China’s Dream Team — MY COMMENT

by John Brian Shannon

While some might think that the sky is falling now that a new President of China and a new Chinese Premier will be installed in March 2013 — Stephen S. Roach with his years of professional experience working with many of the individuals involved, tells us in his latest Project Syndicate article China’s Dream Team we should feel hopeful this time around.

Not that we didn’t feel hopeful when President of China Hu Jintao and Premier Wen Jaibao came to power. In fact, I would like to take the opportunity to compliment the team of Hu Jintao and Wen Jaibao for their many successes — including the massively successful XXIX Olympiad held in Beijing.

Both men attended Harvard in younger years, both had plenty of exposure to Western ideas and neither seemed to ‘have it in’ for the West.

Historically speaking, communist leaders have generally displayed skepticism or outright hostility to the West and have been critical of Western thought and actions, even when some Western policies were of little concern to communist nations.

During the tenure of Hu Jintao and Wen Jaibao, China has advanced in many areas and has remained a peaceful partner of the West. In particular, both leaders ushered in powerful policies and regulations to help mitigate the environmental catastrophe which has resulted from such rapid industrialization.

China presently burns more than 3 billion tons of coal each year resulting in the production of 7.2 billion tons of CO2, plus other gaseous pollutants and particulates. These numbers are expected to double by 2020 based on already planned and funded (but not yet built) coal power plants adding to the output from existing coal-fired power plants there.

The successful Chinese program directed by these two great men to dramatically limit nitrous oxides at coal-fired power plants comes to mind. This is important because, according to Wikipedia; “Nitrous Oxide is a major greenhouse gas and air pollutant. Considered over a 100-year period, it has 298 times more impact ‘per unit weight’ (Global warming potential) than carbon dioxide.[2]”

For an overview of the Chinese environmental situation and their response to it (current as of May 2012), please see my UNDP article here:

Or go directly to the downloadable PDF.

Over 382 billion dollars worth of conservation and sustainable energy projects have been announced since May 2012. And, another 56 billion was announced today, December 5, 2012 read the Reuters article here.

By 2020, when China will pump 15 billion tons of CO2 into the air just from its coal plants, any positive conservation and mitigation efforts made now will have enormous consequences then.

Let us hope that the new leadership team is as enlightened about the environment as the previous team. Let’s hope the calm and reasonable approach to international affairs and the wise economic choices of former President Hu Jintao and Premier Wen Jaibao will continue.

Above all, let’s not spoil the atmosphere with fearful or angry rhetoric. Minor irritants must remain minor! China needs us, we need them. Full stop.

Only second in importance to ending the Cold War (which was successfully ended by dialogue, goodwill and cooperation between the various players) is the need for China and the West to find ways to work together everyday for the betterment of the largest number of citizens in China and the West.

If the same degree of dedication, goodwill and cooperation is employed to find ways for China and the West to work together as was done to end the Cold War, everyone on the planet will reap those benefits for decades to come!

I welcome incoming Chinese leader President Xi Jinping and Premier Li Keqiang to their new official positions and hope that Western leaders will reach out with sincere invitations to promote a grander and better vision of our world than was ever thought possible just 30-years ago.

Note: Xi Jinping became General Secretary of the Chinese Communist Party and Chairman of the CCP’s Central Military Commission, giving him supreme authority over China’s armed forces. Next March, he will become President of China as well. Read more here.

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That’s Not the Goal I’m Working For

by John Brian Shannon

It was fascinating to read the Project Syndicate article by Former US Secretary of Defense Harold Brown on America’s trouble with China discussing some of the history and modern-day challenges to Sino-American relations.

Although I have the greatest respect for former Secretary of Defense Harold Brown, I respectfully disagree with his proposed solution to the present challenges. Starting a new Cold War to secure America’s future is a step backward — not a step forward.

Rather, as both Western and Chinese interests converge at so many levels in the modern paradigm, it is in our best interests to work on solutions together.

Instead of the “Win – Lose” thinking of the past, it is incumbent upon us to find ways to “Win – Win” as so much is at stake.

We survived the last Cold War, but that is no guarantee we would survive another one. It’s simply too big a risk to take — especially when there are better options available. And, there are.

The former Secretary of Defense states that; “China’s export-led economic model has reached its limits…” and I believe this is a most profound point.

IF China has reached it’s export-led model as he asserts, it has only done so because there are presently a lack of purchasers to purchase Chinese goods.

For years, China has manufactured products to sell around the world and as long as there has been plenty of disposable income in the West, there has been plenty of sales.

As the Western economies fell backwards — so did Chinese exports.

Funny how that works.

In case policy-makers haven’t yet reached the same conclusions as I, let me say the situation I describe above is easily verifiable and directly correlates with the economic events of the early 21st century.

Whether political leaders in the U.S. or China like it or not, the relationship has been, is, and must continue to be, a symbiotic one.

China NEEDS a healthy, stable and frankly, a wealthy Western world to sell it’s wares to — and the West needs a source of low priced goods to assist growth to continue at lower cost than otherwise would be the case.

The U.S. needs a large export market for its billions of tons of coal and millions of barrels of petroleum that it must sell every year to support those industries here.

By 2017 the U.S. will surpass Saudi Arabia as the world’s #1 oil exporter — according to the IEA — but in actuality, this may occur in 2015.

http://arabiangazette.com/us-top-oil-producer-2017/

Not only that, so many products are manufactured by American corporations in China at lower cost than they could be here — therefore personal happiness is enhanced on a massive scale by products Western consumers can afford. Thanks China!

And without a healthy China (and Japan) who will continue to buy all those T-Bills to float the American economy? Along with all of the other China-driven (and increasing yearly) investment and purchasing of American goods and services.

For the next few decades, the only politics that make over-arching sense will be the politics of economics. For now, more than ever, the politics of self-interest will be the politics of economics and the politics of economics will be the politics of self-interest.

The stronger the Chinese economy, the better the effect on Western economies and Western governments. The stronger the American and other Western economies, the better for Chinese exports.

Any other model will be a lesser model and will bring it’s own problems with it.

As for the long-range bomber advocated for by former Secretary Harold Brown. I too, want a strong, secure and freedom-loving North America — but let us hope the days of Mutually Assured Destruction (MAD) are over.

Instead of sabre-rattling and an ever-present nuclear threat, let us hope that our thinking as a species has moved on.

A Pentagon report laid it out in stark terms a couple of decades back, “it is not a case of if, but of when” a nuclear exchange will take place under the MAD paradigm.

If we can’t co-exist, if we can’t form and retain viable and symbiotic relationships with other nations — every one of us will be dead, eventually. And then, none of it will matter.

That’s not the goal I’m working for.

.

Read more at: http://www.project-syndicate.org/commentary/from-competition-to-confrontation-for-the-us-and-china-by-harold-brown#yD3qLMzsctZhgiyR.99

JOHN BRIAN SHANNON

To follow John Brian Shannon on social media – place a check-mark beside your choice of Facebook, Twitter or LinkedIn: FullyFollowMe/johnbrianshannon

Last Chance for the U.S. Economy!

by John Brian Shannon

This blog examines Canada‘s debt and deficit-cutting success of the 1990’s and early 2000’s which improved Canada’s credit rating, lowered borrowing costs for the government and when combined with a new 7% nation-wide Goods and Services tax (1990) allowed many job-creation projects to be funded which lessened the blow of the government’s (then) austerity program.

Read “How Canada Cut Its Deficits and Debt” — by former Prime Minister of Canada Paul Martin (prior to that he was Finance Minister) who famously took Canada from second-worst among the G-7 countries to the most stable economic performer in only a few short years. The above link takes you to a downloadable PDF document. It is a must-read for students of macroeconomics.

Paul Martin, 21st Prime Minister of Canada
Paul Martin, 21st Prime Minister of Canada (Photo credit: Wikipedia)

The Fiscal Turnaround

“When the Liberal Party took office, Canada’s deficit and debt were by far the worst among the G-7 but for one, and our level of foreign debt was the highest of the industrial world. Indeed, the Wall Street Journal had publicly dubbed Canada all but bankrupt. Four years later, our debt-to-GDP ratio was dropping like a stone. Our financial record was second to none and Canada’s deficit was no more.” — Paul Martin quote in The Magazine of International Economic Policy — The International Economy.

Many American friends of mine, are asking how the U.S. can solve its massive U.S. deficit and debt problems — problems which seem almost as insurmountable as going to the Moon was viewed in the early 1960’s.

The fact is, these problems have been solved in Canada and they can be solved in the United States. What has been lacking up until now, has been the will to act. Once elected, leaders who are empowered by their electorate to slay the twin dragons of debt and deficit could do so relatively quickly.

Some final advice from the Right Honourable Paul Martin former Prime Minister of Canada, the man most directly responsible for solving Canada’s historic debt and toxic deficit problem.

“The final lesson I would draw is that if deficit reduction is to be a priority, then it has to be a “national” priority.

When Canada’s debt ratio hit 70 percent, it was assumed by most economists that we had crossed the tipping point. The United States is there now, and the IMF projects that within eight years it will hit 115 percent. [!]

These are serious numbers, and yet the so-called deficit debate in the United States is not about the deficit at all. It’s about winners and losers.

One thing to remember from the Canadian experience it is that for deficit cleansing to succeed, there can be no winners while most people are losing. If deficit reduction is to gain public support, it requires a united effort—in other words, it must be a truly national exercise.” — Paul Martin quote in The Magazine of International Economic Policy — The International Economy.

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JOHN BRIAN SHANNON

To follow John Brian Shannon on social media – place a check-mark beside your choice of Facebook, Twitter or LinkedIn: FullyFollowMe/johnbrianshannon

Excerpts from the Center for American Progress Fact Sheet/Regional Energy, National Solutions

by John Brian Shannon

“Developing just 54 gigawatts of offshore wind in Atlantic waters would generate $200 billion in economic activity and create 43,000 permanent, well-paid technical jobs, in addition to displacing the annual output of 52 coal-fired power plants.” — Center for American Progress – Fact Sheet/Regional Energy, National Solutions

I have selected excerpts from this report, which you can read below. I suggest you read or download the entire report in PDF form, click here:

Excerpts from the Southeast: Energy efficiency and smart grid

The Southeast, a region historically dependent on fossil fuels, has become a leader in the emerging field of smart-grid technology—which is at the center of the impending wholesale modernization of our electric infrastructure. An enhanced commitment to regional smart-grid innovation, manufacturing, and deployment, coupled with a robust plan to address the region’s traditional energy efficiency shortfall, point to an economic and environmental boon. — Center for American Progress – Fact Sheet/Regional Energy, National Solutions

• The Southeast boasts more firms across the high-tech smart-grid value chain than any other region. Continuing to lead this transition offers the opportunity to create jobs across a range of skill-levels and fields; to diversify existing companies and to build new ones; to improve quality of life by connecting home, utility, renewable, and vehicle technology; and to reap the environmental and cost-saving benefits of using our resources more efficiently. — Center for American Progress – Fact Sheet/Regional Energy, National Solutions

• At the same time, addressing the region’s serious shortfall in implementing conventional energy efficiency policies provides a tremendous and complementary economic and environmental opportunity. A study by Georgia Tech and Duke University showed the potential to cut energy use across the region by 16 percent in 2030. This would result in annual consumer savings of $71 billion and lead to the creation of 520,000 jobs by 2030. — Center for American Progress – Fact Sheet/Regional Energy, National Solutions

Excerpts from the Midwest: Advanced Vehicles

The auto industry revival that is taking place in the Midwest is proof that states and the nation prosper when we make energy choices that take the American people, our economy, and our outdoor heritage forward together. Having recovered from near bankruptcy less than three years ago, the auto industry is now profitable, sales are rebounding, and fuel-economy projections have exceeded expectations. — Center for American Progress – Fact Sheet/Regional Energy, National Solutions

In addition to revitalizing American manufacturing, the deep oil savings from vehicles being built now under strong new fuel-economy standards will mean net savings to consumers of more than $54 billion a year in 2030 and will add 570,000 jobs to the economy. — Center for American Progress – Fact Sheet/Regional Energy, National Solutions

Excerpts from Mountain West: Wind and solar development and distribution

The Mountain West is experiencing firsthand the economic and environmental benefits of transitioning to low-carbon energy sources. Continuing this shift will be critical—the West is already experiencing serious damage from climate change and would face an even grimmer future if the nation turns its back on clean renewable energy in favor of a continued reliance on dirty fuels. — Center for American Progress – Fact Sheet/Regional Energy, National Solutions

• The West boasts nearly unlimited renewable energy resources—particularly wind, solar, and geothermal—that promise a brighter economic future than is possible with fossil fuels. The National Renewable Energy Laboratory identified 11,788 megawatts of nonhydro renewable energy projects either under construction or in advanced development in the region. Using the Electric Power Research Institute’s estimates of jobs per megawatt, these projects represent 71,872 jobs. — Center for American Progress – Fact Sheet/Regional Energy, National Solutions

Excerpt from the Pacific Coast: Solar power innovation and installation

The Pacific Coast and the adjoining western states are referred to as the “sun belt” for a reason. Capitalizing on that abundant solar resource is paying huge dividends for the region—providing jobs, spurring new industries, and spawning new innovative technologies. Abundant resources and aggressive renewable energy standards, including incentives for both utility-scale and small-scale rooftop solar, position the region to build on its current status as a national leader in solar energy installation and generation. — Center for American Progress – Fact Sheet/Regional Energy, National Solutions

• The solar industry in California has experienced significant growth over the past 15 years. Since 1995 the number of solar businesses grew by 171 percent, and total employment jumped by 166 percent. As a point of comparison, the total number of California businesses has grown by 70 percent, and employment has increased by 12 percent. — Center for American Progress – Fact Sheet/Regional Energy, National Solutions

To read or download the entire report in PDF form, click here.

King Ludd is Still Dead — MY COMMENT

by John Brian Shannon

Please read “King Ludd is Still Dead” by Kenneth Rogoff — at Project Syndicate.org.

Professor Rogoff’s excellent article has outlined the way our modern economic systems work and his statement succinctly describes the need for change to our present paradigm;

“…and the great economist Wassily Leontief worried that the pace of modern technological change is so rapid that many workers, unable to adjust, will simply become obsolete…”

Workers do become obsolete and must then train for other jobs. Which is VERY inefficient from the national economy standpoint. Not to mention lowering the quality of life for that worker and the family that worker supports.

I believe it is in our best national interest to enhance the ability of skilled workers to continue in their chosen career — rather then having their careers suddenly ended by the economic whims of a local marketplace.

Which is why economists everywhere should be proactively calling for the freedom of movement for skilled labour and semi-skilled labour to match local market demands all over the planet.

For just one telling example, take the people who work in high steel. These are the people who build skyscrapers, communications towers and bridges. These are highly skilled workers and it would be a shame for them to become unemployed, or under-employed on account of local conditions.

Such workers add to the knowledge base of a nation and for them to enter training programs to become bus drivers, painters, or insurance salesmen, is deplorable.

But this is what is happening all over America and other Western nations — and not just to the workers in high steel!

Rather than list all of the skilled occupations which face such calamities worldwide, (that would be most occupations which require skilled workers AND also suffer from the boom and bust economic cycle) suffice to say that many skilled workers can be laid off as a national economy tanks. What then?

Economists should be leading the charge in calling for an international treaty to guarantee and enhance the ability of skilled and semi-skilled labourers to go to where the work is, to live in that country with their immediate family until the project is completed, and then move on unhindered to the next project — wherever it may be in the world.

Most often, these workers will return to their home country when their own nations’ economy rebounds and they are again in demand at home.

Instead of staying in the U.S.A. and becoming bus drivers or shopping mall security guards, they will still be in top form — having kept their skills sharp in the interim and will have learned new techniques and practices from working in different jurisdictions around the planet. They will return with a sharp skill-set, positive experiences, they will be more rounded-out and their quality of life will have been enhanced.

This contributes more to the national knowledge base than allowing these people to drift into other employment, unemployment or under-employment during local economic slowdowns.

Economists should not be leading from behind on this, but should research and arrive at a common position which they should present to politicians and separately to the UN, in order to facilitate economic change for the better — change that will benefit all nations. If economists don’t impart this knowledge to political leaders, then who will?

Freedom of skilled labour to swiftly and easily move to where the work is — equals a more efficient world economy, better quality of life for those workers and their families and additional knowledge for the national skilled labour knowledge base.

John Brian Shannon

ABOUT JOHN BRIAN SHANNON

I write about green energy, sustainable development and economics. My blogs appear in the Arabian Gazette, EcoPoint, EnergyBoom, Huffington Post, United Nations Development Programme, WACSI — and other quality publications.

“It is important to assist all levels of government and the business community to find sustainable ways forward for industry and consumers.”

Green Energy blog: http://johnbrianshannon.com
Economics blog: https://jbsnews.wordpress.com
Twitter: @JBSCanada