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Thursday, September 6, 2012

China's Hegemony: How the Baby Boomers Threw US to the Wolves

Who ever is elected the next President of the United States will likely preside over the lasts years of the United States as the world's number one economy.

While some may cheer the end of US Imperialism there will be a lot of consequences for those of US still living in the US.

The US dollar is the reserve currency of the world and that will become jeopardized as well. For example all oil is traded in dollars today because of this - but what if it became the Chinese Yuan instead?

For a long time we here in the US have shirked our responsibilities as far as our economic future is concerned.  Instead of choosing to remain a strong economic force by creating wealth we have instead chosen to trade for it.

This trading was facilitated by the fact that after World War II we were both a world power and the fastest growing economic force in the world.

But throughout the 1970's and beyond we began to lose our way.

Some would say "found our way" - but on reflection I think that's simply nonsense.  Sure the 1960's brought us many changes with regard to environmentalism and so on.  But they were taken on in the context of the world's largest economy.

I remember from those days the "starving children in Biafra" - the result of a war that left a group of tribesmen attempting to succeed from Nigeria in total disaster.

No one would have expected the Biafrans to launch into a big environmental movement - there were simply other priorities: they were starving, they had no economic horsepower, and so on.

But here in the US things in the late 1960's were quite different.  People had free time and free cash flow to spend on "causes" - like environmentalism and "Earth Day" in 1970. 

This was the result of previous decades of educational and economic development to bring our country to the point where it could do these things.

But from the lat 60's things in the US progressed somewhat differently.

The 60's spawned a generation of those focused on "doing good" for "others."  Now I was born in this generation along with a large number of others but I do not except this philosophy.

The idea became not that "you" (a third party) should lift yourself up by your own boot straps to success but instead we will "create a utopian success" for you to live in. 

My parents grew up during WWII and felt that, before anything, they must create a world for "my generation" that had the promise of a better life than they had.  What did that mean?

To them, many children of immigrants from the early 1900's this mean college, a house, a car, food on the table.  Things they were denied in the depression of the 1930's and as part of the WWII war machine.

So with the US economic engine revving up after WWII it became possible to do this.  To create schools, roads, infrastructure, and so on to allow the "baby boom" to have the denied "better life."

What I saw as a child was that this "better life" became a promise of entitlement.

Entitlement to the riches of the economy.

And the "baby boomers" took this to mean that the economic engine that was producing all of this possibility was "evil" - as described in books like "The Pentagon Papers" - the "military industrial complex" and its destruction of the planet.

And of course there is truth in much of this - but that's not the point.  Everyone sane agrees that you should not be fouling your own nest.

But the "baby boomers" took it on themselves not only to prevent the nest from becoming foul but also to gut the economic process of having the nest, and the tree, and the materials for the nest, and the food to feed the young in the nest as well.

So its one thing to stop the pollution of a river by an irresponsible company and quite another to put that company out of business permanently as a punishment for its past behavior.  Clearly management can be shown how something like this is bad.  But what can it do about past decisions over which it hand no control?

Yet somehow the boomers succeeded in hobbling the US economy by undermining economic productivity.

The same is true for vast swaths of society.  Rather than ensure that equal opportunity was provided equal opportunity was manufactured.  And most often by the state providing goods and services rather than creating an environment for people to help themselves.

Fish were handed out rather than teaching fishing.

The US dollar was inflated over the last forty years by Nixon's unhinging it from the gold standard.

So today our economic engine, which provided all this opportunity for "activism" has been all but destroyed.  In fact, its dismantling has become the very symbol of this "activism."

And those responsible a are now retiring to old age - largely unaware of the debt and destruction they have left behind - both in real economic terms as well as social terms (education, etc.)

The Chinese, on the other hand, are not bounded by these societal elements.

After WWII China was basically an agricultural country of a billion people.  Its leaders, right or wrong, decided to move their country into the future they saw in the west.  So they did and still are.

Unlike here there is no significant underlying generation of "boomers" undermining the economic engine (which is good in terms I will describe below and bad because things like responsible environmentalism are also lost).

A decade ago our US economy was three times the size of the Chinese economy.  Within a few years theirs will be larger.

And not only will be lose our standard of living but we will also lose our ability to be activists.

This is because the economics of our country have provided enough economic success for us to have the leisure time to be activists.

So while little Johnny and Suzy sit in college and learn about the evils of American Imperialism, and environmental irresponsibility other countries like China and Russia, who themselves are the epitome of these same things are simply taking the place of US.

Little Johnny and Suzy have not been taught enough to think for themselves or given the ability to see what is happening under their very noses.  They've also been told that these other countries are "better than US" and so they don't view their actions, such as destroying the environment, to have any meaning in their simple, activism-saturated minds.

So don't worry little Suzy and Johnny - good old Mr. Putin in Russia - he must be our friend, right?

(Yes I know he put Pussy Riot in jail but, well, nobody's perfect...)

In any case Mr. Putin is now busy stockpiling gold.


Well because, unlike little Suzy and Johnny Mr. Putin sees that the US has fouled its nest - not with pollution and unequal opportunity - but instead by decades of handing out fish instead of teaching its populous to fish.

Mr. Putin realizes that very soon his country won't be beholden to the US because the US currency will no longer be the reserve currency (little Johnny and Suzy don't even know what that means so Putin is safe in this).

And when this happens the US will no longer, for example, to be ensured of even purchasing, for example, foreign oil.  If its priced in yuan and we have no yuan those countries with yuan will get priority treatment ahead of US.

And our funding of activism will dry up as cash goes to keep the electricity on in grandma's apartment building.

So while we were busy creating the activist utopia we forget to think about the end game.


But men like Mr. Putin (he is ex-KGB after all) are smart and think only about the end game.

And look at our leaders today - the Whitehouse, Congress, the Senate.

Do you think anyone there is thinking about the end game?

Or maybe they are only thinking about the next election (six years out at max).

We have squandered our leadership on short term feel good nonsense.  Not that, for example, environmentalism is in and of itself bad, but because we didn't think it through.

Now the Russians and the Chinese will be free to pollute their way to our destruction.

No, I don't think anyone thought this through.

And now here we are - rolling toward the cliff.  This election is only about how quickly we will reach the cliff - nothing more.

Little Johnny and Suzy will never see the cliff coming - thank God for modern liberal education - they've been told nothing about cliffs and so they this is all lost on them.

And good men that run other countries, like Mr. Putin, the ones little Johnny and Suzy think we should be more like, are happily taking the long term "big picture view" and positioning themselves to be in the best position to take the spoils of our failure.

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