Why Globalization Reaches Limits

Tyler Durden's picture

Submitted by Gail Tverberg via Our Finite World blog,

We have been living in a world of rapid globalization, but this is not a condition that we can expect to continue indefinitely.

Figure 1. Ratio of Imported Goods and Services to GDP. Based in FRED data for IMPGS.

Figure 1. Ratio of Imported Goods and Services to GDP. Based in FRED data for IMPGS.

Each time imported goods and services start to surge as a percentage of GDP, these imports seem to be cut back, generally in a recession. The rising cost of the imports seems to have an adverse impact on the economy. (The imports I am showing are gross imports, rather than imports net of exports. I am using gross imports, because US exports tend to be of a different nature than US imports. US imports include many labor-intensive products, while exports tend to be goods such as agricultural goods and movie films that do not require much US labor.)

Recently, US imports seem to be down. Part of this reflects the impact of surging US oil production, and because of this, a declining need for oil imports. Figure 2 shows the impact of removing oil imports from the amounts shown on Figure 1.

Figure 2. Total US Imports of Goods and Services, and this total excluding crude oil imports, both as a ratio to GDP. Crude oil imports from https://www.census.gov/foreign-trade/statistics/historical/petr.pdf

Figure 2. Total US Imports of Goods and Services, and this total excluding crude oil imports, both as a ratio to GDP. Crude oil imports from https://www.census.gov/foreign-trade/statistics/historical/petr.pdf

If we look at the years from 2008 to the present, there was clearly a big dip in imports at the time of the Great Recession. Apart from that dip, US imports have barely kept up with GDP growth since 2008.

Let’s think about the situation from the point of view of developing nations, wanting to increase the amount of goods they sell to the US. As long as US imports were growing rapidly, then the demand for the goods and services these developing nations were trying to sell would be growing rapidly. But once US imports flattened out as a percentage of GDP, then it became much harder for developing nations to “grow” their exports to the US.

I have not done an extensive analysis outside the US, but based on the recent slow economic growth patterns for Japan and Europe, I would expect that import growth for these areas to be slowing as well. In fact, data from the World Trade Organization for Japan, France, Italy, Sweden, Spain, and the United Kingdom seem to show a recent slowdown in imported goods for these countries as well.

If this lack of demand growth by a number of industrialized countries continues, it will tend to seriously slow export growth for developing countries.

Where Does Demand For Imports Come From?

Many of the goods and services we import have an adverse impact on US wages. For example, if we import clothing, toys, and furniture, these imports directly remove US jobs making similar goods here. Similarly, programming jobs and call center jobs outsourced to lower cost nations reduce the number of jobs available in the US. When US oil prices rose in the 1970s, we started importing compact cars from Japan. Substituting Japanese-made cars for American-made cars also led to a loss of US jobs.

Even if a job isn’t directly lost, the competition with low wage nations tends to hold down wages. Over time, US wages have tended to fall as a percentage of GDP.

Figure 3. Ratio of US Wages and Salaries to GDP, based on information of the US Bureau of Economic Analysis.

Figure 3. Ratio of US Wages and Salaries to GDP, based on information of the US Bureau of Economic Analysis.

Another phenomenon that has tended to occur is greater disparity of wages. Partly this disparity represents wage pressure on individuals doing jobs that could easily be outsourced to a lower-wage country. Also, executive salaries tend to rise, as companies become more international in scope. As a result, earnings for the top 10% have tended to increase since 1981, while wages for the bottom 90% have stagnated.

Figure 4. Chart by economist Emmanuel Saez based on an analysis IRS data, published in Forbes.

Figure 4. Chart by economist Emmanuel Saez based on an analysis IRS data, published in Forbes. “Real income” is inflation-adjusted income.

If wages of most workers are lagging behind, how is it possible to afford increased imports? I would argue that what has happened in practice is greater and greater use of debt. If wages of American workers had been rising rapidly, perhaps these higher wages could have enabled workers to afford the increased quantity of imported goods. With wages lagging behind, growing debt has been used as a way of affording imported goods and services.

Inasmuch as the US dollar was the world’s reserve currency, this increase in debt did not have a seriously adverse impact on the economy. In fact, back when oil prices were higher than they are today, petrodollar recycling helped maintain demand for US Treasuries as the US borrowed increasing amounts of money to purchase oil and other goods. This process helped keep borrowing costs low for the US.

Figure 5. US Increase in Debt as Ratio to GDP and US imports as Ratio to GDP. Both from FRED data: TSMDO and IMPGS.

Figure 5. US Increase in Debt as Ratio to GDP and US imports as Ratio to GDP. Both from FRED data: TSMDO and IMPGS.

The problem, however, is that at some point it becomes impossible to raise the debt level further. The ratio of debt to GDP becomes unmanageable. Consumers, because their wages have been held down by competition with wages around the world, cannot afford to keep adding more debt. Businesses find that slow wage growth in the US holds down demand. Because of this slow growth in the demand, businesses don’t need much additional debt to expand their businesses either.

Commodity Prices Are Extremely Sensitive to Lack of Demand

Commodities, by their nature, are things we use a lot of. It is usually difficult to store very much of these commodities. As a result, it is easy for supply and demand to get out of balance. Because of this, prices swing widely.

Demand is really a measure of affordability. If wages are lagging behind, then an increase in debt (for example, to buy a new house or a new car) can substitute for a lack of savings from wages. Unfortunately, such increases in debt have not been happening recently. We saw in Figure 5, above, that recent growth in US debt is lagging behind. If very many countries find themselves with wages rising slowly, and debt is not rising much either, then it is easy for commodity demand to fall behind supply. In such a case, prices of commodities will tend to fall behind the cost of production–exactly the problem the world has been experiencing recently. The problem started as early as 2012, but has been especially bad in the past year.

The way the governments of several countries have tried to fix stagnating economic growth is through a program called Quantitative Easing (QE). This program produces very low interest rates. Unfortunately, QE doesn’t really work as intended for commodities. QE tends to increase the supply of commodities, but it does not increase the demand for commodities.

The reason QE increases the supply of commodities is because yield-starved investors are willing to pour large amounts of capital into projects, in the hope that commodity prices will rise high enough that investments will be profitable–in other words, that investments in shares of stock will be profitable and also that debt can be repaid with interest. A major example of this push for production after QE started in 2008 is the rapid growth in US “liquids” production, thanks in large part to extraction from shale formations.

Figure 6. US oil and other liquids production, based on EIA data. Available data is through November, but amount shown is estimate of full year.

Figure 6. US oil and other liquids production, based on EIA data. Available data is through November, but amount shown is estimate of full year.

As we saw in Figure 5, the ultra-low interest rates have not been successful in encouraging new debt in general. These low rates also haven’t been successful in increasing US capital expenditures (Figure 7). In fact, even with all of the recent shale investment, capital investment remains low relative to what we would expect based on past investment patterns.

Figure 7. US Fixed Investment (Factories, Equipment, Schools, Roads) Excluding Consumer Durables as Ratio to GDP, based in US Bureau of Economic Analysis data.

Figure 7. US Fixed Investment (Factories, Equipment, Schools, Roads) Excluding Consumer Durables as Ratio to GDP, based in US Bureau of Economic Analysis data.

Instead, the low wages that result from globalization, without huge increases in debt, make it difficult to keep commodity prices up high enough. Workers, with low wages, delay starting their own households, so have no need for a separate apartment or house. They may also be able to share a vehicle with other family members. Because of the mismatch between supply and demand, commodity prices of many kinds have been falling. Oil prices, shown on Figure 9, have been down, but prices for coal, natural gas, and LNG are also down. Oil supply is up a little on a world basis, but not by an amount that would have been difficult to absorb in the 1960s and 1970s, when prices were much lower.

Figure 9. World oil production and price. Production is based on BP, plus author's estimate for 2016. Historical oil prices are calculated based on a higher than usual recent inflation rate, assuming Shadowstats' view of inflation is correct.

Figure 9. World oil production and price. Production is based on BP, plus author’s estimate for 2016. Historical oil prices are calculated based on a higher than usual recent inflation rate, assuming Shadowstats’ view of inflation is correct.

Developing Countries are Often Commodity Exporters 

Developing countries can be greatly affected if commodity prices are low, because they are often commodity exporters. One problem is obviously the cutback in wages, if it becomes necessary to reduce commodity production.  A second problem relates to the tax revenue that these exports generate. Without this revenue, it is often necessary to cut back funding for programs such as building roads and schools. This leads to even more job loss elsewhere in the economy. The combination of wage loss and tax loss may make it difficult to repay loans.

Obviously, if low commodity prices persist, this is another limit to globalization.

Conclusion

We have identified two different limits to globalization. One of them has to do with limits on the amount of goods and services that developed countries can absorb before those imports unduly disrupt local economies, either through job loss, or through more need for debt than the developed economies can handle. The other occurs because of the sensitivity of many developing nations have to low commodity prices, because they are exporters of these commodities.

Of course, there are other issues as well. China has discovered that if its coal is burned in great quantity, it is very polluting and a problem for this reason. China has begun to reduce its coal consumption, partly because of pollution issues.

Figure 10. China's energy consumption by fuel, based on data of BP Statistical Review of World Energy 2015.

Figure 10. China’s energy consumption by fuel, based on data of BP Statistical Review of World Energy 2015.

There are many other limiting factors. Fresh water is a major problem, throughout much of the developing world. Adding more people and more industry makes the situation worse.

One problem with globalization is a long-term tendency to move manufacturing production to countries with ever-lower standards in many ways: ever-lower pollution controls, ever-lower safety standards for workers, and ever-lower wages and benefits for workers. This means that the world becomes an ever-worse place to work and live, and the workers in the system become less and less able to afford the output of the system. The lack of buyers for the output of the system makes it increasingly difficult to keep prices of commodities high enough to support their continued production.

The logical end point, even beyond globalization, is for automation and robots to perform nearly all production. Of course, if that happens, there will be no one to buy the output of the system. Won’t that be a problem?

Adequate wages are critical to making any system work. As the system has tended increasingly toward globalization, politicians have tended to focus more and more on the needs of businesses and governments, and less on the needs of workers. At some point, the lack of buyers for the output of the system will tend to bring the whole system down.

Thus, at some point, the trend toward globalization and automation must stop. We need buyers for the output from the system, and this is precisely the opposite of the direction in which the system is trending. If a way is not found to fix the system, it will ultimately collapse. At a minimum, the trend toward increasing imports will end–if it hasn’t already.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
HRH of Aquitaine's picture
HRH of Aquitaine (not verified) Mar 2, 2016 8:50 PM

My garage is full. I don't need anymore cheap Chinese junk. Ever.

Stainless Steel Rat's picture
Stainless Steel Rat (not verified) HRH of Aquitaine Mar 2, 2016 9:20 PM

Moar planned obsolescence should fix that...

Stuck on Zero's picture

Don't worry. When the dollar crashes we won't be importing anything. At that point we won't be manufacturing anything either. Whatever food we produce will be exported to pay foreign debts.  Third world here we come.

adanata's picture

 

Not importing could very well be a great way for us to get back to making our own stuff... locally. Sounds good to me; back to mom and pop stores as this miserable bankster house of cards folds.

BuddyEffed's picture

I think the large and varied debt structures and the overall system complexity is making it harder to tell what is malinvestment, and what is not. The system was more forgiving on marginal investments and globalization when there was still growth left and lots of untapped resources. Now scarcity is taking what were once marginal investments and turning them into mal-investments. In some ways globalization has increased the possibility for mal-investment as supply chains are very long and very hard to be in control of and the loss of supply chains can be very far reaching now. Plus you get mixed ideologies involved in the supply chains and that can get messy such as with Syria and Turkey and the desire for energy, pipelines, etc. With local supply chains and a local workforce it was easier to determine investment quality and risk levels.

This leads into the below snippet :

From : http://www.zerohedge.com/news/2016-02-23/financial-time-bombs-hiding-pla...
......
"That’s how we get to the crime of NIRP. Keynesian central banks cannot imagine a problem for which more debt is not the solution. But is it not lack of “aggregate demand” which is idling an increasing share of the world’s oilfield drilling equipment; nor did it cause Caterpillar’s heavy mining machinery sales to plunge or the Baltic Dry index to plummet to 30-year lows.

What is driving output, wages and profits drastically southward throughout the materials and energy complex is drastically sinking profits and a desperate need to conserve cash flow in order to survive. The CapEx budget of global mining giant BHP is a proxy for what is becoming a global CapEx depression in the world’s industrial economy. "

.......

And what's driving all of that in my humble opinion is resource constraints caused by depletion of the physically easiest to get (closer to surface and in nearby locations and in higher ore grades) and hence the cheapest to get natural resources.

The easiest to get copper, aluminum, gold, silver, diamonds, oil, coal, natural gas, iron, manganese, fish, trees, etc. etc have all been harvested pretty hard for the past 100 years or so. When the industrial revolution came to us, we got really good at the extraction of non renewable natural resources.
Once those easiest and cheapest resources are gone and the more expensive and harder to get resources are all that is left, that changes business models and the expectation of profits from corporate activities. Business models that were stable for decades and decades become structurally challenged, and at risk of not being able to generate a profit and keep going as valid concerns.

Hence the games of PPT, QE, ZIRP, then NIRP, and banning cash come into play for various reasons such as to purchase the large amounts of bad paper associated with subprime that others would not touch and to help people not notice the underfunded pension plans and unfunded liabilities and the decreasing chance that those models and assumptions will hold together intact while the appearance of them holding must be maintained no matter what. And hence the similar recent government policies on the importance of the keeping up of appearances in China, Japan, Turkey, etc.

Hope was placed on substituting with other resources based on new technology. We all were hoping we could "upgrade". But the strongest upgrade of all in the past 2 centuries was the increasing energy content in our choice of fuels, from wood, to coal, to oil and the increasing FF energy at our disposal did wonders for real (old fashioned) GDP and provided positive reinforcement for an increasing rate of industrialization. Under the increasing rate of industrialization scenario, debt/credit could be used in the financial system to pursue new physical resources or new processes and obtain profit/ROI. Now that upgrade trend seems to be stalled out with indications of deteriorating EROEI, and possibly about to reverse and begin on a downgrade where new debt/credit may not be able to garner anything new or any surplus at all and might not even get return of investment back either. Sure, some renewables came into play across the decades and it helped, but most of the heavy lifting was always done with FF, and the current economy is still highly dependent on FF.

Sadly, we did some inefficient things in big ways too. Rail and boat traffic are very energy efficient ways to move things around. But when the rubber hit the road with automobiles, the energy efficiency of moving things per unit of weight dropped considerably. When we chose that more inefficient mode of transportation of rubber on the road, and ran with it so hard, there was plenty of FF surplus at the time so it made short sighted sense in a way, and it was big fun too. With the former surplus scenario now structurally challenged, various struggling business models now reflect this.

This might give you some clues on why that "markit" is not following their wrong headed models :

http://web.archive.org/web/20111112074159/http://www.zerohedge.com/news/...

And this : http://www.theoildrum.com/node/7062
And this : http://ftalphaville.ft.com/files/2013/01/Perfect-Storm-LR.pdf

NoPension's picture

Chinese get paid a salary to make the junk equal to the lack of salary we now don't have because our jobs have been sent over there.
Yeah, I left out the commas.

We can't afford it , because we lost our manufacturing jobs to them.

They can't afford it, because they don't earn enough. If they did, they would not have the arbitrage advantage.

It's a dog, chasing its tail.

Kicker.... Government workers in both countries can always get the

AChinese's picture

With respect sir, you can't afford expensive US junk. Trained worker won't take lowest wage as salary and that's already above Chinese worker's average pay. If you give up on made in China, you will have to choose from made in Mexico or India or somewhere else. You can keep cursing them but won't change the fact you live with cheap junk.

 

In the meantime, there are not so cheap Chinese non-junk. I guess you didn't see them for a reason.

NoPension's picture

With respect, sir.

I've been to Harbor Freight. When I need something for a one off job, that I know will blow up or fall apart under real use.

I also have fixed cars, for a living. Snap On. Very expensive. But you only have to buy it once.

Chinese, so far...can only produce copies. Cheaply made copies of someone else's product.

Ill give you iPhones and electronics. But they are mostly robots now, with slave labor type hand assembly. Even in the worst of the USA early Industrial Age, we didn't have to decorate our factories with SUICIDE nets!

Oh yeah, you Chinese have definitely got your shit together.

It's cheap fucking junk. 1.3- 1.6 billion people. Our whole population is your rounding error. But, if we don't buy your JUNK, you can't survive. Please.
Start talking about our bonds, you've got a point. We take your junk, you take our junk.
I'd rather we have manufacturing, you have manufacturing. We have labor and wage standards, you have wage and labor standards. We have reasonable environmental controls and so do you.
But, alas, it's not the case.

So now, we have to put The Donald on the problem. We, the people of the US, not the leaders, have been forced to take this drastic measure.

DownWithYogaPants's picture

Have to hope so!  The manufactured goods by themselves are ok.  But the damned globalists are like a case of herpes.

CHoward's picture

I need to order a few more of those really colorful lawn gnomes - love those! 

bbq on whitehouse lawn's picture

Negative interest rates means you can issue debt forever.

not a yahoo's picture

Can this fucking site please stop auto-sizing every 10 seconds on mobile (chrome)?

I have to rezoom and scroll down again every time, it's annoying as hell! Only zerohedge.

NoDebt's picture

Ghostery browser for Android.  

Not Goldman Sachs's picture

Indeed. I moved to  Adblock to view zh.  Pain in the ass resize.

Gab Timov's picture

Something about killing one's customer base.

The US was or still is the largest consumer market in the world, but when the globalists hit the US in the knees with a sledge hammer repeatedly for decades by moving jobs to other countries...well, you know the rest.

"Those jobs aren't coming back." turned into "Those consumers aren't coming back."

But I guess that's just the free market. Then again, "freedom isn't free."

scintillator9's picture

I remember how the idea was that the low cost countries were to have their wages and living standard rise to buy our products.

A win / win scenario.

Looks like we were sold more than a bill of goods, but down the river.

slightlyskeptical's picture

I remember going to Disney World as a kid. Leading into the Space Mountain ride there was an exhibit talking about the future. How advancements in productivity would lead to everyone working part time but with full time wages. A life of leisure for all. Saddest part about it is that I actually believed it would come true.

NoPension's picture

Soon as the wages rise, pack up the machines and move to the next slave labor country with no regulations.

Wash....Rinse... Repeat.

At this rate, it come back to us in about 60 years or so.
The remaining population will be government workers and subsistence farmers.

Either that, or they developed free energy, and it's rainbows and skittle shitting unicorns.

Vendetta's picture

Yep... in the 90's they were lying thru their teeth constantly saying that 2 jobs would be created for every job outsourced.....  I knew they were lying which was really a bitch to have to listen to the tripe for so long and seeing everyone fooled by the deliberate and widespread lies ... yeah ... 2 jobs on the unemployment line looking for another job that doesn't exist any longer.

But all the Ivy League lying blowhards were all nodding their heads like those bobblehead things that used to be on car dashboards

Gab Timov's picture

Under Armor is trying to do local factories for local markets. That could help.

NoDebt's picture

Well thank God we've got luxury undwear manufacturing covered.  Now on to the other 5 million products.

Vendetta's picture

indeed... at least we can shit ourselves in some underwear made in the US as to how fucked over by globalists we've been instead of the crappy underwear that disintegrates in a year after 6 farts made by some pakistani making 3 cents an hour in some remote province of that f'g country having it shipped 8,000 miles to our friendly neighborhood walmart ... which always made sooo much sense

NoPension's picture

I'm in the Baltimore metro. UA home.

Fabric, machines, etc., probably none can be sourced domesticity.
Good luck.
Manufacturing, anything, requires a huge down line that can't be dependent on ONE vendor. I don't think we have it anymore.

GeoffreyT's picture

Jesus wept, TD - your continuing willingness to furnish a platform for economic illiteracy is getting really tedious. This is the shoddiest mercantilist nonsense. The putative 'limits to globalisation' are nothing of the sort: they are, however, evidence of the economic ignorance of the writer.

 

There is a very specific technical term for the idea that imports are per se bad, or that there is a specific share of imports to GDP that is 'good' (or sustainable) regardless of circumstances, or that being resource/commodity-heavy in exports is a bad thing.

That specific term is... RETARDED.

 

In a world with no frictions and different endownments (including technological endowments), the optimal output mix is that mix that conforms to comparative advantage - which involves importing some or all of the goods in which a nation has no comparative advantage.The theory of comparative advantage (and its beautiful cousins - gains from specialisation and division of labour, and gains from voluntary exchange) is one of the least assailable, and most explanatory, theories in economics.

To reduce it to a simple 2-good world with fixed prices, no government and no investment (the 'basic' pedagogical model from Trade Theory) using food and iron ore as the goods (instead of the canonical 'wine/cloth' or 'wheat/shoes')...

For the economy that has comparative advantage in iron ore, the optimal output mix might well be '100% iron ore', some of which is exported in exchange for food: the ratio of imports to exports will then be determined by relative prices.

So it is entirely possible - in a naive theoretical construct - to have the welfare-maximising output/consumption mix consisting of

  • 50% domestic production;
  • 50% imports; and
  • a zero trade balance (and therefore zero net capital flows).

In this case, the ratio of imports to GDP will be... wait for it... 100% (since GDP = C + X - M and in this case C=X=M).

The real world is very different to the idealised 2-good model, but the point is that there is nothing per se that requires that a specific imports-to-GDP ratio is 'right': the 'right' proportion of imports to GDP depends on a swag of stuff... relative factor endowments, technological differentials, and (of course) policy.

Trade Theory expands the basic Ricardian teaching model to account for differences in technology, endowments, pricing power, transport costs, sector-specific capital, tariffs - basically relaxing some constraints, and adding others. Stuff like Hecksher-Olin and Ricardo-Viner.

Once you get to multi-country, multi-good models, the results of Ricardian models become more generalised (they become tendencies, rather than good-by-good absolutes) - Deardorff and Dixit & Norman showed this in 1980 (Deardorff write a nice short piece in 2005 in Review of International Economics 13(5), pp 1004–1016.. DOI 10.1111/j.1467-9396.2005.00552.x for those who want to get hold of it).

But guess what? In order to 'trump' a generalised form of Ricardian comparative advantage, you have to assume things that aren't observed in the real world (persistent economies of scale), or which should be expected to be transient (domestic distortions that drive a wedge between output prices and marginal costs).

 

People who think that some or other output mix is non-optimal because they would prefer it if Nigeria produced fucking smartphones or built semiconductor fabs, are the sort of "I know what's wrong with the world" types upon whom the political parasite classes rely for ideas.

 

Well, take it from me... I actually know what's wrong with the world - it's people who think they know what's wrong with the world, fucking things up by constantly interfering in voluntrary exchange. Economic ignoramuses, operating on flimsy speudo-economic bullshit like Krugman's windbaggery.

Don't give them a fucking podium, guy.

NoPension's picture

Ok ass, we have the fucking EPA and China doesn't.

How does that fit Into your theory?

ITS NOT A LEVEL PLAYING FIELD.

Chuckster's picture

Thanks for squaring that away.

DragonWings's picture

GeoffreyT,

Globalization is bad, period. Competitive advantages are ok, as long as you have balancing self mechanisms left in place, we tamper one side of the equation, but prevent the other to udjust... that leaves imbalance that someone will have to pay for.

The costs advantage that are used to measure the advantages are conveniently fucked when you put side by side two systems that are not compatible, or that are forced to be compatible but are not.

The US had a top industrial system, rules and regulations for safety and pollution. Moving to a country that is not using the same standards and set of rules is not taking into consideration the costs of precisely not having those rules and regulations!!! In accounting you can register lower wages, but you do not register shit that goes in water, in the air and in the ground (that will get to you eventually it is just a matter of time...).

I am afraid you are confusing true competitive advantage theory with idiocy. The competitive advantage theories are beautiful I totally agree with you. But the world is not run by theories, but by moronic real idiots... so, please adjust... and take that into account?

thanks

;-)

Chuckster's picture

There is no end and you can't put the genie back in the bottle.  Welcome to "Dark Ages II".  I guess you people should have done something about it when you could have.  Maybe Bill and Hillary will save us.

RaceToTheBottom's picture

I am counting on Trickle Down to kick in any minute now and make things right......

 

DrData02's picture

The question is how will they (the elite) kill us?  They clearly will have robots with military capabilities.  The current militarized police is/are a stop-gap measure until the automation can be completed.  They will have robots to do all the labor, farming included.  They no longer need the peasantry.  What will they do to reduce the footprint of the population which is, at best, a threat to them?

BuddyEffed's picture

There's too many "kill switches" on the economy at all levels that will prevent TPTB from fielding a robot army. Can anyone name a few? In some northern cities, even a failure to fix potholes could destroy its civilization.

MEAN BUSINESS's picture

Cheaper to arm the crazies and let 'em loose? knocking out infrastructure would be cheaper? wouldn't take long for a Snowden to foil the evil plot? 

@Mediocratas, I'll have the Zero-Child Policy with a side order of doctor-assisted suicide, and a huge half-full glass of hope.

Mediocritas's picture

I say they go for the doomsday virus.

Vendetta's picture

starvation and war .... the usual methods used throughout history.   Any other questions?

trueFacts's picture

.. too much math, and i dont feel like working.  as long as i have my obummaphone, my ebt card, and my section 8 crib, who cares.  someday i am gonna be a famous rapper or dj with a big car and all the ladies.  thats my plan, as long as i dont have to do any work.

lemontree2's picture

No problem. No money you say? Well, you don'' buy enough equties. Now, go Get yourself some money. Buy stawks today. Your way to wealth. The market must rise. From here to infinty

skbull44's picture

Infinite growth on a finite planet...what could possibly go wrong?

http://olduvai.ca

Vendetta's picture

Is Gail trying to say globalization has limits to its growth potential ASIDE from the fact that the entire economic model is an insane and psychopathic theory that has no precendent of being a decent economic model in all of human history?

Even the British East India company didn't gut domestic manufacturing in Britain

Libertati Aut Ad Mortem's picture
Libertati Aut Ad Mortem (not verified) Mar 3, 2016 10:24 AM

The US can make better deals with its trade deficit counterparts Mexico, Japan, Korea, and the elephant in the room China.  What should happen is that US neogtiators should endeavor to increase the amount of US exports for value added products.  For example, despite what you believe in Climate Change foolishness, China must convert from a coal based electricity based economy to a natural gas electricity based economy along with nuclear and hydroelectric to create cleaner air for their citizens.  One way to accomplish this is for the US to sell GE Natural Gas Turbine Power Engine Systems along with Schlumberger hydraulic fracturing equipment for taping China natural gas deposit shale.    Possibly, a US negotiator could convince the Chinese to ue 1-3% US ethanol in place of MTBE and also modertately help clean their urban emissions.  The US might relax its standards from 10% to 7% if an agreement can be accomplished.

 

http://www.afdc.energy.gov/fuels/ethanol_benefits.html

http://www.ethanolrfa.org/wp-content/uploads/2015/09/nec_whitten.pdf 

Libertati Aut Ad Mortem's picture
Libertati Aut Ad Mortem (not verified) Mar 3, 2016 10:24 AM

The US can make better deals with its trade deficit counterparts Mexico, Japan, Korea, and the elephant in the room China.  What should happen is that US neogtiators should endeavor to increase the amount of US exports for value added products.  For example, despite what you believe in Climate Change foolishness, China must convert from a coal based electricity based economy to a natural gas electricity based economy along with nuclear and hydroelectric to create cleaner air for their citizens.  One way to accomplish this is for the US to sell GE Natural Gas Turbine Power Engine Systems along with Schlumberger hydraulic fracturing equipment for taping China natural gas deposit shale.    Possibly, a US negotiator could convince the Chinese to ue 1-3% US ethanol in place of MTBE and also modertately help clean their urban emissions.  The US might relax its standards from 10% to 7% if an agreement can be accomplished.

 

http://www.afdc.energy.gov/fuels/ethanol_benefits.html

http://www.ethanolrfa.org/wp-content/uploads/2015/09/nec_whitten.pdf