How do you assess the rapidly changing economic and political environment, and do you see a viable solution on the horizon to create stability?
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Jeff Christian: There are major tectonic shifts underway in the political, economic, and financial system. I think, a lot of those shifts are grossly misunderstood by many people. The media, social media and media combined, accelerate the misunderstanding and has a very simplistic view that doesn't exist. With that said, these problems exist and many of them don't have readily apparent solutions. In addition to which, the political system in the United States and in other countries, seems geared to prevent logical solutions.
I wrote a piece several years ago called, Five Easy Pieces, and it was five things that could be done in the U.S. fiscal policy that would actually restore surpluses to the Federal surplus. They would have minimal effects on the top 1%-5% of the population, but we could've done that. Some of these five easy pieces have been talked about by Congressman and politicians for decades, but they've never been introduced. Some of them are relatively easy to do, but the lobbying structure of Congress prevents that. There doesn't seem to be a good long-term plan.
In many governments, the United States government for sure, but you see this also in Europe. The Japanese and the Chinese understand this and they're not making this mistake. But you see in the United States and you see in Europe politicians saying, "Well look, back in the 1950's and the 1960's, the U.S. grew at a 4.5% real GDP rate on average. The 1970's, even the 80's it was 3.5%. In the oddies, it was 1.7% and this decade so far is about 2.1%. We need to get back to 4.5% or 3.5% real GDP growth to pay for all of the largesse and overspending that the government has been doing. Problem is that you can't get back there. We are a mature economy. We are a mature society. We are aging demographics. We're in a globalized, deregulated, technologically oriented, global economy that doesn't really lend itself to get there. Politicians in the United States and in Europe keep saying, "Well, the solution is to do... figure out how to get back to 3.5% real GDP." In Japan and in China, they're saying, "No, no, no, no..." In Japan, in particular, they're saying, "We have an aging population. We have an aging mature economy and a globalized environment. We need to understand that growth of .5% to 1% is the new norm and we need to scale our government policies to reflect that and to reflect the needs of our aging population." In the United States, the government hasn't made that realization yet. So, rather than saying what we need to do is rescale government to an extended period of lower growth, they continue to spend as if we're going to get back to 3.5%, and they continue to pretend that there's a way to get back to 3.5% and it's just not there.