The bizarre and ever-longer process by which the world's most powerful and wealthy country chooses its next leader is always fascinating. This year, with the very real prospect of the first woman or the first black or the first Mormon or even in John McCain the first former prisoner-of-war (and torture victim) president, it will be compelling.

There is also the parallel prospect of the next president inheriting a very serious recession, which will depend on the ability of the world's central banks to get the commercial banks out of the liquidity mess into which they have got themselves.

The jury on this financial crisis may well be out for the whole of 2008, an election year that will be enlivened by the likelihood that the owners of more than a million American homes will be unable to meet their mortgage payments and will face foreclosure. A disproportionate number of these will be black and Hispanic, which will make the political effects all the more complex.

Already, the Iowa caucuses and the New Hampshire primary are distracting attention from the social and political meltdown under way in Pakistan. Anyone who thinks Iraq and Afghanistan have been a mess should ponder the implication of the world's only Muslim nuclear power becoming a failed state.

Asians may be forgiven for wondering whether the new year will see China's remorseless economic advance stall or continue. Pessimists fear the slowing of the American economy will erode China's export trade, puncture the bubble of China's overheated stock markets and trigger an Asian recession. Optimists believe the Beijing leadership will let nothing tarnish the bright image of China's growth, at least until after the great showcase of the Beijing Olympics.

Russia and much of Africa and the Middle East are asking themselves how long the great $90-a-barrel oil bonanza can continue and whether a slowing America and the prospects of a global recession will slash demand and set the oil price tumbling. Some far-sighted oil exporters in Saudi Arabia and the Gulf think a modest slowdown that brings the price down to around $60 could be beneficial.

When oil costs $90 a barrel, all sorts of alternative technologies from Canada's tar sands to solar and wind power and biofuels become not just viable but highly attractive. It is not in the long-term interest of oil exporters to allow this to happen. As former Saudi Oil Minister Sheik Yamani used to say, "The Stone Age did not end because the world ran out of stones." Too much greed by the oil states could promote their own obsolescence.

Africa and those underdeveloped parts of Asia and Latin America that have neither oil nor gas are asking themselves the same question, but for a different reason. The debt relief that was granted to the world's poorest nations at the Gleneagles, Scotland, Group of Eight summit in 2005 has been wiped out by the rising costs of their energy imports. They are back to square one, but with much less chance this time of the G8 nations coming to their relief again.

Few will ask the question whether the Doha Round of world trade talks is finally past saving. Many think it to be dead already. Others hear the increasingly protectionist rhetoric coming from Republican and Democratic presidential candidates alike and assume that the funeral might as well be announced. Many Americans would applaud; more than half of them now tell pollsters that free trade has been "bad for America."

Since trade liberalization has been the potent force behind the globalization that is hauling hundreds of millions of Chinese and Indians out of poverty and making the global economy grow at a healthy 5 percent a year, this would be a tragedy for the world. It would also be most unpleasant for the American economy, which has so far been the greatest beneficiary of the liberal trading regime that successive U.S. administrations have built and promoted since 1945.

It could get worse. The bills now before the U.S. Congress to impose sweeping tariffs on Chinese imports unless Beijing sharply revalues its currency could trigger a trade war. And if China retaliates by dumping even a fraction its vast stock of more than a thousand billion dollars, or by ostentatiously buying euros and yen and sterling, the resulting dollar collapse could plunge the world economy into the kind of turmoil that would invite comparison with 1929 and 1931.

Some will look ahead and suggest that these concerns are overshadowed by the challenge of climate change and the ability of the quarrelsome human race to craft a sensible strategy to meet it. The omens from this month's Bali summit were mixed. Everyone agrees that something must be done; vast differences remain over which countries should do what, and most Western politicians suspect that their voters will not like the most obvious recourse, a universal carbon tax.

The irony, of course, is that the world is already paying a stiff carbon tax in the elevated oil price. The proceeds of this tax, however, are not being invested in sensible ways like alternative technologies, but in foolish and self-defeating ones that make the problem worse. High oil prices help more Russians buy big gas-guzzling cars. They let the Saudis create energy-intensive cities in the desert that depend on burning more oil to make seawater drinkable.

And they help the booming Gulf city states like Dubai to build luxury homes on artificial islands shaped like palm trees that are likely to become distinctly damp as the sea levels continue their ominous rise. The more fossil fuels we burn, the faster that rise will be.

In wishing a happy new year to all our readers, this columnist would prefer that he could also wish us all a rather boring 2008. For better or worse, it is likely to be far more tumultuous.

Community
Email This Article
Comment On This Article

Related Links
Learn about the Superpowers of the 21st Century at SpaceWar.com
Learn about nuclear weapons doctrine and defense at SpaceWar.com

Memory Foam Mattress Review

SPACE MEDIA NETWORK PROMOTIONS Solar Energy Solutions Tempur-Pedic Mattress Comparison ... Newsletters :: SpaceDaily :: SpaceWar :: TerraDaily :: Energy Daily XML Feeds :: Space News :: Earth News :: War News :: Solar Energy News