If you’ve read my other articles, you may have noticed a trend. I've pointed out that news reporting tends to focus almost exclusively on negative developments. It's all about ratings, of course, and unfortunately, bad news attracts a bigger audience. So that is what we get.
Don’t get me wrong. I believe it’s important to stay on top of what’s happening in the world. But a steady diet of bad news can impact not only your outlook on life, but also your perspective on how to invest your wealth. That can be a dangerous thing. As I look at our current situation, it’s easy to be dismayed. But I am not. Actually, I am quite optimistic about our future and for many good reasons.
But First, the Bad News
Okay, I’ll be honest. If you watch the nightly news, it can be very discouraging. Locally, gang violence, robberies and corruption frequently dominate the news. Employment is growing, but hundreds of thousands of people have been unemployed for too long. Some have lost hope and feel that they may never regain a good job. We hear stories of how the educational system is broken. Many students are under-performing and are not prepared for future job opportunities. Many lack the kind of family support that helps others succeed.
Talk of inequality is widespread. The rich are pilloried as not caring for the poor. It is good sport to accuse wealthy people of cheating and dishonesty as the means by which they accumulated their wealth. Even worse, our government in recent years has been increasingly dysfunctional. The most extreme sides of both parties seem locked in their positions and appear unwilling even to talk with each other. It often seems as if they would rather sacrifice progress than make compromises that might give their opponents some advantage in the polls. Attrition has replaced common ground.
Foreign policy conflicts dominate the news. Russia's current attempt to gain control of Ukraine, the civil wars in Syria, Congo, and many other countries and human trafficking are among the situations the world faces without clear solutions. China’s air pollution is a huge problem as they face increasing pressures on their economy. And recent news on the economy here at home has not been all that great.
When you look at this laundry list of negative events, it’s no wonder that many people lack confidence about the future and some just seem angry or hopeless. So I ask you. Is there no hope? Are we on the verge of another collapse?
I am optimistic about the opportunities throughout the world and, especially, the future of the United States. I am not the only one who feels this way. I recently attended a number of conferences with other business leaders, economists, and political advisors, many of whom share a similar optimistic outlook. There are many reasons to hope for and believe in a better future. Among all industrialized nations, the U.S. is the best positioned for growth. Here is why:
- Entrepreneurship is alive and well.
- The Federal budget deficit is down substantially.
- Our recovery continues since the crash.
- There is hope for our polarized government.
- An emerging middle-class may likely temper unbridled nationalism.
- Millennials give me hope.
U.S. Growth Potential
When I look around the world at other industrialized nations, I see the potential for growth and prosperity for a growing number of people. I am particularly optimistic about the U.S. Our problems pale in comparison to the problems of many other countries. Yes, China has grown tremendously and prospered, but at what cost? Would you want to breathe that air? And, who would want to exchange our way of life for theirs?
There is a spirit of innovation and freedom in this country that prevails. U.S. citizens seem to just come together and do great things when we need it the most. Throughout our history, the people of the U.S. have solved problem after problem and with great aplomb and resulting prosperity. The rule of law is the basis for fair and healthy competition, and this has always been a key part of capitalism and our democracy.
George Washington lead a rag-tag group of revolutionaries against a superior British force that was much better equipped, trained and supplied. The new nation he led won. In those moments the seed of our resilience as a people was planted. The tree of liberty, opportunity, and prosperity is still very much alive and growing.
This is not an entirely uniquely American perspective. Entrepreneurship throughout the world is very healthy right now. There are people who are raising capital, who are taking risks, and are willing to try something that has never been done before. At Whitnell we invest wealth for many people who had merely an idea in their heads a few years ago. Now those ideas have turned into businesses that employ many people. The opportunity to do well, to take risks, to breathe new life into old ways of doing things – that is still very much alive.
Federal Budget Deficit is Down
From a financial standpoint, it seemed that just a short time ago the Federal government deficit was never ending. It has now been cut by more than half in far less time than the pundits predicted. There is no longer a need for the government to support the economy. In current politics, conversations around the debt ceiling no longer result in threats to shut down the government. Alternative options are discussed with greater ease and fluidity. All of these are signs of forward progress.
The Recovery Continues
Since 2008, we have seen primarily an upward course of economic progress and people tend to lose sight of this when they think about the economy. Here are a few points to remember.
- We’ve added over 9 million jobs since 2008 and there are currently 4 million job openings.
- Many markets have gained back the losses from 2008 and are setting new highs.
- Home values have rebounded and new home construction is double what it was at the bottom.
Yes, it still has a long way to go. But we have already realized significant improvement.
There Is a New Feel to Politics
It seems that the current administration is stymied in its ability to make meaningful progress. While there is blame to be shared on both sides, the point is that collaboration and dialogue are necessary to achieve consensus and forward movement. Since the age of the Continental Congress, this has been the American Way.
With all the gridlock that has gone on during the term of this administration, there is new hope and evidence that a fresh round of candidates of both parties will be more willing to meet in the middle to achieve progress on common ground issues. The American public and our economy will be the beneficiaries of this improving level of collaboration.
An Emerging Middle-Class May Temper Unbridled Nationalism
There is good reason to be concerned about geopolitical conflicts on the world scene, especially with developments reported of Russia’s annexation of Crimea and aggressive moves into the Ukraine as well. But the evolution of capitalism will be a driving factor in how governments behave over time. Russia needs the technologies of the world to be able to tap into the full value of their oil reserves.
Millions of people in China have increased their lifestyle dramatically over the last few years. This new-found wealth creates market opportunities for other countries to trade with China as well. I do not believe this trend is short-lived, but that it will continue for many years to come as prosperity spreads to a growing percentage of their population.
Middle-class families in these countries who have become increasingly acclimated to a more affluent lifestyle will increasingly act as a populist force over time in dealing with totalitarian governments. Our economic interconnectedness now is undeniable. We all have much to gain.
Millennials Give Me Hope
When I look at my children who are in this demographic group and their generation, I find them to be ambitious, talented and very upbeat about future opportunities. Sure, I am undeniably a proud father. But an important dynamic is going on here.
Many of these millennials seem to me to be very creative and more synched into a rapidly changing future than my generation was at the same age. Many of them are highly educated, committed to innovation and are reaching out to make the world a better place. They grew up in the age of the global economy and the digital age and many find talking with someone on a computer from another country and a different culture a commonplace experience. Millennials are connected, passionate and innovative and will be a driving force to improve productivity and growth.
Long ago, Moore’s Law told us that every two years the number of transistors on a computer chip would double and that has been done and more. There is no doubt in my mind that these amazing young people will use these increasingly powerful technologies to work toward making the world a better place, reduce human suffering, improve education and spread democracy and justice.
The indomitable American spirit sees opportunity where others see only conflict and stagnation. I am optimistic about the future, our future. While there are negative news stories that deserve our attention, there are also many positive forces at work in the world and these deserve our attention also. What narrative is shaping your vision?
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