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James Hong

Tuesday, February 22, 2011

The price of democracy (to us)

I am supportive of democracy in the Middle East, if true democracy can be achieved. While extremists grab the headlines and form our impressions, the average person in these countries want the same things everyone else wants: food, shelter, opportunity, a sense of future and hope for their children, friends, family, and peace. Systems of government in the Middle East that distribute the wealth of their resources can be stable. However, there's a lot that can go wrong between where we are now and such a utopian vision. It not likely to happen, because where there is oil there is power and where there is power there is corruption.

What I really want to talk about is the price of these revolutions to those of us living in the rest of the world.

Ever since they started pumping oil out of the ground in the Middle East, the western world and the US government in particular could give a damn about democracy in the region. All they wanted was stability and "their guys" in control so oil could be extracted at a good price. Have no doubt, half of the guys being toppled are "our" guys. Now that they are being ousted, it can only lead to oil becoming more expensive.

This is bad news for our economy. As we learned in the 70s and in 2008, as energy prices rise, everything else falls. EVERYTHING. Energy is the basis of most of the technological leverage the world has created over the past 100 years. Google's servers need energy. Your cell phone needs energy. The food we eat requires a lot of energy, from fertilizer to pesticides to transporting that banana from south america to your plate. Energy is everywhere. If prices rise, expect everything to get a lot more expensive. Expect corporate profits and the stock market to fall. Expect real estate to fall. The only thing that might not fall is gold, due to the worldwide civil unrest that may ensue.


Blogger ashton said...

Good points on ME democracy and energy. I think if democracy ever takes hold at any scale in the ME it will likely not resemble what we have in the US- if that is the standard for true democracy. It will have to adapt to local culture which does not change very fast. What that would look like I have no clue.

The strength of local culture around the world always impresses me. Technology changes our tools very quickly but our values and goals change much slower if at all. Living in China now for the past few years it appears to me that any system (policy or businesses) that takes hold here will always be Chinese flavored first (e.g. reflects the cultures values and how things are acceptably done). Heck even our KFC restaurants sell rice porridge & crab meat! And if MCD and KFC localize to this extent internationally then surely democracy would as well in the ME (as in all other places)- for they are all governed by the people's choices.

The chicken is the only common thing on all KFC menus. ;)

(BTW I came across this blog while thinking today "what ever became of hot or not?", fun memories of your site from back in the day.)

2:37 AM  

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