GUEST AUTHOR BLOG: The American Dream Goes South by James Dale Davidson author of "Brazil is the New America: How Brazil Offers Upward Mobility in a Collapsing World."
Not so long ago there was a widespread belief that the United States was the world’s best destination for achieving upward mobility–an aspiration that became known as “the American dream.”
For most of the 19th and 20th centuries this really seems to be true.
But no longer.
Today, the world’s most valuable passport on the black market is not the US, but the Brazilian.
Not only has Brazil been growing at an average rate of 5% while the US economy flat lines, but Brazil seems to have much more scope for growth in the future. Brazil is the world’s largest tropical country, with an incredible bounty of untapped resources. For one thing, in a parched world, Brazil is the new superpower of water. The Economist magazine put it this way, “according to the UN’s 2009 World Water Assessment, Brazil has more than 8000 billion cubic kilometers of renewable water each year, easily more than any other country.” For reference, there are 264 billion gallons in a cubic kilometer. So 8000 billion (or 8 trillion) cubic kilometers is a lot of water.
Thirty five years ago, Brazil was importing food. Today, it is the world’s largest exporter of 5 major crops, as well as of beef and chicken. Brazilian scientists have engineered new, short-cycle tropical versions of temperate crops like soybeans and corn. These mature 8 to 12 weeks faster than the original temperate versions, making it possible for Brazilian farmers to produce two crops a year rather than one as in the United States.
By 2002, the overall average yield for soybeans in Brazil (2.6 tons/hectare) surpassed the average yield in the United States (2.4 tons/hectare). More significantly, the cost of producing soybeans in Brazil fell to about $6 23 per 60 kg bag, just 50% of the US level of $11 72.
While no one apart from a few professional investors was watching, Brazil has quietly surpassed the United States as the world’s leading venue for upward mobility. With a population just two-thirds the size of the US, Brazil has created over 15 million jobs over the past 8 years while the US lost millions of jobs. Combining energy independence and vast natural resources, including 60% of the world’s unused arable land and 25% of its freshwater, Brazil is the world’s first tropical superpower, offering a whole new frontier of growth.
While no one apart from a few professional investors was watching, Brazil has quietly surpassed the United States as the world’s leading venue for upward mobility.Author, "Brazil is the New America"James Dale Davidson
But don’t make the mistake of thinking that Brazil is just a large, well-watered farm. Brazil has a diversified modern economy. In fact, agriculture represents only 5.5% of the Brazilian economy. Brazil also has a large mining sector, but 84% of Brazil’s exports are manufactured products. Beginning with automobiles and airplanes (Brazil is the world’s 3rd leading producer of commercial aircraft). Steel, machine tools, textiles and apparel, cement, chemicals, fertilizer, footwear rail cars, and locomotives are also important Brazilian exports. It would probably surprise most Americans to learn that at various times in the past decade Brazil has also been the leading global exporter of television programs, expertly dubbed from Portuguese into other languages.
Consider the vexed topic of energy independence. US politicians have been chattering about achieving energy independence for decades. Yet they’ve done little or nothing to advance that goal. US oil import ports have risen from about 30% of consumption in the 1970s to as much as 70% recently. Brazil, on the other hand made dramatic progress. In 1974, Brazil imported almost 80% of its oil. Today, Brazil’s net percentage of oil imports is less than 0. Brazil became an oil exporter in 2009. Brazil now has about 100 billion barrels of oil reserves and is widely acknowledged as the world leader in biofuels.
While the real median wage in the United States has been stagnant for quarter of a century, and one in every seven Americans now participates in the food stamp program, reflecting a disturbing growth of poverty. (By official reckoning, 5.4 million Americans sank into poverty according during the first year of the Obama presidency). Meanwhile, almost 40,000,000 Brazilians rose out of poverty into the middle class in the last decade.
While job growth in the United States remained sketchy, and more Americans have qualified for permanent disability than found jobs during the current presidential term, Brazilian unemployment is at 5.8% and wages are rising due to a shortage of workers.
Not so long ago, anyone who wished to live the “American dream” of upward mobility needed to live in the United States. But what was true in the 19th and 20th centuries is no longer true as the 21st century unfolds. Not only did 40 million Brazilians rise out of poverty to enter the middle class in the past decade, Brazil has become a great place to get rich, adding 19 new millionaires every day since 2007. Not bad as compared to the United States where we lost 353 millionaires each day in 2011 alone. Little wonder that growing numbers of Americans are migrating to Brazil for opportunity. As Scott and Mandy Harker said of their decision to leave the US for Brazil, “For us, it was like sitting on a sinking ship, waiting for it to go down.”
James Dale Davidson is the author of "Brazil is the New America: How Brazil Offers Upward Mobility in a Collapsing World." He was a founder of Agora with Bill Bonner and also a founder of the media outlet, Newsmax.
Email me at bullishonbooks@cnbc.com — And follow me on Twitter @BullishonBooks