The dying western flame

Today I wanted to highlight Japan’s lapse back into recession and its implications for the CNMI tourism industry, but there will be time for that later, given that the implications aren’t really very dramatic. That’s mere fuzz on the economic radar screen. By contrast, the profound factors that are going to change the entire Asia-Pacific region are just coming into public view. I have warned you about these factors for over a decade; the fall of the dollar, for one, and, more recently, the collapse in the U.S. debt markets.

This is too big of a story to pass up, now that it’s headline stuff all over the world. And it’s not pointy-headed trivia. We’re witnessing history. And it probably points to why you should start studying Mandarin, or maybe should dig a fox hole in Marpi.

I’ll put the conclusion first: The West is sinking, right in front of our eyes, and this is going to cause a lot of grief, and a lot of opportunity, in the East. Between now and then, there’s a distinct possibility (or so I think) of a war, be it a trade war, or the worse kind.

Economically, the strongest component of the West, the U.S. (of course), strikes me as entirely un-viable. It’s built on a pile of toxic debt that can never be paid back. In fact, this story just hit my desk: The U.S. federal deficit alone is on track to exceed one trillion dollars on a yearly basis. A trillion!

Government debt, corporate debt, personal debt, mortgage debt, it’s just not going to fly. Because of this false prosperity, workers have grown accustomed to standards of living that are far in excess of their productivity levels. Big economies are very hard to predict with accurate timing, but standards of living seem very likely to start reverting to their fundamental levels very soon; eventually, this could be about half (yes, half) of what standards are now.

If and when this happens, the fear and anger will be too big to ignore.

So you can probably foresee the fallout for yourself, you don’t need me to lead you around by the nose. And, as for Europe, the experts who I follow think it’s in for a similar fate.

OK, but where does the East come in, outside of the obvious implications of their major export markets sagging, and their crazy investments in doomed securities and currencies going sour?

Well, simply put, I think the West is going in one direction, the East is going in another, and when these trajectories cross, somebody is going to miscalculate, and things will get contentious.

Many Americans think that everybody wants to emulate America, and, therefore, Americans are prone to projecting American beliefs onto foreign cultures, and prone to using these premises to gauge how those cultures will react to various situations. Europe isn’t immune to the same outlook. The West enjoyed its prosperity, then got tired of the exertions and risks it required, and, well, there it is. But I don’t think everyone in the East is similarly dissipated or disposed; most of them haven’t had their day in the economic sun yet. It’s their turn now, and I don’t think they’ll be very happy if the West tries to interfere.

And, even if the East embraces more statism it will probably prefer its own brand of it, instead of the western brand. Why wouldn’t it?

In summary, as goes the western economies, so goes western clout in Asia, and the closer we get to the day when some advanced Asian nation tells some important western official to shut up. Or maybe some other small event will get the avalanche going. But you can be sure it will be something, and the latent tensions between East and West will snap into more tangible scraps.

Where will this leave Saipan? Well, I guess western tensions with Asia would, initially mean more money would be poured into Saipan to shore up its defensive viability.

But in the longer run, well, the European powers have, one by one, sunk into their own problems, and have mostly lost their grips on Asia. I thought of this recently, as I stood on the steps of St. Andrew’s church in Kowloon, Hong Kong. I could almost hear the crumbling edifice of western glory, vitality, and power sinking into the gray mire of dissipation and bureaucratic collectivism. Britannia no longer rules the waves. Heck, it can barely keep a grip on London. The U.S. took up the torch, so to speak, but now it can barely keep a grip on San Diego or Tucson. Who to pass the torch to? Nobody. The West has, well, run its course.

I don’t know what language will be spoken on Saipan in, say, two generations, but I doubt it will be English. I just hope that, whichever dictionary is chosen, the switch is made with a polite bow, or perhaps a handshake, and not with artillery.