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“KPMG predicts economic growth of 1.4 per cent next year, but cuts this to 0.6 per cent if Britain leaves the EU without a deal.” — The Times
While some firms predict slower than normal growth for the UK economy in the post-Brexit timeframe, it’s always good to reflect on the assumptions that forecasters employ in creating their reports and why such forecasts can cause more harm than good.
- If you tell your employees that, ‘the chips are down, the economy is sinking, and corporate belt-tightening isn’t far off’ they are likely to respond in a negative way. Some may look for other employment, some will opt for early retirement, while others spend more time in the staff room talking with their coworkers about their employment concerns than getting their work done. Which means such reports can actually cause the negative outcome they’re warning about. It’s human nature to perform to a predicted level instead of trying to exceed expectations. There are few exceptions to this behavior and they are called names like; Olympic athlete, Pulitzer Prize Winner, President, or Astronaut who have the innate ability to ‘power through’ the negative times without losing momentum.
- Such reports deal with known inputs only. For example, a zero-tariff trade deal with the Americans may seem far off today, but by 2020 it may already be signed. And not only the U.S., other political and trade blocs are likely to sign trade deals with the UK following Brexit. The AU (Africa), MERCOSUR (the South American trade bloc), the Pacific Alliance (several Pacific nations), the CPTPP (the Comprehensive and Progressive Agreement for Trans-Pacific Partnership) nations, ASEAN (the Association of Southeast Asian Nations), The Commonwealth (Commonwealth of Nations), and China, are likely to expand their trade links with the UK after it departs the European Union. America and those seven trading areas will have a combined total of 7.0 billion people by 2020. That’s a lot of potential consumers, and the massive opportunities presented by signing zero-tariff trade deals post-Brexit are absent in most economic projections by design. Even if the UK were to sign only one free trade deal (with the U.S., for example) it could improve UK growth by a full 2 per cent or more. Presto! A shiny new UK economy!
- “Now we’ve got them!” While economic forecasting provides vital information for policymakers, Brexit negotiators aren’t helped by the news that growth will slow even in the face of a ‘good Brexit deal’ and will slow moreso in a ‘no Brexit deal’ scenario. It’s the kind of report that makes Michel Barnier’s day! KPMG is certainly one of the most respected firms around, but if you’re a Brexiteer and a report like this has been released to the public instead of it remaining in the hands of policymakers it plays with your mind; “Are they working for the UK’s best interests or are they working for the EU’s best interests?” (and) “Who commissioned (who paid for) this report and what parameters were used?”
So, while the good people of KPMG do their best to provide policymakers with the best near-term assessment of the UK economy, making such reports public can actually cause the negative things to occur about which the report warns.
That’s why policymakers everywhere must be ahead of the curve and treat all such documents as ‘the worst-case scenario’ without exception.
Now that UK Prime Minister Theresa May has been reliably informed that the worst the UK can do is 0.6 per cent growth between now and 2020, it should be an easy matter to arrange a number of free trade deals and blow the doors off that projection by 3 or 4 per cent by 2020.
Looking at this in the proper context means accepting that exiting the European Union is merely a necessary stepping stone to get the UK to 4 per cent growth by 2020 — which should result in Theresa May keeping the PM’s chair for at least one more term and with all past ‘political sins’ forgiven.
Not a bad deal Theresa, if you’re up for it! 🙂
The International Order is Broken
We know this because the world’s politicians are using military means to solve what are essentially political problems they don’t know how to solve.
As the Syrian crisis rolls into its 8th year no clear winner has emerged, other than ISIS has been degraded by Western and Russian forces operating throughout Syria.
Not that Russia and the West are working together to destroy ISIS, rather, Western countries are working to destroy the evil entity to prevent it from spreading across the Middle East and the Western world, while the Russians are tearing ISIS apart because it represents an internal threat to Syria, its longtime ally.
Which are reasonable and noble goals.
But at any time since the Syrian conflict began in 2010, Western, Russian and Syrian diplomats could’ve worked out a plan to solve the terrorist problem inside Syria and could’ve wrapped up the whole mess within 24 months with relatively few civilian casualties. But they didn’t. Or they couldn’t.
The very definition of broken-ness, right there.
“No problem can be solved by the same level of consciousness that created it.”
Why Are We Broken?
When the interests of several countries align — and they still can’t put together a unified coalition — it’s a textbook case of a broken international order.
Which is how we stumbled into WWI, WWII, the Cold War, the Korean War, the Vietnam War, the Gulf War, the Iraq War, the Afghan War, and several other conflicts, such as the Rwanda genocide that killed 800,000 people in a matter of days. And we know how those wars turned out, and we know how many people were killed in total in those 20th-century conflicts.
The failure of politicians and their diplomats to find better solutions and thereby prevent those wars is appalling beyond any scale that humans can understand.
“All war represents a failure of diplomacy.”
Sometimes, very complicated problems can stem from a very simple problem.
FOR EXAMPLE: The neighbourhood’s troubled teen filling your car’s fuel tank with water overnight — although a simple act in itself — can cause serious problems after the car is driven the following morning. Such a simple act can cost a vehicle owner hundreds of dollars to repair and cause major inconvenience.
And likewise, every war fought in the 20th-century was caused by an astonishingly simple misunderstanding of human psychology by the world’s politicians and diplomats.
We are broken because those politicians believed that employing ‘Win-Lose’ thinking to solve problems was the preferred path, instead of realizing that ‘Win-Win’ thinking is a higher form of thinking that only humans can employ to solve problems.
Every war since 1900 is the direct result of employing ‘Win-Lose’ thinking to solve political problems. Another way to say it, is that every single death and injury caused by war in the 20th-century is 100% on the heads of the people who practiced politics and diplomacy in that century — because their thinking wasn’t up to the task.
Never in human history had anyone seen bungling on the scale of 20th-century world leaders.
Therefore, as the ‘default mode’ for politicians in the 20th-century was to employ ‘Win-Lose’ thinking, every serious disagreement inexorably turned into war and mega-millions died as a result.
Because the politicians of the day resorted to their animal instincts, over 250 million people were killed in war and in famines caused by war in the 20th-century. Some might call that number a conservative estimate of the total death toll.
Sobering, isn’t it?
Aren’t We Better Than That?
Apparently not. Because even today we’re still using bombs to solve the problems we’re not smart enough to solve. Problems that humans created aren’t being solved, because we’re not using the right methods to solve our problems.
So we bomb our way out of problems.
Using ‘Win-Win’ Thinking to Solve Our Problems
There are few examples of the world’s politicians using ‘Win-Win’ thinking to solve our very human psychological problems.
Ending the Cold War is the stellar achievement for diplomats in the 20th-century. And just in time, because the civilization that humans built over thousands of years came dangerously close to annihilation many times during the Cold War.
Another example of ‘Win-Win’ thinking occurred when the world’s politicians and scientists came together to sign the Montreal Protocol to eliminate chlorofluorocarbons from our supply chains; chemical compounds that were rapidly destroying the Earth’s ozone layer. The Montreal Protocol has been called ‘the most successful accord in history’.
Yet another example of ‘Win-Win’ thinking occurred when the Allied Powers joined forces after World War II to rebuild Europe using the Marshall Plan to fund food aid, reconstruction of damaged infrastructure, and to help establish a fairer world order based on peaceful relations. In postwar Japan, the Allied Powers facilitated the country’s rebuilding by purchasing billions of dollars of Japanese goods which benefited the Allied Powers as much as it benefited the former Axis Power.
Without the assistance of these, the most brilliant minds that ever lived, humanity may have become extinct long before the year 2000.
The ‘Win-Win’ thinkers who ended the Cold War, the ‘Win-Win’ thinkers who ended the use of chlorofluorocarbons, and the ‘Win-Win’ thinkers who invested in the former Axis Power economies during the postwar era, changed our world for the better (at the very least) and may be responsible for saving all life on the planet (at best).
Those examples prove ‘Win-Win’ thinking can work to solve our problems and that we don’t need to retain ‘Win-Lose’ thinking as our default problem-solving method.
Regardless of the Method we Choose, we Must Stand Up for Our Principles
President Donald Trump today authorized 3 military strikes inside Syria to hit suspected chemical weapon sites and chemical research and development facilities ostensibly used by the Syrian military.
The president cited Article 2 of the U.S. Constitution in his justification for the attack saying that Syria represented an area of strategic importance to the United States. However, there almost isn’t a place on Earth that is of less strategic importance to the U.S. and its allies, as Syria.
It may be the president misread his teleprompter — because Syria isn’t a strategic place from the U.S. viewpoint — and if he sticks to that view he will spend days or weeks defending this military action to members of the Congress and Senate.
What is of strategic importance to the United States (and what would work for members of Congress charged with upholding the U.S. Constitution) is that preventing the proliferation and use of chemical weapons is of strategic importance to the United States, and therefore, President Trump’s authorization of use of force is justified and necessary, and in the best interest of the United States.
In that way the president’s use of force is legal and justified under the U.S. Constitution, and may also serve as a deterrent to a Syrian regime that seems bent on destroying significant numbers of its population and has refused any chance to allow them escape to another country.
Choosing Humanity vs. Hubris: Why We Fight
Exterminating your own citizens because they have a different political view isn’t acceptable and no doubt President Trump is privy to images and videos from Syria that are marked classified because they’re too horrific for U.S. television viewers to see.
And let’s be honest, seeing those images hastened his decision to veer hard towards military action rather than continuing to employ so-called ‘Soft Power’ to bring about a diplomatic solution to the Syrian debacle.
It may be that punishing Syria each time it uses chemical weapons against civilians or terrorist entities will serve as an effective deterrent. However, Syrian forces may become more adept at hiding such attacks from Western eyes and ears.
“We cannot allow the use of chemical weapons to become normalized.”
Syria’s plan seems to be to kill every terrorist, every non-combatant family member of terrorists, or anyone stuck in areas known to contain terrorist entities.
While this may seem normal to dictators, it is highly offensive to civilized people. Even Syria’s ally Russia, abhors attacks on civilians and non-combatants — and Russian citizens seem extremely offended when chemical attacks are used to solve what are, in the final analysis, human problems for which the diplomats haven’t yet found solutions.
Short-term Deterrence or Long-term Mutual Success?
Whether Tomahawk missile attacks act as a deterrent to Syrian chemical weapons attacks inside Syria, or not — at least President Trump can say that America and its allies didn’t stand idly by and let it happen without challenging it.
Yet, the long-term way to solve this crisis is to show these heinous acts on every television in the world, to explain what is actually occurring there, to make chemical weapons use anywhere unacceptable to everyone, and to use ‘Win-Win’ thinking to save our broken, but still human, civilization.
When we finally adopt ‘Win-Win’ thinking as our default option to deal with human-caused problems, that will be the day that human beings finally surpass the animal kingdom in every way on this planet. And if we don’t, our short break from the threat of Cold War-style Mutually Assured Destruction (MAD) will soon be over.
by John Brian Shannon | November 14, 2016
After eight years of competent and relaxed rule by President Barack Obama, real estate tycoon Donald Trump arrived on the scene and swept Democrats and other Republicans aside to win the presidency of the United States. So obviously a protest vote — but a protest against what?
Pollsters and so-called ‘elites’ seem astonished at the Trump victory yet many saw it coming from afar. How is it that some people ‘never saw it coming’ while others saw it as a logical progression of the present societal moment?
The U.S.A. has a total population of 325 million people (November 2016) and when we look at the demographics of the country by quintiles, we see that there are five groups of 65 million people.
Each group is ‘one quintile’. The ‘top quintile’ are those who are the top income earners in the country, while the ‘bottom quintile’ are the lowest income earners in the country, etc.
The so-called ‘elites’ live in sumptuous luxury that few can imagine and tend to have stable lives which is a direct consequence of their high income levels and (usually) higher level of education.
Ninety-four percent of the people who live in the top-two quintiles are children of parents who also lived in the top-two quintiles.
(Yes Virginia, wealth is largely inherited and many studies attest to this — the myth of ‘work hard and you’ll get ahead’ represents only six-percent of the top-two quintile population in Western nations)
The bottom-three quintiles in America have been losing ground since the 1970’s when one person (the ‘breadwinner’ of the family) was able to earn enough to support a family, buy a reasonable home, and a new car every 2-3 years without needing to finance the purchase, take one vacation per year, and send their kids to college. All on the strength of one income-earner!
Nowadays, the bottom quintiles are barely working, many of their jobs off-shored to Asia. For those fortunate enough to have a job, it takes two income-earners to rent or buy a condo, buying a car means financing it for up to 8-years, and one ‘staycation’ per year (staying near home during vacations, with only daytrips to nearby sights) while their kids must obtain expensive student loans that can take decades to pay off.
It’s a different world from the 1960’s and 1970’s.
The major reason for this is the Reagan-era tax cuts that were designed to stimulate growth and investment in the U.S. economy (which were the right prescription for the times) and those tax cuts created a record number of billionaires — which eventually resulted in the creation of the so-called ‘1 percent’ who now invest their money in the ‘Asian Tiger’ economies which bring better financial rewards for those investors, but results in the off-shoring of millions of jobs in the Western nations.
At present, the 1 percent own more than 50% of the world’s total wealth. Leaving less than one-half of the world’s wealth for the remaining 7.3 billion people.
But by 2030, the 1 percent will own more than 75% of the world’s total wealth. Leaving only one-quarter of the world’s wealth for the (then) 8 billion people on the Earth.
And in 2040, the 1 percent will own more than 85% of the world’s total wealth. Leaving only one-sixth of the world’s wealth for the (then) 8.75 billion people to fight over.
World Wars have been waged over less!
People wrongly blame ‘Globalization’ for this sorry state of affairs but it was a profound change in U.S. tax laws that allowed wealth to flow upward to the 1 percent who simply take their money and invest it in Asia. It represents trillions of dollars (U.S. and Canada) and trillions of euros (EU) and hundreds of billions of pounds sterling that will never, ever, return. It’s money that has left the West forever.
And some people wonder why things like Brexit and the stunning repudiation of the status quo candidate in the U.S.A. (Hillary Clinton) have occurred? Really? Are you kidding me?
Politicians and so-called ‘elites’ who didn’t see this coming have no business leading nations, nor should they be calling themselves ‘elites’ — nor have they ever spent a minute talking with a member of the bottom three quintiles in any Western nation.
In democratic societies ‘The People’ are always right. Some 52% of Britons voted to leave the EU, hoping for a better democracy and a better economy, while in the U.S.A. millions of voters chose hope over the status quo.
Upcoming elections in Italy, the Netherlands, France, and other Western nations are likely to show similar results.
It’s startlingly clear. ‘The People’ aren’t looking for more of the same. They voted for real change — not talk about change!
Politicians like PM Theresa May and President-elect Donald Trump have garnered a huge mandate for change. For politicians, it doesn’t get any better than this. Whatever these politicians do as long as it looks like they’re attempting to meet the needs of ‘The People’ they will be generously rewarded for their successes and easily forgiven if a particular policy fails to meet expectations.
It’s a time of unprecedented opportunity for politicians who’ve upset status quo candidates, but failure to deliver meaningful change now will bring us uncomfortably close to a total breakdown of the social contract that has worked so well for citizens and governments in the postwar era.
For those politicians elected to bring change, but who subsequently fail to do so, will find themselves losing landslide elections four years on — while bringing the wrath of ‘The People’ against ‘The Establishment’.
Let us do our part to make it easy for newly-elected politicians to do the right thing, and to forgive them easily if perchance some minor policy point goes awry.
We all need to do our part to assist the change that must now occur — otherwise, by 2040, some 8.5 billion people will be fighting over 15% of the world’s total wealth — resulting in an apocalypse worse than anything we’ve yet seen.