Planning for less Chinese growth

Citing FT here (pic from NYT), but there's been a slew of stories recently in WSJ and FT on same subject:  Western companies planning for less exports to China and looking more to home markets as a result.

As one exec put it: "The problem in emerging markets for us is really isolated to China."

Here also: "... the speed of the slowdown in Chinese demand has taken companies by surprise."

This is the higher labor costs kicking in prior to the domestic consumption driver kicking in enough to compensate for it - the essence of the middle-income trap.  

Doesn't mean companies don't expect growth in China or aren't planning on it.  Just means all this hype about the Chinese economy ruling all is rapidly dissipating.

Chart of the day: remittance "corridors"

From the Economist.

I just love global maps indicating flows - naturally.

What do we see here?

Per my vernacular, in sheer volumen we see New Core being fed remittances by expats living in Old Core.  But when it comes to countries relying heavily on remittances as percentage of GDP, it tends to be mostly Old/some New Core and it all pretty much goes to Gap countries.

Per my flow concept:  whatever the resource, it flows from regions where it is plentiful (here, earning opportunities) to where it is less so.  Yes, we think of India, China, Mexico as New Core and thus "made," but all share the reality of significant numbers of rural poor.  In truth, in most New Core countries, there is massive internal remittances flows.

What I love about this:  this is the best foreign aid there is, because people use it as they see fit.  

You may say to yourself:  What a drain on Core - especially US!

Studies have shown, however, that expats living in new countries spend something like 90% of their earnings in-country, sending about 1/10th home.  It's just that those flows still number in the billions, swamping anything we do on official developmental aid.

Chart of the Day: China's capital stock compared

From the Economist, with arguments not exactly settled by the comparison.

Reality/fear is that too much of China's growth is via capital investment. Compared to other economies, that part seems undeniable.  But like with India, we're talking continental-sized economies where hundreds of millions of rural poor are still left behind, so investment is clearly in order for a very long time.

The per capita comparison, however, shows how China remains a poor country by modern standards.

Another interesting tidbit:

China's rising investment and falling consumption as a share of GDP are commonly portrayed as an economic anomaly. Yet this pattern is normal in a rapidly industrializing country. In a traditional agricultural economy farmers consume most of their income, but once industrialisation gets under way a rising share of national income goes to owners of capital, who invest it in factories and the like. Investment rises as a share of GDP, and consumption falls. During their peak periods of industrialisation, South Korea and Japan saw an even sharper rise in investment relative to GDP than China has seen over the past 20 years.

You can call this the glass-half-full argument on China's long-term growth, and it's just as true or no more false than the half-empty variant:  coastal China must shift from extensive to intensive growth, and there the labor crunch and demographic aging will force evolutions very similar to a developed economy.  But interior China is another whole economy ready to take off - again - like China Coastal has for 2-3 decades. Of course, not being coastal will make this a far harder task in terms of attracting FDI and the manufacturing it enables.

But that just speaks to a certain economic slowdown that is inevitable.  We have a strong West Germany economy (Coastal China) being forced to bring along/accommodate/prioritize somewhat an East Germany (interior China).  Coastal China/Beijing will do this for political stability reasons, but slow down the overall economy it will - even as it assured plenty of long-term growth and development (all that urbanization, for example).

Ah, the complexity of modern China.

Hollywood gets itself some Chinese

Old Jack Welch bit: you can't succeed in global economy without succeeding in China.

My addendum: you can't succeed in China unless you're Chinese.

Solution: Get yourself some Chinese.

Hollywood has seen overseas B.O. rise from a tiny share to well over half in recent years. More specifically, while the US market is flat, burgeoning middle class China's is booming.

WSJ sees two different markets, but I already see a Chinese market that, with incredible restrictions on the number of US imports, is already half-synched to our blockbuster mode.

You know about Spielberg already turning toward China for future financing.  This piece talks about Disney doing the same.  Co-productions will become the norm, connecting talent with bucks (literally).  Yes, nothing will change the flops-v-tentpoles ratio. Indeed, it is likely to rise in the short-run, but Hollywood is very adept at figuring these things out, much like Japan does in its very clever global marketing of anime.

In the meantime, we be treated to the glorious hysterics of the "Red Dawn" remake. [The Chinese dodged a movie bullet there, as the original script had them invading, but now we get the fantastically implausible depiction of North Korea doing the same - much like a recent (pretty good) video game "Homefront."  The kicker: MGM rebooted the script so as to not lose out on the growing Chinese box office.] But, over time, this will be a good collaboration and a bilateral image reshaper that benefits the planet.

Wikistrat post @ CNN-GPS: New global sources of demand

Editor’s Note: The following piece, exclusive to GPS, comes from Wikistrat, the world's first massively multiplayer online consultancy.  It leverages a global network of subject-matter experts via a crowd-sourcing methodology to provide unique insights.

When Americans are warned that the “era of cheap credit is over,” we’re really being told that the inherent advantage of owning the world’s reserve currency is coming to an end. No, it won’t happen overnight, because China’s renminbi is still far from becoming a serious rival.

But the end is coming all right, and it’ll make all that Thomas Friedman hyperbole about a “flat world” a whole lot more real. America simply won’t have the advantage of being able to float debt - of all kinds - as easily as we did in the past, which means we’ll need to compete more intensely on the price and quality of our goods.

The primary driver here is China’s need to shift from a super-saving economy to a super-consuming economy. It’s gone about as far as it can go with export-driven growth, and now it needs to turn on its domestic consumption big-time, but doing that means China’s willingness to finance the debts of others will decrease - thus the end of cheap credit.

So, accepting all that, what can America anticipate when it comes to new sources of demand in the global economy?  What are some of the hot goods and services of the coming years?  We asked Wikistrat's global community of strategists for some ideas, and here’s what they chose to highlight:

Read the entire post at CNN's GPS blog.

Wikistrat post @ CNN-GPS: Three visions for America

Editor’s Note: The following piece, exclusive to GPS, comes from Wikistrat, the world's first massively multiplayer online consultancy.  It leverages a global network of subject-matter experts via a crowd-sourcing methodology to provide unique insights.

The U.S. economy is most definitely in recovery mode, but it’s the sort of recovery one experiences after a scary heart attack.  There is little confidence in being able to go uptempo. Fears persist about slipping into a permanent sort of disability.

Worse, many are resigned to the fact that big structural problems such as health care, tax reform, the federal deficit and education remain unaddressed by a political system that remains fiercely divided.

So America finds itself in a funny position: Clearly getting better and doing better than most of the West but almost completely lacking in self-confidence.  If this is “morning in America,” then most citizens have hit their snooze button.

This week’s Wikistrat’s drill explores this ambivalence in the face of mounting good economic news, asking our global community of experts to present their arguments for the U.S. economy’s possible mid-term (3-5 year) paths ahead.  We’ll start with the optimism and then let the darker thoughts pile up - much like most Americans today.

Read the entire post at CNN's GPS blog.

The geo-pol argument on Russian-Iranian bond

Nifty oped in WSJ Monday on Russia's "stake in Syria and Iran" by Melik Kaylan, a "writer in New York."

Usual case made on the old Sov-era naval base in Syria (snore), but more vigorous one made on Iran being sort of geo-strategic southern plug that keeps Russian influence substantial in the Central Asian republics - as in, lose Iran and the CA Reps "escape" with all their oil and gas ("southern bottleneck"), thus loosening Russia's energy grip on Europe, etc.:

Why is Iran so central to Mr. Putin's global pretensions? Take a look at the Caspian Sea are map and the strategic equations come into relief. Iran acts as a southern bottleneck to the geography of Central Asia. It could offer the West access to the region's resources that would bypass Russia. If Iran reverted to pro-Western alignment, the huge reserves of oil and gas landlocked in Kazakhstan and Turkmenistan and the like could flow directly out to the world without a veto from Moscow . . .

At stake here is not merely the liberation of a vast landmass from the Kremlin's yoke. The damage to Russian leverage would amount to a seismic shift in the global balance of power equal to the collapse of the Warsaw Pact.

Hmm.  Had me going right up to that bit, but the argument is certainly compelling enough when you see just how much the emerging reality and future prospect of North America's energy export boom is already redrawing certain global energy market landscapes.

WPR's The New Rules: Make China the Face of the World Bank

When Robert Zoellick recently announced that he won’t seek a second term as president of the World Bank, representatives of numerous emerging-market countries issued a flood of statements decrying America’s 66-year lock on the position. Meanwhile, the Chinese went out of their way within the organization to express their firm desire to have a commanding say in who succeeds Zoellick. Insiders are predicting that an American will still win the spot and that the Chinese simply want to exercise a showy veto over the proceedings. That would be too bad, because there are a host of good reasons why Washington should presently burden Beijing with the job of running the World Bank.

Read the entire column at World Politics Review.

The case for exporting natural gas

WAPO reports that America surpasses Russia as world's biggest natural gas producer, but the WSJ notes that domestic prices have gotten so low with the NG glut that drillers are cutting back and local govs are seeing tax revenue shrink.

All that would change, of course, the minute we start exporting gas out of Louisiana and that new LNG export terminal there, but some in Congress, backed by certain industries and enviros, seek to block that. There is actually a proposed bill to block LNG exports until 2025.

This is why gas in the US is oftentimes 1/4 the price of LNG in Asia, and buyers there are crying out for gas.

So WAPO's editorial makes the case for exporting, attacking the notion that slighly higher electricity prices are worth all the benefits that can accrue:

But the benefits of expanded exports must be weighed against these predicted costs — which are neither inevitable nor dramatic. Among them would be a potentially significant reduction in the U.S. trade deficit, which would mean less need for the United States to borrow from its Asian trading partners. Foreign demand gives U.S. companies an incentive to produce more, which creates jobs; if they don’t expand production, then, over time, supply will dwindle, and domestic prices will creep up anyway. Don’t forget that taxes and other fees on gas production help state and local governments balance their books. Already, low prices, and the resulting reduction in drilling, have cost many communities revenue.

The silly chimera of "energy independence" looms in some of this anti-export thinking, but the real push is to keep gas incredibly cheap here relative to industrial and manufacturing competitors.  Problem is, the Nat Gas industry will not go along with being beggared, thus drilling slows down and the price will inevitably rise.

That's what happens when you go for win-lose instead of a win-win. 

LNG global demand

Of great personal interest to me right now:  FT reporting yesterday that Bernstein Research is predicting global demand for LNG will double by 2020.

That's right, double.

You may think it's all about Germany and Japan running from nuclear power, and that's certainly a big part of it. But I can tell you from personal experience right now that there is exploding demand for LNG in emerging markets.  Bernstein cites LATAM, the Middle East, India and China. But frankly, it's everybody out there.

This is why North America's emergence as a potential big source (imagining as much as 1/4 of US production being shipped out) is such a game changer.  

This is why so many investing companies are looking at East Africa right now (as another FT story portrays) for both oil and gas.  Natural gas production in Africa is up roughly 80 percent from a decade ago.  And it will only move higher in response to such incredible demand.

West Hemisphere way behind on integrating intra-regional trade

Per the 10 March Economist editorial on Latin America's growing fears about being recaptured by China as just a source of commodities (deindustrialization) and per the recent Wikistrat sim on North America's Energy Export Boom where we discussed, in one master narrative, the notion of NAFTA using the lure of cheaper and cleaner energy to re-energize the Free Trade Area of the Americas initiative.

Now, you have to understand that this chart is misleading, because it counts intra-EU trade while not counting interstate trade within the multinational union known as the US.  If the stats were equalized on that scale, then the NorthAm numbers would be unreal.

But larger point about Latam's numbers being small (and presumably the W Hem numbers being commensurately low) is valid.  The US and the rest have not made the regional trade integration effort that is possible here, as South America is beginning to recognize its mistake is not pursuing FTAA.

People will paint this as de-globalization, but it's not a binary choice.  Globalization tends to push regions to up their regional integration for all sort of reasons, the primary one being the title of the editorial here: "unity is strength" in trade negoations.

But the long-term advantage here is substantial: if you want to grow, then you want to have high trade flows with faster-growing neighbors first and foremost.  China is doing that in SE Asia but US is not doing the same in W Hem, thus the strategic impulse now to go after things like reviving FTAA.

WPR's The New Rules: U.S. Needs Chinese Partners in Asian Century

While America has begun an economic recovery of uncertain strength and staying power, we Americans nonetheless face a far longer-term and more substantial national rebuilding project. This daunting task has placed us in a contemplative space, in which we nervously toggle between bouts of renewed self-confidence and crippling self-doubt. But the same thread runs through both cycles of this national bipolar disorder: the assumption that we must bear this burden alone.

Read the entire column at World Poliics Review.

Bhagwati on Obama on trade: "shame on you . . . for pandering"

Jagdish Bhagwati is a Columbia econ prof whose writings on globalization (particularly his book, In Defense of Globalization) I consider on par with Martin Wolf.

A tour of his recent FT op-ed:

President Barack Obama infamously killed the multilateral Doha Round last December by instructing his representative at the World Trade Organisation to be a "rejectionist" negotiator.  He compounded the folly by instead floating the trans-Pacific Trade Initiative that is conceived in a spirit of confronting China rather than promoting trade, and is also a cynical surrender to self-seeking Washington lobbies that would have have made John Kenneth Galbraith blush. Not content with these body blows to the world trading system, which his predecessors had built up over decades of US leadership, Mr Obama has pulled off the remarkable feat of making things yet worse with his State of the Union address . . .

Outsourcing is a bogeyman. The deception that Mr Obama buys into goes back to the populist commentator Lou Dobbs . . .

The two wrongs Obama promotes on outsourcing, according to Bhagwati: It's incorrect to cite only the jobs sent abroad. You have to factor in the jobs saved by reducing cost in a "fiercely competitive world."  Also, there is evidence of significant insourcing occurring in parallel - the "near sourcing" on certain services and supplies that makes competitive sense.

Bhagwati then goes on to attack Obama's "fetish on manufacturing."

• the notion that, unless you can "drop a product on one's foot" then it is not worth making;
• the reality that as specializaton grows in manufacturing, services naturally splinter off - a process that has nothing to do with outsourcing;
• the current dislike of the financial sector results in manufacturing lobbies arguing that manufacturing deserves support instead of the services sector, but it is in those services sector that the US will find genuine competitive advantage more often, because cheap labor there doesn't translate in the same way as it does in manufacturing; and
• the manufacturing sector in the US is already heavily subsidized.

The close:

So the campaign for more manufacturing is a boondooggle.  Jeff Immelt of General Electric, a splendid businessman and confidant of Mr Obama, has succumbed: who would look a freebie in the eye? Clyde Prestowitz, a Republican who earned Bill Clinton's plaudits in the 1992 campaign, is now celebrating on his blog that Mr Obama is his new convert. Mr Clinton regained his sanity in a year. This time it is likely to be a long slog.

I do feel like Obama lacks a core sense of who he is as a putative policymaker and thus what he believes in as a leader.

We see him lugging around Fareed Zakaria's Post-American World as a candidate, but now he's alleged to have drunk deeply Robert Kagan's anti-declinist book, The World America Made.  Yes, I understand that a sophisticated reading of both can be had, one that allows for seeing the bridges between the two arguments.  My point is, the declinist argument was more popular in 2008, so he gloms onto it, and now the anti-declinist argument is more politically palatable, so now he gloms onto it.

Same thing seems to happen with Obama on geopolitics: I have no idea where he got this "strategic pivot" on China bit (except to say it's a cyncial retreat from dealing with the Middle East), but when it dovetails with this anti-trade mindset, I have little sense that he realizes exactly what kind of world America has spent the last seven decades creating.

In the end, I get this sick sense that there is "no there - there" with the man, other than he wants the "success" of two terms - the sort of success that the self-perceived smartest guy in the room naturally assumes he has coming.

Unfolding Wikistrat simulation on North American energy boom

After the success of the "China as Africa's de facto World Bank" simulation, we start moving expressedly into a series of sims aimed to flesh out the logic of the world's first crowd-sourced strategy book, the proposal for which we're now circulating in NYC. It was about time for me to gin up another, and I was really looking to do something different because I feel like I got my "vision" out in the trilogy.  Plus, I wanted to do something long-term in its thinking.  More details later as things unfold.

For now, we tee up the first of about a half-dozen major sims that will explore the drivers of a particular future world order that I became intrigued with as a result of last summer's Wikistrat Grand Strategy Competition. To me, how the NorthAm energy boom (question mark suggests nothing in this world is a given) unfolds is one of the major global uncertainties.  North America can get it right or wrong on a host of levels, and since we're the inventors of these fracking revolution, the QWERTY effect would be huge, triggering a host of possible future pathways from fabulous to self-desructively nasty in terms of the environment and/or whether or not this great gift becomes an excuse for bad geostrategic choices by the U.S., China, Europe, Brazil, India, Russia - the big six we're focusing on here.  You can say, it's a simple projection: it works or it doesn't.  But the secondary and tertiary pathways that are revealed in this two stage process (NorthAm leads, others follow or ignore) are varied and immense in their capacity to make global stability better or worse.

So, naturally, I'm pretty pysched about the sim.  One thing to go and read a bunch of books and try to get smart enough to cover this in a book, but another to turn loose dozens-to-hundreds of virtual co-authors in a competitive space to brainstorm all the possibilities.

Especially exciting for this sim: we now have senior experts stepping in and providing big-time ideas.  Dr. Anne-Marie Slaughter, just out from the Kennan job at State (Policy Planning) under Obama, joined Wikistrat weeks back and she brings not just a wealth of experience and keen insight, she's also a not-too-closeted enthusiast for this sort of social networking as a tool to drive new thinking and change old thinking. She's already made a huge contribution to the sim that lays out, in a very clever way grounded in real-world vehicles, how a positive path in NorthAm could go global (as a fellow optimist, my attraction to her scenario was immediate, not because it was rosy per se, but because she elucidated why, given the parameters, this was the best forward-moving deal for the universe of public and private-sector actors working this policy space now in the U.S.).

Other senior experts piping in with their own scenarios include: Gary Hunt, president of Tech and Creative Labs, a tech mash-up that moves software solutions into the energy vertical market; and Chris Cox from Gesellschaft für Konsumforschung (GfK), Germany's oldest consumer research org (Chris comes with an energy focus on the fmr USSR realm).

But, as always, the coolest outlier ideas come from the Wikistrat rank and file, and that's the way we love it: "big firm"/senior experts with the go-to-market pillar concepts that structure the sim, and our "sea of entrepreneurs"/younger analysts with all the just-on-the-edge-of-plausibility stuff that most of us seniors have had beaten out of us by experience and bad bosses.  Already there's been a nice cluster of jaw-dropping ideas out of this bunch, many of which see major players gaming the process very cleverly (both in a nice and nasty way).

I've been chiming in throughout on the scenarios ginned up to date (about two dozen).  Each results in a wiki page that gets fleshed out across a dozen or more fields, to make sure we're collectively thinking out the scenario to the degree of robustness. I had given the pool of analysts my notional master narratives (simple frameworks for putting all these scenarios into "bins") and they've responded nicely by distorting the implied framework with all sorts of surprises I hadn't anticipated.  At the end of the week I'll array and string together all these scenarios and rejigger the master narratives to cover enough of them for the next phase of the sim to unfold: brainstorming competiting notions of how these master narratives impact the strategic interests of our six-pack of great powers.

My only fear?  How to stuff all these ideas into one book?  But this is a good problem to have.

WPR's The New Rules: Extended Life Expectancy Globalization's Next Political Battleground

Human life expectancy at birth, which remained stunningly fixed for thousands of years before suddenly doubling over the course of the 20th century, now seems destined to experience a similarly bold leap across the 21st century. When it does, it will shift human thinking about population control from its present focus on the outset of life to the increasingly delayed final curtain. The problem is that the technological advances that will make extending life expectancy possible are likely to come far faster than our political systems -- including the democracies -- can handle. 

Read the entire column at World Politics Review.

Deficit myths: it's still all about healthcare, so Obama was right to work it. And yet, I want him gone in 2013 [WITH ADDENDUM]

Got asked in Belvoir this last week about the present situation in US and what must be done.  I answered by citing my own household economy as microcosm:

• Far more competitive world means earning potential is harder to achieve;
• That income "haircut" means past debt patterns unsustainable, thus the deleveraging that continues (done better by individuals, families, firms, everybody but the Fed Gov!);
• Housing is key (our move to short sale old house was big financial achievement of 2011), and curing that is key to allowing workers to move (that's why we did it this year, while the right constellation of circumstances presented themselves, in preparation for eventual 2014 move back East for job-related purposes);
• Education is key (I pay 7 tuitions: 2 preschool, 2 grade school, 1 HS, 1 undergrad and 1 grad) to maintaining future possibilites, so investment trumps damn near everything; and yet,
• Healthcare is huge drain (I pay my own now and the pre-tax cost, by my estimate, is between $30-40,000, meaning that's how I gotta earn to cover it all from stem to stern).

So larger reality for US not unlike my family: we had to scale back everything to preserve what matters, which is healthcare and education; we had to solve the housing situation to allow for renewed labor mobility; we haven't really seen our standard of living go down at all, and yet we've made wrenching changes to be able to live on a much smaller consumption footprint. All tough adjustments, but incredibly worthwhile.

But again, healthcare is huge and seemingly unassailable from my perspective. We are exceedingly careful about how we spend those dollars, even as that's the last thing - besides education - that we want to scrimp on.

Of course, if we don't have six kids, then my life is dramatically simpler on all scales, but there again, what keeps America strong?  Demographics, so that's worthwhile too.

Citation here is Alan Blinder op-ed in WSJ.  Great stuff.

"Four deficit myths":

1. Americans now demand deficit reduction like never before. Not true.  Jobs matter far more now, as does healthcare and housing. Just understand, polls on this subject are no more definitive than they were 20-30 years ago.  This is not our current obsession.
2. Our deficit is so bad right now that massive cuts are required immediately. Also not true. We have no trouble selling debt in this global economy. Yes, long-term deficit issue is acute, but key is setting in place conditions for long boom that takes care of that. See Europe for austerity approach.
3. The ten-year reduction focus makes sense. Bad thinking. Little can and will be accomplished in any 10-year plan. The problem if far longer in scope - see demographics, and thus the solutions must be similarly gauged.
4. America has a generalized problem of runaway spending. Very untrue. The only part of the Fed budget that's really exploding is Medicare and Medicaid, so it's still mostly about healthcare.

In short, "we have a humungous healthcare problem."

Anybody familiar with the US defense budget has long said the same thing: we don't have operations or acquisition or training or personnel crises. The "imperial overstretch" argument remains complete academic bullshit.  We primarily have a healthcare crisis that is extended into pension system. Everything else pales.

In my family right now, the biggest short-term threat, now that we're mortgage free and successfully deleveraging across the board, is healthcare. Huge drain.  Big uncertainty. Encourages self-defeating avoidance behavior on many levels (which we try desperately to be smart about). Leaks into everything.

When GOP says Obama went off deep end on healthcare because country didn't want that or didn't elect him for that, they miss the mark.  It is clearly the biggest internal challenge we face - short and long term. It is the hidden villain on everything. Saying it was a diversion is - itself - a diversionary election-centric tactic.  

But still, I would trust a Romney to finesse its implementation better than an Obama, whose political and negotiating skills I no longer respect, and whose stunning ignorance of, and antipathy toward, business has become an unacceptable leadership flaw - given the tough adjustments still to come.

And yes, I LOVE that Romney did it first in Massachusetts - and did it intelligently. That is a huge credentializer in my mind.

Americans' distrust and anger toward globalization and big business is stunningly misplaced. Globalization has made the world so much better, but it now challenges us in ways we've long gotten used to avoiding because of our long-term privileged position in the global economy, which itself reflected gross historical injustices stemming from colonialization, WWII, socialism in the East, etc. None of those things were our fault, and we took the lead in overcoming them all, but we did live in a pretend world of superiority on that basis across the second half of the 20th century.

That world is gone, and good riddance, say I, because it was supremely unfair to the majority of the planet, and I don't want to live in this world by exploiting others unnecessarily.

So our succees in spreading American-style globalization now comes back to haunt us, demanding we adjust. That's not about demonizing business, even as it is about cleaning up some incredibly bad form on Wall Street (a regular task, just bigger this cycle). It's also not about demonizing China, who is our biggest ally in the global economy going forward - like it or not.

Romeny will say stupid things on China to win the GOP nomination. Obama is already doing stupid things. On the business, it's clear who's hostile and who's not.

Looking ahead, I want a dealmaker, a difference-splitter, a realist on business who acts based on experience and not sterile theory. I also want somebody who can rationalize our military budget and global presence without resorting to idiotic, default targeting of the Chinese.

Romney is far from ideal on all those scores, but he does beat Obama, in my mind, on every one of them.

I stil maintain Obama was the best choice of the two in 2008. I would still vote for him all over again, given the repeated chance. I do think America, however, would have been much better served by a Hillary presidency (I voted for her in the primary), and since I can't get that this time around, I'll make do with the alternative, who I think will have a far better chance of working with a Republican House and Senate than Obama will - given overall Boomer political proclivities (most Boomer politicians are just above cartoon-grade in their motivations, skills and intelligence).

No, I would take Obama over the two jokers (Santorum and Paul) and the complete wild card (Gingrich). And yes, this would be my first vote for a GOP presidential candidate in my entire life.

And my logic on all this if decidedly unemotional (can I toss in that I'm the father of two African-come-to-America daughters, just to be safe?).

This isn't personal in the least; this is strictly business.

LATER ADDENDUM DUE TO MIKE RUSSELL'S COMMENT ABOUT GOP'S CHARGE THAT OBAMA IS "ANTI-BUSINESS":

I don't use that political term of art (anti-business), because I don't think it's true. I don't think his policies have been particularly anti-business.

I think he doesn't understand business (ignorance) and on that basis tends to vilify and scapegoat business (antipathy) for our continuing poor recovery. The silliness over "taxing millionaires and billionaires" is, to me, just rhetorical nonsense. Those people pay plenty, but no matter how much more we tax them (I am indifferent on the subject), it won't change our fundamental issues. So, to me, rolling with political gamesmanship like that says serious change isn't what he's looking for, otherwise he would have gone with Bowles-Simpson and not ignored what everyone said were sound recommendations.

I also cite the ignorance issue for what I consider to be generally bad-for-business-but-bad-for-everybody-else-too policies in combating the crisis. The administration just hasn't done enough to encourage deleveraging throughout the economy, instead preferring stimulus spending to cure a financially-driven overhang crisis, which, per Rogoff, is the wrong medicine chasing the wrong disease.

I won't claim to have tracked the US economy enough to have said, I told you so way back when, because I most certainly did not. But it's hard for me to accept that a guy as smart as Obama couldn't find enough people around him who were smart enough to realize that stimulus splurging after a financial crisis only gets you a follow-on fiscal crisis without actually improving the financial hang-over/debt overhang. They still don't seem to get that, and as long as they don't, I think business will hold off on investment and hiring because consumers are forced to keep their spending low (I certainly am).

So all I am left assuming is that he doesn't know business (ignorance) and made patently bad choices out of some antipathy to business (it is hard to advise the guy who's certain he's always the smartest guy in the room). I say that because business has largely argued for a far stronger deleveraging focus versus the path Obama has taken. That path did include bailouts for Wall Street firms (not sure history will be kind there) and Detroit (am certain history will be kind there and have said that throughout in posts and speeches - but there I cite the global car industry, which is something I have tracked).

Finally, if Obama were both smart on business and less into his business-can't-be-trusted mode, I think he would have pursued opening up the US economy to Chinese investment instead of staying stuck on the RMB's value and this bizarre strategic "pivot" to East Asia, where apparently our weaponry and national "will" is going to keep us economically engaged in the region despite openly targeting the biggest economy there, a country, by the way, that we expect to finance this military buildup in the Pacific. But that's just me saying I don't trust how he views or understands global business.

In general, I do think Obama is a smart guy, but he's displayed enough dumb/antipathy WRT business for me to want him swapped out versus keeping him another four years. The global economy right now is in fairly precarious shape, and I don't see his administration being able to work with a GOP congress over the next four years any better than he has the past 3. We can say it's all GOP hostility but Bill Clinton managed that, and Reagan did with the Dems. Obama is just not that guy. He matches the GOP's Manichean view with too much of his own, along with a pride and self-confidence in his supreme intelligence that I think is his biggest weakness.

We've have world-class brain presidents (Hoover, Carter, Obama) and they manage to have attract hard economic times. I have come to greatly prefer emotionally intelligent presidents (FDR, Reagan, Clinton) or incredible dealmakers (Johnson, Nixon). That's why I will take Romney and his blandness and his difference splitting and flip-flopping and non-agenda. I want a manager who moves the process along for the next four years, rather than the perceived/actual ideologue who attracts more fight than he's worth and isn't clever enough to realize when he needs to bend instead of stand proud.

China as Africa's De Facto World Bank - the Wikistrat video

This is a recorded briefing that I generated from the recent Wikistrat internal training simulation entitled, "China as Africa's de facto World Bank." It summarizes the points I gleaned from the wide-ranging simulation (dozens of wiki pages filled with all manner of brainstormed ideas, strategies, options by several dozen analysts) and summed up in an 8-page report.

This was the first major video production in the set-up I have constructed - after excruciating testing and accumulation of equipment - in our new rental home, which, in various parts, doubles as my work environment. Fortunately for me, virtually everyone else in my family is in school, with youngest Abebu starting within months. So during the day I have the house completely under control, meaning I can meticulously set up the gear, test at length, and pursue recordings and subsequent processing/production in peace.

Ah, the life of the bootstrapped start-up!

Naturally, comments and suggestions are welcomed on content, presentation choices (there are many ways to skin that cat, given the tremendous volume of ideas generated by any one simulation), and video capture.

One correction already accomplished: on this taping I set up a flatscreen for video feedback (I can see screen's content and myself in foreground) just to the right of the camera.  That gives me a slight off-camera eye orientation, which I thought was fine for simulating an audience interaction. But in retrospect, we decided that a straight-into-the-camera style would be better.  That is accomplished in an improved set-up that involves a smaller feedback screen being place just below the came - as in, within a couple of inches. That way I can look directly into the feedback and be, for all practical purposes, looking directly into the camera. The feedback screen is crucial because all of these briefs will be screen-content heavy and first-and-one-time briefs on my part, meaning I can't possibly memorize every click like I do on my regular brief. In that way, it is a LOT like doing the TV weather: lots of data/info to get through and you need to position yourself in front of the screen while not blocking it.  I do fairly well on this first try, but can obviously get smoother - trick being the feedback presents itself in a mirror image.

Another fix in the works: I lost my clip for my clip-on mike and therefore had to wear below the camera line because my substitute clip ain't so elegant.  That meant I picked up the clicking sound from my remote controller a bit too much - for my taste. New one is in the mail, so next time I'll wear the mike far higher and hopefully not pick up that sound.

Overall, pretty happy with the effort. At first, I repeat the text too much, but I warm up over time and get more extemporaneous and relaxed as I got more comfortable with moving myself around. This is far different from me being tracked by a cameraman on a big stage, because I go completely unconscious on my style and let the camera-guy deal with all that.  Here, with a fixed camera, I have to adjust my style somewhat. So a bit stiff at first, improving throughout, and clearly something I will grow more easy with it as I repeat the process.

Time's Battleland: More Evidence of the Glorious Do-Loop That Is the East Asian Arms Race

WSJ lead story about Chinese developing a ballistic missile designed to fragment - like a cluster bomb - on the deck of a U.S. carrier and wipe out all aircraft and personnel.  Naturally, it's unbelievably provocative to us, because in our world view, U.S. carriers get to come right up to the coast of any nation whenever we please, bringing all that magnificent power projection to bear.

What the Chinese tell us with this development - and so many more - is that the days of the U.S. doing that off China's coast are coming to an end.

Unless we pick up the challenge, of course!

Read the entire post at Time's Battleland blog.

WPR's New Rules: Worried by China's Rise? Watch Out for its Decline

Much of what drives America’s current phobias regarding China stems from the dual -- and fantastically linear -- assumptions of America’s terminal decline and China’s perpetual ascension. We are thus led to believe that China no longer needs the United States and that America, in turn, can do nothing -- short of increasing military pressure -- to constrain the Middle Kingdom’s rise to global hegemony. On all scores, nothing could be further from the truth. China and the United States suffer a level of strategic interdependency that is vast and shows no signs of reduction. Simply put, America cannot stay rich without China, and China cannot get rich without America.

Read the entire post at World Politics Review.

Another prominent crowd sourcing effort: competitive but not collaborative

Chicago Tribune story about prominent economists from around country linking up on one site (U Chicago biz school) to post competing answers to a weekly posted policy question.  Site then polls the other economists and you get an agree/disagree/undecided number.

Another nice example of crowdsourcing, but one that highlights the Wikistrat difference: instead of just holding up the challenge in front of the mob and asking the crowd to yell out its answers, Wikistrat asks the crowd to work together, on the wiki, to strategize pathways, outcomes, options and impacts. It's that nonstop dialogue and debate in real-time that makes us different: not just a concentration of opinions but their collaborative interplay.

Still, another interesting example of thinkers reaching for something similar.