This is the continuation of the first thread as it was too long to post as one thread. Sorry. But I think it’s well worth reading, and I’m sure sone here will get a kick either picking it apart or agreeing with some or all of it. It’s got me thinking, anyway.
IMPLICATIONS OF THE FOUR TRANSFORMATIONS
- The War in Iraq
In some ways, the war is going very well. Afghanistan and Iraq have the
beginnings of a modern government, which is a huge step forward. The
Saudis are starting to talk about some good things, while Egypt and
Lebanon are beginning to move in a good direction. A series of
revolutions have taken place in countries like Ukraine and Georgia .
There will be more of these revolutions for an interesting reason. In
every revolution, there comes a point where the dictator turns to the
general and says, Fire into the crowd. If the general fires into the
crowd, it stops the revolution. If the general says No, the revolution
continues. Increasingly, the generals are saying No because their kids
are in the crowd.
Thanks to TV and the Internet, the average 18-year old outside the U.S.
is very savvy about what is going on in the world, especially in terms
of popular culture. There is a huge global consciousness, and young
people around the world want to be a part of it. It is increasingly
apparent to them that the miserable government where they live is the
only thing standing in their way. More and more, it is the well-educated
kids, the children of the generals and the elite, who are leading the
revolutions.
At the same time, not all is well with the war. The level of violence in
Iraq is much worse and doesn’t appear to be improving. It’s possible
that we’re asking too much of Islam all at one time. We’re trying to
jolt them from the 7th century to the 21st century all at once, which
may be further than they can go. They might make it and they might not.
Nobody knows for sure. The point is, we don’t know how the war will turn
out. Anyone who says they know is just guessing.
The real place to watch is Iran . If they actually obtain nuclear
weapons it will be a terrible situation. There are two ways to deal
with it. The first is a military strike, which will be very difficult.
The Iranians have dispersed their nuclear development facilities and put
them underground. The U.S. has nuclear weapons that can go under the
earth and take out those facilities, but we don’t want to do that.
The other way is to separate the radical mullahs from the government,
which is the most likely course of action. Seventy percent of the
Iranian population is under 30. They are Moslem but not Arab. They are
mostly pro-Western. Many experts think the U.S. should have dealt with
Iran before going to war with Iraq . The problem isn’t so much the
weapons, it’s the people who control them. If Iran has a moderate
government, the weapons become less of a concern.
We don’t know if we will win the war in Iraq . We could lose or win.
What we’re looking for is any indicator that Islam is moving into the
21st century and stabilizing.
- China
It may be that pushing 500 million people from farms and villages into
cities is too much too soon. Although it gets almost no publicity, China
is experiencing hundreds of demonstrations around the country, which is
unprecedented. These are not students in Tiananmen Square . These are
average citizens who are angry with the government for building chemical
plants and polluting the water they drink and the air they breathe.
The Chinese are a smart and industrious people. They may be able to
pull it off and become a very successful economic and military
superpower. If so, we will have to learn to live with it. If they want
to share the responsibility of keeping the world’s oil lanes open,
that’s a good thing. They currently have eight new nuclear electric
power generators under way and 45 on the books to build. Soon, they will
leave the U.S. way behind in their ability to generate nuclear power.
What can go wrong with China ? For one, you can’t move 550 million
people into the cities without major problems. Two , China really wants
Taiwan , not so much for economic reasons, they just want it. The
Chinese know that their system of communism can’t survive much longer in
the 21st century. The last thing they want to do before they morph into
some sort of more capitalistic government is to take over Taiwan .
We may wake up one morning and find they have launched an attack on
Taiwan . If so, it will be a mess, both economically and militarily.
The U.S. has committed to the military defense of Taiwan . If China
attacks Taiwan , will we really go to war against them? If the Chinese
generals believe the answer is no, they may attack. If we don’t defend
Taiwan , every treaty the U.S. has will be worthless. Hopefully, China
won’t do anything stupid.
- Demographics
Europe and Japan are dying because their populations are aging and
shrinking. These trends can be reversed if the young people start
breeding. However, the birth rates in these areas are so low it will
take two generations to turn things around. No economic model exists
that permits 50 years to turn things around. Some countries are
beginning to offer incentives for people to have bigger families. For
example, Italy is offering tax breaks for having children. However, it’s
a lifestyle is sue versus a tiny amount of money. Europeans aren’t
willing to give up their comfortable lifestyles in order to have more
children. In general, everyone in Europe just wants it to last a while
longer.
Europeans have a real talent for living. They don’t want to work very
hard. The average European worker gets 400 more hours of vacation time
per year than Americans. They don’t want to work and they don’t want to
make any of the changes needed to revive their economies. The summer
after 9/11, France lost 15,000 people in a heat wave. In August, the
country basically shuts down when everyone goes on vacation. < /DIV>
That year, a severe heat wave struck and 15,000 elderly people living in
nursing homes and hospitals died. Their children didn’t even leave the
beaches to come back and take care of the bodies. Institutions had to
scramble to find enough refrigeration units to hold the bodies until
people came to claim them. This loss of life was five times bigger than
9/11 in America , yet it didn’t trigger any change in French society.
When birth rates are so low, it creates a tremendous tax burden on the
young. Under those circumstances, keeping mom and dad alive is not an
attractive option. That’s why euthanasia is becoming so popular in most
European countries. The only country that doesn’t permit (and even
encourage) euthanasia is Germany , because of all the baggage from World
War II.
The European economy is beginning to fracture. Countries like Italy are
starting to talk about pulling out of the European Union because it is
killing them. When things get bad economically in Europe , they tend to
get very nasty politically. The canary in the mine is anti-Semitism.
When it goes up, it means trouble is coming. Current levels of
anti-Semitism are higher than ever.
Germany won’t launch another war, but Europe will likely get shabbier,
more dangerous and less pleasant to live in. Japan has a birth rate of
1.3 and has no intention of bringing in immigrants. By 2020, one out of
every five Japanese will be 70 years old. Property values in Japan have
dropped every year for the past 14 years. The country is simply shutting
down. In the U.S. we also have an aging population. Boomers are
starting to retire at a massive rate. These retirements will have
several major impacts:
Possible massive sell of large four-bedroom houses and a movement to
condos.
An enormous drain on the treasury. Boomers vote, and they want their
benefits, even if it means putting a crushing tax burden on their kids
to get them. Social Security will be a huge problem. As this generation
ages, it will start to drain the system. We are the only country in the
world where there are no age limits on medical procedures.
An enormous drain on the health care system. This will also increase the
tax burden on the young, which will cause them to delay marriage and
having families, which will drive down the birth rate even further.
Although scary, these demographics also present enormous opportunities
for products and services tailored to aging populations. There will be
tremendous demand for caring for older people, especially those who
don’t need nursing homes but need some level of care. Some people will
have a business where they take care of three or four people in their
homes. The demand for that type of service and for products to
physically care for aging people will be huge.
Make sure the demographics of your business are attuned to where the
action is. For example, you don’t want to be a baby food company in
Europe or Japan . Demographics are much underrated as an indicator of
where the opportunities are. Businesses need customers. Go where the
customers are.
- Restructuring of American Business
The restructuring of American business means we are coming to the end of
the age of the employer and employee. With all this fracturing of
businesses into different and smaller units, employers can’t guarantee
jobs anymore because they don’t know what their companies will look like
next year. Everyone is on their way to becoming an independent
contractor.
The new workforce contract will be: Show up at the my office five days
a week and do what I want you to do, but you handle your own insurance,
benefits, health care and everything else. Husbands and wives are
becoming economic units. They take different jobs and work different
shifts depending on where they are in their careers and families. They
make tradeoffs to put together a compensation package to take care of
the family.
This used to happen only with highly educated professionals with high
incomes. Now it is happening at the level of the factory floor worker.
Couples at all levels are designing their compensation packages based on
their individual needs. The only way this can work is if everything is
portable and flexible, which requires a huge shift in the American
economy.
The U.S is in the process of building the world’s first 21st century
model economy. The only other countries doing this are U.K. and
Australia . The model is fast, flexible, highly productive and unstable
in that it is always fracturing and re-fracturing. This will increase
the economic gap between the U.S. and everybody else, especially Europe
and Japan .
At the same time, the military gap is increasing. Other than China , we
are the only country that is continuing to put money into their
military. Plus, we are the only military getting on-the-ground military
experience through our war in Iraq . We know which high-tech weapons are
working and which ones aren’t. There is almost no one who can take us on
economically or militarily.
There has never been a superpower in this position before. On the one
hand, this makes the U.S. a magnet for bright and ambitious people. It
also makes us a target. We are becoming one of the last holdouts of the
traditional Judeo-Christian culture. There is no better place in the
world to be in business and raise children. The U.S. is by far the best
place to have an idea, form a business and put it into the marketplace.
We take it for granted, but it isn’t as available in other countries of
the world. Ultimately, it’s an issue of culture. The only people who
can hurt us are ourselves, by losing our culture. If we give up our
Judeo-Christian culture, we become just like the Europeans.
The culture war is the whole ballgame.
If we lose there isn’t another America to pull us out!