The Obama administration, responding, we assume, to the putative message sent by the Massachusetts election result, has proposed that federal budgets be completely frozen for three years, and then only grow at the rate of inflation thereafter.

This is a step in the right direction.

All:

Here is the talk I plan to give…  After I received the strongest possible message from you that I should not hold back the message in any way, what you see below is the result.  At the same time, I wanted to keep the messaging on the positive/hopeful side, even if the core ideas are not.  It’s a fine line, so I am interested in your perspectives on that balance.

I am still wide open to revisions, and it will change between here and then. 

Tuesday, January 12, 2010

Executive Summary

• China is pursuing an active policy of resource mercantilism.
• China appears to be strategically preparing for resource scarcity.
• China’s auto sales have surpassed those of the US.
• This year China also edged out Germany as the top exporter.
• As China’s economy expands, its energy use increases.
• The US should be stewarding its remaining resources and transitioning deliberately to a very different economic model, but instead we are wasting both time and resources.

No, this report has nothing to do with golfing.  In the Chinese calendar, 2010 is the Year of the Tiger.

While the US and Europe are busy wasting time trying to figure out how to return to the condition of illusory economic health that defined The Aughts, China seems to be operating from a very different playbook.

For the moment, I want you to assume that the concept of rapidly (and permanently) depleting resources is a reality.  This shouldn’t be much of a stretch, because this is true on a per-capita basis for nearly every critical resource, and some are already “past peak” by any measure.

Now suppose that you have a multi-year view of things and are in charge of running a major nation.  What would your strategy be?

Tuesday, January 5, 2010

Executive Summary

• This is not a normal recession, and it will not follow predictable patterns.
• Tax data does not support the assertion that consumer spending has essentially remained unchanged.
• Housing market recovery is being delayed by government programs.
• Households and small businesses are shedding debt, and big businesses are only adding a little, leaving government responsible for most of the new debt.
• We need to become serious about our real needs and stop frittering away time and capital.

I am going to be peering ahead with my views for 2010 and beyond in a multi-part series, beginning with the big picture before moving into individual ideas and suggestions.

Let’s start by pondering a bullish set of views gleaned from the news:

Wall Street closes 2009 with “an expectancy of better times in the air.”  While not predicting immediate return to prosperity, general mood was the most optimistic since midyear slump dashed hopes of early business revival.  General belief that “factors of long-range bullish import” are steadily increasing, while vast bulk of necessary deflation has been accomplished.

While the past year was painful, the pain won’t necessarily end with the year.  However, there’s good reason to believe the country is in a better position than it was a year ago.  The past year has rid the country of illusions, including the theory shortly after the crash that the US had invented the “harmless panic.”  It has produced a new realism, where business projects must be sound to proceed. 

The year has also provided an “incalculable amount of ultimate benefit” in eliminating the many “weak spots” that an economic boom always produces. Institutions that “withstood the extraordinary strains of 2009” should be well positioned for the tests of 2010; common sense and experience suggests these will be less severe. Consumption has outpaced production for months; “effective demand for expanded mill and factory production cannot logically lag far behind.”

Truth be told, these quotes were gleaned from newspapers published on December 31, 1930.  The only things I changed were the dates, to make my point that these quotes could have been written last week.