Pro-Obama supporters are right in a sense. I do fear the Obama administration. Not because President Obama is black. But because of what Obama does. He may have flourishing rhetoric and he is a gifted politician, but as George Will points out in the article quoted below, what scares me about Obama is the “tinctiture of lawlessness” we are seeing from the Obama-run federal government.

Will points out:

Anyway, the Obama administration, judging by its cavalier disregard of contracts between Chrysler and some of the lenders it sought money from, thinks contracts are written on water. The administration proposes that Chrysler’s secured creditors get 28 cents per dollar on the $7 billion owed to them but that the United Auto Workers union get 43 cents per dollar on its $11 billion in claims — and 55 percent of the company. This, even though the secured creditors’ contracts supposedly guaranteed them better standing than the union.

…

The Economist says the administration has “ridden roughshod over [creditors'] legitimate claims over the [automobile companies'] assets. . . . Bankruptcies involve dividing a shrunken pie. But not all claims are equal: some lenders provide cheaper funds to firms in return for a more secure claim over the assets should things go wrong. They rank above other stakeholders, including shareholders and employees. This principle is now being trashed.” Tom Lauria, a lawyer representing hedge fund people trashed by the president as the cause of Chrysler’s bankruptcy, asked that his clients’ names not be published for fear of violence threatened in e-mails to them.

Yes, I am scared. I am scared of high taxes and wealth redistribution. I am scared of increasing Federal power dictated by elitists on the coasts and non-reflective of traditional American values. I am scared of what high taxes will do with our economy in terms of incentive and ingenuity. On the incentive point, I am scared that America will lose its economic influence in the world, which is part of what secures our comfortable lifestyle and provides for the peaceful defense (for the most part). I am scared that the whim of the president and his friends (and make no mistake, if you are not a friend of Obama you are deemed an enemy, citizen or not) dictate to businesses what they must do, how they must act, and the metes and bounds of contracts already entered into, even when contrary what was agreed–all this by people who have never sat in a corporate board room, let alone been to a corporate board room.

Yes. I am scared. Not of Obama’s skin, but of what Obama is doing.

Obama Delivers Economic Report Card, Defends Agenda

So Obama is telling us how good a job he has done on the economy?!? Since when does the student get to determine his own grades?

A government report that found old-fashioned reusable nappies damage the environment more than disposables has been hushed up because ministers are embarrassed by its findings.

…

The report found that using washable nappies, hailed by councils throughout Britain as a key way of saving the planet, have a higher carbon footprint than their disposable equivalents unless parents adopt an extreme approach to laundering them.

To reduce the impact of cloth nappies on climate change parents would have to hang wet nappies out to dry all year round, keep them for years for use on younger children, and make sure the water in their washing machines does not exceed 60C.

This just goes to show that what is best for the environment isn’t always what requires the most effort.

To be fair, I searched the internet to find a good copy of the article. It was supposedly given at the World Economic Forum to a group of CEOs.

There are a number of people online questioning when and where this article was published. Many claim the speech was never given. However, these same critics tends to call the author names at the same time, which makes it hard to take their assertions seriously. Invariably, they assert that Herbert Meyer never spoke at the World Economic Forum, therefore the paper is a hoax. Others attribute this paper to the 2006 forum (which would seem to gel better with his take on Iraq).

I couldn’t find anything authoritative on way or another, even at the World Economic Forum website. It is plausible that this paper is by Herbert Meyer, but given at another event, or that it was given in one of the many official, but not always well documented, break-out sessions at the World Economic Forum, or that it is a complete hoax altogether. I could not locate an official Herbert Meyer website, nor is there an official (or even semi-official) statement disavowing this paper being his.

So, for what it is worth, read on.

By HERBERT MEYER

FOUR MAJOR TRANSFORMATIONS

Currently, there are [4] major transformations that are shaping
political, economic and world events. These transformations have
profound implications for American business leaders and owners, our
culture and on our way of life.

1. The War in Iraq

There are three major monotheistic religions in the world:
Christianity, Judaism and Islam. In the sixteenth century, Judaism and
Christianity reconciled with the modern world. The rabbis, priests
and scholars found a way to settle up and pave the way forward.
Religion remained at the center of life, church and state became
separate. Rule of law, idea of economic liberty, individual rights,
human Rights-all these are defining point of modern Western
civilization. These concepts started with the Greeks but didn’t take
off until the 15th and 16th century when Judaism and Christianity
found a way to reconcile with the modern world. When that happened,
it unleashed the scientific revolution and the greatest outpouring of
art, literature and music the world has ever known. Islam, which
developed in the seventh century, counts millions of Moslems around the world who are normal people. However, there is a radical streak
within Islam. When the radicals are in charge, Islam attacks Western
civilization. Islam first attacked Western civilization in the seventh
century, and later in the 16th and 17th centuries. By 1683, the
Moslems (Turks from the Ottoman Empire) were literally at the gates
of Vienna. It was in Vienna that the climatic battle between Islam
and Western civilization took place. The West won and went forward.
Islam lost and went backward. Interestingly, the date of that battle
was September 11. Since them, Islam has not found a way to reconcile
with the modern world.

Today, terrorism is the third attack on Western civilization by
radical Islam. To deal with terrorism, the U.S. is doing two things.
First, units of our armed forces are in thirty countries around the world
hunting down terrorist groups and dealing with them. This gets very
little publicity. Second we are taking military action in Afghanistan
and Iraq.

These actions are covered relentlessly by the media. People can argue
about whether the war in Iraq is right or wrong. However, the
underlying strategy behind the war is to use our military to remove
the radicals from power and give the moderates a chance. Our hope is
that, over time, the moderates will find a way to bring Islam forward
into the 21st century. That’s what our involvement in Iraq and
Afghanistan is all about.

The lesson of 9/11 is that we live in a world where a small number of
people can kill a large number of people very quickly. They can use
airplanes, bombs, anthrax, chemical weapons or dirty bombs. Even with
a first-rate intelligence service (which the U.S. does not have), you
can’t stop every attack. That means our tolerance for political
horseplay has dropped to zero. No longer will we play games with
terrorists or weapons of mass destructions.

Most of the instability and horseplay is coming from the Middle East.

That’s why we have thought that if we could knock out the radicals
and give the moderates a chance to hold power, they might find a way
to reconcile Islam with the modern world. So when looking at
Afghanistan or Iraq, it’s important to look for any signs that they
are modernizing.

For example, women being brought into the work force and colleges in
Afghanistan is good. The Iraqis stumbling toward a constitution is good.

People can argue about what the U.S. is doing and how we’re doing it,
but anything that suggests Islam is finding its way forward is good.

2. The emergence of China

In the last 20 years, China has moved 250 million people from the
farms and villages into the cities. Their plan is to move another 300
million in the next 20 years. When you put that many people into the
cities, you have to find work for them. That’s why China is addicted
to manufacturing; they have to put all the relocated people to work.
When we decide to manufacture something in the U.S., it’s based on
market needs and the opportunity to make a profit. In China, they
make the decision because they want the jobs, which is a very
different calculation.

While China is addicted to manufacturing, Americans are addicted to
low prices. As a result, a unique kind of economic codependency has
developed between the two countries. If we ever stop buying from
China, they will explode politically. If China stops selling to us,
our economy will take a huge hit because prices will jump. We are
subsidizing their economic development; they are subsidizing our
economic growth.

Because of their huge growth in manufacturing, China is hungry for
raw materials, which drives prices up worldwide. China is also
thirsty for oil, which is one reason oil is now at one hundred dollars a barrel.

By 2020, China will produce more cars than the U.S. China is also buying
its way into the oil infrastructure around the world. They are doing
it in the open market and paying fair market prices, but millions of
barrels of oil that would have gone to the U.S. are now going to
China. China’s quest to assure it has the oil it needs to fuel its
economy is a major factor in world politics and economics.

We have our Navy fleets protecting the sea lines, specifically the
ability to get the tankers through. It won’t be long before the
Chinese have an aircraft carrier sitting in the Persian Gulf as well.
The question is, will their aircraft carrier be pointing in the same
direction as ours or against us?

3. Shifting demographics of Western Civilization

Most countries in the Western world have stopped breeding. For a
civilization obsessed with sex, this is remarkable. Maintaining a
steady population requires a birth rate of 2.1 In Western Europe, the
birth rate currently stands at 1.5, or 30 percent below replacement.
In 30 years there will be 70 to 80 million fewer Europeans than there
are today. The current birth rate in Germany is 1.3. Italy and Spain
are even lower at 1.2. At that rate, the working age population
declines by 30 percent in 20 years, which has a huge impact on the
economy. When you don’t have young workers to replace the older ones, you have to import them.

The European countries are currently importing Moslems. Today, the
Moslems comprise ten percent of France and Germany, and the percentage is rising rapidly because they have higher birthrates.

However, the Moslem populations are not being integrated into the cultures of their host countries, which is a political catastrophe. One reason Germany and France don’t support the Iraq war is they fear their
Moslem populations will explode on them. By 2020, more than half of
all births in the Netherlands will be non-European.

The huge design flaw in the postmodern secular state is that you need
a traditional religious society birth rate to sustain it. The
Europeans simply don’t wish to have children, so they are dying. In
Japan, the birthrate is 1.3. As a result, Japan will lose up to 60
million people over the next 30 years. Because Japan has a very
different society than Europe, they refuse to import workers.
Instead, they are just shutting down. Japan has already closed 2,000
schools, and is closing them down at the rate of 300 per year. Japan
is also aging very rapidly. By 2020, one out of every five Japanese
will be at least 70 years old. Nobody has any idea about how to run
an economy with those demographics.

Europe and Japan, which comprise two of the world’s major economic
engines, aren’t merely in recession, they’re shutting down. This will
have a huge impact on the world economy, and it is already beginning
to happen. Why are the birthrates so low? There is a direct
correlation between abandonment of traditional religious society and
a drop in birth rate, and Christianity in Europe is becoming irrelevant.

The second reason is economic. When the birth rate drops below
replacement, the population ages. With fewer working people to
support more retired people, it puts a crushing tax burden on the
smaller group of working age people. As a result, young people delay
marriage and having a family. Once this trend starts, the downward
spiral only gets worse. These countries have abandoned all the
traditions they formerly held in regard to having families and
raising children.

The U.S. birth rate is 2.0, just below replacement. We have an
increase in population because of immigration. When broken down by
ethnicity, the Anglo birth rate is 1.6 — same as France — while the
Hispanic birth rate is 2.7. In the U.S., the baby boomers are
starting to retire in massive numbers. This will push the elder
dependency ratio from 19 to 38 over the next 10 to 15 years. This is
not as bad as Europe, but still represents the same kind of trend.

Western civilization seems to have forgotten what every primitive
society understands-you need kids to have a healthy society. Children
are huge consumers. Then they grow up to become taxpayers. That’s how a society works, but the postmodern secular state seems to have
forgotten that. If U.S. birth rates of the past 20 to 30 years had
been the same as post-World War II, there would be no Social Security
or Medicare problems.

The world’s most effective birth control device is money. As society
creates a middle class and women move into the workforce, birth rates
drop. Having large families is incompatible with middle class living.

The quickest way to drop the birth rate is through rapid economic
development. After World War II, the U.S. instituted a $600 tax
credit per child. The idea was to enable mom and dad to have four
children without being troubled by taxes. This led to a baby boom of
22 million kids, which was a huge consumer market. That turned into a
huge tax base. However, to match that incentive in today’s dollars
would cost $12,000 per child.

China and India do not have declining populations. However, in both
countries, there is a preference for boys over girls, and we now have
the technology to know which is which before they are born. In China
and India, families are aborting the girls. As a result, in each of
these countries there are 70 million boys growing up who will never
find wives. When left alone, nature produces 103 boys for every 100
girls. In some provinces, however, the ratio is 128 boys to every 100
girls.

The birth rate in Russia is so low that by 2050 their population will
be smaller than that of Yemen. Russia has one-sixth of the earth’s
land surface and much of its oil. You can’t control that much area
with such a small population. Immediately to the south, you have
China with 70 million unmarried men who are a real potential
nightmare scenario for Russia.

4. Restructuring of American Business

The fourth major transformation involves a fundamental restructuring
of American business. Today’s business environment is very complex
and competitive. To succeed, you have to be the best, which means
having the highest quality and lowest cost. Whatever your price
point, you must have the best quality and lowest price. To be the
best, you have to concentrate on one thing. You can’t be all things
to all people and be the best.

A generation ago, IBM used to make every part of their computer. Now
Intel makes the chips, Microsoft makes the software, and someone else
makes the modems, hard drives, monitors, etc. IBM even out sources
their call center. Because IBM has all these companies supplying
goods and services cheaper and better than they could do it
themselves, they can make a better computer at a lower cost. This is
called a fracturing of business. When one company can make a better
product by relying on others to perform functions the business used
to do itself, it creates a complex pyramid of companies that serve
and support each other.

This fracturing of American business is now in its second generation.

The companies who supply IBM are now doing the same thing -
outsourcing many of their core services and production process. As a
result, they can make cheaper, better products. Over time, this
pyramid continues to get bigger and bigger. Just when you think it
can’t fracture again, it does.

Even very small businesses can have a large pyramid of corporate
entities that perform many of its important functions. One aspect of
this trend is that companies end up with fewer employees and more
independent contractors. This trend has also created two new words in
business, integrator and complementer. At the top of the pyramid, IBM
is the integrator. As you go down the pyramid, Microsoft, Intel and
the other companies that support IBM are the complementers. However,
each of the complementers is itself an integrator for the
complementers underneath it.

This has several implications, the first of which is that we are now
getting false readings on the economy. People who used to be
employees are now independent contractors launching their own
businesses. There are many people working whose work is not listed as
a job. As a result, the economy is perking along better than the
numbers are telling us.

Outsourcing also confused the numbers. Suppose a company like General Motors decides to outsource all its employee cafeteria functions to Marriott (which it did). It lays-off hundreds of cafeteria workers,
who then get hired right back by Marriott. The only thing that has
changed is that these people work for Marriott rather than GM.

Yet, the media headlines will scream that America has lost more
manufacturing jobs. All that really happened is that these workers
are now reclassified as service workers. So the old way of counting
jobs contributes to false economic readings. As yet, we haven’t
figured out how to make the numbers catch up with the changing
realities of the business world.

Another implication of this massive restructuring is that because
companies are getting rid of units and people that used to work for
them, the entity is smaller. As the companies get smaller and more
efficient, revenues are going down but profits are going up. As a
result, the old notion that revenues are up and we’re doing great
isn’t always the case anymore. Companies are getting smaller but are
becoming more efficient and profitable in the process.

IMPLICATIONS OF THE FOUR TRANSFORMATIONS

1. The War in Iraq

In some ways, the war is going very well. Afghanistan and Iraq have
the beginnings of a modern government, which is a huge step forward.
The Saudis are starting to talk about some good things, while Egypt
and Lebanon are beginning to move in a good direction. A series of
revolutions have taken place in countries like Ukraine and Georgia.

There will be more of these revolutions for an interesting reason. In
every revolution, there comes a point where the dictator turns to the
general and says, Fire into the crowd. If the general fires into the
crowd, it stops the revolution. If the general says No, the
revolution continues. Increasingly, the generals are saying No
because their kids are in the crowd.

Thanks to TV and the Internet, the average 18-year old outside the
U.S. is very savvy about what is going on in the world, especially in
terms of popular culture. There is a huge global consciousness, and
young people around the world want to be a part of it. It is
increasingly apparent to them that the miserable government where
they live is the only thing standing in their way. More and more, it
is the well-educated kids, the children of the generals and the
elite, who are leading the revolutions.

At the same time, not all is well with the war. The level of violence
in Iraq is much worse and doesn’t appear to be improving. It’s
possible that we’re asking too much of Islam all at one time. We’re
trying to jolt them from the 7th century to the 21st century all at
once, which may be further than they can go. They might make it and
they might not.

Nobody knows for sure. The point is, we don’t know how the war will
turn out. Anyone who says they know is just guessing. The real place
to watch is Iran. If they actually obtain nuclear weapons it will be
a terrible situation. There are two ways to deal with it. The first
is a military strike, which will be very difficult. The Iranians have
dispersed their nuclear development facilities and put them
underground. The U.S. has nuclear weapons that can go under the earth and take out those facilities, but we don’t want to do that.

The other way is to separate the radical mullahs from the government,
which is the most likely course of action. Seventy percent of the
Iranian population is under 30. They are Moslem but not Arab. They
are mostly pro-Western. Many experts think the U.S. should have dealt
with Iran before going to war with Iraq. The problem isn’t so much
the weapons, it’s the people who control them. If Iran has a moderate
government, the weapons become less of a concern.

We don’t know if we will win the war in Iraq. We could lose or win.
What we’re looking for is any indicator that Islam is moving into the
21st century and stabilizing.

2. China

It may be that pushing 500 million people from farms and villages
into cities is too much too soon. Although it gets almost no
publicity, China is experiencing hundreds of demonstrations around
the country, which is unprecedented. These are not students in
Tienanmen Square. These are average citizens who are angry with the
government for building chemical plants and polluting the water they
drink and the air they breathe.

The Chinese are a smart and industrious people. They may be able to
pull it off and become a very successful economic and military
superpower. If so, we will have to learn to live with it. If they
want to share the responsibility of keeping the world’s oil lanes
open, that’s a good thing. They currently have eight new nuclear
electric power generators under way and 45 on the books to build.
Soon, they will leave the U.S. way behind in their ability to
generate nuclear power.

What can go wrong with China? For one, you can’t move 550 million
people into the cities without major problems. Two, China really
wants Taiwan, not so much for economic reasons, they just want it.
The Chinese know that their system of communism can’t survive much
longer in the 21st century. The last thing they want to do before
they morph into some sort of more capitalistic government is to take
over Taiwan.

We may wake up one morning and find they have launched an attack on
Taiwan. If so, it will be a mess, both economically and militarily.
The U.S. has committed to the military defense of Taiwan. If China
attacks Taiwan, will we really go to war against them? If the Chinese
generals believe the answer is no, they may attack. If we don’t
defend Taiwan, every treaty the U.S. has will be worthless.
Hopefully, China won’t do anything stupid.

3. Demographics

Europe and Japan are dying because their populations are aging and
shrinking. These trends can be reversed if the young people start
breeding. However, the birth rates in these areas are so low it will
take two generations to turn things around. No economic model exists
that permits 50 years to turn things around. Some countries are
beginning to offer incentives for people to have bigger families. For
example, Italy is offering tax breaks for having children. However,
it’s a lifestyle issue versus a tiny amount of money. Europeans
aren’t willing to give up their comfortable lifestyles in order to
have more children.

In general, everyone in Europe just wants it to last a while longer.

Europeans have a real talent for living. They don’t want to work very
hard. The average European worker gets 400 more hours of vacation
time per year than Americans. They don’t want to work and they don’t
want to make any of the changes needed to revive their economies.

The summer after 9/11, France lost 15,000 people in a heat wave. In
August, the country basically shuts down when everyone goes on vacation.

That year, a severe heat wave struck and 15,000 elderly people living
in nursing homes and hospitals died. Their children didn’t even leave
the beaches to come back and take care of the bodies. Institutions
had to scramble to find enough refrigeration units to hold the bodies
until people came to claim them. This loss of life was five times
bigger than 9/11 in America, yet it didn’t trigger any change in
French society.

When birth rates are so low, it creates a tremendous tax burden on
the young. Under those circumstances, keeping mom and dad alive is
not an attractive option. That’s why euthanasia is becoming so
popular in most European countries. The only country that doesn’t
permit (and even encourage) euthanasia is Germany, because of all the
baggage from World War II.

The European economy is beginning to fracture. Countries like Italy
are starting to talk about pulling out of the European Union because
it is killing them. When things get bad economically in Europe, they
tend to get very nasty politically. The canary in the mine is anti-
Semitism.

When it goes up, it means trouble is coming. Current levels of anti-
Semitism are higher than ever.

Germany won’t launch another war, but Europe will likely get
shabbier, more dangerous and less pleasant to live in. Japan has a
birth rate of 1.3 and has no intention of bringing in immigrants. By
2020, one out of every five Japanese will be 70 years old. Property
values in Japan have dropped every year for the past 14 years. The
country is simply shutting down. In the U.S. we also have an aging
population. Boomers are starting to retire at a massive rate. These
retirements will have several major impacts:

Possible massive sell off of large four-bedroom houses and a movement
to condos.

An enormous drain on the treasury. Boomers vote, and they want their
benefits, even if it means putting a crushing tax burden on their
kids to get them. Social Security will be a huge problem. As this
generation ages, it will start to drain the system. We are the only
country in the world where there are no age limits on medical
procedures. An enormous drain on the health care system. This will
also increase the tax burden on the young, which will cause them to
delay marriage and having families, which will drive down the birth
rate even further.

Although scary, these demographics also present enormous
opportunities for products and services tailored to aging
populations. There will be tremendous demand for caring for older
people, especially those who don’t need nursing homes but need some
level of care. Some people will have a business where they take care
of three or four people in their homes. The demand for that type of
service and for products to physically care for aging people will be
huge.

Make sure the demographics of your business are attuned to where the
action is. For example, you don’t want to be a baby food company in
Europe or Japan. Demographics are much underrated as an indicator of
where the opportunities are. Businesses need customers. Go where the
customers are.

4. Restructuring of American Business

The restructuring of American business means we are coming to the end
of the age of the employer and employee. With all this fracturing of
businesses into different and smaller units, employers can’t
guarantee jobs anymore because they don’t know what their companies
will look like next year. Everyone is on their way to becoming an
independent contractor.

The new workforce contract will be: Show up at the my office five
days a week and do what I want you to do, but you handle your own
insurance, benefits, health care and everything else. Husbands and
wives are becoming economic units. They take different jobs and work
different shifts depending on where they are in their careers and
families. They make trade-offs to put together a compensation package
to take care of the family.

This used to happen only with highly educated professionals with high
incomes. Now it is happening at the level of the factory floor worker.

Couples at all levels are designing their compensation packages based
on their individual needs. The only way this can work is if
everything is portable and flexible, which requires a huge shift in
the American economy.

The U.S is in the process of building the world’s first 21st century
model economy. The only other countries doing this are U.K. and
Australia. The model is fast, flexible, highly productive and
unstable in that it is always fracturing and re-fracturing. This will
increase the economic gap between the U.S. and everybody else,
especially Europe and Japan.

At the same time, the military gap is increasing. Other than China,
we are the only country that is continuing to put money into their
military. Plus, we are the only military getting on-the-ground
military experience through our war in Iraq. We know which high-tech
weapons are working and which ones aren’t. There is almost no one who
can take us on economically or militarily.

There has never been a superpower in this position before. On the one
hand, this makes the U.S. a magnet for bright and ambitious people.
It also makes us a target. We are becoming one of the last holdouts
of the traditional Judeo-Christian culture. There is no better place
in the world to be in business and raise children. The U.S. is by far
the best place to have an idea, form a business and put it into the
marketplace.

We take it for granted, but it isn’t as available in other countries
of the world. Ultimately, it’s an issue of culture. The only people
who can hurt us are ourselves, by losing our culture. If we give up
our Judeo-Christian culture, we become just like the Europeans.

The culture war is the whole ballgame. If we lose it, there isn’t
another America to pull us out.