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Tuesday, March 25, 2014

Inherent Advantages

The theory of Natural Selection says that organisms (or species) that have an inherent advantage over their competitors will succeed in the long run in the battle for survival.  It is the basis for evolution.  A predator that eats both larger and smaller prey will survive an event that kills off most of the large prey while a predator that eats only the larger prey will not.  As conditions change, the advantage may change to a disadvantage.  An animal with heavy fur may do better in a cold climate but it will suffer if the climate warms. 

This theory works not only in connection with evolution, but also with regard to the success of nations.  National characteristics, institutions, resources and many other things may provide the advantage that allows one nation to prosper while another fails.  Frequently the success of a nation is determined by how well it uses its natural advantages.  This could be illustrated by a great number of examples from history, but that is not the point of this post.  Instead, I want to look today at the inherent advantages of the USA and see how well we are doing in making proper use of them.  Here is a list of the relevant advantages:

1.  America has enormous natural resources.  The USA has the world's largest reserves of coal and natural gas.  We also have huge oil reserves that have yet to be tapped.  We have mineral deposits and fertile lands.  We have ample water resources.  Are we maximizing the benefit from these resources?  The answer is clearly negative.  Think about it.  President Obama has led a war on the use of coal.  He is trying to destroy the use of the one energy source where the USA is the unquestioned world leader.  The effort is not to get to the clean use of coal; it is to destroy the use of coal.  For oil and gas, Obama is similarly trying to reduce the use of these fuels and simultaneously to reduce the production of them.  Fortunately, most of the American production of oil and gas is outside the control of the federal government.  In the portion of the country where Obama has control, his actions have cut production by nearly 20% since he took office.  In the remainder of the country where Obama does not have control, production has skyrocketed since Obama took office and the increase more than outweighs the reduction imposed by Obama.  When it comes to the exploitation of mineral deposits, the record is much the same.  New mines are blocked repeatedly on supposed environmental grounds, but the reality is more the triumph of anti-development than of environmentalism.  The Obama administration have become environmental Luddites.

2.  America has entrepreneurial people.  For centuries, Americans have been risk takers.  It is in our DNA.  Remember, over the last three hundred years, it has been the risk takers who were willing to pull up stakes and move to a new country for a new life.  The migration of people to the USA was, in essence, the selection of the risk takers as immigrants.  As a result, our people value adventure, risk taking and innovation more than many others.  Now it may be that this acceptance of taking risks is not genetic, but even so, our culture was developed by folks with an appreciation of the value of risk taking and that view survives today.  The result has been the creation of a vibrant economy fueled by the constant creation of new ventures, many of which become enormously successful.  To a great extent, this culture or characteristic has led to America's position as the world's largest economy.  Sadly, this is another area where the Obama government has been working to destroy that advantage.  Start with Obama's attack on success.  People who start with nothing but then become successful are part of the "evil rich", the 1% who don't deserve what they have and who fail to pay their fair share of the nation's costs.  Indeed, Obama does not even think that they built their own successes.  Then consider the changes to the tax laws which reduce the chance for success from risk taking.  The top capital gains taxes are up 50% under Obama.  This is not a minor adjustment; it is a major assault.  The tax rate on our corporations is the highest in the world, another assault on risk taking.  Then there are the extra burdens placed on businesses through laws, regulations and presidential whim.  Obamacare may have burdened millions of individuals but it also places a heavy burden on the nation's businesses.  Rules under the Dodd-Frank law that are supposed to reduce the chance of financial calamities do little to achieve that end, but they work well to prevent small and new businesses from getting bank loans.  This is a crushing blow to most new enterprises.  There is more, but the point is that reversing the government's efforts so that they encourage entrepreneurship rather than attacking it would lead to a growth spurt and the creation of millions of jobs.

3.  America had a network of friends and allies across the globe.  In 2008, America had adversaries; one could not doubt that.  At that same time, however, we had close friends.  A good example is the United Kingdom.  Sixty years after the end of World War II, America and Britain still had a special relationship.  The Brits sent troops to Iraq and Afghanistan to fight alongside Americans.  These countries supported each other.  That is not true anymore.  President Obama has worked tirelessly to alienate the British.  He has made clear to them that they are no longer important to us, and they have responded as you would expect.  Indeed, just last year, Parliament voted not to allow British forces to participate in any response to Syria led by the USA.  It was a vote that would have been unthinkable just five years earlier.  And how about South America?  Five years ago, most of that region was friendly to the USA with the notable exceptions of Cuba and Venezuela.  Today, the most important country in that continent, Brazil, no longer is a friend after it was disclosed that we were spying on its leadership.  Argentina, another important part of the continent is moving away from the USA.  And in Washington, they are just ignoring the situation.  Then there are Israel and Japan, both of which were close friends and both of which Obama has alienated. 

For the USA to succeed, we need to work to maintain our advantages and not to destroy them.  It is not happening now.  Things need to change.




 

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