"What Goes Around Comes Around"
by Bill Bonner
NORMANDY, FRANCE – “China is defying US pressure to change its behavior,” says a Financial Times headline. The FT reports: "As Wendy Sherman, US deputy secretary of state, prepared to fly to China this weekend, Beijing imposed sanctions on seven Americans, in a tit-for-tat blow that illustrated the dismal state of US-China relations."
And China is not the only one. The U.S. effort to change Russia’s behavior using “sanctions” also failed, most recently in the Baltic Sea. There, the U.S. tried to sanction companies putting down a pipe to bring Russian natural gas to Germany. But the Russians sent their own team to do the work. And now, the Germans will soon be using Russian gas, rather than the more expensive liquid natural gas, LNG, shipped over from the U.S.
The World’s Best: What goes around comes around. And going round now is a growing indifference and hostility to U.S. bullying. Why? "To much of the world,” writes columnist Spengler in the Asia Times, “the U.S. looks like it is in decline. Because it is in decline.”
We were thumbing through an old book, one that we published in 1988. Titled "The World’s Best," it told readers about the best things we had discovered in almost 10 years of publishing the magazine "International Living." The book began by describing our attempt to rate the world’s countries from best to worst, giving them scores for everything from Freedom to Infrastructure… Culture to Cost of Living.
It was an ambitious undertaking, probably foolhardy. There are too many regional differences and nuances to make such a score meaningful. In America, for example, life on a true grit western Montana ranch has very little in common with life in gritty West Baltimore. But it was good fun… and made for interesting reading. And in 1988, guess what country came out as Numero Uno… the world’s best place to live? Here’s how we reported it then:
The United States takes first place, with a total score of 88.88. Although it is not outstanding in all categories, its consistently good scores in most categories averaged out to put it on top. Here’s a breakdown of the U.S. category rankings. In health, it ranks 15th. In the culture category, it ranks first. In the economy category, the U.S. ranks 20th. In cost of living, it comes in a mediocre 49th [it was not cheap to live in the U.S… compared to the rest of the world]… In terms of political stability, the U.S. ties for third place… It ranks first for infrastructure… In recreation/environment, the U.S. also fares well, tying with Australia, France and Italy and New Zealand for first place. And in freedom, the U.S. ties with 21 other countries for first place.
Now, it’s 33 years later. How are we doing?
Bad News: "International Living" gave up its quality-of-life scoring efforts years ago, but almost all the other rankings show the U.S. slipping… and after 2000, almost in freefall. According to one score, reported last week in Al Jazeera, the U.S. has dropped 18 places down from the top: "The US remains one of the most prosperous countries in the world, ranking 18 out of 167 nations, the conservative-leaning, London-based think-tank [the Legatum Institute] said in its 2021 "United States Prosperity Index."
The index, which Legatum publishes annually, measures US prosperity using 11 pillars: safety and security, personal freedom, governance, social capital, business environment, infrastructure, economic quality, living conditions, health, education and natural environment… The COVID-19 crisis has weakened prosperity in the United States, but even before the pandemic, mass shootings, elevated obesity levels and mental health issues had taken their toll on Americans’ quality of life. Compared to 1988, almost all the news is bad.
The federal government owed just under $2.5 trillion at the beginning of 1988. Now, the debt is more than 10 times as much. The cost of living today is at 5% and going up. In 1988, it was 4% and going down. Social tensions, today, are heating up - exacerbated by a big increase in inequality. “Wealth inequality widens to a record level,” says a headline in this morning’s FT. (Thanks to the Fed’s stimmies, your editor adds.)
In 1988, the U.S. was ending a “Cold War” with the Soviet Union… Now, it is beginning a new one with Russia and China. And the outcome of the new cold war is no sure thing. Here’s Spengler again: "The people with big jobs in Washington came of age in the 1980s and 1990s, when America was the technological marvel of the world, and American inventions created the digital age. We haven’t done a lot lately except code some complicated software.
China has installed about 80% of the world’s 5G mobile broadband capacity… [essential] for the Fourth Industrial Revolution as much as railroads were for the First Industrial Revolution, and is moving much faster towards smart cities, automated ports, autonomous vehicles, self-programming robots and a wealth of other 5G applications."
How to meet these challenges? The armed wing of its Deep State wants more sanctions, backed by more aircraft carriers and more cyber warfare spending. The unarmed wing of its Deep State wants more stimmy – more fake cash to support its latest must-have fads and woke fashions.
Made in China: The U.S. response to the COVID-19 crisis, for example, was some $6 trillion in various forms of stimmy. What did it produce? An unprecedented consumer spending boom. But what were consumers buying? Imports from China! The U.S. trade balance shot up to a record $1 trillion.
Why can’t U.S. workers and U.S. businesses meet the new demand (albeit phony) from U.S. consumers? Because the whole system is based on claptrap. The fake interest rates/fake-money system discourages real saving and real investing (building factories… training workers… increasing real output) and favors short-term speculating, cockamamie gambling, and jackass politics.
Spengler notes that the U.S. is going through a “version of Mao’s Cultural Revolution, where the ‘woke’ equivalent of Red Guards hold self-criticism sessions at corporations and universities to extract confessions of racism, homophobia, transphobia and so forth.” Where does this lead? We’ll peek ahead tomorrow…"