Changes in the Relative GDPs of the G20 Nations over the Last 25 Years

The American Enterprise Institute has an interesting graphic on the relative GDPs of the G20 nations over the last 25 years.  Who's GDPs increased as a relative percentage of the total GDPs of the G20 nations and who's fell over that time?

Note that the European Union as a whole has a membership in G20, but not being a nation is excluded from the chart above.

What I am interested in is the change in the relative percentage of the GDP of the G20 nations over the past 25 years.  Let us look at the fraction of the 2018 percentage divided by the 1992 percentage beginning with the nations that had the highest percentages 25 years ago:

USA, 30.90/31.96 = 0.9668
Japan, 7.77/19.11 =  0.4066
Germany, 5.86/10.38 = 0.5645
France, 4.12/6.85 = 0.6015
Italy, 3.08/6.43 = 0.4790
United Kingdom, 4.18/5.77 = 0.7244
Canada, 2.63/2.90 = 0.9069
Russia, 2.51/2.25 = 1.1156
China, 19.50/2.09 = 9.3301
Brazil, 3.28/1.96 = 1.6735
Mexico, 1.83/1.78 = 1.0281
South Korea, 2.44/1.71 = 1.4269
Australia, 2.11/1.59 = 1.3270
India, 4.14/1.39 = 2.9784
Argentina, 1.02/1.12 = 0.9107
Turkey, 1.36/0.77 = 1.7662
Saudi Arabia, 1.09/0.67 = 1.6269
South Africa, 0.56/0.66 = 0.8485
Indonesia, 1.62/0.63 = 2.5714

If an underdeveloped nation is not determined to shoot itself in the foot, it can commonly make easy gains on its share of the world's GDP over time.  Similarly, the lesser developed nations of the G20 could easily have done so over the last 25 years.  Some of them have, the most remarkable one being China.  India has had the second greatest GDP surge among the G20 nations.  Third place belongs to Indonesia.  Turkey, Brazil, Saudi Arabia, South Korea, Australia, Russia, and Mexico have improved their relative positions in that order from more to less.  The gains of Russia and Mexico are actually very unimpressive.  The losers among the smaller economies of the G20 nations from biggest loser to smaller loser are South Africa and Argentina, though both were at one time relatively leading economies in the world.

Japan and the major nations of the European Union have suffered huge reductions in their significance, while the USA and Canada have seen relatively minor reductions in their relative economic significance.  The least bad performer of the major European Union nations has been the United Kingdom.  France has been the distant second least bad.  The former Axis nations of WWII have done relatively poorly with Germany being only 0.5645 as significant and Italy becoming only 0.4790 as significant.  Japan has many anti-competitive restrictions in its home economy and has a rapidly aging and shrinking population among its problems.

Both Canada and Australia have done far better than the United Kingdom, which I believe has been held back by its membership in the European Union.  If the United Kingdom simply makes a break from all of the European Union's collectivist requirements and bureaucracy, while it will likely do worse for a while as it adjusts to the new reality, it will do much better in the long run.  The United Kingdom should aim to be more like the USA as a dynamic economic power in the world and increase its trade with the USA, Canada, Australia, and India especially.  These are all nations doing comparative well, while France, Germany, and Italy are sinking rapidly.

The EU has smothered itself with many largely irrational safety and quality control policies, which I can see as such from the standpoint of being active in materials analysis and testing.  They are using these policies to suppress goods and services from outside the EU, but the effect is to increase costs and to make local companies lazy and unresponsive in an anti-competitive environment.  In addition, the EU has been following very foolish energy policies and has swallowed the catastrophic man-made global warming fraud hook, line, and sinker, with disastrous economic results.  The inability of the bigger economies of the EU to keep up in economic growth is the result.  The USA, for all of its increased regulations and the many anti-business policies of the Obama regime, has performed much better in comparison.  With Trump decreasing the burden of unreasonable regulations and following rational energy policies, the USA is improving its relative position in the world economy.  We can do even better to the extent that we can arrange truly free trade agreements with nations around the world.

King Coal Will Continue to Rule the World

The renewable energy, non-fossil fuel phantom is not about to replace Coal as the King of World Electric Power Generation.  The Western European attempt to replace coal with wind energy and solar power has only proven what was perfectly obvious:  They are unreliable and very expensive.  They are threatening Germany and other nations with severe winter power inadequacies and these are continuing to mount.  Industry is fleeing Germany for less expensive and more reliable electricity power.

The problem is not just that wind and solar power generation plants themselves are unreliable and expensive.  Because these power sources are unreliable, they have to be backed up by natural gas power plants, which can be tuned to higher or lower power outputs relatively rapidly, unlike coal-fired power plants.  The late start and the resistance to the development of shale oil and gas fields by using the well-proven frakking technique has left Europe with only high cost natural gas, much of which is imported from Russia.  The use of coal provides much less expensive and very reliable electric power, but also produces more of the falsely accused CO2 villain.

The European Union has regulations that were designed to reduce CO2 emissions which discouraged coal use altogether and limited natural gas power plants to standby duty, only to be turned on when the wind did not blow or blew too hard.  But, natural gas power plants are too expensive to keep running at less than about 57% of their capacity.  The result is that 60% of European natural gas electric power plants will be closed by 2016.  Power outages will become a frequent occurrence.  It will be miserable for residences and businesses will go out of business or move to other parts of the world.  Many of the big European businesses will continue, at an accelerated pace, to move more manufacturing operations to the US, where power is still more reliable and less expensive in many states despite Obama's best efforts to drive prices sky high.

Idiot European Union regulations or not, Europe will have to build more coal-fired power plants at some point.  According to the World Bank, in 2011 world-wide electric generation plant capacity was just over 22 trillion KWH or 22 billion MWH.  The presently known proposed building plans for coal-fired electric power plants are summarized in the schematic map below.  The 1.4 billion MWH of plants proposed will be a about a 6.4% increase in electric power generation capacity.  The biggest two contributors by far to this increase are China and India.  But, Russia, Turkey, and Vietnam are a distant 3, 4, and 5 by rank.  In Europe, Ukraine, Poland, and Germany are ranked 1, 2, and 3 with their proposed coal power plant increases.  Ukraine and Poland rightly have no qualms about this, but Germany is being driven to it out of necessity.

Given the coal-fired power plant plans of China, India, Russia, Turkey, Vietnam, South Africa, and the US, the contribution of Germany would have no significant impact on global warming, even if the failed hypothesis of CO2 emission catastrophe were true.  Obama's madmen and madwomen at the EPA are trying to nix the US building of such power plants and may succeed for awhile.  Eventually, we will learn what Germany is in the process of learning.

China is talking about trying to reduce its coal-fired power plant contribution to its increasing power needs.  However, the projected 2030 electric power plant generation capacity in 2030 is expected to compare with that of 2006 as shown below:

So in 2006, China had a 2.77 trillion KWH capacity and by 2030 it is expected to have an 8.55 trillion KWH capacity.  This is a 3.1 times increase.  Try as China may, the only way that can happen is if the use of coal powered plants greatly increases.  The 2006 coal-fired power plant capacity was 2.19 trillion KWH and it will expand in 2030 to 6.41 trillion KWH.  This is a 2.9 times increase!  The 2030 coal-fired power plant capacity of China will be the equivalent of nearly 30% of the present total world electric power generating capacity.

It is a very good thing that the hypothesis of catastrophic man-made global warming has failed.  The world is not going to be able to avoid the continued and even the increased use of coal.  If it tried, that would be a catastrophe.  The global warming alarmists time is drawing to a close.  King Coal will remain well ensconced on his throne.

European Energy Silliness: Wood is Top Renewable Fuel

Despite the huge investments in wind and solar renewable energy in Europe, the top form of renewable energy is wood biomass.  About half of Europe's much hyped effort to advance renewable forms of energy has wound up in wood fuel according to the 6 - 12 April issue of the Economist.  Even in Germany, 38% of non-fossil fuel consumption is wood.  In Poland and Finland, 80% of the renewable energy is from wood.

Wood, unlike wind and solar, is at least reliable.  The EU effort to get 20% of its energy from renewable sources by 2020 is impossible based on wind and solar.  Wood makes this possible.

Coal-fired power plants have been under pressure due to the production of carbon dioxide, which according to fable will cause catastrophic man-made global warming.  So, the power companies with coal-fired power plants like wood because they can easily modify a coal-fired power plant to mix in 10% wood pellets.  In Great Britain, power plants are given a huge subsidy to use wood and this is causing a number of coal-fired power plants to convert to wood use.

So much wood is being used for fuel that Europe is importing considerable wood.  In 2012, Europe used 13 million tonnes or 13 billion kilograms.  A tonne is a metric ton or 2204.6 pounds.  Europe is expected to use 25 to 30 million tonnes of wood pellets in 2020.  In 2010, wood pellet imports increased by 50%.  Global trade in wood pellets is expected to shoot up from about 10 to 12 million tonnes now to about 60 million tonnes by 2020.  Much of this wood comes from western Canada and the southern U.S.

Consequently, prices for wood are rising rapidly.  Wood pellet prices rose from $116 a tonne in August 2010 to $129 a tonne in December 2012.  Prices of hardwood from western Canada rose by 60% since the end of 2011.  These wood price increases have contributed to the closing of about 20 large saw mills making particle board in Europe over the last five years.  The higher prices are creating difficult times for pulp and paper companies, as well as furniture makers.

Burning wood pellets in coal-fired power plants makes no sense at all.  It was early on claimed that burning wood was carbon neutral, since as the trees grew, they removed carbon dioxide from the atmosphere.  There are many problems with this.  If you use hardwood pellets from western Canada, the output of CO2 from coal-fired plants using 10% wood pellets occurs now and it may take 100 years of new trees growing in western Canada to remove as much carbon dioxide from the atmosphere as is being emitted now.  In addition, making the wood pellets uses considerable energy and transporting them from North America to Europe uses still more.  It has been calculated that with the British subsidy of 45 Pounds per MWH of electricity, switching from gas to wood saves one tonne of CO2 emission at a cost of 225 pounds.  That is very expensive for an idea based on a failed hypothesis of catastrophic man-made global warming and a bad accounting of the total carbon dioxide emissions due to using wood pellet as fuel.

There are other considerations.  Land not used to grow trees can be used for other purposes that have value.  Taxpayers have to pay the subsidy money.  Consumers pay higher electricity costs, as well as higher particle board, paper, cardboard, board, and furniture costs.  They are forced to do this on the basis of a false hypothesis of catastrophic man-made global warming and concern for fossil fuel supplies in the face of the huge supplies of coal and natural gas now made available by hydraulic fracturing technology.

European socialism can sure cause Europeans to pursue and enforce some very silly ideas.

Krugman Claims Europe is Economically Successful, Proving Socialism Works

Paul Krugman says:

Europe is an economic success, and that success shows that social democracy works.

Since 1980 -- when our politics took a sharp turn to the right, while Europe's didn't -- America's real G.D.P. has grown, on average, 3 percent per year.  Meanwhile, the E.U. 15 -- the bloc of 15 countries that were members of the European Union before it was enlarged to include a number of former Communist nations -- has grown only 2.2 percent a year.  America rules!

Or maybe not.  All this really says is that we've had faster population growth.  Since 1980, per capita real G.D.P. -- which is what matters for living standards -- has risen about the same rate in America and in the E.U. 15:  1.95 percent a year here; 1.83 percent there.

Seems interesting and perhaps surprising, but wait.  Think about it.

First off, in 1981, not 1980, we stopped moving deeper into socialism, but we did almost nothing to reverse it.  In 1988, we restarted our momentum down the socialist path under the first President Bush with President Clinton and then the second President Bush continuing the slide into the numbing clutches of socialism.  We now have the highest corporate tax in the world, excepting Japan whose corporate tax will be lower than ours starting in 2011.  Meanwhile, many of the European countries have been reducing their corporate taxes and many other business taxes.  Some have adopted flat rate income taxes with growth rates increasing as a result.  Many of the nations have returned state-run enterprises to the private sector.  Yes, there are many legacies of socialism in Europe and yes, they are still enamored of it in many ways.  At the same time, they have come to understand that there are economic penalties associated with it and they have backed off from socialism somewhat. The effects of the long term legacy of socialism are stronger in the comparison between the U.S. and Europe than have been the effects only compared in the window since 1980 as Krugman does.

There are other problems in the comparison.  One is that our population growth is not just a variable in need of correction.  It is due to Americans having a more positive view of the future, which the socialist environment seems to kill off.  This makes it more tempting to have children.  It is also due to the fact that we allow very high levels of immigration to the U.S. and many of our immigrants are very poor as they begin their life here.  Many take years to learn the skills that native Americans have.  But, let us leave this caveat aside and look at the more meaningful per capita GDP numbers corrected for Purchasing Power Parity (PPP).  This information is available at a Blog called Political Calculations in a post entitled Battle of the Titans: U.S. vs E.U. GDP per Capita, 2008.

We find there that:

United States 2008 GDP-PPP is $45,588.10

European Union 2008 GDP-PPP is $31,182.49

The U.S. beats the complete E.U. by miles and miles, or more than 46%!  But this is not what Krugman was comparing.  He left out the newer members of the E.U. to exclude those most hurt by their prior experience with socialism.  So let us look at the results on a country by country and a state by state basis while ordering them together, with the E.U. countries in red (note that Norway and Switzerland are not E.U. countries) in the table at the end of this article.

Luxembourg does well and beats the U.S. average, but it comes in behind the District of Columbia and has a bit less than half the GDP-PPP of D.C. and it has a smaller population, so it does not raise the E.U. result relative to the U.S.  The next country on the list is Ireland, which comes in just behind the U.S. average of $45,588.10 with $45,475.12.  Then the Netherlands and Austria manage to beat 16 states.  Sweden, which has made a strong reversal of its socialist model lately, beats out the nine poorest U.S. states, but loses to the Okies!  The United Kingdom only beats seven states, finishing behind Montana.  Germany beats only five states and loses to Alabama.  France and Italy can only beat Mississippi!  None of the other countries of the E.U. can beat any state of the U.S.

So despite the fact that many of the European countries have been backing away from socialism and the U.S. has been moving deeper into its clutches, the standard of living in the U.S. is clearly much higher than that of Europeans with their long history of embracing socialism, even gussied up as social democracy.  The upcoming election should slow down our present slid deeper into the quagmire of socialism.  As the table below makes clear, you have to weigh a horror of seeing anyone around you who is better off materially than you are very heavily to find any reason to think socialism will give you a higher standard of living.  I do not believe any thinking Americans really want to trade places with European countries on this list and we should be able to agree that the Paul Krugman claim is false.

European Discrimination Against Mid-19th Century Slave Peoples

A favorite pastime of Europeans is to criticize the United States for its discrimination against black Americans or more recently for some complaints by Americans about illegal immigrants.  Our homegrown Progressives commonly view Europe, especially Western Europe, as the land of Nirvana.  They only wish our governments were as socially responsible as they believe the more socialist governments of Europe are.  As a result, Obama and his like have recently complained to the U.N. Human Rights Council about how horribly America still discriminates against black Americans and illegal immigrants. Obama's Justice Department recently filed a lawsuit against the state of Arizona for alleged discrimination against illegal immigrants and a complaint with the same U. N. Human Rights Council.

But the European Union has a major discrimination problem of its own.  The 4-10 Sep 2010 and the 18-24 Sep 2010 issues of The Economist discuss this problem.  It is the Roma, or Romanies, or Gypsies as they are variously called who it is thought migrated from Rajastan in India at about 1000 AD.  The Romanies were slaves in Romania until about the mid-19th Century.  Then in WWII, the Nazis uprooted them, took their possessions, and killed about 500,000 of them in concentration camps.  When the Soviets controlled Eastern Europe, they provided jobs, housing, and reduced the discrimination.

Now that the Eastern European countries are in the European Union, there are anti-discrimination laws, but they are largely unenforced.  They are commonly discriminated against in jobs.  In Slovakia, they are 10% of the population, but are 60% of the special needs school population.  Many are in the special needs schools to escape the bullying in the regular schools.  Boys are often put to work at an early age, cutting any schooling they get short.  Girls are often married off as teenagers.  The conditions of Roma settlements are often as bad as those of poor areas of Africa and India.  Their incomes, health, illiteracy, criminality, and life expectancy are worse than any other group in Europe.  Since the population of many European countries is shrinking and the Roma have large families, these problems will have a growing impact on Europe if they are not addressed.

Spain and Macedonia treat them better than many countries, while Bulgaria, the Czech Republic, Hungary, Romania, and Slovakia treat them very poorly.  An MEP from Hungary called for the mass internment of the Roma.  Violent attacks are often made on them.  The entrance of the Eastern European countries into the EU with its freedom of movement rules has allowed some Romani to seek a better life in Western Europe.  However, the Western Europeans have become upset with the appearance of shanty towns, an increase in pickpocketing and begging by children, and an increase in rapes and fighting.  In Western Europe, Roma have been evicted forcibly in Greece, attacked by mobs in Belfast, Ireland, and firebombed in Italy.  The Italian government began deporting them.  The French government has deported 8,000 Romani this year, sending them back to Romania and Bulgaria.  In fact, French police were ordered to clear 300 camps, with priority being given to removing the Roma camps.  When the European Commission complained to Nicolas Sarkozy, he suggested that Luxembourg, where the EU's justice commission resides, should provide the displaced Romanies a home.

The population of Roma in a number of countries in Europe:

Romania, 1,850,000
Bulgaria, 750,000
Spain, 725,000
Hungary, 700,000
Slovakia, 500,000
France, 400,000
Czech Republic, 300,000
Great Britain, 265,000
Macedonia, 198,000
Italy, 145,000
Albania, 115,000
Moldova, 108,000
Germany, 105,000
Kosovo, 38,000
Croatia, 35,000
Montenegro, 20,000
Slovenia, 9,000

There is one country, according to The Economist, where the Romani are treated just like other immigrants and those immigrants are treated pretty well.  Of course, those of you who are not Progressives know the answer immediately.  The country that has welcomed them and allowed them to make a much better life for themselves is the United States of America.  Yes, that same country Obama and the Progressives so love to denigrate.

Ragnar, Sink that Relief Ship Going to Greece!

With our national debt of nearly $13 trillion, huge shortfalls looming for Medicare, Medicaid, and Social Security, certain losses on GM, Chrysler, and many lending institutions, further losses for Ginny Mae and Freddy Mac, large losses for AMTRAK and the Postal Service, bailouts for many underfunded union retirement funds, and looming bailouts for U.S. states such as California, New York, and Rhode Island, the U.S. has recently guaranteed $56 billion of loans to Socialist Greece through our involvement with the IMF.

The loan guarantees to Greece are expected to be insufficient to save the Greek government from insolvency.  The Greek economy is only about 2% of the GDP of the European Union, but its insolvency has been a major threat to the weak economies throughout the EU.  About one-third of all workers in Greece work for the government.  They have retirement for hazardous occupations at age 58 and for women at age 50.  The hazardous occupations include musicians, news announcers, and hairdressers.  Greece worked its way into this insolvency by flouting the EU's rules on deficit spending and misrepresenting their indebtedness.  This was long recognized, but the EU did not enforce its rules, which have been widely violated in other nations in the EU also.  Portugal appears also to be on the verge of collapse.  Spain, with its wildly profligate spending on alternative energy, among many other popular socialist programs, is not far behind.  Italy and Ireland are also in sad shape and even the United Kingdom is in worse shape than the U.S.  We are likely to be expected to bailout all these countries whose socialist policies have brought them to the brink of failure through our contributions to the IMF.

The U.S. itself is near the brink of failure, if not quite as close as Greece, Portugal, Spain, Italy, Ireland, and the United Kingdom.  This is because the Progressives have so long worked so hard and so successfully to transform the U.S. into their European ideal of a socialist state.  We are now driving ourselves even faster into irrecoverable insolvency by sending relief ship after relief ship to Europe.  Where are you Ragnar?  You are needed.

Real life is working very hard at replicating Ayn Rand's great novel Atlas Shrugged.