Climate Change And Competition

The Keystone Pipeline is raising the issue once again of climate change and the environment  There is a balance that needs to be taken into account when addressing climate change. We occupy a small part of this planet and we cannot lick the climate challenge by ourselves. The issue needs to be addressed on the world stage.

As an advanced country, it is easy for us to talk about doing something concerning CO². However, as places like China, India, Southern Africa, Central and South America, who are concerned about providing the basic necessities to their people, increase their usage of environmentally bad fuels, the result will put us at a significant competitive disadvantage directly hurting our “standard” of living.

A partial answer is to increase funding for alternative energy research so the switch to environmentally friendly fuels is not only good for the planet but also economically prudent. That is why the carbon tax, used for energy research, should be implemented. The rest of the world will also make the point that we are the major contributor to climate change and therefore we should be the ones paying the largest price to correct it.

Economy And Global Warming

While reading a recent article by Tom Friedman in the New York Times titled The Market And Mother Nature I concluded our leadership is doing a poor job communicating to the American people. In a democracy, doing what is right will not occur unless the people believe it is the correct thing to do.

Therefore, it is the responsibility of those elected to educate the populace as to what is best for the country given the circumstances of the country and the world and then make it happen.

The science exist to substantiate much of global warming is caused by human behavior that can be reversed. Our financial problems are man made and therefore can be corrected. Our leaders must explain these problems and consequences and we are running out of time.

The outcome of global warming is catastrophic. This is easy to comprehend. It is the responsibility of the President to make sure the population understands that much of the warming problem is man made and there are solutions to reverse the trend.

Further, our financial condition must  not be swept under the rug. This again requires the President  to help the public understand we must get our debt under control or we will be aiding and abetting China becoming the dominant economic power sooner than later. The National Intelligence Agency is already predicting this will happen in a mere 17 years. ( )  If we continue our present course it may happen sooner.

Leaders must lead. The President must step back from the fray in Washington and explain the gravity of our problems to the people. Based on the last election, his campaign staff has the skills to assist him in delivering the message. Put them to work on the most important campaign confronting us. It is a campaign for the survival of our way of life.

U.S. Super Power Decline

The world is changing and it is hard to accept. We are declining in our superpower status and this is not totally bad. We helped bring it about. Our decline is less the result of becoming weak, but rather other countries becoming stronger economically as a result of our quest to help them be free.

Our country has always been a promoter of democracy and free markets. We have always opposed repression, dictatorships and central control. We cherish our own freedom and the freedom of others. A historically defining moment was the fall of the Berlin Wall in 1989. It was the beginning of the fast end of the Soviet Union. It was also the beginning of other nations believing they also could be free and determine their own future.

China is another example of peoples quest of freedom. China’s ruling power in the 1970’s made a strategic decision to convert much of its economic apparatus to a more open system to unleash the power and ingenuity of its people by capturing the benefits of our free market system while at the same time centrally controlling other strategic decisions of their country. This central control will not be able to withstand the power of the people. The freedoms given to China’s economy will slowly and surely wrestle control of the central government from the communist party.

The China experiment is another example of the United States relinquishing some of its world influence by promoting freedom and free markets in other parts of the world. China will be the historic legacy of Richard Nixon and Henry Kissinger, far surpassing Watergate.

We are slowly waking up to the fact that our promotion of freedom also means we are promoting competitors to our standard of living. As these countries become better competitors wanting more of the good life and using more energy. As this happens prices will rise and we will have little choice but to find other sources of cleaner energy.

“Per capita consumption rates in China are still about 11 times below ours, but let’s suppose they rise to our level. … China’s catching up alone would roughly double world consumption rates…

If India as well as China were to catch up (with the United States), world consumption rates would triple. If the developing world were suddenly to catch up, world rates would increase eleven fold. It would be as if the world population ballooned to 72 billion people (retaining present consumption rates).” The York Times, January 2, 2008

The above quote is somewhat outdated but the reality remains even more serious. Russia and Brazil are forming a middle class and free markets. Countries in southern Africa are becoming more prosperous as a result of gaining freedoms and exploitation of their abundant natural resources. The Arab Spring will mean more prosperous countries and citizens in that part of the world competing for the worlds bounty.

Romney’s Five Point Plan

What is Romney’s plan, exactly? He broke it down for Fortune into five categories:Below each category is my response in blue.

(1) Aggressively promote domestic energy development, especially fossil fuels. 
How can anyone disagree with developing domestic energy sources? The question is at what cost in terms of the environment and future generationsOur concern should be which presidential candidate will implement the best energy policy for us and future generations. The President has a duty to think beyond tomorrow.

World-wide demand for energy will increase dramatically as more countries develop a middle class. The BRIC countries, Brazil, Russia, India and China are well on their way to becoming good economic competitors. In 2005 the U.S. consumed 16 times as much energy per capita as did India. They have a population that is roughly 4 times ours. As India becomes more prosperous their consumption rates will get closer to ours. Over the same time period we consumed 6 times more energy on a per capita basis as China. Countries in southern Africa are beginning to experience economic success. It is also easy to envision a time when Egypt, Iran, Saudi Arabia and Jordan begin developing a middle class and thus consuming more energy on a per capita basis.

I want a President who is not squandering our future today and thinking about the next generation and the generation after that. Who do you trust to do this; Romney or Obama?

The policy should factor in the sources of energy and the affects on the environment. After all, it is our children and grandchildren we are discussing. I wonder how Dick Cheney would feel if some of this development impaired his favorite trout streams in Wyoming. He may get mad enough where he would consider taking a few oil executives out for some sport shooting.

(2) Expand the market for U.S. goods overseas by negotiating new trade agreements and standing up to China on intellectual-property and currency issues.
The Obama administration is already addressing this issue. This is why Hillary Clinton has traveled more than any other Secretary of State in our history. Negotiating treaties must be done in private. Holding a press conference on a regular basis announcing what we are demanding of other countries, and what they are demanding of us, would be counter productive. Romney knows this.

Can you imagine if, while Romney was at Bain, he held a daily press conference detailing the progress being made in his attempt to buy Staples? The deal would never have happened. It would have broke down and a competitor of Bain would have stepped in and bought Staples.

This country has invested billions, if not trillions, of dollars into technology. Technological development allows us to maintain a high living standard even as it is difficult to compete against the low cost of labor in other countries. Many of our advances made as a country can be attributed to the space program and the development of the internet by scientist working for the government. I would not be typing this on my flat screen monitor if it were not for this nations ability to create useful technology. Steve Jobs and his fellow employees at Apple would never have created that smart phone you have in your pocket if prior presidents did not have the foresight to invest in technology. YES, STEVE JOBS MADE APPLE. He made it utilizing the technology funded by our tax dollars.

 Korea and Japan need to lower tariffs on our auto exports to their countries. The current administration is working on this. I have more faith in Obama to get it done than R&R
(3) Improve workforce skills by transferring job-training programs to the states and going after teachers’ unions, which, he says, stand in the way of school choice and better instruction.

This is another one where the devil is in the details. Education, just as defense, is a national issue. If this country is going to maintain a high standard of living, relative to other countries, we need to do everything possible to nurture the greatest asset we have for the future, our children. How are we going to make sure the next Einstein, who may be a person of color, living in inner city Detroit, without a father and with an unemployed mother who has a drug problem, gets properly educated? It would be a great loss to the country if we let that child be sucked into the abyss. We must find a way to save what she has to offer society.

Condoleezza Rice at the Republican National Convention said, “But today, today, when I can look at your zip code and I can tell whether you’re going to get a good education, can I honestly say it does not matter where you came from, it matters where you are going? The crisis in K-12 education is a threat to the very fabric of who we are.” We need to address this at a national level not only for the sake of the child, but also for the sake of the nation.

I am a firm believer in giving as much power and authority as possible to the level of government that is closest to the people. The problem is each individual should have an equal chance to get a good education.

George Romney’s son, who grew up in Grosse Pointe, Michigan, had a much better chance of getting a good public education than the boy who lived eight miles away in Detroit. Further, there is an even possibility that the child living in Detroit, having the necessary skills and attributes, would to be far more successful than Mr. Romney if given the chance. Not only did the young boy in Detroit lose, but so did the nation. We cannot afford to let that happen. The world is too competitive.
 (4) Attack the deficit through budget cuts, not tax increases. 

I see that Romney has already learned the Pledge of Allegiance to Grover Norquist. Personally, I find it scary to see so many politicians take an oath to an individual, and his organization, that may be in conflict with the oath they gave to us voters when we elected them to office. The country has a serious challenge to get our fiscal house in order. It is going to require budget cuts and finding ways to increase revenue. To take tax increases off the table this early in the process is irresponsible. This issue is directly related to number 5 below.

(5), reshape the regulatory climate to “encourage and promote small business” rather than swamp it. 
This is certainly a worthy objective. My problem is how do they accomplish this while R&R is so indebted to the crony capitalists that stand in the way of small business competing. The bribes, campaign contributions, that Romney is receiving from the oligarchs who are taking over our economy will not allow this to happen. These cronies remind me of Don Corleone when he said in the movie the Godfather, “some day, and the day may never come, I will call upon you to do a service for me.” They will be calling on Mr. Romney.
1 Mitt Romney’s 5-point plan for the economy, Fortune, August 15, 2012
2 The above is corrected for an error relating yo India’s population. It is approximately 4 times that of the United States instead of 10 times as earlier stated.

Natural Gas: Use Wisely

Thomas Friedman of the New York Times recently had an excellent article on how new developments in the domestic natural gas industry has the potential of setting us free from our dependency on oil from the middle east. He also points out that it could also cause us to relax our efforts to find alternative energy sources that are more friendly to the environment.

He is absolutely correct that natural gas has bought us time and we need to use it wisely. As the data below indicates, we have less time than many think. 

There are a number of countries that are beginning to prosper including Brazil, Russia, India and China. In addition there our other countries that seem to be on the cusp of a serious break through to a more prosperous life including Poland, the southern part of Africa, Vietnam and others. Greater prosperity comes with greater consumption. Greater consumption comes with greater use of energy.

Energy prices are dictated by supply and demand and demand is rising. World-wide demand for energy will be increasing dramatically as demonstrated below.. Our policy should factor in the sources of energy and the affects on the environment. After all, it is our children and grandchildren we are discussing.

Procuring sufficient energy in the future will be much harder. The population of the planet is growing and other countries are becoming more affluent and thus consuming more, including energy. Below is a graph of the amount of oil consumed per capita by country.

Below are other quotes concerning worldwide energy consumption. Some are in conflict with the chart above; however, the point is clear. We need a President who is thinking long term and strategically.

“In 2009…China’s per capita energy consumption was about one-fifth of that of the United States”. The National Energy Bureau and the National Bureau of Statistics reported on Aug. 11, People’s Daily Online, August 12, 2010

“Per capita consumption rates in China are still about 11 times below ours, but let’s suppose they rise to our level. … China’s catching up alone would roughly double world consumption rates…

If India as well as China were to catch up (with the United States), world consumption rates would triple. If the developing world were suddenly to catch up, world rates would increase eleven fold. It would be as if the world population ballooned to 72 billion people (retaining present consumption rates).” The York Times, January 2, 2008

“Americans consumes as much as 32 Kenyans. With 10 times the population, the United States consumes 320 times more resources than Kenya does.” The York Times, January 2, 2008

The rest of the world is not only growing, it is developing a middle class and prospering. Our posterity will be living and competing in that world. It is time we focus on this problem, rather than when will gas prices hit $5.00 per gallon.