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Entries in US (269)

9:49AM

Global inequality: before America ruled and when America ruled

No question we're heading for a globalized "progressive era" to match what America experienced at the end/turn of the 19th/20th centuries.  Been talking that one for about five years now, and it was THE major theme of "Great Powers" back in 2009.  Now the Economist joins in.

But this historical chart is interesting.  Note the rising inequality across Europe's long colonial age (let's say 1800 to 1950) and then look at what happens when US-style globalization kicks in (1950-now):  It slows, despite the ginormous wealth creation globally, and even flattens out and peaks across the period of its truest expression (1990-now).

To be sure, the 1% are slicing off too much wealth - just like during America's Gilded Age, thus my long-standing prediction of a necessary progressive era on a global scale led by coastal megacities (like NYC led ours and re-attempts to do so today with Bloomberg). But an interesting difference between how Europe ran the world and how we've managed to do it.

9:28AM

Chart of the day: US-China economic ties deepen across Great Recession

Click smaller image for larger version.

Go here for interactive one you can peruse in depth.

BusinessWeek post by way of Craig Nordin.

Some basics:

 

  • Both imports from, and exports to, China grow since 2008.
  • Chinese investment creates 8,000 US jobs in 2007 and now 27,000 in 2012.  "If investment from China remains on track, Chinese businesses will employ 200,000 to 400,000 Americans by 2020."
  • Applications for enterpreneur visas to US:  About 500 Chinese in 2008 equals about 40% of total, and almost 3,000 Chinese applications in 2011 = about 80%.
  • Chinese students in US up 135% since 2008 (84,000 --> 197,000).
  • Chinese holdings of US Treasuries up 158% since 2008.
  • Patent applications: 4-5,000 Chinese applications in US in 2008 and 10-11,000 in 2011; and US applications in China 24-25,000 in 2008 and 28-29,000 in 2011.
  • Top 10 US exports to China are power generation equipment, oil seeds and fruits, electrical machinery/equipment, vehicles, aircraft and spacecraft, optics and med equipment, plastics, pulp and paperboard, copper, organic chems.
  • Top 10 US imports from China are electrical machinery/equipment, power generation equipment, toys-games-sports equipment, furniture, footwear, apparel, plastics, iron and steel, vehicles.

It is dismaying to listen to the crude level of discourse in this presidential election regarding China.  Something to remember when we blame domestic Chinese politics on similarly crude behavior/talk from the Beijing.

Yes, the clever wags will point out that we've outsourced more jobs to China than they've created over here.  But the interesting point is that China is already creating jobs over here and that that number is growing rapidly. That tells you how quickly that worm has already begun turning. Moreover, while some of those jobs will invariably return as China's wages rise, most will simply continue their long-term global migration to the next great sources of cheap labor - as they should (unless you believe America should, for example, attempt to become the most expensive manufacturer of low-cost, low-tech items in the world).

 

9:55AM

Expensive oil as trigger for less exhausting ag land practices

Special WSJ report on agriculture, with interesting article on "fertile land is under strain."

Ag takes up about 1/5th of energy consumption in the US, so higher oil encourages, over the long run, abandoning certain energy-intensive practices, such as tilling:

The most popular fuel-reduction strategy involves a radically new way of planting seeds. Instead of breaking up the ground with a plow to plant seeds, no-till farming leaves the remains of last year's crop on the surface.  Drills punch through this mat of vegetation and insert seeds into the ground.  Ditching the plow can cut fuel consumption by as much as half . . . It also reduces the need for expensive fertilizer.

A major enviro drawback, according to an accompanying article?  No-till requires more herbicides.

Another reason why farmers like to plow: you can dry out a wet spring field and thus plant earlier.  You see that hear in Indiana with its super-wet springs.  But with climate change making for more droughts, ag experts expect more and more farmers to adopt the no-till method (or one of its many variants) over time, thus reducing the ag sector's energy draw.  Fields that aren't plowed typically hold up much better in July and August when rain gets much more rare.  Indiana has suffered super-dry summers, with this year's summer reducing the crop haul by a large amount, as just my eyeballs can attest.

Interesting pair of articles.

The map and chart below came with the first cited piece.  Note all the stable soil in the "New North."

Click the smaller image for a more readable version.

 

12:03AM

Too few immigrants = an absolute ag industry loss

WSJ story on how 1/4 of second-biggest crop ever of Washington State apples is going to rot on the tree/ground due to a severe shortage of immigrant labor.  Compounding the insult, the apple crops elsewhere in the nation are dramatically down this year due to drought conditions, so the nation's is really screwing itself on an agricultural bright spot this year thanks to our inspired national crackdown on illegal immigration.

Apples are Washington's top ag produce earner: $7B supporting 60k permannent jobs in the ag sector.

But it doesn't work without the access to seasonal farm workers....

Yes, they have tried with prison labor in the past.  Turns out prisoners don't work very hard - go figure.

Damn (lack of) illegal immigrants are ruining this country!

10:07AM

Charts of the day: Saudi Arabia's options

Nice full-page analysis at FT on how the Saudis have worked hard to give themselves a response option if Iran attempts to close Hormuz (far harder than imagined).

The relevant bit:

Earlier this year, Riyadh and Abu Dhabi opened new pipelines that will increase the ability of countries to bypass the strait. Fully operational, 6.5m barrels per day, or about 40 per cent of total flows, will now be able to take alternative routes. “The Middle East is much better prepared now than a year ago to cushion the impact of a disruption in the Strait of Hormuz,” says Edward Morse, head of commodities research at Citigroup and former US deputy assistant secretary of state for international energy policy.

The key number is the Saudi one.  The kingdom has managed to siphon off half their exports to other vectors.

Then look at who's at risk.  US imports only 42% of its oil, and only 16% of that comes through straits, so only about 7% of US imported oil comes through straits, or roughly 3% of total US oil usage comes through straits. Of total US energy usage, that's just under 1.5%.

So no, the US won't be crippled when Hormuz gets shut down - as unlikely as that feat would be for Iran.

12:42PM

Smart argument on handling America's water advantage

Smart op-ed in WSJ.

America is sending over huge amounts of alfalfa to China.  Alfalfa is a VERY water-intensive crop.  China uses it to feed their cattle which produce beef and dairy products.

Point of the article:  why not send beef and dairy to China instead and reap the better profit margin for our valuable water?

That's how New Zealand does it.  Its highest-value export is powdered milk, notes the authors of the piece.

The culprit?  America's antiquated and byzantine water-regulation practices - especially in the West.

12:33PM

Charts of the day: the US "oil recovery"

Alas, our inevitable "Mad Max" future a bit . . . modified.

From a WSJ interview with Daniel Yergin.

Production up (25% since 2008), drilling way up (didn't Obama and the Dems sabotage all that?), and imports falling.  US demand relatively flat - like Europe's, so the rising production means a substantial drop in import share.  Was 60% in 2005, now 42%, and expected to be roughly a third by 2035 (though I think it happens MUCH earlier).

Of course, now we'll never have to fight a war overseas . . .

12:02AM

Where is the world is Wikistrat?

A graphic listing most - but not all - of the sims conducted by Wikistrat this year.  The point is to display the breadth and the volume.  Be impressed, because you should be.

Wikistrat's sims aren't a year in the planning.  Client names the subject and we're off and running in days.  Why? All Wikistrat needs is a framework and then we turn the analysts loose on the scenarios.  The company don't spend countless man-hours narrowing down the range of possibilities so that 95% of the uncertainty and surprise is drained from the exercise by the time we actually start it.  Wikistrat can customize the structure to your concerns and then it brings the masses in to run with that structure and take it places you - the client - hadn't considered.

That approach allows for a huge mapping of possibilities.  You want to find the needle in the haystack?  Well, Wikistrat can run through that hay awfully damn quick.

Spend a minute and see if you can guess the four sims that were my ideas . . .

{music}

First one was China as Africa's de facto World Bank.  I'm pretty sure that was based on a WSJ headline noting that tipping point.  It ended up positing a lot of interesting intersection points between the US and China on the continent. Sim ended up generating both a report and a briefing by me.

Second one was the North American Energy Export Boom.  There was a time when Wikistrat asked me what I'd most like to explore in terms of near-term uncertainty in the system, and the whole fracking thing just jumped out at me:  Which way does it go?  Does it work out big-time for the US and - ultimately - the world?  Or does it get aborted like nuclear power for enviro reasons?  That was a very strong sim in terms of output, and all that material (final report and my brief) still tracks incredibly well with headlines.  All we did is simply systematize all those possibilities, organizing them into four major trajectories (usual X-Y approach). But the upshot was, anybody who goes through that stuff now has the capacity to process all the headlines to come.

Third one was the China slowdown sim.  That one's been in my mind since I wrote the piece for Esquire back in the fall of 2010 (it came out in the Jan '11 issue).  The idea came to me in the summer of 2010 and it took a while to sell it to the magazine, but it looks fairly prescient today, doesn't it?  Anyway, a very solid sim that ran down all manner of possibilities, and I really loved the quartet of scenarios we came up with (which drew comparisons to historical risers).  Great report and probably the strongest brief I've yet done for WS.

Fourth one was "when China's carrier entered the Gulf."  Wikistrat asked me to generate a host of possible sims way back when, and that was one of them. Just a simple logical progression argument, with the trick being imagining all the possibilities when that inevitability unfolds.  Hence the sim, which turned out great, along with a solid report.  And this one was only a "mini-sim" by WS standards:  just a brainstorming drill on scenarios with a quick follow-up on policy options.  Mostly junior analysts, but the output was as good as anything I've seen from the National Intelligence Council - seriously.

Two on the list I didn't really have anything to do with: NATO and Pakistan.  First one was driven by a client's curiousity.  Second one is just a natural "what if?"  Both turned out quite nicely.

The Democratic Peace Theory Challenged sim is another one I did not design, and I will admit that, at first blush, I didn't much care for the subject.  I was brought in to work the design and shaped it somewhat, but I truly had low expectations.  In truth, those were exceeded by a long shot.  The material needed more shaping than usual, because the sim had a theoretical bent, but what I ended up with at the end in the final report was . . . to my surprise . . . quite strong - I mean, present at a poli sci/IR conference strong (or walk into any command and brief strong).  It easily could have veered into all sorts of panic mongering, but instead it organized a universe of possibilities very neatly.  I was really proud of the overall effort, and it reminded me not to get too judgmental going into sims.

The Syria sim I didn't design, nor did I oversee its operation.  That Wikistrat left to junior versions of myself.  I was brought in at the end to shape the first draft of the report, and, while I moved things around plenty, the material held up very nicely to my critical eye, which is encouraging.  If Wikistrat is going to handle all the volume coming down the pike (contractual relationships are piling up at a daunting rate), then the Chief Analyst position needs to be like that of any traditional RAND-like player:  that person needs to be able to shape things a bit at the start and then at the end, but mid-range staff need to be able to herd all those cats and the resulting material. So that one felt like a nice maturation of the process, because, like with any successful start-up, the real challenge isn't marketing but execution.

This graphic, for some sad reason, skips the headlining sim of the year to date:  When Israel Strikes Iran.  That one I had a lot of fun with, giving it my years-in-the-testing phased approach (initial conditions, trigger, unfolding, peak, glide path, exit, new normal).  That approach goes back to my Y2K work and later after-action on the Station Nightclub fire disaster in Rhode Island (done for the local United Way to provide lessons learned on how well the organization responded). That was the most structurally ambitious Wikistrat sim to date and it - unsurprisingly - produced the best material by far. I'd put that final report and brief up against anything the best elements of the US national security establishment could produce . . . naturally at about 20 times the cost and five times the duration of effort.

The graphic also doesn't include the most recent sims.  I just finished a final report on The Globally Crystalizing Climate Change Event (one of mine), and, despite the great time projection, I was pleasantly surprised at how well the material holds up in the report.  I thought the analysts did a great job there.

Based on that fine crowd performance, Wikistrat pushes the community even harder in the just-wrapping-up sim entitled When World Population Peaks.  This one was truly challenging, but my point in designing the sim was almost to purposefully "test out" analysts in the manner of a language-skills oral exam, meaning I wanted something almost too hard for most analysts so as to press both them and the supervising analysts on how they handled it.  Think of it like a NASA sim where Control is trying to crash the lunar module.  That was a bit stressful, I think, for a lot of the community who participated, but - to me - it was like a nasty cross-country workout (I am assistant coaching my kid's team again for the 8th year in a row and I'm on my third kid) early in the season:  bit of a bitch mentally and physically, but it'll pay off down the road.

Yes, Wikistrat does take all its sims - even the training ones - very seriously.  If you're not growing then you're dying - simple as that.  Start-ups have to have that survival-of-the-fittest mentality and we're talking about a small firm that's come out of nowhere (okay, Israel) in just three years.

So, a nice overview of the year, and it's an impressive body of work.  Would you believe me if I told you that all of it was accomplished within a timeframe and with a far smaller budget that one of those bloated wargames that Booz Allen runs for the Pentagon?

Well, if you did, then you'd know why Wikistrat is going to succeed in this cutthroat business.

12:04AM

Yeah, right. It's Washington regulations that are screwing "clean coal."

We all see the commercials:  Washington is killing clean coal with its regulations!

Complete and utter bullshit.

The gas glut is killing coal, displacing it for up to a quarter of US electrical production across the latest full quarter.

So now you see power companies even going to the point of idling coal-fired stations (from the WSJ story):

Sammis is one of a growing number of coal-fired plants that were built to run 24 hours a day, seven days a week, but now may run only occassionally because of soft demand for electricity and competition from gas-fired plants that are cheaper to run and cleaner to operate.

Coal, says the piece, has been progressively losing out to shale gas for four years now. It's just gone super-critical over the last year.  Cheap gas now is half the cost of coal when it comes to generating electricity.

This is why America is going to be exporting our superior coal to Asia in coming years.

And that will be a good thing.

 

7:19AM

Sign of the times: Morsi's first big foreign stop = China

Nice WSJ story on this seminal example of south-south ties.

The "bamboo network effect:  Increase your trade with China and you increase your trade with China's network and the world at large.

But the trick for an Egypt:  awfully hard to follow in China's wake, so you tend to import more from China than you sell it.

China's challenge:  demographic aging means it needs to shift some portion of manufacturing (within overall processing trade network) to cheaper labor sites as China's labor gets more expensive.

Some of that shift China wants to direct inward to its interior provinces.  Some will go to SE Asia, experiencing a big demo dividend.  Some will go to India, which experiences an even bigger one.  Some to Middle East - still more, and some to Africa - the biggest demo dividend out there.

You say it's international corps that will make all these decisions, and that's true, but increasingly those corps are Chinese.  Plus, think about who's got the cash in the system for that FDI.

If you're developing and want to emerge in globalization today, you're reaching out to China - not the West.

11:31AM

The amazing - and continuing - drop in crime in US

Economist story about how "big city" PDs around US using Compstat (a data management system that allows crime stats to be worked in-depth for deeper understanding and response patterns) and how most cops feel like it's been a huge tool in the plummenting of crime rates across the US for the past 20 years - a trend that is absolutely amazing.

Yes, I know some think "three strikes and you're out" accomplished much, but many professionals say the key is big data, effectively wielded through better policing tactics.

Other theories abound, but to me, this is a sign of what happens when big data is worked: the whole complexity-out-of-control meme just isn't true.  The growth of networks is fundamentally freeing - not enslaving, and it offers more control over environments - not less.

Point being, if you believe that America is avatar of modern globalization, this is proof that growing connections and technology handles growing complexity much better than we - in our enduring fears - imagine.

Orwell continues to be one of the most stunningly incorrect futurists, but this is the plight of all dystopians.

10:43AM

Fascinating article on GM-SAIC partnership in China

From WSJ.

The USG could learn much from GM on this:  the Detroit automaker sought out SAIC about 15 years ago, which is when the US should have made its moves as well.  They embraced genuine partnership with the Chinese automaker, and worked hard to bring it up to global standards.  In the process, GM became the biggest foreign player in China's exploding auto market.

But yeah, now SAIC wants to go global with GM and somewhat on its own at the same time, and that's where the relationship gets trickier.

But my point is, GM has the right problems to manage right now, while the USG is still stuck in a host of aging issues with Beijing.

As the piece says, "SAIC wants more from its partnership with GM; GM has yet to decide how far it will go."

The great quote from GM chief exec Dan Akerson:

It's kind of like a marriage.  We have a good and viable relationship and partnership.  But to make it work, you have to have needs on both sides of the table, not just wants.

That, in a nutshell, is the big constraint on Washington's approach to Beijing:  we constantly focus on our wants and denigrate China's needs.

Would that national security strategists had the breadth of vision that GM has so ably demonstrated in this long-term engagement.

Again, that's where the US and China should be:  we facilitated China's rise and then got scared right when we should have moved closer in.

12:15PM

The irony: as America executes "strategic pivot" to contain Chinese military, the US economy continues to open up to Chinese FDI 

FT p. 1 story: "US opens up to Chinese takeovers with record figures for M&A deals."

Almost $8b of deals announced so far for this year.  Biggest is Dalian Wanda buying my favorite movie theater chain from my college years - AMC Entertainment.  Next is a Sinopec purchase of a stake in Devon Energy.

Best year of Chinese FDI to date is $8.9b, so 2012 likely to set new record.

Why this matters: the more China buys into the US economy, the harder it gets for Washington to treat it as the military "other," because stakeholders accumulate inside the US - in addition to all those who export to China.  All these jobs add up.

10:14AM

China's looming populist problem

It's right out of 1880s America:

In China, less than 1% of households control more than 70% of private financial wealth.

So noteth the WSJ.

In the US today, we're talking somewhere between 40 and 45 percent.

Globally, says, John Bussey in the WSJ, the number is "nearly 40%," so America's not much off the norm.

But here's the biggest problem for China: a great deal of the wealth is connected to people with political positions (aka, the princelings like Bo Xilai and his now imprisoned wife).  In the US, if you want to get rich, you need to stay out of government (or get rich before you go in, aka, the "fuck you money" that allows you to behave yourself while in power and quit on principle if need be).

For China to truly advance and become a genuine competitive threat, the political system has to decide to divorce wealth from political power.  Otherwise we're looking at decay and decline and a very short "Chinese century."

US hit that moment and launched itself into a multi-decade progressive era that cleaned up a lot of things but government most of all.

As I have said many times, the world needs a small army of Teddy Roosevelts right now - but China most of all.

12:07AM

When - and why - GMOs will attract a lot less criticism/resistance

WAPO story on how a few select US farmers are waiting on pins and needles to see how a planting of GMO corn ultimately handles the worst US drought in half a century - one that costs the US economy about $18B just after last year's TX-centric drought cost $8B.

In western Kansas, the corn looks unsalvageable. The landscape is rife with curled brown leaves, an unmistakable sign of severe drought.

Yet beneath those wilted leaves, some of the corn shows promise. The kernels have held up surprisingly well in a few places given this summer’s swelter. At hundreds of sites across the Great Plains, seed companies such as Monsanto and Pioneer are testing a slew of corn varieties engineered to withstand drought. As the harvest approaches, they’re anxious to see the results . . . farmers are more interested than ever in innovations that could make crops more resilient. That includes improved farming practices, better plant-breeding techniques and even — most controversially — genetic engineering . . . “I’ve been surprised so far. The plants are responding well,” said Clay Scott, a Kansas farmer who planted two plots of Monsanto’s genetically engineered DroughtGard Hybrids among his 3,000 acres of corn. The experimental strain, which carries a gene that helps it draw water more gradually from the soil, is slated for wider release in 2013. “The ear size, kernel counts, the ear weights look good,” Scott said. But, he cautioned, “pretty corn doesn’t always result in yield.”

For Scott, who lives in a region prone to dry spells, where irrigation water from the nearby Ogallala Aquifer needs to be conserved, these crops could prove indispensable.

It’s a pitched battle between nature and human ingenuity that will only grow more difficult. Earth’s population has soared past 7 billion. Climate models suggest that drought will become more frequent in North America. Water will become increasingly precious. Feeding the world will require wringing as much food as possible from every last drop of water.

It’s far from assured that human ingenuity will win out.

Human greed will win out.  US farmers and the US economy will want that income in order to exploit the wider human greed for better and longer lives through improved nutrient and caloric intake.

Yes, as the story points out, GMOs are only part of the equation.  There are plenty of tactics that improve yields and make crops more resistant to drought - but water is water, and climate change is undeniably here (to all but those who abandon facts for faith).

In the future, GMOs will constitute a clear margin between life and death.

12:06PM

Why the special relationship (US-Israel) isn't going anywhere

Fascinating factoid:  80 percent of the world's Jews live in US and Israel (roughly an equal split in numbers).

Then look at the lower right-hand bar charts and realize - Holocaust or no - that the 20th century was the best century the Jews ever had, because of the location of, and population concentration within, the two great safe places in the global system: the Jewish homeland of Israel and the next best thing called America.  The Economist (where the chart is drawn from) notes that the Jewish faith is now stronger and more "alive" than it's been for a very long time.  Naturally, Judaism experiences the same crises of all religious identities in this modernizing world (absolutely nothing "special" about the Jews in that regard, even as they consider themselves "chosen" like every other faith on the planet - the Lake Woebegon effect that all religions suffer ("I get it!  You don't!")), but there's no question it's a powerful and well-placed faith in a world experiencing religious awakening (everywhere but Europe's non-Muslims).

Expats and coreligionists driving US foreign policy constitutes a long and storied tradition in America.  It - for example - essentially defines our special relationships with the Brits and Europe in general.  Is it weird or "unfair" with regard to Israel?  Hardly.  People want to see conspiracies and what not.  But it's the simple - and beautiful -business of money talking.

America is a supremely fair place when it comes to minorities - save African Americans for obvious historical reasons.  But, in general, if you're an immigrant group or otherwise minority, you can make yourself heard and somewhat obeyed in our political system simply by organizing yourself and applying your collective wealth to the system of influence that is our political system.  Many people find this process slimy, but I love that the only color that matters in this country is green, because that's eminently more fair than skin tone. (And yes, the fact that our first African-American president is a genius at raising money in small amounts is highly indicative of this process - thank God!).

Simply put, NOBODY in this country gets what they want until they organize and start donating money (or spending in the market corollary) - i.e., start making their market heft known.  We've seen it with ethnic group after ethnic group over the decades, and we're watching now with Hispanics and Asians - and Indians in particular (who are becoming amazingly adept at it at a rather fast pace).  We likewise watch it now with the GLBT (gay, lesbian, bisexual, transgender).

Again, cry all you want, but I like a process where money beats prejudice.  If you want to deny the party in question, then you mount a bigger effort. But, fortunately, people operating on the basis of love for something win out - time and again throughout history - over people operating on the basis of hatred (my personal fave being the early Christians v. Roman empire).  This is why I don't argue over things like gay marriage or America's continued support to Israel:  the connectors always win out over the disconnectors.  May take some time, but it always happens.  

You just can't bet against people wanting to connect. 

Strategy-wise, you just doom yourself to failure.

Pulling back the lens, this is why I don't - in the end - worry about globalization's future.  The fear-meisters will have their days (and revel in them), but history is stunningly clear on the subject - once America rose up and started running the show.

There is a reason why this is the greatest country in the world.  It's not that we're the best at doing this (personally, I would choose Canada or the Netherlands or Sweden or Norway - all very Wisconsin-ish, so it wouldn't be a big change for me), it's that we're right up there with the best AND we have the capacity and will to spread our system across the planet.  Notice how world history improves incredibly over the past several decades?  It's no accident. It's America doing on a global scale what minorities do on a national scale within our country.

Again, money talks . . . and wins over prejudice and tradition and intolerance and hatred and violence and . . ..

10:50AM

Chart of the Day: North Korean mobiles

Kim Jong-Eun is presenting himself in the guise of his grandfather, discounting the military and presenting a "great father of the natio" motif.

Now, with one million-plus phones, and all those portable cameras, the place opens up considerably.

My projection:  KJE is going to try and reform the place in the Chinese way and thinks he can handle the process.

My hope: it spirals out of control in a Gorby manner.

Whatever the mid-term outcome, nice signs and good progress in all of this. I honestly believe that DPRK is off the danger radar in five years.

That way, we can all get jacked about arresting fishermen in the South China Sea, pretending it serves as prelude to a high-tech war with China.

12:16PM

Impact of the drought is multivariable

First, the good news: the "margin squeeze" due to rising corn prices/futures is killing corn ethanol - still the stupidest idea on the planet (outside of Washington-subsidized Iowa).

Then the worse news: Russia/Black Sea region is undergoing another bad drought, raising the specter of another export ban. US is biggest exporter of wheat but the Black Sea trio (Russia, Kazakhstan and Ukraine) account for one-quarter of global exports and are traditionally key suppliers to north Africa and the Middle East.

10:04AM

The only solution to our immigration "crisis" that matters

In the 1950s, there was a scare (mostly in NYC) about the seemingly endless influx of Puerto Ricans (you remember "West Side Story" and Leonard Bernstein's attempt to dance the problem away?), but the stream thinned out dramatically when the local GDP per capita reached somewhere in the region of 40% of the US's number.  When it got to that point, all things being equal, PRs preferred staying in PR.

This dynamic is well know and has been pointed out many times before in print.

Point of these charts from WAPO story about how returning migrant workers are bolstering Mexico's middle class is that we are reaching that point on Mexico, where - commensurately and with no surprise - the birth rate falls dramatically.

No, it doesn't end the flow of immigrants from LATAM writ large, but the point is made:  as long as a huge opportunity disaparity exists, they will come.  If you want a more manageable flow, you need to whittle down that delta along the lines I just described.

From the story:

 For a generation, the men of this town have headed north to the land of the mighty dollar, breaking U.S. immigration laws to dig swimming pools in Memphis and grind meat in Chicago.

In the United States, they were illegal aliens. Back home, they are new entrepreneurs using the billions of dollars earned “on the other side” to create a Mexican middle class.

The migrants “did something bad to do something good,” said Mexican economist Luis de la Calle.

Where remittances from El Norte were once mostly used to help hungry families back home simply survive, surveys now reveal that the longer a migrant stays up north, the more likely the cash transfers will be used to start new businesses or to pay for homes, farm equipment and school tuitions.

From Santa Maria del Refugio, a once rural, now almost suburban, community of 2,500 in central Mexico’s Guanajuato state, young men have gone to the United States seeking the social mobility they could not find at home.

Their money, and many of the workers themselves, have since returned, as the U.S. economy slowed in the global recession. For the first time in 40 years, net migration is effectively zero. About the same number of Mexicans left the United States last year as arrived. Migration experts expect the northward flow to pick up again as the U.S. economy improves. It is also possible that as Mexico provides more opportunity for upward mobility, some potential migrants will stay home.

In Santa Maria, dollars scrimped and saved in the United States have transformed a poor pueblo into a town of curbed sidewalks, Internet cafes and rows of two-story homes rising on a hillside where scrawny cattle once grazed.

“Look at this place — it’s practically a city now,” said Roberto Mandujano, 50, who moved back to his home town and opened a hardware store five years ago. “There was nothing here when I left.”

Mandujano is a member of a new demographic in Mexico, the anxious, tenacious, growing middle class who own homes and cars and take vacations. They see the United States more as a model than an exploiter.

Another argument for the US focusing more on amping up growth across LATAM: If we want to grow long-term above what history says we should be restricted to as a mature economy, then the best way to achieve that is for countries in our neighborhood to be experiencing rapid growth. [NOTE: this is ultimately why China will need to cool it on seabed territoriality disputes, but no, this logic does not rule out Beijing's stupid behavior in the meantime - as humans have an unlimited potential for letting idiocy trump logic.]

The resurrection of cheap energy in the US is the lure we should use in such an integration effort, and yes, we should most definitely be thinking about adding more stars to our flag.

You either get busy growing or you get busy shrinking in this globalized world.

1:20PM

Reasons to be optimistic regarding the global economy's response to global warming

US experiencing warmest year on record and 13 hottest years (going back to 1880) for the planet have all occurred since 1998.

David Leonhardt (whom I like a lot and always read) writing in NYT speaks of a non-punitive vector that seems to be emerging among the big players:

Behind the scenes [of the disappearing public debate on global warming], however, a somewhat different story is starting to emerge — one that offers reason for optimism to anyone worried about the planet. The world’s largest economies may now be in the process of creating a climate-change response that does not depend on the politically painful process of raising the price of dirty energy. The response is not guaranteed to work, given the scale of the problem. But the early successes have been notable.

Over the last several years, the governments of the United States, Europe and China have spent hundreds of billions of dollars on clean-energy research and deployment. And despite some high-profile flops, like ethanol and Solyndra, the investments seem to be succeeding more than they are failing.

The price of solar and wind power have both fallen sharply in the last few years. This country’s largest wind farm, sprawling across eastern Oregon, is scheduled to open next month. Already, the world uses vastly more alternative energy than experts predicted only a decade ago.

Even natural gas, a hotly debated topic among climate experts, helps make the point. Thanks in part to earlier government investments, energy companies have been able to extract much more natural gas than once seemed possible. The use of natural gas to generate electricity — far from perfectly clean but less carbon-intensive than coal use — has jumped 25 percent since 2008, while prices have fallen more than 80 percent. Natural gas now generates as much electricity as coal in the United States, which would have been unthinkable not long ago.

The successes make it possible at least to fathom a transition to clean energy that does not involve putting a price on carbon — either through a carbon tax or a cap-and-trade program that requires licenses for emissions. It was exactly such a program, supported by both Barack Obama and John McCain in the 2008 campaign, that died in Congress in 2010 and is now opposed by almost all Congressional Republicans and some coal-state and oil-state Democrats.

The real goal, according to one scientist, is the emergence of disruptive technologies that push the planet "down" the hydrocarbon chain (wood-->coal-->oil-->gas-->renewables & hydrogen).

The more we shift from threatening fines to promising record profits, the migration will occur as it should.

Fascinating for me to watch a dozen years after I ran that global warming-focused "economic security exercise" with Cantor Fitzgerald atop World Trade Center One.

NOTE: the falling USG support for renewable energy research is why the influx of China investment is so important.