Over the past year, we’ve been watching a geopolitical revolution get underway. It’s much bigger and more consequential than the Arab Spring, though the legacy media are giving it much less play. It will rearrange the global chessboard, improving the position of some powers, weakening others. It is a powerful boost to American power, reducing America’s strategic and economic liabilities while adding considerably to its assets. And it dramatically changes the long term outlook for, among other things, the US dollar.
We’re talking about the looming energy revolution, of course, and in this first essay in a continuing series, we looked at who will be the biggest losers in this geopolitical reshuffling—namely Russia, the Gulf petro-states, and countries like Venezuela whose global clout is measured solely in oil production capacity.China looks to do fairly well if predictions bear fruit, with the second largest shale oil reserves in the world, estimated at about half the size of America’s. This will add an interesting dimension to the Asian Great Game, a dangerous dance which this week showed no signs of abating any time soon. As ASEAN wound down, no joint communiqué was issued for the first time in the conference’s 45 year history. This was largely blamed on the lack of consensus over how to resolve conflicting territorial claims between China and several of its neighbors. Tensions ratcheted up a notch again this week with the Philippines, as a Chinese frigate ran aground in Philippine territorial waters and was assisted by several other Chinese warships. And rhetoric got a little hot between China and Japan over the resource-rich Senkaku (aka Diaoyu) Islands. This all accompanied further regional realignment, with Japan showing signs of cozying up to Burma and Sri Lanka moving closer to its stalwart supporter, China.You don’t need to be the Russian president to see that there’s trouble afoot in America’s economy. Moody’s released a report saying that public pensions are indeed sorely underfunded and will more than likely not be able to make good on the promises made given realistic growth estimates. California’s voters are ahead of Wall Street, voicing skepticism over public union pension demands in a recent poll. And as more and more municipalities go the way of Stockton and San Bernardino, public opposition to pension schemes which are clearly unsustainable is sure to rise.Undeterred by all the gloom and doom, California forges ahead with its high speed rail boondoggle, despite a recent UCLA study claiming that the bullet train will not bring any growth, and evidence mounting that massive blue public works projects, such as Boston’s Big Dig, almost always come in way over budget. And the madness is spreading: Amtrak also wants to get in on the act, proposing an eye-opening $151 billion expansion of its own high speed rail project between Boston and Washington DC.States can serve as useful laboratories for policy experiments which others can observe and improve upon—or reject in horror, as the case may be. For example, by being biased towards green energy and turning its back on ample opportunities for brown job development in the state, California has crippled its chances at recovery. And as is usually the case, the hardest hit are the poor and minorities, the very constituencies progressives hope to sustain and protect. Sadly, arithmetic is inexorable, and even the bluest of the blue municipalities have to make it all add up at some point.Other stories we thought worth tracking:
- Angela Merkel did the right thing and came down hard against the circumcision ruling by a Cologne court from a few weeks back. We’re glad she did.
- There was a marked uptick in euroskepticism in the UK, as evidenced by a recent move by the government to audit Brussels.
- Could looming defense cuts favored by Democrats swing Virginia, and the elections, decisively for Romney?
- Syria: still ugly, bloody, and unfixable.