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What I’m Reading: Accidental Superpower

by John on 01/23/2015

This could be my book of the year.

The Accidental Superpower is so full of insight and research I will probably quote it for weeks and months – maybe years.

Who should read The Accidental Superpower: The Next Generation of American Preeminence and the Coming Global Disorder by Peter Zeihan:

  • Everyone American – especially Millennials, Gen-Y, and Gen-X
  • Anyone who plans on living until the year 2030 and beyond
  • Anyone preparing to retire in the next few years
  • Anyone thinking about living their retirement years overseas
  • Anyone who comments or analyzes US politics, because after you read this you will realize how antiquated most of our leaders are.

Zeihan appears politically neutral in his research; a small government libertarian seeing the case for higher taxes and legalizing illegal immigrants in the US. He’s a big proponent of US shale oil production but also sees the cause and effect of normalizing relations with Cuba while understanding the US populace wanting to back pedal from Middle East allies. He can balance the need for workers’ rights such as time for child care but he examines the unintended consequences of Swedish women getting the benefits but finding themselves not getting hired.

Zeihan is a blend of Dragnet’s Joe Friday (“Just the facts, Ma’am”) with Alvin Toffler (Future Shock). Yes I just went 1960s on you. But Zeihan’s clarity and research, without bias, is so refreshing. It is something hardly any of our political leaders or media pundits could do, or if they could, would allow themselves to say out loud because it encompasses so many benefits of inclusive thinking that would upset the money paid by special interests.

Zeihan confirms the two main factors changing the world now: an aging population that is changing investment and credit markets; and new disruptive technologies like shale oil fracking which is leading to breakthroughs such as 3D printing/manufacturing right here in the US.

However, I question two of his conclusions:

  • Zeihan is optimistic the US and other countries can financially survive this aging boom after 2030. I think it will last longer since, to name one reason, old farts like me will live longer into our 100s putting more pressure on the social safety nets; and
  • Zeihan’s theories rests on the shale oil boom lasting decades giving the US low energy and energy self-sufficiency. Accidental Superpower was published before New York State banned fracking due to environmental and seismic concerns. In addition, some Facebook followers who live in Texas complain about increased tremors as fracking grows. Is fracking to blame? Who knows? But there are many studies being conducted now that could diminish the optimism of Zeihart’s arguments.

Zeihan probably questions them too. He admits the risk in prognosticating the world decades out.

Still, Americans should pray Zeihan’s mountain of research is piled higher than any poop dumped by a black swan. That’s because Zeihan has good news and bad news.

Almost all of the good news is for Americans.

The bad news is almost entirely for the rest of the word. In a phrase, if you’re not American, you’re screwed.

Zeihan believes the US will suffer from its aging population. That’s because the Boomers are heading to the rocking chairs and hoping not to rock their fixed income investments. The 1990s and the early 2000s are ancient history now; double digit returns on risky stocks and the availability of cheap credit will seem like bell bottoms and Fu Manchus. In addition, younger taxpayers will be paying more for Boomers’ retirements which means less money to invest into new technologies and businesses.

That sounds glum. But compared to the rest of the world the US will be heaven.

There are two big reasons. The first is the rest of the world is graying much faster than we are; or we were copulating more than they were. (Credit online porn?) Our Gen-X, Gen-Y, and Millennials appear to be more plentiful than most other nations. Give our youngsters the natural resources and the innovation in America and, Zeihan thinks, they will not only weather the old folks storms but come out stronger. There’s a lovely Catch-22; as other nations suffer from low growth, whatever investments they have will be parked in a safe place like the US giving us more capital.

Again, we need shale to be a big winner. Shale will keep us energy-independent while also keeping our energy costs down.

Zeihan says that will crumble the economic foundations that have been in place since World War II and the Bretton Woods Conference which brought relative peace but a US role as cop and economic guarantor for most of the world.

Think about most of the conflicts of the latter part of the 20th Century and even today. The underlying cause was oil. If it wasn’t the US trying to keep the oil flowing to our shores, then it was keeping the oil flowing to the shores of our trading partners.

Zeihan says that is already changing. The US doesn’t have to be in the center of other nation’s political and economic confrontations. Why? We have our own oil. Of course, we will still be a super power with fighter jets and aircraft carriers. But he says we won’t be stationed as guard forces in different countries for different regions. Instead, Special Forces and Navy Seals will be deployed for armed conflicts. It is already happening. We have less of a footprint in the Middle East chaos while most of our military/policing efforts are shifting to the Asia-Pacific region to make sure that more prosperous region will be able to buy our goods and services.

Republicans can knock Obama for “leading from behind” in Benghazi or failing to bomb Syria and allow the rise of ISIS, but Obama seems to be reading the future chapters of history while listening to the majority of Americans.

Most Americans want a retrenchment from foreign incursions. We’re tired of being the world’s cop. We are tired of seeing billions of dollars spent overseas. We’re also tired of watching our men and women being put in harm’s way for what appears to be someone else’s sovereignty or the right to buy things.

Now we have a better excuse to pull back: low cost oil in our backyard.

Zeihan then gives us a roster of the effects on other nations once America has fully retired from walking the world’s cop beat.

  • Canada, or Alberta, might become the 51st state. Canada will have plenty of oil and lots of retirees
  • Mexico will most certainly become the low-cost manufacturing center, what China was in the early 2000s
  • Russia could be in the dustbin of history
  • China will be a regional power but with little military sway over the US
  • Iran and Saudi Arabia might be left to fight for themselves in the Middle East
  • The European Union may not exist
  • Germany may become the bully of Europe again
  • If Americans desire to be ex-pats, the best places may be Australia and New Zealand.

I will let you explore what falls into your sphere of interest. Trust me. This is worth the read.

Special thanks to Paul Seaver, professor at Providence, my intellectual mentor, and friend, who suggested the book.

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