September 19, 2013

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The last post before the weekend starts with a couple of pieces of good news. First, Joel Kotkin celebrates the future of our partnership with our neighbors to the north and south – NAFTA.

OK, I get it. Between George W. Bush and Barack Obama we have made complete fools of ourselves on the international stage, outmaneuvered by petty lunatics and crafty kleptocrats like Russia’s Vladimir Putin. Some even claim we are witnessing “an erosion of world influence” equal to such failed states as the Soviet Union and the French Third Republic. “Has anyone noticed how diminished, how very Lilliputian, America has become?” my friend Tunku Varadajaran recently asked.

In reality, it’s our politicians who have gotten small, not America. In our embarrassment, we tend not to notice that our rivals are also shrinking. Take the Middle East — please. Increasingly, we don’t need it because of North America’s unparalleled resources and economic vitality.

Welcome then to the NAFTA century, in which our power is fundamentally based on developing a common economic region with our two large neighbors. Since its origins in 1994, NAFTA has emerged as the world’s largest trading bloc, linking 450 million people that produce $17 trillion in output. Foreign policy elites in both parties may focus on Europe, Asia and the Middle East, but our long-term fate lies more with Canada, Mexico and the rest of the Americas.

Nowhere is this shift in power more obvious than in the critical energy arena, the wellspring of our deep involvement in the lunatic Middle East. Massive finds have given us a new energy lifeline in places like the Gulf coast, the Alberta tar sands, the Great Plains, the Inland West, Ohio, Pennsylvania and potentially California.

And if Mexico successfully reforms its state-owned energy monopoly, PEMEX, the world energy — and economic — balance of power will likely shift more decisively to North America. Mexican President Pena Nieto’s plan, which would allow increased foreign investment in the energy sector, is projected by at least one analyst to boost Mexico’s oil output by 20% to 50% in the coming decades. …

 

The next piece of good news comes from James Pethokoukis. Posting on a study by Deutsche Bank analysts, he claims zero population growth is in sight.

Make room! The current world population of roughly 7.2 billion will rise to 9.6 billion by 2050 and then to 10.9 billion in 2100, according to the most recent United Nations projections.

Wait, don’t make room. Demographer Sanjeev Sanyal of Deutsche Bank thinks the UN is way off. His calculations find the world’s overall fertility rate falling to the replacement rate in 2025, although global population will continue to expand thanks in part to rising longevity, for another few decades. Then comes the Big Shrink. Sanyal:

We forecast that world population will peak around 2055 at  8.7 billion and will then decline to 8.0 billion by 2100. In other words, our forecasts  suggest that world population will peak at least half a century sooner than the UN expects and that by 2100, and that level will be 2.8 billion below the UN’s  prediction. This is obviously a radically different view of the world.

The missing 3 billion. Below are two charts, the first with the UN’s projections, the second with Deutsche Bank’s: …

… 4. Some developed countries may do surprisingly well. The one developed country that stands out in our model is the United States. Even though our population growth projections are more moderate than those of the UN, the US can be expected to continue to enjoy an expanding working-age population till the 2050s (i.e. longer than many emerging economies). Germany’s low birth rate implies a declining population but we feel that it will be much more successful in absorbing immigrants than anticipated by the UN. Thus, its demographic trajectory may not be quite as dire as generally believed. …

 

The failure of Summers to gain the Fed post is an indication of early onset of lameduckedness according to Jennifer Rubin. No, she didn’t dream up that word, it was the German in Pickerhead.

It’s a measure of just how far the president’s stock has fallen that he couldn’t get the Federal Reserve chairman he wanted because Democrats revolted. Democratic Senators Jon Tester of Montana, Jeff Merkley of Oregon and Sherrod Brown of Ohio all publicly said they wouldn’t support the Clinton-era economist. Certainly the liberal base was up in arms that President Obama might have the temerity to appoint a business-friendly veteran of the Clinton administration.

Rather than fight, Summers (no doubt at the White House’s behest) stepped aside, just as Susan Rice shied away from a tough nomination fight for secretary of state. But Rice was a victim of the right; Summers’s rejection by the left is a reminder that the president has disappointed his base on so many topics (the sequester, failure to repeal all the Bush tax cuts, gun control, single-payer health care and climate change) that he felt obliged to relent on this one. …

 

More on this from The Atlantic.

… Perhaps even more surprising is who did Obama in: a small team of Democrats on the Senate Banking Committee. On Friday, Montana’s Jon Tester announced he would not back a Summers nomination. That followed similar comments, via aides, by Sherrod Brown of Ohio and Jeff Merkley of Oregon. Elizabeth Warren of Massachusetts, the progressive icon and former Obama aide, was also thought to be reluctant. That meant Summers would have required at least four Republican votes to clear the Senate Banking Committee, and around 10 from the wider Senate to reach the 60-vote threshold likely needed to overcome GOP procedural obstruction.

Until Sunday afternoon, these seemed like just the latest skirmishes in a war. In July, almost a third of the Democrats in the Senate sent a letter to Obama imploring him to appoint Janet Yellen to the job instead. While the letter didn’t mention Summers, it was clearly a rebuke to the White House’s reported preference. Progressives worried that Summers was too much a part of the Clinton-era economic team that they charged with helping to make the Great Recession possible, and they argued that Yellen had been right more frequently on crucial recent economic issues.

But Obama was reportedly angry at the letter, and dispatched aides to Capitol Hill to vent and get the troops in line. While Majority Leader Harry Reid promised to support whomever the president picked, he apparently wasn’t able to keep his caucus completely in line, leading to today’s withdrawal.

Here are three political takeaways from the demise of the Summers nomination. …

 

The Toast with tips on how to write like a NY Times pundit.

I am going to share a tip with you, a tip that thus far I have managed to keep to myself but that will benefit you enormously, whether student or amateur sociologist or writer for The Economist.

No matter what time period you are referring to, no matter what country or region of the world you are referencing, there is a single claim that you can make that will always be true and will never be challenged, not even by Malcolm Gladwell himself: the middle class is always in the process of emerging. Like a shivering, fluffy clutch of chicks poking their heads out of the membraneous shards of a newly-cracked shell, the middle class is in a constant state of emergence.

That’s it. That’s all there is to it. Want to sound like an authority on growing third-world markets, whatever those are? Talk about the increased influence of the emerging middle class.

Writing a history essay about the policies of Louis XIV? Don’t forget to include a paragraph or two about the checks on his national authority by the newly influential middle class.

What was the middle class doing during the Victorian Era? Emerging.

What is the middle class doing in China right now, this very moment? Emerging. Oh, look, what’s that over there? It’s the middle class, just down the road in India, and they’re emerging all over the place. …

 

Late night from Andrew Malcolm.

Leno: Some 312,000 Americans gave up job-hunting in August, lowering the unemployment rate to 7.3%. Obama calls this a real step in the right direction, urges more Americans to give up looking for work.

Leno: John Kerry has given Syria one week to turn over all its chemical weapons. And if they don’t, they get one more week. That’s where we are.

Letterman: Did you see Obama’s speech? First thing he said, ‘Good evening. I’m the President of the United States. I killed bin Laden.’ A good start.

Letterman: President Obama now says we may be close to a deal with Syria. So, thank you, Dennis Rodman.

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