The United States: BRIC-Solid or Rolling in the Muck with the PIIGS?
BRIC nations are those generally thought to have stable economies at a time when the PIIGS are those falling apart. Currently, The United States is not in either group. Gratefully we are not in the pits with Portugal, Ireland, Italy, Greece, and Spain. We should be with Brazil, Russia, India, and China who, while not rock solid, are growing, up-and-coming economies. Each BRIC country is doing what America used to do back when our economy was solid. All have strong extractive/energy economies-with the US supporting Brazil’s newly discovered oil reserves. China holds 95% of the world’s supply of rare earth. Russia controls most of Europe’s known natural gas supplies and has been producing 10 million barrels of oil per day, more than anybody, including Saudi Arabia. India has coal and metallic resources.
Lately, India’s economy had begun to slow a bit and businesses had been complaining about Jairam Ramesh, environment minister, claiming that his dogged enforcement of environmental regulations had blocked or delayed several major industrial projects viewed as vital to India”s economic development. To fix the problem, Indian Prime Minister Manmohan Singh moved Ramesh out of the environment minister position and replaced him with Jayanthi Natarajan-who the business community expects, based on her history, will not take Ramish’s hard stand. (How nice it would be if Barack Obama were to take similar stand with EPA, which has made a habit of discovering environmental concerns that nobody ever observed, like “fracking” contaminating drinking water.)
India has discovered what America has known for decades: too much government regulation stifles progress and ultimately economic growth. As previously addressed, legendary oil man T. Boone Pickens has been pushing for government subsidies for his plan to convert America’s truck fleet to natural gas fuel. But, as Aubrey McClendon, Chairman and Chief Executive at Chesapeake Energy said, “Government moves more slowly than the marketplace.” Pickens and McClendon have now joined forces to do privately what they’d hoped government funds would underwrite. This lesson was learned more than 100 years ago, the Wright Brothers proved the same thing when their privately funded plane-built in their bicycle shop, flew out of Kitty Hawk and the government-supported competitor, the Langley plane, sunk like a stone.
If we know that too much government involvement often stifles or slows creativity and ingenuity-and the economy, why do we persist in foolish programs where, for example, the Environmental Protection Agency attacks the sale of raw milk from Amish cows or requires that dairy farms have hazmat crews? Or, that the Forest Service, which used to receive income from logging permits and royalties, now pays for selected thinning or, due to the overgrowth, allows nature to clear the forests through fires that destroy personal property, businesses, and kill wildlife? Or, that the Fish and Wildlife Service allows an entire community to die, killing jobs and turning a once thriving economy into a ghost town, to, supposedly, save a critter? Or, the Bureau of Land Management so over regulates the oil and gas industry that resources are untapped and potential workers are left unemployed? Why exactly?
Could it be that we have a government which wants to block jobs and economic growth?
In India’s case, by replacing Ramesh for his over-zealous enforcement of the country’s environmental laws, they’ve taken steps to insure their position in the BRIC status. In America, we seem to have forgotten how to encourage the entrepreneurial spirit. We keep adding regulation on top of regulation. As a result, we get our stuff from China. We send our jobs to India. We’ve given our space leadership and technology to Russia. And, President Obama has committed the United Sates to being Brazil’s best oil customer.
Meanwhile, we wish for a magic wand to transform our stalled economy when we have the ability to do what it takes-though, like India, it will require a change in personnel. ABRIC-adabra! It could be America, Brazil, Russia, India, and China. Or, as our current path is taking us, the United States could be relegated to rolling in the muck with the PIIGS. We can follow India’s lead and replace the “environment minister” or join Portugal, Ireland, Italy, Greece, and Spain. In a democracy, the choice is ours.