Sorry for yesterday’s light posting, and this morning’s. I was traveling in Washington yesterday, and had no access to the laptop. And I didn’t get home till midnight. Have mercy! Anyway, via The Browser, which you should be checking at least twice daily, comes a Walter Russell Mead talker laying down Mead’s Top Ten Lessons of the the Global Economic Meltdown. Among them:

8. The demographic crunch time is here.
For more than a decade we’ve been worrying vaguely about the consequences of demographic change for government budgets. The problem is no longer abstract; the long-term deficits associated with rising entitlement spending in the US, Europe and even China are beginning to affect investor perceptions and to limit what governments can safely spend. Across the industrial world governments now face a long-term fiscal squeeze. For the foreseeable future, governments will be less able to respond to economic slowdowns with deficit spending. While the global slowdown has temporarily dampened inflationary forces, the unfunded liabilities for pensions and entitlement spending will begin to affect interest rates and inflation expectations when and if the world recovers to something more like a ‘normal’ growth pattern.
Policy and politics will be dominated by efforts to raise retirement ages and otherwise adjust to an era of diminished government resources and rising demand for health and other services. Governments that are unable to get their long term finances in order will pay an increasingly heavy price — especially in times of economic crisis when their markets will come under speculative attack and when their efforts to bail themselves out by increased spending will only undermine their global credibility.

9. Culture matters.
The economic crisis has further dispelled the illusion that the post-World War Two western world had achieved a permanently prosperous, permanently stable social democratic wonderland. The idea that liberal capitalism would produce a stable and secure world of low risk, rising living standards and increased economic equality has been proved wrong — at least for the time being. Propelled by global competition and rapid technological change the west is shifting into a world of higher risk, faster change, less stability and more inequality. This will be a difficult transition for all countries and cultures; for some it will be more wrenching than others. The fragile social peace in some European countries will be tested by the continued erosion of the old social model. The countries (in Europe and around the world) who are able to spend their energies exploiting the new possibilities of the new capitalist era will grow more rapidly than those who waste their energies fighting a rearguard action against it. Ultimately the fast changers will become more prosperous and more powerful than the slow changers. Historically, the English-speaking world has been a world of fast-changers; this is one reason English speaking countries have prospered so greatly in the capitalist era. In the post-2008 world, the ability to roll with the punches and change with the times has become more important than ever. Understanding the risks and rewards of investment and the future trends of world power and prosperity is increasingly linked to an understanding of the cultural forces in each country that make it easier for some and harder for others to take advantage of the emerging world system.