Hopefully by the end of this post I will have convinced you that, although our role in the world must change, it doesn’t have to mean that America won’t be the pre-eminent military and economic power in the world.
If you were to Google the words “America in Decline” you would an endless number of articles on the subject. Also, you would find a few that say the American decline is a myth. One of the better articles, in my opinion, is by Christopher Layne at The National Interest, which is titled The Global Power Shift from West to East.It’s more than an article. It’s more like a dissertation. Seven pages long, you may want to bookmark it to read at your leisure. The article covers a lot of history and demonstrates that not only will the United States lose its seventy year reign as world’s greatest military an economic leader but the Western nations in total will lose their 500 year dominance over the world. Mr. Layne recognizes that it will take decades before China is at parity with the US militarily; but, because of our economic weakness, we will not be able to control China’s intentions in the Far East. The article talks about how China has become the manufacturing capital of the world and how they have taken over markets that were once dominated by the United States.
Okay, we can’t deny that the world has changed and continues to change. Countries like China, India, Brazil and Russia are gaining in wealth at an incredible rate. America’s wealth as a percentage of the world’s wealth is declining as other countries become richer. Of course that will alter geopolitics in the world. But does that mean the American can’t remain an important player or even the most important player?
Being the contrarian that I am, I believe we can continue to be the most important Player even though there will be other important players too. For this to happen, I believe that we must stop looking for leaders to lead the way. We don’t have those kinds of leaders. The leadership is going to have to come from Main Street America. And, I believe if Main Street America has the information they need, they will rise to the challenge. Americans need to become informed about two critical issues and then decide they will change they way America does things in the future. First they must learn that America is broke and what must be done about that. Second, they must come to terms with the fact that as a country, we are no longer economically competitive and what can we as a people do about that.
America is Broke
I’m not going to bore you with all the reasons we are in the financial mess we are You, dear readers know the whys as well or better than i do. But, it is not clear to me that Main Street America knows or understands we are broke. Certainly the young OWS protesters do not know. The Democrats and the liberals either do not know or don’t care. I don’t think Barack Obama cares. Somehow we must find a way to make sure Main Street America is aware of our dire straits and that they understand that we simply can not afford our government and all the things they think they should be doing for us. I found and borrowed this video at America’s Watchtower yesterday. I commented that this video should be on prime time television every day from now until the elections. Take a look.
What ever the means, we who know better have got to get this message out to those who don’t yet know. We have to educate the people that there are ways to reform Social Security without harming those that are already dependent on these programs. Paul Ryan and others to know how to do it. But the “leaders” in Washington are likely to do nothing unless there is a ground swell of pressure coming from Main Street. The bottom line is that we can not afford this government anymore. In this post I laid out why I think electing Mitt Romney is an important first step. In short I said that if we elect the Republicans and them hold their feet to the fire they will reduce corporate and other taxes and reduce some of the business stifling regulations and open up drilling for oil and gas. these acts will create an environment for the economy to start growing again. I further suggested that a growing economy would have unintended consequences that would cause inflation and cause the bond market to drive up interest rates. These unintended consequences along with pressure from Main Street will force the government to do what must be done to severely downsize our government to a manageable level.
Lowering corporate and other taxes will help make the US more competitive. But, I don’t think will be enough to keep us the most important player in the game. I’m distressed when people cry about the greedy capitalist sending American jobs to countries with cheap labor. Capital always flows to where it can earn the greatest returns. Right now China and India and Brazil are growing much faster than America. China is the manufacturing capital of the world today. But keep something in mind. China is a centrally controlled economy and starting from nothing it has been easy to show dramatic growth. But, like all centrally controlled economies, they are and they will continue to go from crisis to crisis. They know the must start consuming more. But, to do that wages will have to increase. Eventually they will lose their competitive edge to countries like Thailand, Vietnam or, Bangladesh. So, accepting this reality, how does America compete with cheaper labor in other parts of the world. Must we wait hundreds of years until all countries are equally wealthy or equally poor? Twenty years ago or even ten years ago I might have said there is no way for America to be competetive in today’s world. Once we could count on our talents for innovation and productivity improvements to keep us on top. Today technology can be bought, stolen or cloned. Yet I do believe there is a way for America to compete in today’s world. I believe the answers has to do with energy; specifically with natural gas.
When Newt Gingrich was still a candidate for the Republican nomination for the presidency, part of his plan to put America back on the right track was for America to become energy independent. That is still a good plan and we can do it. America does not need to be dependent on OPEC nations anymore. Although a move in this direction would tend to move oil prices down in the world in the short term, as other countries continue to grow they will increase the demand for oil and prices will continue to rise. The other reason it is a good idea is, as Newt pointed out, there will be trillions of dollars in new royalties flowing to the government that could be used to pay down our national debt. But, we still have the issue of our competitiveness.
The answer, I believe is natural gas. America, like no other country has been blessed with enormous reserves of natural gas. If America were to convert all their cars, trucks, and tractors to run on natural gas instead of gasoline, if America were to convert all their coal-fired power plants to run on natural gas instead and, if all the homes in the northeast that heat with fuel oil were to convert to natural gas, America would have the world’s lowest cost of energy and that, my friends would allow America to compete with any nation; no matter how cheap their labor. Not only would we attract capital investment back to America, we could be exporting oil and coal. Think about what that would do to help our balance of payment deficits.
We have the supply. All we need to do now is provoke the demand. I believe if Americans understood what we are up against, the will rise to the challenge. If we wait for our “leaders” to show us the way, America will surely decline to a second-rate nation.
Well, that’s what I’m thinking. What are your thoughts?