Continued from last Tuesday...
* We are in the infancy of the technology revolution. Consider This. The last ice age ended 10,000 years ago, The New World was discovered 500 years ago (Chris Columbus), The United States is 232 years old. The light bulb only 129 years ago. By comparison, the computerization of the world is only a few decades old. The World Wide Web in comparison is only going on 17 years (August 6, 1991) as a publicly available service. A proverbial "drop in the bucket" on the human development timeline. Most people didn't get online service at home until the late 1990s.
The world is now linked together with the ability to access information anywhere on the planet almost instantly. As new, faster, easier technology floods the market, the cost will be high initially but will eventually level off as the supply increases. Gradually, as the technology becomes more integrated in society, the cost will lower. Remember how expensive plasma TVs were 7 years ago?
For the developing world to take advantage of these technological goods to better their lives and increase their quality of living, a free market has to be opened up by the governments of these countries. While I firmly believe that these governments will eventually acquiesce under pressure from their peoples to open their society (North Korea et all), the adaptation of these societies psychologically to a free market economy must be the first step in fostering an environment conducive in creating growth and ultimately a greater standard of living. It will take time, undoubtedly a few generations for any country.
For example, I believe you can argue even within our own country, society as a whole has yet to grasp Internet technology as a "fully-integrated" system capable of many wondrous things. The World Wide Web as of this writing, 2008, has been fully absorbed into many disciplines but it continues to be a novelty as a whole. How many people do you know over the age of 50 that refuse to use the Internet? Many are still scared of computers. A huge paradigm shift is needed to quell this fear. How this will manifest itself is any one's guess. Expect to wait another generation--20 or 30 years before we see the fruits of this shift. Indeed, we have a long way to go in our own developmental hangups.
* While not sexy to report in the media, free-market forces have a very pronounced effect on the global economy that, in my opinion, are many times too large for any president to alter wholesale with policy. Policy can help for sure but its not the ultimate remedy. Can you imagine a presidential candidate on the campaign trail explaining the macroeconomic forces at work for their constituents in the rust belt? Most of them wouldn't understand and probably wouldn't give a damn especially if they just lost their job. Yet, these macroeconomic effects probably govern more what happens than what most of us realize.
The next president has to fiscally responsible. I have to hand it to Bill Clinton. He acted like a fiscal Conservative, much to the dismay of his fellow democrats in congress, when he pulled back spending and trimmed the deficit in his first several years in office setting the stage for a government surplus.
He didn't push for tax cuts increasing the potential spending tendencies of Congress. Whoever is the next president, he or she cannot cut taxes and increase spending on social programs at the same time while reducing the deficit along with keeping campaign promises of universal health care or changes in medicare at the same time infusing money into Social Security while funding the military at these levels. Even if we pulled out of Iraq and devoted all of that money to these programs, it would still be short. Its mathematically and realistically impossible to achieve everything.
Something has to give. Someone or some group will be ticked off. We shall see what or who this "something" or 'someone" is.
You won't hear any of this from either side of the political isle. Maybe we don't want to hear it because its complexity scares us and we all hope for a simply solution. Maybe all we want to hear is the tone of what the candidates say not the underlying dirty truth.
On a lighter note, Hong Kong's Hang Seng Index is my favorite global market indice. I chuckle every time I say it.