Category Archives: Global Economics

Cheap Electricity and Food

My Comments: Over the next 25 years, the US will resume it’s role as THE major global economic influence. You can argue it will happen as a result of bringing coal mining jobs back to Appalachia or because there will be a wall built along our Mexican border, one built by Mexico with help from China to keep Americans out, but it will happen.

Right now we’re the only industrialized nation on the planet with a food surplus. I’m reminded again of comments by Thomas P. M. Barnett several years ago. He said our ability to grow food and export our surplus would position us as the dominant nation on the planet. Wars will be fought not over energy but over food.

With projected advances in solar technology suggesting a 30% or more net increase in efficiency, tribal pressures to promote coal, oil, and perhaps even natural gas will diminish. Let’s hope so. BTW, that’s my dad on the tractor in 1933 in Vermont.

by Joseph Hincks / December 15, 2016

Solar power is becoming the world’s cheapest form of new electricity generation, data from Bloomberg New Energy Finance (BNEF) suggests.

According to Bloomberg’s analysis, the cost of solar power in China, India, Brazil and 55 other emerging market economies has dropped to about one third of its price in 2010. This means solar now pips wind as the cheapest form of renewable energy—but is also outperforming coal and gas.

In a note to clients this week, BNEF chairman Michael Liebreich said that solar power had entered “the era of undercutting” fossil fuels.

Bloomberg reports that 2016 has seen remarkable falls in the price of electricity from solar sources, citing a $64 per megawatt-hour contract in India at the tart of the year, and a $29.10 per megawatt-hour deal struck in Chile in August—about 50% the price of electricity produced from coal.

Ethan Zindler, head of U.S. policy analysis at BNEF, attributed much of the downward pressure to China’s massive deployment of solar, and the assistance it had provided to other countries financing their own solar projects.

“Solar investment has gone from nothing—literally nothing—like five years ago to quite a lot,” Zindler said.

When the numbers come in at the end of 2016 the generating capacity of newly installed solar photovoltaics is expected to exceed that of wind for the first time: at 70 gigawatts and 59 gigawatts respectively, according to BNEF projections.

The Brilliant Incoherence of Trump’s Foreign Policy

My Comments: This may be far too long to read in one sitting. But if, like me, you are willing to absorb some rather heavy reading, you may find yourself somewhat relieved by the message.

Stephen Sestanovich | May 2017

Every 20 years or so—the regularity is a little astonishing—Americans hold a serious debate about their place in the world. What, they ask, is going wrong? And how can it be fixed? The discussion, moreover, almost always starts the same way. Having extricated itself with some success from a costly war, the United States then embraces a scaled-down foreign policy, the better to avoid over commitment. But when unexpected challenges arise, people start asking whether the new, more limited strategy is robust enough. Politicians and policy makers, scholars and experts, journalists and pundits, the public at large, even representatives of other governments (both friendly and less friendly) all take part in the back-and-forth. They want to know whether America, despite its decision to do less, should go back to doing more—and whether it can.

The reasons for doubt are remarkably similar from one period of discussion to the next. Some argue that the U.S. economy is no longer big enough to sustain a global role of the old kind, or that domestic problems should take priority. Others ask whether the public is ready for new exertions. The foreign-policy establishment may seem too divided, and a viable consensus too hard to reestablish. Many insist that big international problems no longer lend themselves to Washington’s solutions, least of all to military ones. American “leadership,” it is said, won’t work so well in our brave new world.

With minor variations, this is the foreign-policy debate that the country conducted in the 1950s, the 1970s, and the 1990s. And it’s the same one that we have been having for the past few years. The rise of the Islamic State, the Syrian civil war, Russian aggression in Ukraine, and China’s muscle-flexing in East Asia jolted the discussion back to life in 2014. Presidential debates in 2015 and 2016 added issues (from Barack Obama’s Iran nuclear deal to his Asian trade pact) and sharpened the controversy.

Those of us in the foreign-policy business are always glad to have our concerns get this kind of prominence. Down the decades, these debates have tended to produce a consensus in favor of renewed American activism. Yet each version unfolds in its own way. The global turmoil of 2016 meant that nobody could be completely sure how this one was going to turn out.

We still don’t know. The advent of Donald Trump—his candidacy, his election, and the start of his presidency—has given our once-every-two-decades conversation extra drama and significance. Some commentators claim that Trump wants to cast aside the entire post–Cold War order. To others, he is repudiating everything that America has tried to achieve since 1945. Still others say he represents a break with all we have stood for since 1776 (or maybe even since 1630, when John Winthrop called the Massachusetts Bay Colony “a city upon a hill”).

That we talk this way is but one measure of the shock Trump’s victory has administered. The new president is raising questions about the foreign policy of the United States—about its external purposes, its internal cohesion, and its chances of success—that may not be fully answered for years. Yet to understand a moment as strange as this, we need to untangle what has happened. In this cycle, America has actually had two rounds of debate about its global role. The first one was driven by the 2016 campaign, and Trump won it. The second round has gone differently. Since taking office, the new president has made one wrong move after another.

Though it’s too soon to say that he has lost this round, he is certainly losing control of it. In each case, we need to understand the dynamics of the discussion better than we do.

Russia has a grand plan to undermine the West’s democracies — and it’s working

My Comments: Several months have passed since this was written but the message is as real today as it was then, perhaps even more so.

I’m almost willing to give 45 and his cronies a pass since I don’t think it was, or is, their intent to subvert our system of democracy. But they sure as hell allowed themselves to get enmeshed is a mess that today is playing out to Russia’s advantage, and not ours.

I’m convinced that until just recently, the prize that 45 had his eyes on from the beginning was financial benefits for himself and those around him. Then, when it got closer to the election, his inexperience and inability to apply a critical focus on the confounding variables associated with winning the White House allowed Russian to control the narrative.

As all this plays out, it creates a real opportunity for us as a nation to take a hard look at where we are in the world and decide where we want to be going forward. Yes, we have to first look out for ourselves, because first we have to feel secure about who we are as a nation. That means culturally, in terms of our values as people, and militarily, in terms of can we protect ourselves from forces outside our borders.

Clearly, we have some work to do to limit the damage being done to us by forces in Russia.

Alex Lockie on October 30, 2016

Not since the Cold War have tensions between Russia and the West reached the terrifying heights we’ve seen in recent months.

Russia now challenges the West in virtually every arena possible, with cyberattacks, nuclear posturing, military invasions of Western-leaning countries, and the intimidation of US allies and neutral states.

According to Dr. Jeffrey Lewis, the founding publisher of Arms Control Wonk and an avid Kremlin-watcher, Russia’s resurgence owes mainly to one thing: paranoia.

“We’ve seen the failure of democratic institutions in Russia. It’s not the open and free society that we had hoped for at the end of the Cold War, and with that failure comes an insecurity on the part of Moscow’s leaders,” Lewis said of Russia’s retreat back toward dictatorship after the fall of the Soviet Union.

Democracy provides countries like the US with a stable, established path for power changing hands. In the US, politicians serve at the pleasure of the people, who have legal and political means to replace their leadership without revolting.

But in Russia, where rampant inequality exists between powerful, connected oligarchs and regular Russian citizens, Lewis said, the rulers are “terrified that they’re going to be toppled from power, which they don’t hold democratically or temporarily — they fear a coup.”

Lewis said the wisdom from George F. Kennan’s 1946 “Telegram from Moscow” still holds. Kennan argued that the Soviet Union saw itself in a “capitalist encirclement” and could not peacefully coexist with the capitalist, or Western, world.

“At bottom of Kremlin’s neurotic view of world affairs is traditional and instinctive Russian sense of insecurity,” Kennan argued. “Russian rulers have invariably sensed that their rule was relatively archaic in form, fragile and artificial in its psychological foundation, unable to stand comparison or contact with political systems of Western countries.”

Lewis contends that these conditions persist and that “the way they deal with that insecurity is bullying and threatening their neighbors.”

Russia has committed to “build their security on the insecurity of their neighbors,” Lewis said. And creating instability is as easy as casting doubt, while creating stability requires accountability and transparency, which the Russian state need not bother with as it increasingly takes control of the country’s media.

“Interference with Ukraine and Baltics is part of that” will to destabilize Russia’s neighbors, Lewis said. Moscow’s push for chaos in the West can be seen, he said, in its “desperate effort to shore up Syria” as well as in its hacks on the US election system.

“It’s important to them to tear us down to prove that we’re just as bad and corrupt as they are,” Lewis said.

Unfortunately for the US, much of Russia’s campaign to discredit Western institutions works. Republican presidential nominee Donald Trump often touts information exposed by WikiLeaks, an organization with ties to Russia, and has attacked the legitimacy of US democracy and threatened to ignore the results of the election.

Russian President Vladimir Putin’s favorability numbers, which he keeps artificially high in his country by controlling the media and oppressing dissenters, have also improved dramatically among US Republicans this election cycle.

Lewis says Russia has funded several far-right nationalist organizations in Europe, like that of France’s Marine Le Pen. The rise of nationalistic, law-and-order seeking authoritarians on the far right, a well-documented phenomenon in Europe, seems to favor autocratic regimes like Putin’s.

In countries like Turkey and Hungary, powerful leaders with nationalist rhetoric erode the democracies that brought them to power. Those leaders then increasingly turn to Putin as an ally who won’t fault them for attacking the press or other democratic institutions.

Lewis said Russian leadership wanted Americans to think, “The people who run the US are just as bad as the people who run Russia,” adding that he found such tactics “infuriating.”

While examples of corruption and abuse can certainly be found in Western, democratic governments, regular citizens and a free press can freely speak out when they disagree with the rich and powerful. This brings accountability to the government.

Putin, on the other hand, doesn’t want free speech, dissent, or rule by consensus; he wants order to provide the security his authoritarian government so sorely lacks.

“Russians just want a free hand to bully their neighbors,” Lewis said. “There is no level of Russian power that will make Putin feel secure. There is nothing we can do that can make them happy.”

“If we gave them the Baltics, they’d ask for Finland and Poland,” Lewis said.

But the US has very few options to deal with this menace. The US allows free speech, and Russian propaganda and talking points will no doubt continue to find their way into Western society. Within Russia, Lewis said: “Putin is consolidating power, and he’s paranoid. There’s not much you can do. You can’t fix it for the Russians — they have to fix it themselves.”

China Can’t Carry Global Economy if U.S. Stumbles

My Comments: Last Thursday and Friday I re-posted two articles about the US and China. This is related to those two.

We as a nation have about $20T (that’s TRILLION) of debt. Sooner or later, we have to pay it back, and #45 has promised huge infrastructure and defense spending increases. Either we grow our way out of it (creating more debt to get started), cut a piece out of everything we now spend money on, or change our tax structure. My opinion is it’s going to have to be all three.

Donald Trump has expressed an interest in tax reform. At least I think he has; I’m not sure anymore what he has in mind, if anything. But if the repeal of ObamaCare is any indication, that effort, as much as anything, gave tax cuts to those who are already rich. Trickle down economics has been shown to not work and is a false mantra. If he thought health care was complicated, he hasn’t seen anything yet when he starts to tackle tax reform.

So how do we keep everything on track if the US economy stumbles? A growing middle class following World War II gave rise to our strength as a global economic power. But that middle class is disappearing and with it will go our role as a financial power on the global scale. It’s the middle class that buys stuff like houses and cars and all the goodies America is famous for. Nothing I’ve seen or heard from the Trump camp is directed towards revitalizing America’s middle class.

By Nathaniel Taplin on March 31, 2017

Suddenly it’s a world upside down–investors are deserting U.S. growth plays as skepticism about Donald Trump’s agenda rises, while overcapacity-ridden China and aging Japan are looking unexpectedly strong.

Better growth in the world’s second- and third-largest economies, which both posted surprisingly good manufacturing numbers Friday, is great news for Asia and commodity exporters.

It won’t do much to help major developed economies, however, if growth in America and Europe falters along with Mr. Trump’s pro-business agenda.
Better growth in China does contribute in one key way to the so-called Trump trade: It boosts global inflation through higher commodity prices. The close correlation between global commodities and Chinese real-estate investment shows the bulk of the big bounce in prices since early 2016 is due to the cyclical recovery in China, rather than the rhetoric around plans for increased U.S. infrastructure spending.

That means that a big part of the uptick in global inflation numbers –which central banks from Europe to the U.S. have worriedly noted has mostly been driven by fuel prices rather than rising wages–is about China as well.

Unfortunately that is the wrong sort of inflation: Rising commodity prices in consumer countries such as the U.S. and nations in Europe erodes purchasing power and ultimately means lower growth. Strong growth in Chinese construction, meanwhile, is an enormous help for Australian iron-ore exporters and copper miners in Chile, but it doesn’t do much for the U.S. or Europe–the likes of heavy equipment maker Caterpillar(CAT) aside.

Faster growth in China and Japan will doubtlessly help certain firms and sectors on the margins–but these are still highly protected economies, unlike the U.S. and European powerhouses such as Germany and the U.K.

The primary effect of better growth in China’s “old” economy is still higher commodity-price driven inflation –reflation indeed, but not of the happy variety. With Mr. Trump’s agenda under assault and political uncertainty in Europe still rising, the West needs to look to itself to keep growth ratcheting higher.

Trump Is a Chinese Agent

My Comments: Yesterday, I posted about how 45 has handed China a huge advantage. This one is more along the lines of “Really?”. But I challenge anyone who voted for Trump to read these two posts, and point by point, show me where I’m wrong. I really want to know as I find it hard to fathom how we allowed ourselves to get to this point.

Economics is a second language for me. And yes, there are as many theories about economics as there are economists. But every now and then, we speak the unvarnished truth, with supportable metrics.

I had my reservations about the Trans Pacific Partnership, but I thought Robert Reich and later Hillary, were wrong to dismiss it. The desired outcome was not what would happen next year, or the year after that, but how it would play out to our advantage 20 years from now. That’s a rare outcome, given that virtually all politicians think in terms of 2 or 4 years from now. That’s when they have to get re-elected, so they rarely try to put anything in motion that isn’t for immediate consumption.

Thomas L. Friedman | MARCH 29, 2017

The big story everyone is chasing is whether President Trump is a Russian stooge. Wrong. That’s all a smoke screen. Trump is actually a Chinese agent. He is clearly out to make China great again. Just look at the facts.

Trump took office promising to fix our trade imbalance with China, and what’s the first thing he did? He threw away a U.S.-designed free-trade deal with 11 other Pacific nations — a pact whose members make up 40 percent of global G.D.P.

The Trans-Pacific Partnership was based largely on U.S. economic interests, benefiting our fastest-growing technologies and agribusinesses, and had more labor, environmental and human rights standards than any trade agreement ever. And it excluded China. It was our baby, shaping the future of trade in Asia.

Imagine if Trump were negotiating with China now as not only the U.S. president but also as head of a 12-nation trading bloc based on our values and interests. That’s called l-e-v-e-r-a-g-e, and Trump just threw it away … because he promised to in the campaign — without, I’d bet, ever reading TPP. What a chump! I can still hear the clinking of champagne glasses in Beijing.

Now more Asian nations are falling in line with China’s regional trading association — the Regional Comprehensive Economic Partnership — which has no serious environmental, intellectual property, human trafficking or labor standards like TPP. A Peterson Institute study said TPP would “increase annual real incomes in the United States by $131 billion” by 2030, without changing total U.S. employment levels. Goodbye to that.

But Trump took his Make China Great campaign to a new level on Tuesday by rejecting the science on climate change and tossing out all Obama-era plans to shrink our dependence on coal-fired power. Trump also wants to weaken existing mileage requirements for U.S.-made vehicles. Stupid.

O.K., Mr. President, let’s assume for a second that climate change is a hoax. Do you believe in math? There are now 7.5 billion people on the planet, and there will be 8.5 billion by 2030, according to the United Nations population bureau — and most will want to drive like us, eat protein like us and live in houses like us. And if they do, we’ll eat up, burn up, smoke up and choke up the planet — and devour our fisheries, coral reefs, rivers and forests — at a pace we’ve never seen before. Major cities in India and China already can’t breathe; wait for when there are another billion people.

That means that clean power, clean water, clean air, clean transportation and energy-efficient buildings will have to be the next great global industry, whether or not there is climate change. The demand will be huge.

So what is China doing? Its new five-year plan is a rush to electric cars, batteries, nuclear, wind, solar and energy efficiency — and a cap-and-trade system for carbon. Trump’s plan? More coal and oil. Hello? How can America be great if we don’t dominate the next great global industry — clean power?
The U.S. state leading in clean energy innovations is California, which also has the highest vehicle emissions standards and the strictest building efficiency codes. Result: California alone has far more advanced energy jobs than there are coal miners in America, and the pay is better and the work is healthier. In January 2016, CNNMoney reported that nationally the U.S. “solar industry work force is bigger than that of oil and gas construction, and nearly three times the size of the entire coal mining work force.”

“More than half the electric vehicles sold in the U.S. are sold in California,” said Hal Harvey, C.E.O. of Energy Innovation. “If there are two jurisdictions hellbent on transformation, it is China and California. There have been 200 million E.V.s sold in China already. They’re called electric bicycles, which cost about $400 — quiet, not contributing to congestion or pollution, and affordable.”

China is loving this: It’s doubling down on clean energy — because it has to and it wants to leapfrog us on technology — and we’re doubling down on coal, squandering our lead in technology.

It was bitterly ironic that on the same day that President Trump took America on a great leap backward to coal, The Wall Street Journal reported that “Tencent Holdings Ltd. bought a 5% stake in Tesla Inc., giving the backing of China’s most valuable company to the Silicon Valley electric-vehicle maker as it prepares to launch its first car aimed at the mass market. … Having a powerful friend in China could help Tesla as it eyes further global expansion. Big Chinese tech companies have backed a wave of green-car start-ups in the country recently.”

If you liked buying your oil from Saudi Arabia, you’ll love buying your electric cars, solar panels, efficiency software and batteries from China.
Finally, Trump wants to slash the State Department and foreign aid budgets and make it harder for people to immigrate to America, particularly Muslims. This opens the way for China to expand its influence across the developing world and signals the smartest math and science students in the world to start their start-ups overseas and not in America.

NBC News reported last week that applications from foreign students, notably from China, India and the Middle East, “are down this year at nearly 40 percent of schools that answered a recent survey by the American Association of Collegiate Registrars and Admissions Officers.”

So you tell me that Trump is not a Chinese agent. The only other explanation is that he’s ignorant and unread — that he’s never studied the issues or connected the dots between them — so Big Coal and Big Oil easily manipulated him into being their chump, who just tweeted out their talking points to win votes here and there — without any thought to grand strategy. Surely that couldn’t be true?

Donald Trump Is Handing China the World

My Comments: This is a topic that resonates with me, and yes, it probably conforms to my bias as a left leaning Democrat. And yes, creating a total rethink of the assumptions about government and it’s role in society is something I can live with.

However, for the past 12 months or more, the message from the Trump camp has been to cede the global high ground on trade to China. I can’t figure why they want to do that. This is not 1817, but 2017 and the world is a very different place.

Nothing they’ve said and done so far gives me any confidence that they know what they are doing, other than to feather their nests at my expense. I had my concerns about the Trans Pacific Partnership but creating an enemy out of Mexico? If the objective is to push Mexico into China’s back yard, they are doing a great job.

David Axe 01.30.17

President Donald Trump wants to build up the U.S. Navy, a move that could help the United States counter China’s aggressive expansion into the Western Pacific.

But the new, bigger fleet will come too late to save America from a rising China. That’s because Trump’s other initiatives—rejecting foreign alliances, throwing up barriers to global trade and withdrawing from efforts to combat climate change—are creating a power vacuum that China naturally fills.

Beijing will step into leadership roles that Trump’s Washington has vacated quicker than Trump’s Navy stands any chance of blocking Chinese ascension.
The counter productiveness of Trump’s China strategy seems to make no sense, until you realize that Trump doesn’t want a bigger Navy in order to deter China. He wants a bigger Navy for the same reason he wanted to include tanks and missile launchers in his inaugural parade:
Trump is a chauvinist and aspiring autocrat for whom displays of strength are the same as actual strength—and whose primary audience isn’t rising foreign powers, but the majority of Americans who voted against him and who strongly oppose his policies.

As recently as the late 1980s, China possessed only a modest navy whose main role was to protect the Chinese coast from possible invasion by Soviet forces. As the Chinese economy expanded in the 1990s and 2000s, Beijing’s strategic aspirations expanded, too. The Chinese Communist Party needed a navy to assert and protect its increasingly global role.

After 20 years of investment, today the Chinese navy looks a lot like the U.S. Navy does. It possesses more than 100 large, sophisticated warships armed with long-range guided missiles plus hundreds of smaller ships. It has nuclear-powered submarines. In 2012, it commissioned its first aircraft carrier. Today a second carrier is under construction in Shanghai.

Emboldened by its new, powerful fleet, in recent years China has forcefully expanded into the China Seas, occupying isolated reefs in disputed waters and transforming them into armed outposts replete with guns and missile launchers, airfields and port facilities for warships.

Meanwhile, the U.S. Navy has shrunk from its Cold War peak, and today numbers around 280 frontline warships. These ships patrol less often. In 1996, the U.S. Navy sailed two aircraft carriers side-by-side through the Taiwan Strait as a message to a belligerent Beijing. Today it’s exceedingly rare for two of America’s remaining 11 flattops to deploy together anywhere.

It was the George W. Bush administration that first identified the need for a bigger fleet to counter the Chinese, among other potential threats. President Barack Obama mostly continued Bush’s fleet plans, slowly adding a few, mostly smaller, vessels. Obama was constrained first by the global economic crisis and, later, by the 2011 Budget Control Act, which mandated across-the-board cuts in government spending.

Trump has pledged to repeal the Budget Control Act and grow the fleet to 350 ships—a move Obama’s outgoing Navy Secretary Ray Mabus actually strongly endorsed. With Republican majorities in Congress, Trump can theoretically accomplish both goals.

But navies don’t grow fast or cheaply. A new warship costs U.S. taxpayers $2 billion, on average, and takes several years to build and bring into the fleet. Even if Trump and Congress give the Navy every dollar it asks for starting with the 2017 budget—Trump’s first—the sailing branch won’t receive the first of the new ships Trump promised until right around the time candidates start campaigning for the 2020 presidential election.

It’s for that reason that many outside observers are skeptical of Trump’s bold pronouncements on the military front.

“The big issue for me is how long this buildup is going to last,” Eric Wertheim, an independent naval expert and author of Combat Fleets of the World, told The Daily Beast.

“Russia, China, Japan, Mexico, all countries will respect the U.S. more than they have under previous administrations,” Trump vowed during a Jan. 11 press conference. But if Trump is counting on a bigger military to drive that respect, he might be disappointed.

And in the meantime, Trump is voluntarily surrendering ground to Beijing on economic, diplomatic, and environmental fronts, opening the door to an even greater global role for China that the country’s own growing military will only reinforce.

In one of his first acts as president, Trump formally withdrew the United States from the Trans Pacific Partnership, a trade pact that Obama had initiated in the hope of getting regional economies to agree to U.S. rather than Chinese legal, labor, and environmental standards and tariff-free imports.

Eleven countries have signed the TTP, but the pact loses much of its power without American participation. In November 2016, U.S. Senator John McCain (R-AZ) warned that Trump abandoning the trade deal “will create an opening for China to rewrite the economic rules of the road at the expense of American workers.”

Trump’s promise to effectively quit the Paris Climate Accord, Obama’s signature environmental accomplishment, will have a similar China-emboldening effect. Halting U.S. investment in clean energy technology such as solar and wind will surrender a $1.35-trillion annual world market to China, which is set to pour hundreds of billions of dollars into new green tech over the next few years in a bid to sharply reduce its own, presently sky-high, carbon emissions.

Trump doesn’t seem interested in competing on the clean-tech front. And that benefits Beijing. “There can now be no question that China—while still leading the world in both coal consumption and carbon emissions—is also leading the way forward to the clean-energy future,” wrote Barbara Finamore, Asia director at the Natural Resources Defense Counsel.

Finally, Trump seems determined to undermine America’s longstanding Pacific alliances, surrendering what is arguably the United States’ biggest advantage relative to China. Note that America never planned to confront an assertive China on its own. U.S. military planning in the Western Pacific has long assumed close cooperation with friendly countries—most importantly, Japan, which possesses the third-most-powerful navy in the region after the United States and China.

But Trump began pushing away Japan even before he got elected. In March 2016, Trump said that Japan should develop its own nuclear weapons so that it can defend itself without American help. “We can’t afford to do it anymore,” Trump said.

As the world’s only victims of atomic warfare, the Japanese people and their government are deeply opposed to nuclear weaponry. Trump either didn’t know that or doesn’t care. But the effect was the same. Alarm. In the aftermath of Trump’s comment, Japan’s Prime Minister Shinzo Abe rushed to reassure his country. “Whoever will become the next president of the United States, the Japan-U.S. alliance is the cornerstone of Japan’s diplomacy,” Abe warned.

Abe signaled cautious optimism following a November meeting with Trump in New York City. “The talks made me feel sure that we can build a relationship of trust,” Abe said in a carefully-worded statement. But America and Japan already had a relationship of trust prior to Trump’s entry onto the world stage.

It’s because of Trump that Abe had to reassure his citizens at all. President Trump must work hard simply to return U.S. diplomacy to where it was before candidate Trump started mouthing off. That creates an opening for Beijing to assume a greater regional leadership role, even amid China’s own aggression in the China Seas.

China’s continuing commitment to free trade could more than make up for the country’s military bellicosity when it comes to aligning other governments behind it—and Beijing knows it. Hence Chinese President Xi Jinping’s recent trade-themed charm offensive. “Pursuing protectionism is like locking oneself in a dark room,” Xi said at the economic summit in Davos, Switzerland on Jan. 17. “Wind and rain may be kept outside, but so are light and air.”

If Asian countries follow China’s lead on trade and the environment, they could lend Beijing the diplomatic heft to firm up and legitimize China’s recent military gains. When Trump’s bigger Navy sets sail in 2019 or 2020, it could arrive in the Western Pacific too late to make any difference for America’s standing in the region.

It’s Economics, Stupid!

Four words surfaced in the 1991/92 presidential election cycle that put Bill Clinton in the White House. Those four words were “It’s the economy, stupid!”.

My thoughts here echo that catchphrase but extend beyond the recently completed election cycle and instead are an attempt to better understand the current malaise that is gripping the country, and indeed the world.

It’s economics, stupid!

Many of us are almost paralyzed by the ongoing stress in this country. It may result from the efforts of 45 to change reality, or it may be something more fundamental.

On an almost daily basis, we are confronted by news of killings by deranged individuals or by law enforcement officers under questionable circumstances, by protests in the streets over racially driven perceptions, by arguments over what constitutes a minimum wage and whether society should play any role in this, by arguments over immigration questions and whether some people should be allowed to stay, by religious claims that freedom of religion as guaranteed by the Constitution has it limits, and on and on.

You only have to look at North Carolina and the trouble they are having with deciding who should use which bathroom to know something is seriously amiss.

While each issue has its followers and detractors, my observation is that much of the obsession surrounding each issue also has an economic component. Some have argued there is a cancer infecting our democracy and I’m inclined to think they are right.

Cancer as we normally think of it is a medical issue that encourages fear and loathing, is often life changing, if not fatal, and is the focus of a staggering effort by scientists to bring it under control. But never forget, there is also an economic component to the cause and effect surrounding cancer.

The tobacco industry has promoted the use of cigarettes since before we had a Constitution. It employs, or did, millions of people around the world who grow, manufacture, distribute and promote the use of tobacco to what are otherwise normal people on our planet. Today we know that tobacco smoke is a cancer causing agent, yet is not outlawed, even though advertising has been curtailed in this country.

Why has it not, you might ask. Whole swaths of our countryside have evolved over the decades such that the economic survival of millions of people depend on the agriculture associated with tobacco, its harvesting and subsequent conversion to a consumable product. Those people are citizens of this country just like you and I and they have an economic stake in preserving their way of life. So while it slowly dies, it still results in lung cancer, which is usually fatal.

With an African American politician in the White House for eight years, we saw the evolution of what might have been a positive racial outcome devolve into nightmare bordering on insanity. The principal antagonists in this nightmare can be described easily as ‘white vs non-white” even if that is not entirely accurate. This country is comprised mostly of those whose ancestry is ‘white’ and those whose ancestry is ‘black’. Centuries of cultural evolution has left an apparently indelible psyche that results in an ‘us vs them’ mindset.

I used the word ‘insanity’ in the context of a descriptive argument that says that doing the same thing over and over again and expecting a different outcome is, by definition, insanity. Some of this is encouraged by the relatively short election cycles imposed on our elected leaders. The time frame encourages actions that might result in a positive outcome before the end of the current cycle, which effectively discourages actions that might take much longer, such as those associated with cultural changes over time.

Promises made by candidates for public office sometimes need much longer to become manifest in society. An example is the current conflict between law enforcement and the citizenry they are bound to protect. Rightly or wrongly, it’s been festering for many decades, and as a result, is going to take decades to remedy. This is not to suggest that efforts to create a remedy are not needed, but to suggest there is an economic component to the conflict and not solely a racial component.

If we can somehow persuade our elected leaders to focus more of their time and energy on resolving economic differences, there will be a far greater chance that racial differences can be resolved to the satisfaction of both sides. I’ve long maintained that like it or not, members of our society find life better with more money than with less money. For most of us, our waking lives are devoted to improving our financial lot in life, and when it doesn’t happen, conflict follows.