Challenges posed by Russia, China, and the Islamic State confront the US with insoluble foreign policy dilemmas. There is no easy way out of any of these conflicts. When combined with US domestic problems — the race war of blacks against whites, Obama’s war against the US economy and US energy, skyrocketing debt, and the inability of the US’ European populations to breed to replacement levels — and one may begin to sense an imminent collapse of the US.
But which “US” is in danger of collapse? The US government, or the country known as the US? The government, after all, is not the country. As the US was originally conceived, the government was merely the means of protecting the country and allowing the people to build their lives and ambitions as they saw fit — as long as they refrained from violence, fraud, and theft.
Since then, the US government has grown huge and unwieldy, impinging upon every aspect of the lives of its citizens and residents. Judging by the most recent US administrations, one might think that the US government is intent upon strangling the country — to destroy its economy, industry, and will to prevail against challenges. Should that be allowed to occur, the US likely would collapse.
Don’t be confused by the boom in US oil & gas production. The US government could crush those industries with a stroke of Obama’s executive pen. But what about the decline in US manufacturing costs? Will increased efficiencies rescue the US economy from its government?
Part of the reason for the narrowing gap is that wages have been rising in China. And American companies have been boosting their productivity faster than many of their international competitors. But perhaps the single largest factor is that fracking has helped dramatically drive down the price of oil and gas that’s being used in energy intensive industries such as steel, aluminum, paper and petrochemicals. BCG calculates that U.S. industrial electricity prices are now 30% to 50% lower than those of other major exporters. __ Fortune
Ah, yes. We had forgotten to look at US electricity costs. The cost of US electric power is much lower than that of European competitors. This is because the US has been slow to adopt the “green energy swamp” approach to economic suicide which the Europeans seem determined to follow. As long as costs for US natural gas and electricity are appreciably lower than those of its competitors, the US will have a distinct advantage in manufacturing. Thus all the European manufacturers that have moved operations to the US to take advantage.
“A 5% price discrepancy in manufacturing between China and the US doesn’t amount to much,” says BCG’s David Gee, “when you consider that US manufacturers face the risks of delay when shipping from China, the threat of port strikes, and the local investments and partnerships that Beijing often requires of foreign companies doing business there.”
Lower energy prices can also open up new opportunities such as a using natural gas to power fleet vehicles and trucks, which would reduce American dependence on foreign oil and cut greenhouse gases. Natural gas can also be converted into hydrogen to power fuel cells like the ones in Toyota’s TM 1.17% Mirai passenger car. (The Japanese car giant will start taking orders for the Mirai in California this summer.)
Over the last few years, cheap energy has encouraged players in various industries to earmark $138 billion for new U.S.-based investments. This spring, for example, the petrochemical giant Sasol SSL 2.22% started construction on an $8.1 billion ethane cracker at Lake Charles, La. And energy companies like Cheniere LNG 0.76% are building multi-billion LNG terminals on the Gulf of Mexico to export overseas, where natural gas can be three to four times more expensive than it is in the U.S.
How long will America’s advantage last? Harvard Business School’s Michael Porter, who along with BCG issued a new report in June called “America’s Unconventional Energy Opportunity,” says that America has about a 15-year lead on other nations when it comes to fracking. The most telling number to make that point? The U.S. has 101,117 fracked wells, followed by Canada’s 16,990. By contrast China has 258. __ https://fortune.com/2015/06/26/fracking-manufacturing-costs/
Perhaps the collapse of the US economy can be pushed back for a number of years, if future US presidents are not carbon copies of Barack Obama. Wait and see.
What about US allies? Under Bush, many traditional US allies had begun to back away. And under Obama, the rush away from US alliances has been a veritable stampede. And yet, in all the foreign challenges the US faces from Russia, China, and the Islamic State, something odd is causing at least a modest sea change in the global anti-US sentiment.
With Russia, China, and the Islamic State flexing their collective muscles, the world looks to the United States to take the lead. Yet, it is not 1941 and not everything is possible through American power alone.
Some regions have the capabilities required to address their own security challenges. Europe, for example, is sufficiently united and developed to deal with Russia’s hybrid war in Ukraine. The Indo-Asia-Pacific is also capable of balancing China’s rise. The Middle East is less capable of dealing with continued strife in the region, but the fundamental answer to the region’s problems must be answered by the nations and peoples of the region. In all three regions, America’s breadth of diplomatic, economic, and military power combine with like-minded nations to balance those who would return us to the days of power politics. ____ http://thediplomat.com/2015/06/how-russia-china-and-is-have-made-the-us-popular-again/
The dynamic balance of powers can quickly swing from one extreme to another. An invasion here, a massive over-reach there, before you know it two BRICS formerly in ascent begin to acquire a noxious smell.
Today, China is overwhelmingly seen as a national security threat in countries like Japan, Vietnam, and the Philippines, while in other states such as Malaysia, Singapore, and Indonesia, where there are more positive popular perceptions of China, the ruling governments have been hedging their bets by fortifying strategic ties with Washington. __ http://nationalinterest.org/feature/chinas-economic-plan-rule-asia-13233?page=2
Putin’s threats of nuclear war in particular are pushing much of Europe back into the orbit of US diplomatic and military alliance. Putin grows more desperate as his out-of-balance economy shrinks. The out-migration of Russia’s talented brains, and a rapidly shrinking working-age population makes the situation worse. It is too late for Putin to create a Spartan Russia. Domestic unrest is growing, and desperate people tend to take desperate actions.
China is in much better condition than is Russia, but it suffers its own problems of economic mis-allocation, widespread poisoning of land-rivers-air-food, rampant corruption, and a mistrust and fear of government institutions. And China still needs Ukrainian engines — despite its “alliance” with Putin’s Russia. Russia is “stuck” without Ukrainian arms, but China can still do backdoor deals with Ukraine as long as it pays its bills.
Foreign observers understand how desperate Russia is becoming, and do not want to be caught behind the next “iron curtain” that Russia decides to throw down. Hence the move toward the US — as distasteful as such a move may be for many.
None of this erases the huge US national debt, or the dysgenic shifting of US demographics — to say nothing of the monstrous US governmental impingement upon liberty, enterprise, and opportunity.
Still, when one embarks on comparing different nations and power blocs, one must embrace the discipline of “relativistic thinking.” Since capital flows to the greatest opportunity of returns, the global game of power, wealth, and dominance is a dynamic game of judging relative advantage.
The imminent collapse of the US has been confidently predicted on a regular basis for the past 238 years. But as we have learned, it is quite difficult to predict anything — especially the future.
Hope for the best. Prepare for the worst. Always look to the best location for you and your loved ones. Best to let your actions do your talking for you.