Apparently Herbert Meyer, a former member of the Reagan Administration, gave a speech in Seattle to a group of CEO’s which is getting a lot of attention. This is a very interesting speech and is an interesting strategic assessment of the world today, but this is an assessment provided by an intelligence officer and not a businessman. Consequently while his views are essentially sound they are not totally accurate because he simply does not have the business knowledge or experience to put some of these things into perspective.
Essentially Mr. Meyer addresses four major transformations and their impact that are shaping the political and economic events of the world today. These transformations are:
1. The War in Iraq
2 The Emergence of China
3 The Shifting Demographics of Western Civilization
4 The Restructuring of American Business
THE WAR IN IRAQ
This is perhaps the most misunderstood of these four transforming events. The Islamofascists have declared war on the West and this war is not limited to Iraq. However, the reality is that Islam is at war with itself as the radical Muslims are attacking other Muslims with growing violence. The reality is that Islam is under going its long delayed reformation with the violence that characterized the Christian Reformation. Unfortunately the Western powers are caught in the middle of this because the radicals are using America as the scapegoat for the failure of the Islamic governments.
This internal struggle between the Radical Muslims and the mainstream Muslims is global in nature and poses a real threat to Western Civilization especially with regard to Iran. The Iranian Mullahs have a tiger by the tail and are desperately holding on. Iran is an ancient culture and not Arabic. The Iranians look down on the Arabs as goat herders and lacking in the cultural refinement of Persia. The modern Iran is Islamic but has a very young population that is essentially pro-Western. This does not mean “pro-America” but it does mean pro- technology, and pro-freedom. The Iranian young are chafing under the puritanical and restrictive policies of the Mullahs.
The Mullahs are doing everything they can to force Israel or America into a military confrontation. The purpose of this would be to unify the country against a common enemy which would allow them to regain control. Iran represents an even greater threat to America and the West than Iraq or Afghanistan.
THE EMERGENCE OF CHINA
China is actually becoming Imperial China with different names. There is no doubt but that it is a powder keg politically. Capitalism is creeping across China and ultimately it will topple the communist structure – maybe not the government but certainly the structure. Socialism’s objective is “employment” not efficiency or profit. This allows the Chinese to effectively compete through their subsidized industry but if the human rights activists and those who oppose the balance of trade policies with China succeed in restricting the trade with China then this destabilization to America and China could easily happen.
This is something that the politicians don’t want to hear, but the reality is that the world demand for oil is outstripping the supply – primarily because of the Chinese demand. As China loosens the restrictions on business they are becoming more and more capitalistic and this change is causing their economy to boom. The average Chinese has given up his bicycle in favor of a car – many of these built in China. The favorite pass time of the liberal establishment is to condemn the oil companies and their “obscene” profits. But the reality is that there is a big difference between revenues and profits. Hillary Clinton has actually said her objective is to take the profits from the oil companies. As the demand for oil goes up the price goes up and as the price goes up the profits go up, but so do the costs. The good news is that the higher pump prices make mining our oil shale economically feasible.
The Chinese have a huge military and will undoubtedly build their navy but challenging the American Navy for supremacy of the seas is probably not realistic – at least not in the near term. The Chinese are an interesting people but they have never been expansionists.
THE SHIFTING DEMOGRAPHICS OF THE WEST
There is little doubt but Europe will fall to the Muslims because the Europeans cannot stop the immigration or the growth of the Muslims already there. The Europeans have never learned to assimilate outsiders, which has given rise to anti-Semitism throughout their history. Now that they are faced with this huge influx of Muslims they refuse to allow them in and this is leading to a very explosive situation. It is already beyond their control.
Europe is lost – France and Germany are declining into irrelevance and are being taken over by Islam. I expect by 2050 Western Europe will be Islamic. The Europeans are abandoning Christianity and are so self absorbed that they don’t care what happens as long as they can continue their life of laziness. Their productivity is declining, their taxes are increasing, their unemployment is high but their programs for the unemployed are generous, which encourages idleness and creates an unstable underclass. They refuse to assimilate the Islamic immigrants and this is greatly increasing this instability. They have reduced their military to the point that it is practically non-existent. They rely entirely on NATO – meaning the US – to defend them. However the threat to them is internal and civil war in France is a distinct possibility.
Actually the population of the US has continued to increase, the longevity continues to increase, the productivity per capita continues to increase, and the tax relief has increased. Large families are simply not economically feasible and probably not necessary. It is true that the ethnic mix is changing and it is less white than it used to be but I’m not sure I understand Meyer’s point regarding the economic impact on our society since he fails to acknowledge our growing productivity and booming economy.
Mr. Meyer expresses great concern over social security and the healthcare demands in the US. There is no doubt that the healthcare system needs overhauling and it is only a matter of time before this is done. The Social Security System will not go away and it could easily be funded through the elimination of pork barrel projects. The housing market has already been seen as a problem as the costs have reached unreasonable levels. Million dollar homes are commonplace just as foreclosures. I anticipate the housing market will continue a slow decline over the next several years. I think the impact will be mostly in large urban areas because retirees will move and virtual employment will become more commonplace, which will allow workers to live anywhere.
Japan is not really a Western Society but it is certainly a member of the Industrialized World. There is no doubt but that the Japanese have significant problems that are economic in their root cause. They use a central planning approach and this in concert with their cultural sense of face and pride has left their economy in a shambles. In order to get out of this funk they would have to open their doors to competition and to force their banks to write off their bad investments. Culturally and politically they cannot bring themselves to do this so things continue to decline. Where will it end? Who knows but I think Meyer’s assessment is more extreme than the reality.
THE RESTRUCTURING OF AMERICAN BUSINESS
I think Meyer’s view is the view of a non-business person – not inaccurate but not totally accurate either. Companies are increasingly seeing the advantages of “work from home” jobs. This allows one or both parents to work from their home office (I have done this since 1995) and this home office can be in Moose Jaw as well as Los Angeles. People will live where they want and many will opt for small towns with low costs and high quality living. This model is driving up our productivity while reducing our costs. Plus mundane jobs are being shipped overseas. American technology is driving our productivity and it is making our companies more flexible and reactive. No other country in the world approaches us in this regard. So yes, American business continues to morph into a completely new model far in advance of the rest of the world. While companies shrink in size they increase in scope, productivity, and profitability.
Certainly China represents a potential threat to America both economically and militarily .America is probably the most reluctant military power in the world but we are also the most warlike people. The Chinese have a huge army and it is growing in strength. It is possible that they could challenge us militarily but the Chinese have historically not been an expansionist power. As long as we command the seas this is probably not an issue. Economically China is very dependent on the US because we are their principal business partner. This symbiotic relationship will probably continue for the foreseeable future.
Our Judeo-Christian culture is really the crux of the issue. If we allow our work ethic to erode and become self-absorbed hedonists like the Europeans we are doomed. If we give up our Christian culture we are doomed. So far we have resisted this erosion but with the influx of people from socialistic countries (e.g. Latin America) they expect our government to take care of them like they were used to in their countries. Politicians like Nancy Pelosi and others from states with high immigrant populations play on this expectation in order to remain in power. They are the real threat as they focus on their personal power at the expense of the country as a whole.
Mr Meyer's speech can be viewed at the following address
Live Search: A global intelligence briefing for ceo's
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