America Is No Longer A Superpower

When I first started writing this article I wrote the title as a question.  Upon further reflection I came to the easy decision that there really wasn’t any question about it and that I should write it as a statement instead to better reflect reality.  As our fearless leaders in Washington both republican and democrat debate whether or not we should launch military strikes against Syria I think it is time to acknowledge that our days of being a Superpower have passed.  Yes, we do still have the world’s most powerful military by far but that fact doesn’t look so powerful when you begin to realize that for us to use this military we have to borrow the money, mostly from China.  Can you really claim to be a real Superpower when you are dependent on rival regimes to finance your mighty military?  To me the answer is obvious and has been since the Great Recession began.  The sad fact of the matter is that we are now dependent on borrowed money from rival foreign powers to do anything militarily.  What happens when our interests don’t align with the people that are lending us the money?

 

US Trade Policy, Another Example Of Our Government’s Icompetence

GM will shift production of the XTS above to China so they can avoid paying the Chinese tariff of 25% and export back to the US where there is no 25% tariff courtesy of our government.

Over at www.autoblog.com is a story about how GM just won approval from the Chinese government to build a new Cadillac plant there with the capacity to build 150,000 new cars.  Along with this comes an announcement that GM is going to move production of its brand new flagship sedan the Cadillac XTS to this new plant in China.  Now I don’t really blame GM for this move because I believe that it is governments responsibility to set the conditions for success for both individuals and corporations.  Our government in all its wisdom has decided that we ourselves will remove most of our barriers to trade so that countries like China can export all their garbage here and make a fortune while in the process we lose millions of jobs to countries like China.  Our government is then stupid enough to actually believe that this policy encourages predator nations like China to open up their market when in reality we just get more chinese junk, less American jobs, and bigger trade deficits.

Some will say that the Chinese do support our budget deficit by financing it with the money our government allowed them to steal from us.  My response is that this practice has only encouraged our incompetent government to continually run ever larger budget deficits because the American people are too dumb to care and the extra money the government spends helps get some of these politicians re-elected so in reality it is like a double whammy to the country.  To prove my point about our government being responsible the article from autoblog mentioned that the reason they were shifting production of the new XTS to China was to avoid that countries 25% tariff if GM would have shipped it from the US.  This tells us that we don’t have  a similar tariff on automobiles produced in China and shipped to the US.  The real question is why we don’t match the Chinese tariff for tariff?  Pretty soon we won’t have to worry about this because we won’t have anymore jobs to send to China nor the ability to buy their junk.  All thanks to those morons in Washington.

http://www.autoblog.com/2013/05/08/gm-build-cadillac-plant-china/

http://www.bing.com/images/search?q=xts&qpvt=xts&FORM=IGRE#view=detail&id=A6C467C1C0E3485ACE6CEA879203EAC02AB6BECE&selectedIndex=12

The Fall Of The Athenian Republic

Below is a quote often attributed to a Alexander Tyler (although it is unverified), a Scottish professor who was active in the late 18th century and early 19th century.

“A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse over loose fiscal policy, (which is) always followed by a dictatorship.”

“The average age of the world’s greatest civilizations from the beginning of history, has been about 200 years. During those 200 years, these nations always progressed through the following sequence:

From bondage to spiritual faith; From spiritual faith to great courage; From courage to liberty; From liberty to abundance, From abundance to complacency; From complacency to apathy, From apathy to dependence, From dependence back into bondage.”

http://www.lorencollins.net/tytler.html

http://www.freerepublic.com/focus/news/1062343/posts

Obama’s Economic Report Card

The Economist, a British magazine dealing with economics, has put out a report card for President Obama’s first term.  I would like to give my thoughts on each grade and would hope if anybody actually reads this that they could offer up their own report card for all the categories.

The Economist/Me

Crisis response          A-/C          I lowered the grade to a C because although the auto bailout was necessary in my opinion they should have done more to reign in the UAW because much of the reason the companies were no longer competitive was due to labor costs.

Stimulus                     B+/C-         I gave him a C-  here because it did not deliver anything near what the president had said it would.  Also so much of it was wasted on green energy pipe dreams that will never work without government funding.

Housing                      C+/C          An enormous problem that will take years more to work through to see the housing market fully recover.

Labour                        C+/F           I’m not sure what the guy writing this article was thinking but boosting college funding is not near a good enough reason to merit a passing grade when the nation is still at record high unemployment levels 4 years removed from the crisis.

Trade                           B-/B-         I left the grade unchanged because I do feel the Obama administration has tried to help American companies export more goods.  However, since the Obama administration has not fundamentally addressed the nation’s most critical economic failure, our trade policy, I could not give him an even higher grade as I originally wanted.

Industrial Policy        F/F            The Economist laid out the obvious reasons for the grade already.

Regulation                  D/F            To me there is no question this has been of the administration’s most glaring failures.  The fear that companies have of what Obamacare might mean in terms of new costly regulations is enough for most to give him an F here.

Debt            Incomplete/F            I thought hard here about giving the president a D because republicans have not been realistic about accepting at least some meagre tax hikes in exchange for entitlement reform, which will have to happen to solve the deficit problem.  Unfortunately I couldn’t do that because of the president’s record-breaking trillion-dollar plus deficits for each year he has been in office.  The bottom line is that the size of these yearly deficits and the accumulated debt overall has done more to endanger our country than anything in the history of this nation since World War II.

In the final analysis the Obama administration faced problems not seen since the Great Depression and should be graded with that in mind.  Some of the things that many conservatives blast him for the most were needed like the auto bailouts and the stimulus, even though they were poorly executed, because the country was ready to plunge into the abyss.  Unfortunately record high unemployment, out of control deficits, and the burden of Obamacare mean that this president does not deserve a passing grade in my opinion.

Barack Obama’s economic record: End-of-term report

Consequences Of Globalization

It is interesting to see the consequences of globalization taking place all around the world today.  People so often in the 90’s talked about how globalization would improve people’s lives across the globe.  To be fair to some degree that has happened in places like China where several hundred million people have been lifted out of poverty by moving from the countryside to the urban manufacturing centers of China.  Other nations like Germany have also benefited greatly from globalization in the form of the EU.  With the barriers to trade removed from the internal European market German companies have proceeded to destroy their fellow European competition and reap the rewards.  Unfortunately these two examples of countries benefiting from globalization have also cast a dark shadow across many other countries who have suffered while China and Germany have benefited.  In China’s case many of the jobs in manufacturing that now power the Chinese economy were once based in America.  The fallout from this in America has been significant because many of the jobs lost to China were some of the best paying jobs a non skilled worker could find in America.  Recently in the last several years there has been a small glimmer of hope in the American manufacturing sector where instead of losing jobs they have actually begun adding some.  It remains to be seen if this is just part of the economy coming back from the lows of the economic meltdown in 2008 or if this is part of a new trend of increased American industrial production over the long term.

The situation in Europe seems more straight forward where there is little doubt that the Euro has made life much more difficult for countries like Greece, Italy, and Spain to compete with Germany since they can no longer devalue their own currency to become more competitive.  The result has been that much of southern Europe chose to use debt to fuel economic growth (much like America has done) instead of trying to make their economies more competitive.  The consequences of this have been tragic for those countries with some like Greece in what can only be described as a economci depression.  One thing is for certain, you don’t seem to hear nearly as many world leaders talking up the benefits of globalization because the real long term consequences have now manifested themselves and it is not a very pretty picture.

Putin Says The West Is In Decline

Vladimir Putin once again the president of Russia recently spoke to Russian diplomats and was reported to have said that the West was in decline.  He also went on to point out that the decline of the West was much more than just the current Euro crisis.  Even though Putin had his own reasons for talking about the decline of the West, such as trying to make himself look better, the fact of the matter is that irregardless of his reasons he is essentially correct.  The West for all its talk on Syria and Iran and what needs to be done in both places is beginning to find that nobody is listening.  Why should Russia take us seriously when they know we are broke and there is no stomach for another military adventure.  We keep telling everyone what they should do but they know now that they do not have to listen anymore.

Russia’s Putin says the West is on the decline

http://blog.chron.com/apentecostalperspective/2011/06/is-america-beyond-saving/

Judgement Day, Supreme Court Upholds Obamacare

 

In a surprising move the Supreme Court upheld the majority of the Obama administration’s most significant piece of legislation today when it ruled 5-4 in favor of Obama Care.  Many were stunned, myself included, that Chief Justice Roberts sided with liberal justices to support the legislation.  Now the question is will this ruling fire up the base of the republican party to get rid of Obama?  This should make an already close election that much more interesting.

Supreme Court upholds Obamacare individual mandate as a tax

 

Obama Rebuked By German Finance Minister

 

It is pretty apparent European leaders have pretty thin skins these days.  If you have read this blog at all before you probably know that I’m no fan of Obama but in this latest transatlantic dust-up I’m going to defend him.  President Obama has been calling on Europe to do more, especially Germany, to finally resolve the Euro crisis.  Yesterday German Finance Minister Wolfgang Schaeuble was quoted saying that “Mr. Obama should first of all take care of reducing the American deficit, which is higher than in the eurozone.”  While if the EU is taken as a whole he is probably right but unfortunately when you look at individual countries you find that many of the PIIGS (Portugal, Ireland, Italy, Greece, Spain) are in far worse shape than the US which is why there is a Euro crisis.

  Frankly, European leaders should be embarrassed for their numerous attacks on the US.  Constantly trying to shift blame for their problems by saying the crisis originated in America, or trying to tell the world how much worse off the US is.  Yes, America has plenty of problems that we need to work on asap.  However, Europeans are the ones endangering the global economy with their ill-conceived debacle that is the Euro.  Europe needs to shut up, stop blaming everyone else, and either fix the problem or scrap the Euro.  Period.

German Finance Minister Rejects Obama Criticism of Crisis

The Obama Economic Record

 

I saw this on facebook so I’m not sure who to credit it to but it pretty much speaks for itself.  After reading it I do find myself wondering why the Romney campaign has not done something like this?  Of course, maybe they are the ones who put it out but it still seems that they should just be able to build a narrative around the info here and pound Obama into submission.

Riding In Style, Your Tax Dollars At Work

 

Within 2 short years of being elected president the Obama administration had seen the number of limousines in the  federal governments inventory shoot up 73% according to the GAO (General Accounting Office).  Recognizing a problem of perception with the 2012 election coming up the Obama solution was not to get rid of all the new limos but rather to change the definition so the new number would not appear so large.  Then they asked the GAO to do another count which of course reflected smaller numbers because of the change in definition.  Your tax dollars at work, thanks Obama.

How many limos does the U.S. government actually use?