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« on: May 06, 2007, 10:39:45 PM »
There is a lot in this speech that I have not heard about before. It's very interesting. Tell me what you think.
Herb Meyer served during the Reagan administration as special assistant
to the Director of Central Intelligence and Vice Chairman of the CIA's
National Intelligence Council. In these positions, he managed production
of the U.S. National Intelligence Estimates and other top-secret
projections for the President and his national security advisers. Meyer
is widely credited with being the first senior U.S. Government
official to forecast the Soviet Union's collapse, for which he later was
awarded the U.S. National Intelligence Distinguished Service Medal, the
intelligence community's highest honor. Formerly an associate editor of
FORTUNE, he is also the author of several books.
HERBERT MEYER
FOUR MAJOR TRANSFORMATIONS
Currently, there are four major transformations that are shaping
political, economic and world events. These transformations have profound
implications for American business owners, our culture and our way of
life.
1. The War in Iraq
There are three major monotheistic religions in the world: Christianity,
Judaism and Islam. In the 16th 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
points 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 7th 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
7th 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 30 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 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 workforce 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 $60 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 questio n is, will their aircraft carri er 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 10 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 post-modern 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 2000 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 regards
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 post-modern 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, many 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 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 quali ty 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 outsources 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 s upport 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
complementor. 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 complementors. However, each of the complementors is itself
an integrator for the complementors 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 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 resu lt, 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.
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<--- Because you are an idiot.
