, and even Morocco, in spite of unruly elements that threaten the monarchy’s downfall, continue to be the recipient of record foreign investments.
Only the major Arab power Egypt, controlling the critical Suez Canal, has abandoned the “Arab Spring” fiasco to install a solid econo-political future, with the overthrow of the Moslem Brotherhood extremist group. It is now ruled by former Field Marshall Abdel Fattah al-Sisi, who has the support of the army and backing of most of the 85 million strong population. This consolidates the critical Suez Canal waterway, and is reversing the disintegration under the short reign of President Mohamed Morsi; and his Brotherhood terrorists.
But the heart of Africa’s future lies mainly in the sub-Saharan “republics” of Central and Southern Africa. Leading the way is Nigeria, with a forthcoming 200 million population,
by far the largest in the 900 million population of that once totally-colonized continent. Its biggest problem is the 50/50 religious split between Islam and Christians. The former is controlled by Islamic terrorist group Boko Haram, which is terrorizing the Christian majority, mainly in the north. This is impeding a near 6% economic growth rate, based on the largest supply of light sweet crude oil, found practically nowhere else on the continent.
Most promising is South Africa, which successfully saw a post-apartheid regime fuse into successful economic cooperation between the 80% majority of the indigenous native population, with the previously ruling white and East Indian citizens holding most of the economic power and professional, plus government-oriented control. With a growing population of nearly 60 million, it also retains the greatest evolution to a thriving middle class. Natural resources, especially gold, are a mainstay, while the vast black majority represents the continent’s prime example of a professional, middle class evolution. Both oil-dominated, former Portugese colonies, Angola and Mozambique, have major contracts with China, which presently assures substantial economic improvement for years to come.
Probably least known is Ethiopia, the continent’s second most populous, but primarily a agriculturally based economy. It has a rich history of Judeo-Christian culture, but a predominant Islamic majority is keeping religious strife at a minimum. While most of the two Congos, once colonized by the Belgians and French, the disintegrated North and Southern spinoff Sudan, along with Islamic terrorist controlled Somalia, paint a discouraging picture of Africa’s future. But such independents as Kenya, Cameroon, Liberia, and once German-colonized Namibia, are showing signs of slow, but steady improvements.
But with some of the most varied and numerous natural resources available anywhere else in the world, plus the evolution from colonial shackles, both middle class evolution, education and a steady conversion from tribalism, make Africa a most promising growth prospect by 2050, and thereafter.