Wealth Distribution in America is not what you think it is!
Watch this 6-minute video to see just how wrong our perceptions are about how the total wealth of the United States is shared between all these different socio-economic groups of people. “The Poor” and “The Middle Class” and “The Rich” are compared to “The Wealthy” in this video. What you will see is mind-blowing.
The total wealth of the United States (in 2009) was 54 Trillion dollars. Let’s see how it’s distributed, shall we?
After having watched the video, were you as speechless as us?
Kuwait has embarked on its first renewable energy project and will now be able to export the oil that would have been used to produce domestic electricity. Solar and wind will produce 70MW for the GCC nation by September, 2016. And by 2030, 15% of Kuwait’s total energy mix will be powered by renewable energy according to a new government policy.
Phase I of the country’s first renewable energy project is already underway and it will be in the form of a 70 MW hybrid power plant with PV-solar, thermal solar, and small wind power, set to come online by Q3 of 2016, in Shagaya, Kuwait – near its border with Iraq and Saudi Arabia.
By 2030 the 2000 MW renewable energy plant will be fully operational and the project will save Kuwait 12.5 million barrels of oil (BOe) per year — and power 100,000 Kuwaiti homes.
Saving 12.5 million barrels (BOe) per year will allow Kuwait to export that same amount of oil at the going rate. (12.5 million barrels of crude oil, is about equal to four of the largest and most modern, fully-loaded supertankers, the TI-class double-hulled supertanker)
Oil prices have been hovering around the USD 80.–100. mark recently, but this will certainly rise and some energy experts see oil rising as high as USD 250. per barrel, mid-century.
For demonstration purposes only, if those four supertanker loads of ‘saved oil’ is priced near today’s USD 90. per barrel ($90. x 12.5 million barrels per year) it means Kuwait will rake in an extra USD 1.12 billion, per year, every year, due to this renewable energy project.
If the oil price shoots up as expected, the government will see even greater benefits. By the time oil hits USD 180. per barrel, this 3-Phase project should be complete — allowing Kuwait to take in USD 2.25 billion, per year, every year, due to this renewable energy project.
Separate from all of the foregoing, is the additional income that could be garnered from those ‘saved’ 12.5 million barrels per year — IF Kuwait added some value to that crude oil by refining it into valuable products before exporting it, instead of merely exporting it as raw crude oil. Gasoline, diesel, aviation fuel, plastics and synthetic rubber, are all examples of value-added products that can be made from crude oil.
At that point, the relatively small amount of 12.5 million barrels per year could become worth much more than crude oil sold for USD 1 or 2 billion per year. Instead, when sold as finished fuels or plastics, it becomes many billions of dollars contributing to the national GDP of Kuwait.
Based on USD 90. per barrel, with 126 million barrels (BOe) saved: If Kuwait switched completely to renewable energy, and instead,exported all the crude oil and gas it burns to produce domestic electricity, yearly GDP could increase by USD 11.3 billion.
Based on USD 180. per barrel, with 126 million barrels (BOe) saved: If Kuwait switched completely to renewable energy, and instead,exported all the crude oil and gas it burns to produce domestic electricity, yearly GDP could increase by USD 22.6 billion.
Based on value-added products made from crude oil, with 126 million barrels (BOe) saved: If Kuwait switched completely to renewable energy, and instead,refined all the oil and gas it burns to produce domestic electricity, yearly GDP could increase by USD 56.7 billion, or more.
Only now, with the recent combination of high crude oil prices and the dramatic fall in the cost of renewable energy has it made economic sense for OPEC nations to consider the switch to renewable energy.
Simply put, OPEC nations can make more money by exporting their oil – instead of burning it to produce electricity for domestic consumption.
Adding value to the ‘saved’ crude oil, means that OPEC nations have the opportunity to make money many times over, when compared to simply exporting raw crude product.
Embracing this new vision can work miracles for GCC economies, which are blessed with plentiful sunshine and wind resources, and already have the technology to refine their crude oil, thereby adding value to the resource, while creating thousands of jobs for the region’s chronically under-employed youth.
Cleaner air for GCC citizens, billions more dollars via value-added exports, and a lower unemployment rate among region’s youth. Now that’s something to celebrate!
As the world economy improves, national economies are being lifted up by a rising tide of success in other countries.
Now that we are living in an evermore globalized world, nations are no longer entities unto themselves. While they were once insulated from the economic successes or failures of other nations, that is profoundly no longer the case.
A recent example is the United States financial crisis of 2008 which was at first confined within the U.S., but later spread to Europe, Japan and China, with those countries experiencing varying degrees of economic malaise directly attributable to the original fall of the U.S. sub-prime mortgage segment.
Had a financial crisis of this sort taken place within the 1950-1980 timeframe, it would have been seen as an ‘America only’ affair as the (then) economic islands of Europe and Asia had little interest in the internal workings of the American economy.
How the world has changed in the 21st century
Recently, ‘America sneezed’ and most of Europe along with Canada ‘caught the cold’ – and while Asia felt unwell, it didn’t miss a day of work.
Globalization is a process. Every year, countries are harmonizing their diplomatic relations, international trade and laws, walking through the remaining issues towards true interdependence between nation-states.
Along the way, we have seen dramatically lower prices for consumers within the participating nations and a strong downward pull on inflation within the globalized community. Foreign Direct Investment (FDI) flows toward nations with lower land, factory and labour costs, while competition ensures that prices reflect those newfound cost savings.
One of the unfortunate effects of globalization from the Western perspective are the jobs that have fled the West to Asia. Over the span of (almost exactly) four decades, millions of manufacturing jobs have gone to the nations which feature low cost land, factory, and labour rates.
The transition of trillions of dollars from the West to the Emerging Market economies and Frontier Market Economies has spawned a rising economic tide in the Middle East, much of Asia, and in India. In fact, the rise of the BRICS nations are easily traced by the FDI inputs into their nations, as a welcome effect of, (but certainly not the primary cause of) their success.
Since 1998 China and India have been described as the two economic engines of Asia, and during recent recessionary times were noted as the economic engines of the entire world. Even as some nations were falling away from their traditional economic rankings, the unprecedented demand for raw resources and high-tech originating from the ‘rising tiger’ economies, slowed the fall of the Western economies and have even spurred their quicker recovery.
Historically, it was axiomatic that when the United States was doing well, Europe, Japan, Canada, Australia and New Zealand were doing well — as the U.S. economy had the power to float those economies no matter the ‘local’ economic conditions.
America is no longer alone with this power
Now, not only can American demand float the economies of countries or entire regions — the combined demand of the BRICS nations can float national economies and regions.
The U.S. population seems ‘torn’ at this juncture, with some in that country lamenting the loss of the unipolar world which was theirs since the end of the Cold War, whilst others welcome the strengthening and broadening-out of the world economy into a truly interdependent and open economic model.
For those Americans who believe in the open economic model (which is the name given to the ‘free enterprise’ system by economists) the strengthening and broadening-out of the world economy is exactly in line with their beliefs and is seen as an adjunct to American economic and political clout.
“We told you the open economic model was the way to prosperity, and now you are ‘our firm converts’ to that, and to the democracy which necessarily accompanies successful free enterprise systems.”
For those Americans who secretly or publicly wish for a closed economic model (known as the ‘communist’ or ‘statist’ economic model by economists) globalization is the root cause of all American economic woes — when in fact, America’s recent economic problems were caused by a perilously-lacking regulatory environment in but one segment of the U.S. economy and poor decision-making by a handful of individuals.
As nations advance towards interdependence they will see rising demand in their own countries from other partner nations (as at any given time, certain of them will be experiencing growth) thereby helping to balance-off the occasional lack of demand in their own country.
De-facto; Interdependence between nations means facilitation of effort, FDI, and countless other forms of assistance towards whatever is the weakest link of the chain.
This contrasts with the decades of ruthless competition which played itself out (even between allies) and ruled every diplomatic and national economic decision. De-facto, that was a ‘sink all the other boats first, before we get sunk’ game, played out in the global economy.
Wherever interdependent nations are working together to improve upon an open economic model, they are in effect working to create a rising tide for all of the participants within that interdependency, because it is simply and profoundly in their best interests to do so.
Interdependency is creating the incoming tide that will float our boats.
From Wikipedia, the free encyclopedia
“The aphorism “a rising tide lifts all boats” is associated with the idea that improvements in the general economy will benefit all participants in that economy, and that economic policy, particularly government economic policy, should therefore focus on the general macroeconomic environment first and foremost. The phrase is commonly attributed to John F Kennedy, who used it in a 1963 speech…”
Some nations are replacing retiring workers with robots at an accelerating pace — and for good reason.
In Germany, this is an absolute necessity as a huge pool of German workers are approaching retirement and there aren’t nearly enough Germans to replace them. Germany imports (low) millions of workers from Turkey and the MENA nations, but Germany still can’t keep up with the demand for labour in their export-driven economy.
What’s a country to do? Phone all their export customers and tell them they can’t produce all the widgets they ordered? Not the German way!
So, I understand, precisely, the position of the Germans and agree with their moral reasoning and their necessary choice.
While at the same time, I worry about other nations (us) making a massive shift to robotics – for very different reasons, and none of them moral — causing workers (who are human beings, after all) to become redundant while concentrating evermore billions into the hands of the infamous 1% of the population.
A switch to robots to improve the bottom line could become a threat to millions of workers in the coming decades and might become the most profound, social issue since the 1960’s anti-war movement.
Replacing retiring workers with robots (as is the case with Germany now) is a moral decision, which was made to ensure the German economy does not falter and thereby harm large numbers of citizens.
In this case, it is a completely understandable and moral decision, one that benefits vast numbers of German citizens.
Replacing presently-employed workers with robots so that 1% of the U.S. population can make more profit is an immoral decision, which will allow the 1% to keep evermore of the U.S. money supply for themselves at the expense of the other 99% of the population.
In this case, it is not understandable, nor is it a moral decision – as it primarily benefits 1% of citizens over 99% of citizens.
It will come down to this, will we assure human rights for American citizens who want jobs and want to contribute to their nation’s economy, or will we favour a small number of people (the 1%) who want more, more, more, for themselves?
Who is America in business for? The 1% or the 99% of American citizens? It is a political, economic and social decision that voters will need to make in the next election cycle.
In one of Paul Krugman’s latest blogs (which are always great reads) entitled “Bleeding Europe” our favorite Professor takes the side of all the Eurozone nations — except for the one that has to pay the bills — Germany!
Which is fine, because those countries have been beaten up by everyone including, well, everyone. They need as many powerful voices on their side as possible, so that they can continue to run huge deficits forever — and have Germany foot the bill.
And, why not? It’s all Germany’s fault for WWI and WWII, isn’t it? Ergo, they are punishing Germany and it feels good!
The fact is, that all of the people who started both wars are long dead, as are most of the brave soldiers who were told to fight brother Europeans because the politicians of the day on both sides couldn’t get their diplomatic acts together.
But it’s a great relationship while it lasts, isn’t it? Spend like drunken sailors and have Germany’s grand-kids pay for it and if they so much as dare to hint this is a bad deal, then browbeat them with WWII-era propaganda until they stop.
It is not a sustainable relationship — even for the Germany-haters. Why? Because the combined debts and deficits of southern Eurozone nations are so large, soon even Germany won’t be able to cover the losses at the casino and they will all sink into the economic abyss together. (Then it will be; “Hey, South Korea, wanna buy the Eurozone, cheap? Their assets are mortgaged to 200% of their value, but maybe you could kick-start it.”)
It is not a sustainable relationship for 21st-century German taxpayers either, all of whom have nothing to do with WWI or WWII by the way, and are tired of paying for the neighbour’s “no wine is good enough for us” trips to the casino!
But in the end, all of this will come to a crashing halt when German voters have had enough of footing the bill for spendthrift nations who badmouth Germany at every opportunity.
And then watch what happens. Not only will the good ole days of eat, drink and be merry on Germany’s tab be well and truly OVER, the credit-ratings agencies themselves will dictate what kind of budgets countries like Greece are allowed to run. A sudden transition to balanced-budgets would be quite the shocker! If you happen to be visiting southern Europe when that happens — be sure to duck.
I think German ChancellorAngela Merkel is the smartest woman on the planet. For now, she is paying their way, biding her time, no doubt biting her tongue and just waiting for the almost inevitable day that the credit-rating agencies finally take control of overspending Eurozone member-state economies.
If and when that happens she will suddenly be recast as the sweet and gentle fairy-godmother of Europe who convinced her countrymen and women to pay the bills for her free-spending southern neighbours for as long as humanly possible. Sie haben meine Bewunderung, große Dame!