Fewer babies = more wealth opportunities

LEADERS: "Falling fertility: Astonishing falls in the fertility rate are bringing with them big benefits," The Economist, 31 October 2009.

BRIEFING: "Fertility and living standards: Go forth and multiply a lot less; Lower fertility is changing the world for the better," The Economist, 31 October 2009.

This whole treatment should be familiar to readers of my books: dropping fertility rates, which just so happen to kick in big-time around the time globalization matures in its modern form across the 1970s and 1980s, mean we add about 3B more to our 6.5B between now and 2050, topping out as a species somewhere between 9 and 9.5B.

Nothing here on the social-religious implications of humanity no longer seeing itself in procreation mode (Do we freak out a la "Children of Men"?). Rather, a focus on economic opportunity.

Neat factoid: a clear sign of the death of the revolution inside Iran is the wildly plummeting birth rate. Women are voting with their uteruses: we don't want to raise babies under this regime. Iran goes from 7 babies per woman in 1984 to just 1.5 now in Tehran (1.9 overall across the country).

Another key point: people crank babies until per cap income hits about $1-2,000, and then it drops until it hits replacement level somewhere between $4-10,000. [I need to add this to a slide of mine.]

Right now both Asians and Latinos are enjoying their Goldilocks moment of plenty of workers, and not too many kids nor elders. Of course, China's moment will disappear in under two decades--hence their extreme desire to cash in on rapid growth now while they can.

China's a long way from effective anti-piracy

ARTICLE: Navies seeking better ways to battle pirates, By Ricardo Marquez, China Daily, November 6, 2009

Good sign, but a sense of the gap between China getting its mind wrapped around the problem and the actual real-world problem rushing at it.

Good thing the Chinese are so patient--and so used to humiliation.

The pendulum swings back toward vertical integration

FRONT PAGE: "Companies More Prone to Go 'Vertical,'" by Ben Worthen, Cari Tuna and Justin Scheck, Wall Street Journal, 30 November 2009.

After a long stretch in the direction of distributed and flat, we now see a return to the days of vertical integration--a blast from our industrial past.

The reasons vary. Arcelor, the world's largest steelmaker, wants more control over its raw materials. Pepsi wants more authority over its distribution. GM and Boeing are moving by necessity, to assure quantity and quality of vital parts from troubled suppliers. Some are repurchasing business they only recently shed.

You get the feeling that the distributed model expanded so quickly over the past two decades, along with globalization, and now, following the crisis, everybody wants more certainty, which should spell a big uptick in mergers and acquisitions across borders.

And yet, key differences this time around:

"The historical view of vertical integration was that you had complete control of the supply chain and that you could manage it best," says Bain & Co. consultant Mark Gottfriedson.

Today's approach is more nuanced. Companies are buying key parts of their supply chains, but most don't want end-to-end control.

Naturally, the regulators (with trust-prevention in mind) are paying attention.

Where the shift is most prominent: the tech business, where companies like IBM are back in the consulting biz big time. You have to wonder whether IP concerns drive a certain amount of this too.

Larry Ellison and Oracle are held up as the poster boy of the new strategy--i.e., the Sun deal.

From the road

Union Station, DC.

Super-cool bas relief at Philly main train station, which is a gorgeous old historic building.

Baseless NYT editorial on Iran

EDITORIAL: Iran Punishes Its People, New York Times, November 25, 2009

I couldn't disagree more with the subtitle here: "Washington must work to curb Iran's nuclear ambitions with the same zeal used to condemn Tehran's assault on reform-minded opposition."

The exact opposite makes more sense: keep ratcheting up on the human rights and forget about trying to influence the nuke question.

This BS about Iran being able to "threaten the world" with a nuclear weapon is very unhelpful. Nobody's ever successfully gotten anybody to do anything by threatening a nuke attack. It simply does not work. The only thing that such threats have ever achieved is a moratorium on attacks against the threatening party--that's it.

So why, after 64 years where nukes and their alleged "threats" have achieved nothing--except killing great-power war, do we suddenly hypothesize about the immense and immediate power Iran will magically wield with a nuke or two. See any great power accruing to North Korea on this subject? Have several hundred warheads made Israel the undisputed boss of the Persian Gulf?

This is complete nonsense, and all part of our fetishizing of nuclear weapons that has no basis in reality, no basis in rationality and no basis in history.

How the NYT can print such hyperbolic crap is beyond me.

I see no reason to cancel the future of the world over Iran's nukes. If they want to play for real, the Iranian leadership and everybody in that country can be immolated tomorrow. It's easily arranged and there will be few tears.

Beyond recognizing that responsibility to global stability, the rest of this hypothesizing and fear-mongering is pure bunk.

Let's ask the freak-out artists to step to the back and let the adults hold the conversation.

Iran will get the bomb and Israel will survive

POST: The Looming US-Israel Split, By Andrew Sullivan, The Daily Dish, 08 Dec 2009

Another growing consensus that "off shoots" from the reality of Iran achieving its sloppy asymmetrical deterrence--as far as declared nuke powers are concerned.

Shocking in a traditional sense, but in an interconnected, interdependent world, there's no strategic logic for any binding "special relationships"--truth be told.

Does that seal Israel's "doom"?

Please. That is one country that is incredibly adept at thriving in a globalized world.

These fears too shall pass ....

(Thanks: stuart abrams)

Not the original multinational union

ARTICLE: European Union Reform Moves Ahead, By DAN BILEFSKY and STEPHEN CASTLE, New York Times, November 3, 2009

A single president! A single foreign minister!

The things these Europeans come up with! If only our 50 states had been so smart . . ..

(Thanks: Robert Frommer)

China slowly coming online in AfPak

ARTICLE: Islamabad Sees Deals With China, By Victoria Ruan and Wan Xu, Wall Street Journal, NOVEMBER 4, 2009

Again, just underscoring who's really going to have strategic pull in the region: not just the $3b investment in Afghani copper, but now this host of deals in Pakistan.

With our troops and military aid, we are merely holding the line for the true stabilizer (China) to emerge over time.

(Thanks: Jarrod Myrick)

Beck helping the Dems

ARTICLE: Glenn Beck Stakes Out Activist Role in Politics, By BRIAN STELTER, New York Times, November 21, 2009

Good news for the Dems.

Not a good sign when the infotainers amass on your side and your nut quotient goes up.

More Chinese 'communist' capitalism

ARTICLE: Chinese Agencies Fight For Control Of Web Game, AP, Nov. 04, 2009

Interesting struggle, one in which I think we'll see greed win out over ideology time and time again.

Funny to see allegedly "communist" government officials fight over who gets to tax new media markets.

It was all so much simpler under the elderly Mao, when only a handful of propaganda-laden operas were approved for regular use.

(Thanks: Neo-Trad Librarian)

Business aid

POST: CARE chief taps business know-how, By Henry Unger, The Biz Beat, November 3, 2009

Great example of unofficial developmental aid.

(Thanks: Jack Slovic)

Elite finally coming around on Iran

POST: Obama As Nixon, By Andrew Sullivan, The Daily Dish, 06 Dec 2009

The cognoscenti coming around to the dynamics as presented, seeing them finally through Obama's prism.

Hopefully, that will make it easier for everyone to eschew the usual knee-jerk about "giving Iran the bomb!"

Expect many more conversions. Obama has the gift of reflecting what people want to see (more FDR), but the landscape (the bankruptcy theme) is definitely more Nixonian and has been for years WRT Iran.

Then again, I wrote about the Nixon-goes-to-Tehran roughly five years ago this month (the publishing came later).

But the strategy always emerges once the fitful shouting has died down . . ..

No good for TV, mind you--just history.

(Thanks: Jeffrey Itell)

Give me a 'T'! (forget the 'R')

ARGUMENT: Take the R Out of BRIC, BY ANDERS √ÖSLUND, Foreign Policy, DECEMBER 2, 2009

Agree with Aslund here: better to think about the BICT, with Turkey as the fourth.

(Via WPR's Media Roundup)

Turkey continues its high road on the Kurdish question

EUROPE: "Turkey and the Kurds: Return of the natives; A trickle back of PKK terrorists may herald a lasting peace," The Economist, 24 October 2009.

34 PKK fighters take Turkey up on its amnesty offer.

Meanwhile, the imminent drawdown of US troops in Iraq has convinced both Turkey and the Iraqi Kurds to put aside differences: Turkey now imports Kurdish oil and in return, the Kurds put a squeeze--finally--on PKK operatives on its territory.

Steve DeAngelis has been telling everybody Enterra deals with--for years--that this would be the outcome.

Maybe it won't be a "red" moon after all?

SCIENCE AND TECHNOLOGY: "Lunar landers: Space hopper; A prize for a moon lander will be won this month," The Economist, 24 October 2009.

Nice sign of NASA looking to turn on "groups of potential suppliers and experienced engineers to build any future moon lander."

America's chronic debt problem--not the death of US

BRIEFING: "America's public debt: Tomorrow's burden; America's debt crisis will be chronic, not acute," The Economist, 24 October 2009.

If America were an emerging market, the foreign money would have scampered long ago. But as one ICAP economist (ICAP is like Cantor Fitzgerald) notes:, "What do you do when there is a confidence shock to your flight-to-safety asset?"

Yes, the dollar's reserve currency status will fade, just like British sterling, but the decline will take decades. In the short term, nobody is incentivized to trigger a crash--that financial balance of terror that Summers talks about.

Even India's outsourcing turns inward!

BUSINESS: "Domestic outsourcing in India: Bittersweet synergy; Offshorers find rich opportunities--and tough critics--onshore," The Economist, 24 October 2009.

The rule: outsourcing IT firms in India make all but a tiny fraction of their money abroad. Now, thanks to the slowdown in the Old Core and the continued growth in India, the same firms turn inward.

Not an easy sales pitch, but a good sign, methinks, in terms of the global economy's much-needed rebalancing.

The ICC-precursor continues to plug away

INTERNATIONAL: "War crimes and international justice: Always get your man; Bringing war criminals to justice is a slow business. But the net is widening," The Economist, 24 October 2009.

161 indicted so far, with all but two brought to trial.

Meanwhile, in a room on loan from the International Criminal Court, the Sierra Leone tribunal gets ready to try Charles Taylor.

All good stuff, as far as I am concerned: the Core extending justice into ungoverned or badly governed Gap lands.

Status report on the Balkans

EUROPE: "Serbia's busy foreign policy: Better troublesome than dull; Some Balkan diplomacy matters more than usual just at present," The Economist, 24 October 2009.

EUROPE: "Worries over Bosnia: Balkan scheming; Efforts to hold Bosnia together have repercussions as far afield as Afghanistan," The Economist, 24 October 2009.

The Serbs are trying to Taiwan-ize Kosovo, so far to a split global verdict.

For now, Serbia is on the outs with the EU, but membership candidacy is on the horizon, so we shall see.

As for Bosnia, the Economist de-hypes the recent war fears: yes, deeply troubled, but the US and the EU are doing their best to bribe the relevant parties into compromises.

In my view, the EU does what it's supposed to do in its neighborhood: keep a lid on things.

Hitchens also picks India over Pakistan

ARTICLE: Don't Forget About India, By Christopher Hitchens, Slate, Nov. 30, 2009

Another seat taken on the bandwagon.

Nice bit from Hitchens that contrasts India and Pakistan over the future of Afghanistan.

Hint: one is our true friend and the other is something less.

(Thanks: Jeffrey Itell)