Currently, there are four major transformations that are shaping

political, economic and world events. These transformations have

profound implications for American business owners, our culture and our

way of life.

 

 1. The War in Iraq

There are three major monotheistic religions in the world:

Christianity, Judaism and Islam. In the 16th century, Judaism and

Christianity reconciled with the modern world. The rabbis, priests and

scholars found a way to settle up and pave the way forward. Religion

remained at the center of life, church and state became separate. Rule

of law, idea of economic liberty, individual rights, human Rights-all

these are defining points of modern Western civilization. These concepts

started with the Greeks but didn't take off until the 15th and 16th

century when Judaism and Christianity found a way to reconcile with the

modern world. When that happened, it unleashed the scientific revolution

and the greatest outpouring of art, literature and music the world has

around the world who are normal people. However, there is a radical

streak within Islam. When the radicals are in charge, Islam attacks

Western civilization. Islam first attacked Western civilization in the

7th century, and later in the 16th and 17th centuries. By 1683, the

Moslems (Turks from the Ottoman Empire) were literally at the gates of

Vienna. It was in Vienna that the climatic battle between Islam and

Western civilization took place. The West won and went forward. Islam

lost and went backward. Interestingly, the date of that battle was

September 11. Since them, Islam has not found a way to reconcile with

radical Islam. To deal with terrorism, the U.S. is doing two things.

First, units of our armed forces are in 30 countries around the world

hunting down terrorist groups and dealing with them. This gets very

little publicity. Second we are taking military action in Afghanistan

whether the war in Iraq is right or wrong. However, the underlying

strategy behind the war is to use our military to remove the radicals

from power and give the moderates a chance. Our hope is that, over time,

the moderates will find a way to bring Islam forward into the 21st

century. That's what our involvement in Iraq and Afghanistan is all

people can kill a large number of people very quickly. They can use

airplanes, bombs, anthrax, chemical weapons or dirty bombs. Even with a

first-rate intelligence service (which the U.S. does not have), you

can't stop every attack. That means our tolerance for political

horseplay has dropped to zero. No longer will we play games with

 That's why we have thought that if we could knock out the radicals and

give the moderates a chance to hold power, they might find a way to

reconcile Islam with the modern world. So when looking at Afghanistan or

farms and villages into the cities. Their plan is to move another 300

million in the next 20 years. When you put that many people into the

cities, you have to find work for them. That is why China is addicted to

manufacturing; they have to put all the relocated people to work. When

we decide to manufacture something in the U.S., it's based on market

needs and the opportunity to make a profit. In China, they make the

decision because they want the jobs, which is a very different

low prices. As a result, a unique kind of economic codependency has

developed between the two countries. If we ever stop buying from China,

they will explode politically. If China stops selling to us, our economy

will take a huge hit because prices will jump. We are subsidizing their

materials, which drives prices up worldwide. China is also thirsty for

oil, which is one reason oil is now at $60 a barrel. By 2020, China will

produce more cars than the U.S. China is also buying its way into the

oil infrastructure around the world. They are doing it in the open

market and paying fair market prices, but millions of barrels of oil

that would have gone to the U.S. are now going to China.  China's quest

to assure it has the oil it needs to fuel its economy is a major factor

in world politics and economics. We have our Navy fleets protecting the

sea lines, specifically the ability to get the tankers through. It won't

be long before the Chinese have an aircraft carrier sitting in the

Persian Gulf as well. The question is, will their aircraft carrier be

civilization obsessed with sex, this is remarkable. Maintaining a steady

population requires a birth rate of 2.1. In Western Europe, the birth

rate currently stands at 1.5, or 30 percent below replacement. In 30

years there will be 70 to 80 million fewer Europeans than there are

today. The current birth rate in Germany is 1.3. Italy and Spain are

even lower at 1.2. At that rate, the working age population declines by

cultures of their host countries, which is a political catastrophe. One

reason Germany and France don't support the Iraq war is they fear their

Moslem populations will explode on them. By 2020, more than half of all

a traditional religious society birth rate to sustain it. The Europeans

million people over the next 30 years. Because Japan has a very

different society than Europe, they refuse to import workers. Instead,

they are just shutting down. Japan has already closed 2000 schools, and

is closing them down at the rate of 300 per year. Japan is also aging

very rapidly. By 2020, one out of every five Japanese will be at least

70 years old. Nobody has any idea about how to run an economy with those

engines, aren't merely in recession, they're shutting down. This will

have a huge impact on the world economy, and it is already beginning to

happen. Why are the birthrates so low? There is a direct correlation

between abandonment of traditional religious society and a drop in birth

rate, and Christianity in Europe is becoming irrelevant. The second

reason is economic. When the birth rate drops below replacement, the

population ages. With fewer working people to support more retired

people, it puts a crushing tax burden on the smaller group of working

age people. As a result, young people delay marriage and having a

increase in population because of immigration. When broken down by

ethnicity, the Anglo birth rate is 1.6 (same as France) while the

Hispanic birth rate is 2.7. In the U.S., the baby boomers are starting

to retire in massive numbers. This will push the elder dependency ratio

from 19 to 38 over the next 10 to 15 years. This is not as bad as

society understands-you need kids to have a healthy society. Children

are huge consumers. Then they grow up to become taxpayers. That's how a

society works, but the post-modern secular state seems to have forgotten

that. If U.S. birth rates of the past 20 to 30 years had been the same

as post-World War II, there would be no Social Security or Medicare

creates a middle class and women move into the workforce, birth rates

development. After World War II, the U.S. instituted a $600 tax credit

per child. The idea was to enable mom and dad to have four children

without being troubled by taxes. This led to a baby boom of 22 million

countries, there is a preference for boys over girls, and we now have

the technology to know which is which before they are born. In China and

India, many families are aborting the girls. As a result, in each of

these countries there are 70 million boys growing up who will never find

wives. When left alone, nature produces 103 boys for every 100 girls. In

be smaller than that of Yemen. Russia has one-sixth of the earth's land

surface and much of its oil. You can't control that much area with such

a small population. Immediately to the south, you have China with 70

million unmarried men; are a real potential nightmare scenario for

of American business. Today's business environment is very complex and

competitive. To succeed, you have to be the best, which means having the

highest quality and lowest cost. Whatever your price point, you must

have the best quality and lowest price. To be the best, you have to

concentrate on one thing. You can't be all things to all people and be

Intel makes the chips, Microsoft makes the software, and someone else

makes the modems, hard drives, monitors, etc. IBM even out sources their

call center. Because IBM has all these companies supplying goods and

services cheaper and better than they could do it themselves, they can

make a better computer at a lower cost. This is called a fracturing of

business. When one company can make a better product by relying on

others to perform functions the business used to do itself, it creates a

 The companies who supply IBM are now doing the same thing-outsourcing

many of their core services and production process. As a result, they

can make cheaper, better products. Over time, this pyramid continues to

get bigger and bigger. Just when you think it can't fracture again, it

does. Even very small businesses can have a large pyramid of corporate

entities that perform many of its important functions. One aspect of

this trend is that companies end up with fewer employees and more

and "complementor." At the top of the pyramid, IBM is the integrator. As

you go down the pyramid, Microsoft, Intel and the other companies that

support IBM are the complementors. However, each of the complementors is

itself an integrator for the complementors underneath it. This has

several implications, the first of which is that we are now getting

false readings on the economy. People who used to be employees are now

independent contractors launching their own businesses. There are many

people working whose work is not listed as a job. As a result, the

Motors decides to outsource all its employee cafeteria functions to

Marriott (which it did). It lays off hundreds of cafeteria workers, who

then get hired right back by Marriott. The only thing that has changed

is that these people work for Marriott rather than GM. Yet, the

headlines will scream that America has lost more manufacturing jobs. All

that really happened is that these workers are now reclassified as

service workers. So the old way of counting jobs contributes to false

economic readings. As yet, we haven't figured out how to make the

companies are getting rid of units and people that used to work for

them, the entity is smaller. As the companies get smaller and more

efficient, revenues are going down but profits are going up. As a

result, the old notion that revenues are up and we're doing great isn't

always the case anymore. Companies are getting smaller but are becoming

the beginnings of a modern government, which is a huge step forward. The

Saudis are starting to talk about some good things, while Egypt and

Georgia. There will be more of these revolutions for an interesting

reason. In every revolution, there comes a point where the dictator

turns to the general and says, "Fire into the crowd."  If the general

U.S.  is very savvy about what is going on in the world, especially in terms

of popular culture. There is a huge global consciousness, and young

people around the world want to be a part of it. It is increasingly

apparent to them that the miserable government where they live is the

only thing standing in their way. More and more, it is the well-educated

kids, the children of the generals and the elite, who are leading the

in Iraq is much worse and doesn't appear to be improving. It's possible

that we're asking too much of Islam all at one time. We're trying to

jolt them from the 7th century to the 21st century all at once, which

weapons it will be a terrible situation. There are two ways to deal with

it. The first is a military strike, which will be very difficult. The

Iranians have dispersed their nuclear development facilities and put

them underground. The U.S. has nuclear weapons that can go under the

earth and take out those facilities, but we don't want to do that. The

other way is to separate the radical mullahs from the government, which

but not Arab. They are mostly pro-Western. Many experts think the U.S.

isn't so much the weapons, it's the people who control them. If Iran has

What we're looking for is any indicator that Islam is moving into the

cities is too much too soon. Although it gets almost no publicity, China

is experiencing hundreds of demonstrations around the country, which is

unprecedented. These are not students in Tiananmen Square. These are

average citizens who are angry with the government for building chemical

pull it off and become a very successful economic and military

superpower. If so, we will have to learn to live with it. If they want

to share the responsibility of keeping the world's oil lanes open,

that's a good thing. They currently have eight new nuclear electric

power generators under way and 45 on the books to build. Soon, they will

people into the cities without major problems. Two, China really wants

Taiwan, not so much for economic reasons, they just want it. The Chinese

know that their system of communism can't survive much longer in the

21st century. The last thing they want to do before they morph into some

Taiwan. If so, it will be a mess, both economically and militarily. The

U.S. has committed to the military defense of Taiwan. If China attacks

Taiwan, will we really go to war against them? If the Chinese generals

believe the answer is no, they may attack. If we don't defend Taiwan,

every treaty the U.S. has will be worthless. Hopefully, China won't do

shrinking. These trends can be reversed if the young people start

breeding. However, the birth rates in these areas are so low it will

take two generations to turn things around. No economic model exists

that permits 50 years to turn things around. Some countries are

beginning to offer incentives for people to have bigger families. For

example, Italy is offering tax breaks for having children. However, it's

a lifestyle issue versus a tiny amount of money. Europeans aren't

willing to give up their comfortable lifestyles in order to have more

 Europeans have a real talent for living. They don't want to work very

hard. The average European worker gets 400 more hours of vacation time

per year than Americans. They don't want to work and they don't want to

in nursing homes and hospitals died. Their children didn't even leave

the beaches to come back and take care of the bodies. Institutions had

to scramble to find enough refrigeration units to hold the bodies until

didn't trigger any change in French society. When birth rates are so

low, it creates a tremendous tax burden on the young. Under those

countries. The only country that doesn't permit (and even encourage) euthanasia

 Countries like Italy are starting to talk about pulling out of the

European Union because it is killing them. When things get bad

economically in Europe, they tend to get very nasty politically. The

canary in the mine is anti-Semitism. When it goes up, it means trouble

is coming. Current levels of anti-Semitism are higher than ever. Germany

won't launch another war, but Europe will likely get shabbier, more

immigrants. By 2020, one out of every five Japanese will be 70 years

old. Property values in Japan have dropped every year for the past 14

retire at a massive rate. These retirements will have several major

benefits, even if it means putting a crushing tax burden on their kids

to get them. Social Security will be a huge problem. As this generation

ages, it will start to drain the system. We are the only country in the

world where there are no age limits on medical procedures.  An enormous

drain on the health care system. This will also increase the tax burden

on the young, which will cause them to delay marriage and having

for products and services tailored to aging populations. There will be

tremendous demand for caring for older people, especially those who

don't need nursing homes but need some level of care. Some people will

have a business where they take care of three or four people in their

homes. The demand for that type of service and for products to

action is. For example, you don't want to be a baby food company in

Europe or Japan. Demographics are much underrated as an indicator of

where the opportunities are. Businesses need customers. Go where the

of the age of the employer and employee. With all this fracturing of

businesses into different and smaller units, employers can't guarantee

jobs anymore because they don't know what their companies will look like

next year. Everyone is on their way to becoming an independent

contractor. The new workforce contract will be a "show up at the my

office five days a week and do what I want you to do, but you handle

jobs and work different shifts depending on where they are in their

careers and families. They make tradeoffs to put together a compensation

package to take care of the family. This used to happen only with highly

educated professionals with high incomes. Now it is happening at the

level of the factory floor worker. Couples at all levels are designing

their compensation packages based on their individual needs. The only

way this can work is if everything is portable and flexible, which

model economy. The only other countries doing this are U.K. and

Australia. The model is fast, flexible, highly productive and unstable

in that it is always fracturing and re-fracturing. This will increase

the economic gap between the U.S. and everybody else, especially Europe

are the only country that is continuing to put money into their

military. Plus, we are the only military getting on-the-ground military

experience through our war in Iraq. We know which high-tech weapons are

working and which ones aren't. There is almost no one who can take us on

economically or militarily. There has never been a superpower in this

people. It also makes us a target. We are becoming one of the last

holdouts of the traditional Judeo-Christian culture. There is no better

place in the world to be in business and raise children. The U.S. is by

far the best place to have an idea, form a business and put it into the

marketplace. We take it for granted, but it isn't as available in other

are ourselves, by losing our culture. If we give up our Judeo-Christian

culture, we become just like the Europeans. The culture war is the whole

assistant to the Director of Central Intelligence and Vice Chairman of

the CIA's National Intelligence Council. In these positions, he managed

production of the U.S. National Intelligence Estimates and other

top-secret projections for the President and his national security

advisers. Meyer is widely credited with being the first senior U.S.

Government official to forecast the Soviet Union's collapse, for which

he later was awarded the U.S. National Intelligence Distinguished

Service Medal, the intelligence community's highest honor. Formerly an