Our commentary partners will help you reach your own conclusions on complex topics.
Do the tools we use to regulate our economic system work anymore?
Hey everybody, Peter Zeihan here coming to you from the DC area where I’m about to give a work presentation in a room without electricity, because the power’s been out for the last 12 hours. So that’s fun. Two things I wanted to talk about today. The first is the nature of the economic system that we’re trying to wrestle with right now. The new book is called the end of the world is just the beginning and that’s in many ways. A lot of the tools that we have developed to regulate the economic system, most notably interest rates at the federal bank level…we’re not sure if they’re gonna work anymore.
The whole idea of interest rates is that you make the cost of borrowing higher, so that demand becomes more expensive so that people and companies do less of it. But for that to work, you have to have a consumption as a primary drive in your economic system.
Most of the world doesn’t have that any longer. Most of the advanced world hit the point of no return with their demographic aging back in the nineties and places like Germany and Italy and Japan now have more people in their fifties and their forties than their thirties and their twenties and so on. Now in the United States, it hasn’t hit nearly as hard, but we still have this huge generation, the baby boomers are retiring and a very small generation, the Zoomers who are coming into the system right now in calendar year 2022. That’s a shortage of 400,000 workers. And by 2034, that number will have increased to 900,000. This is structural inflation, and this is a problem on the supply side. And when you raise the cost of borrowing, it doesn’t just impact people who are trying to buy a car or a destroyer. It also affects people who are trying to build out… industrial plant and productive capacity and train new workers.
It’s not clear to me whether in places where this demographic decline is advanced, such as Germany, will interest rates even work anymore. Because you are capable of strangling now supply with it and it doesn’t do anything to demand because there isn’t any. The, the economic rules of the past may not apply anymore. Now in the book, I called this something called the end of more, the idea that every economic model that we have developed in the last 500 years, whether it’s fascism or socialism or communism or capitalism, they were designed for an environment where the pie got a little bit bigger every year, largely because of population growth. That’s no longer true.
And so when I look at the problems that the Fed, oh yeah, lovely sound in the background, those are emergency generators. Fun touch, huh? When you look at the problem that the US Federal Reserve is dealing with right now, they would like to get inflation under control and interest rates are the tool they have.
But if we’re in a world where the normal relationships between demand and consumption and supply and production are somewhat out of whack and might not go back, it’s not clear to me that they can raise interest rates to dampen demand without also crushing supply, because we’ve never had a significant problem on the supply side before. And because we are now facing the greatest labor inflation in American history, raising interest rates just might not be the right tool.
And then it comes to the executive branch and that’s a whole other discussion of whether the Biden Administration is up to the challenge. Okay. So that’s the first big topic. I’m not sure that the tools apply anymore.
The second big topic….we made the bestseller list. We came in number 12 on the NYT best seller list late last night. Um, I’m still trying to calm down, but thank you. Thank you. Thank you all. Thank you to everyone who helped put the book together. Thank you to everyone who shared it with your friends. Thank you to everybody who bought a copy or who says they’re going to buy a copy. This has been a wild ride for the last four months with the Russia war. I feel like I’ve dropped the ball in so many ways because there’s so much going on. I’m doing my best to keep up. My team is fantastic, but ultimately it’s for the viewers and the readers out there that have made this happen. So thank you. Thank you. Thank you. Okay. That’s it for me. I’m gonna go see if I can find a place with at least one bar of signal to upload this and I will see you guys next time. Bye.
Russia and China provoke Finland short of war
Russia recently began sending hordes of migrants and refugees toward the Finnish border in an attempt to overwhelm Finland’s border posts and force the Finns to close them. China, in a separate incident, severed a crucial undersea cable off the Finnish coast by dragging an anchor along the seabed for twenty miles. These provocations fall
Is geothermal energy a viable solution to electricity shortage?
Stored deep within the earth’s core, geothermal energy is a naturally occurring renewable resource receiving backing from big tech companies. The aim is to harness this energy to fill gaps in wind and solar power generation, providing a source of clean power without burning fossil fuels such as coal, gas, or oil. Straight Arrow News
Why Siberian rail network attacks are a potential setback for Russia
Ukraine’s security service blew up railway connections linking Russia to China in a strike carried out deep in Siberia. This targeted action severed the only significant railway link between Russia and China, potentially impeding the flow of military supplies from China to Russia. Straight Arrow News contributor Peter Zeihan sheds light on the potential fallout
Methane is the low-hanging fruit at COP28 climate summit
During the COP 28 United Nations Climate Change Conference in the United Arab Emirates, conference president Sultan Ahmed Al Jaber announced a commitment aimed at curbing methane gas emissions. Methane, a powerful greenhouse gas, has been a focal point for climate advocacy groups urging nations to decrease emissions amid rising global temperatures. Straight Arrow News
Can far-right Wilders consolidate his power in the Netherlands?
In a surprising turn of events on Nov. 22, the anti-Islam populist Geert Wilders emerged victorious in the Netherlands’ election. The win for the far-right politician opens the door to a potential new coalition that many fear could disrupt the EU. But a Wilders-led government is not a sure thing, and he will likely have
Underreported stories from each side
UPenn loses $100 million donation after antisemitism hearing
13 sources | 15% from the left
Post-Roe, nearly 1 in 5 people seeking an abortion traveled out of state, analysis finds
10 sources | 0% from the right
In addition to the facts, we believe it’s vital to hear perspectives from all sides of the political spectrum.
We know it is important to hear from a diverse range of observers on the complex topics we face and believe our commentary partners will help you reach your own conclusions.
The commentaries published in this section are solely those of the contributors and do not reflect the views of Straight Arrow News.
- What in the World
- America Speaks
In addition to the facts, we believe it’s vital to hear perspectives from all sides of the political spectrum. We hope these different voices will help you reach your own conclusions.
The opinions published in this section are solely those of the contributors and do not reflect the views of Straight Arrow News.
Other AEI Contributors