Harry Dent Responds to Your Objections to The Need for Crisis and Improved Global Governance

On Friday, April 11, I wrote to you about our need for a major crisis and improved global governance. And boy did it cause a stir.

We got the biggest negative reaction we’ve ever seen.

So today, I’d like to respond to your objections.

First, I apologize for using some poorly chosen words, like “new world order.” I know that notion doesn’t sit well with you… and it suggests something much bigger than what I was looking at.

That was my mistake.

What I was trying to convey is that history (and I study history exhaustively) shows the need for increased governance as we grow and become much more urban and global.

When you progress from a rural nation of smaller towns to larger, urban cities, you need a greater level of government. Large cities and urban areas are much more complex, in interactions, traffic, infrastructures, regulations, crime, you name it.

Let’s be honest here: You simply can’t manage New York City with the same level of government relative to your size that would be fit for Mayberry.

Similarly, when you move to a global world of megacities, you need the appropriate amount of governance, with enforceable rules and regulations.

To suggest we need almost no global rules is like saying we should revert back to 50 individual states that have no federal government… where crossing from one state to another would require customs processing and perhaps even different currencies.

As much as that may or may not appeal to you, it’s unlikely to happen anytime soon.

And honestly, it doesn’t appeal to me. Europe is a mess because it tried to unify into one market and financial system much later than in the U.S. and without the appropriate level of governance to accommodate the new scale.

But here, our federal government has the necessary control over its financial system, trade and migration among states, and our system works better than that of the euro zone. If you disagree with me on that, then we just have to agree to disagree.

That’s not to say I want some giant, over-arching global government. Absolutely not!

All I’m saying is that, at any level, we need the “optimum minimum” of government… not just the minimum at all costs.

To go back to a much smaller government, with lower taxes, would require us to regress to the little house on the prairie type of life.

Sorry, but that’s just not for me!

What I was saying (albeit it poorly) in that Friday article is that we need some clear and enforceable rules at the global level… ones that are appropriate to our globalized economy.

But that’s not so say we need MORE global governance in general… just that we need it in three critical areas, which are:

Global trade and competition: If you think it’s good that Japan can artificially lower its currency to create an unfair advantage over its competitors, then you and I disagree.

Global pollution: If you think it’s OK that China, with an economy half our size, can pump 8.4 trillion tons of carbon dioxide into the atmosphere without a second thought, while the U.S. only pumps 5.4 trillion, then we disagree.

Europe, which is a similar size to us, creates much less pollution than we do. So why should it be penalized for doing the right thing while China is rewarded with lower costs for doing the wrong thing?

Arbitrary invasions of other countries… like the Ukraine (potentially), or Saddam Hussein and Kuwait in 1990. The U.S. bears much too great a burden for being the global policeman. We simply won’t be able to continue in such a role for much longer, especially when the American public has to choose between health care and protecting the world.

We would not have had to go into Kuwait, Iraq or Afghanistan virtually alone if there was a global agency that had the power and teeth to make strong demands and viable threats.

These are the types of improvements and stronger rules I think we need.

I certainly don’t think we need a global government that tries to tell other governments how to run things a certain way.

I DO think we need fair trade and competition, and fair business practices.

That said, I’d like you to know that disagreements like the one we had over that Friday article, in my opinion, are very healthy.

I don’t agree with anyone more than 90% of the time. Even Rodney and I don’t agree as much as that.

I only agree with the authors and experts I most tout, the ones I have speak at our conferences, like George Gilder and David Stockman, about 80% of the time.

My point is that we don’t have to agree all of the time.

Obviously, I want you to agree more often than not and to find value in my communications… but sometimes it’s good to disagree.

It not only improves our thinking… it improves our communication as well.

Thanks for the feedback. I learned a lot from it.


Harry

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About Author

Harry studied economics in college in the ’70s, but found it vague and inconclusive. He became so disillusioned by the state of the profession that he turned his back on it. Instead, he threw himself into the burgeoning New Science of Finance, which married economic research and market research and encompassed identifying and studying demographic trends, business cycles, consumers’ purchasing power and many, many other trends that empowered him to forecast economic and market changes.