Here are some observations by a snowbird after spending 24 months in the USA over the past six years. Of course, the US situation must first be considered in the context of the broader global situation.
- Global population growth – Remember 1950? Global population tripled from 2.5 billion in 1950 to 7.5 billion in 2019 and is projected to reach 11.2 billion by 2100; almost 5 times 1950.
- Climate Change – Global population growth and high consumption in developed countries caused a spike in fossil fuel use. Resulting emissions produce a greenhouse effect that is raising global temperatures to a dangerous level; causing increased severity of extreme weather events, rising ocean temperatures and levels, more destructive storm surges and flooding, draughts and wildfires.
- Depletion of finite resources is accelerated by global population growth and high consumption in developed countries. E.g. Global reserves of oil and gas will be depleted in 50 to 60 years. This results in increased competition between countries to secure scarce resources for themselves
- Global Economy – Satellite TV and the Internet have given developing countries a new window on their plight. They are no longer content to live in poverty and they aspire to live more like developed countries. They feel exploited by the wealthy developed countries, especially the USA with the biggest GDP. That puts pressure on leaders in both developed and underdeveloped countries.
US Economy Situation
With the world’s largest GDP and high GDP per capita, the US does not have an income problem. The US does have an income distribution problem. Income among the top 10 per cent is 18 times the bottom 10 per cent. That is not sustainable in a democracy. (Japan is five times, Germany is seven times, Canada is nine times, while the Russian autocracy is 13 times and the Chinese autocracy is 22 times).
The excessive US income ratio provoked excessive demands by US Unions, making US-made products progressively uncompetitive. Middle class manufacturing jobs were not moved to China and Mexico by Chinese and Mexican companies. They were moved by over 300 US companies to access more competitive costs and enhance their profits to the benefit of investors, and US workers lost their jobs.
Excessive US military spending sometimes does more harm than good by provoking others to feel the need to increase their own defence spending.
US Security Situation
Right or wrong, the large and conspicuous gap in wealth between the US and South and Central America causes resentment and makes the US a ripe target for smuggling of people and drugs. US business interests in the Middle East caused resentment and provoked terrorism. The 1990 US invasion of Iraq was justified by Iraq’s invasion of Kuwait. The 2003 invasion of Iraq was in retaliation for the 2001 terrorist attacks on US soil. But the 2003 invasion was not justified and produced widespread chaos. Lack of credible evidence of Weapons of Mass Destruction did not meet the burden of proof for such drastic action. The terrorist attacks on the US were in fact instigated by Al Qaeda’s training ground in Afghanistan, not by Iraq. As warned in-advance by knowledgeable leaders in other nations, the invasion of Iraq resulted in further destabilization of the complex Middle East and North Africa and was the genesis of ISIS and resulting mass migrations into Europe. (After Saddam Hussein was toppled, Iraq’s Sunni government was replaced by a US- backed Shiite government that was bent on revenge against Saddam’s Sunnis. Saddam’s surviving Sunni military officers formed ISIS to retaliate against Shiites in Iraq, Iran and Syria, which gave Russia more influence in the area.) The high cost of military operations in Iraq added $3 trillion to the US debt.
Enter Donald Trump
During his campaign, Trump claimed to have inherited $1 million and turned it into a $10 billion empire. A later estimate shows his worth closer to $3 billion. An extensive NY Times investigation found that Trump inherited $400 million in today’s dollars and engaged in tax invasion, fraud and questionable business practise to build his fortune. No doubt these factors explain why he refuses to release his tax returns, as is customary for presidential candidates. Trump refused to put his business interests in blind trust as is also customary. Trump has a widespread reputation for making money by not paying contractors involved in his condo and casino businesses, and by not paying taxes. After several bankruptcies, he was unable to borrow money from US banks and turned to German and Russian banks and he is now vulnerable to their pressure. He has a longstanding reputation for dishonesty and bad behaviour that sets a bad example for young Americans. These factors are now the subject of some 17 investigations, and a record 26 of his close business and political associates have received criminal charges or left the government as a result of serious disagreements with the president.
Trump’s Campaign Promises
Although America was already great, Trump promised to “Make America great again” by:
- Bringing back lost jobs through clever “deals” to reduce trade imbalances with China, and Mexico
- Cancelling environmental regulations and encouraging more use of fossil fuels
- Tax reductions for business and wealthy investors.
- Building a wall to prevent drugs and migrant workers from Mexico
- Reducing threat of terrorism by restricting Muslim immigrants
- Making NATO allies pay a bigger share of defence costs
- Stopping nuclear arms development by North Korea
- Improving relations with Russia (where he borrowed money for his businesses)
- Cancelling US involvement in the multi-nation Iran nuclear agreement
These promises were all based on ill-advised analysis of causes and on ill-advised solutions. But these promises appealed to voters who felt left behind by job losses. Trump now feels compelled to keep his ill-advised promises to secure his base and legacy. The results have been a growing distrust of America as a reliable business and security partner, alienation of NATO allies, debt, a trade war with China that threatens the world economy, US withdrawal from UN initiatives to combat global population growth and climate change, and adding another trillion dollars to the already very high US debt.
The Real Solutions
America’s problems will not be resolved until they:
- Improve democracy and reduce corruption by changing election campaign contribution laws to reduce the influence of big money on elected representatives.
- Change tax provisions to reduce the unsustainable ratio of top 10 per cent to bottom 10 per cent incomes.
- Level the education playing field by state-funded vs municipal-funded schools. Wealthy municipalities now have good schools; poor municipalities do not.
- Focus more education on jobs in the new economy. China is now graduating five times as many as the US in STEM programs (Science, Technology, Engineering, and Math) where the future jobs will be.
- Facilitate workforce mobility by:
- Universal and portable health care (People losing their job now also lose their employer-funded health care)
- Financial assistance to connect workers with new available jobs
- Apply full US expertise to the mitigation of global population growth and global warming
Hugh Holland is a retired engineering and manufacturing executive now living in Huntsville, Ontario.
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