States lead on energy, but jobless recovery rough on many americans
States have led the way in the domestic energy revolution, but the recovery may well be less helpful than Americans would have hoped for, according to Ian Bremmer, president of the Eurasia Group, a leading political risk consulting firm. I had the opportunity to ask him about some of the critical issues in domestic politics.
“The US is not playing a global leadership role and doesn’t want to,” he explains, noting that our appetite to serve as a global police force and mediator has declined even in the face of flare ups in Syria and Iraq. However, the US is poised to be the “best large bet” for economic recovery.
“The US has allowed the energy revolution to happen without over regulating and that’s happened largely at the state level which is positive for markets,” Bremmer says. “I think there is a decent chance that immigration reform will go through. The budgetary environment has been made somewhat better even though it was done in a very stupid way. There’s even a small shot tax reform could happen. The upside for the US is that even if things go really badly in the US government, it doesn’t really hurt the market here in the same way that it does when things go badly in other governments like Russia, India or the emerging markets.”
He says that even with all of these bright spots the real trouble for average Americans will be the largely jobless recovery. “The problem the US has is not a problem for investors, it’s a problem for many Americans who aren’t investors and that’s sad, and that needs to be fixed. That should depress those of us who have believed in the American dream for all Americans since our nation was founded, there is no doubt in my mind that the US is in decline from the perspective of the bottom half of earners in the US and has been for decades – we’re not addressing that.”
To him, globalization isn’t the only issue causing this problem. “Large numbers of Americans lack the skill set for this economy and they aren’t being trained properly. They also don’t have the networking skills. This is an economy where you find jobs if you know people are hiring or know someone who can recommend you.”
The vast differences in life experience between people inside and outside of urban centers is also a problem. “It effects the relationships you have, or your parents have from preschool all the way through life,” Bremmer notes. The American system fails a lot of people outside of “super zip codes,” where opportunity and training are easier to come by. There also is little incentive to change this at the Congressional level, when monied interests get more from the current divide than they would from fixing it.
Going forward in the US, this he says that even though the economy might get better, “there will be many people with flexible job environments that do not pay as well, and do not always come with benefits. This isn’t just an US problem, it’s also a Japan problem. Few people can start at a company now and spend 20 years there.”