Brazil Is the New America: How Brazil Offers Upward Mobility in a Collapsing World
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Authors: James Dale Davidson
Tags: #Business & Economics, #Economic Conditions
Contents
A Decrease in Productive Capacity
Chapter 2: The Original America is the New Brazil
Can America's Destiny Be Fulfilled in Brazil?
Chapter 3: How Brazil Became Endowed for Prosperity in a Collapsing World
Yesterday's Limitations as Today's Strengths
Chapter 4: Prosperity and Energy Density
Denser Energy Equals a Rise in Prosperity
The Phases of Extracting Energy
The Shift from Coal to Oil and World War I
The Competition for Prosperity
The SS
Great Britain
Sails Again
Waiting for Our Malthusian Moment
Dearth, Insanity, and Revolution
Chapter 6: Deficit Attention Disorder
Debtism Helps Politicians Manipulate You
The U.S. Budget Deficits Would Make Greece Blush
Worse than the Great Depression
Chapter 7: “Rome” Falls, Again
Slip-Sliding Down the Road to National Insolvency
Welcome to the Second Decline and Fall of “Rome”
Americans as the New Illegal Emigrants
Chapter 8: The Sunny Side of the Leverage Cycle
You Are in Steerage on a Sinking Ship
Important Lessons from Hyperinflation
GDP Gains Based on Income Growth
Chapter 9: A Bounty of Water and Land
Leading the Way in Renewable Energy
Declining Power after an Energy Transition
Chapter 11: Demographic Turbocharge
Chapter 12: Back to the Future
Is Brazil Following the United States Too Closely?
Chapter 13: On the Outside Looking In
“Plagiarize, Plagiarize, Why Not Use Your Eyes?”
Coming Soon: Financial Repression
From the Empire Settlement Act to Unsettling Choices
Copyright © 2012 by James Dale Davidson. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
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Library of Congress Cataloging-in-Publication Data:
Davidson, James Dale.
Brazil is the new America : how Brazil offers upward mobility in a collapsing world / James Dale Davidson.
p. cm.
Includes index.
ISBN 978-1-118-00663-4 (cloth); ISBN 978-1-118-22175-4 (ebk);
ISBN 978-1-118-26041-8 (ebk); ISBN 978-1-118-23556-0 (ebk)
1. Economic developmentâBrazil. 2. Economic developmentâUnited States. 3. Economic forecastingâBrazil. 4. Economic forecastingâUnited States. 5. BrazilâEconomic conditionsâ21st century. 6. United StatesâEconomic conditionsâ21st century. 7. BrazilâSocial conditionsâ21st century. 8. United StatesâSocial conditionsâ21st century. I. Title.
HC187.D38 2012
330.981âdc23
2012010364
To my Brazilian son, Arthur Leonardo DeClare Davidson
Preface
The first decade of the twenty-first century has taught me a lesson. I now realize that I was hasty to be cocky half a lifetime ago about having been born in the United States.
When I was a young man, the American Dream was alive and well. I took advantage of it to invent my own work as a serial entrepreneur. I have had a hand in launching and building three billion dollar-plus companies, two companies that attained a market cap of half a billion dollars or more, and about a dozen others that became worth $100 million or more. I enjoyed the adventure and the high standard of living that went with it. But I don't see the same opportunities ahead for my children, especially my two older children who are entirely American as I was.
By no means am I selling them short. They are both bright and energetic. They will need all the energy they can muster to succeed in the world in which they will live.
My youngest child has better prospects. He is a Brazilian citizen who speaks fluent Portuguese and is already learning Mandarin, to go with Spanish, French, and English in his language repertoire. Touch wood, he seems to have a bright future as a global citizen, more because his mother's family includes some well-connected and successful Brazilians than because of his connections to the United States.
Most Americans are ignorant of Brazil. Many might be inclined to consider it an Hispanic country. Or guess that its capital is Buenos Aires. Equally, many would be inclined to suppose that Brazil is a small, poor country. I remember my astonishment several years ago when a very wealthy Brazilian woman of my acquaintance took a fancy to a house in McLean, Virginia, that was for sale by its owner. When the owner learned that the proposed buyer was Brazilian, he arrogantly announced that he would take the discussion no further because “a Brazilian could not possibly afford” his house. What an idiot. Now I live in South Florida, where newspapers report that up to half of all real property transactions in Miami in 2011 were conducted with Brazilians for cash.
We Americans believe ourselves to be rich. For our entire lives, we have been told that the United States is the richest country on earth. Many of us who cast uneasy glances into the future anticipated that sometime in the by-and-by the unrealistic promises made to pay Social Security and Medicare benefits would come to grief. We were optimists. That someday is not decades away, but the day after tomorrow. Thinking superficially, we have supposed as Americans that we were far richer than Brazilians. No longer.
A little-noted report from the United States Treasury in August 2011 showed that the U.S. government owes $210 billion or approximately $1,034 per capita to Brazilians ($4,138 per Brazilian household). How many American households bear this burden could be debated. According to the U.S. Census Bureau, there are approximately 113,000,000 U.S. households, but only 97 million households are above the poverty line. Those who are already destitute have no capacity to pay the government's vast obligations. Another 18 million households are retired and no longer producing goods and services that can be used to support the government's obligations. That leaves approximately 79 million, nonretired, apparently solvent households to pay the staggering burdens left behind by economic collapse. On average, therefore, each productive household in the United States will owe the average Brazilian $2,658. The world is changing faster than we think.
This book is an attempt to explain how and why the world is changing, with respect to the other great, continental American economy, Brazil.
Acknowledgments
I thank the many persons whose thoughts entertained and provoked me as I got to know Brazil. The works of many of the published authorities are cited in the text. In particular, I found Austrian novelist Stefan Zweig's classic,
Brazil: A Land of the Future
, to be far-seeing and informative.
I was especially lucky in having the support and encouragement of Romualdo Concado, who graciously allowed me to roost in the guest room of his home in Belvedere, Belo Horizonte. He is not only a great host; he is also a well-informed observer of the Brazilian economy. He entertained me with stories about why “Brazil is no country for beginners.” He generously read early drafts of some of the chapters and saved me from embarrassing mistakes. I also thank Cristina Barbosa for her spirit-lifting encouragement and her perspectives on the trials of dealing with Brazilian bureaucracy. I also thank my sometimes co-author, Lord William Rees-Mogg, for his encouragement. And cheers to my personal assistant, Laurie Geller, for braving tottering stacks of notes, books, and drafts to keep me organized in the writing process.
Arthur's mother, Taciana Davidson, helped set this whole enterprise in motion. I am grateful for the good years we spent together. She welcomed me into her Brazilian family, and went far to educate me on the ways of her country. I also thank my colleague Charles Del Valle for his intelligent comments on early drafts; my agent, Theron Raines, for finding a publisher; Jennifer MacDonald, at John Wiley & Sons, for her unfailing, good humor and constructive edits; and Debra Englander, for thinking I have an important thesis about Brazil and for publishing this book.