Let’s Dance

Great advice from Julie Alexandria on WallStrip to all the big thinkers in Davos who are Scornful of US Policies and worried about the impact of the fall of the "wounded giant."  To you, Julie says "Eh screw it.  Let’s dance."

I loved George Soros’ quote: "“The current crisis is not only the bust that follows the housing boom. It’s basically the end of a 60-year period of continuing credit expansion based on the dollar as the reserve currency.”  Is the US finally having it’s post-Edwardian England moment?

  • http://www.venturedeal.com Don Jones

    Every decade or so there is some new reason that anti-Americans trot out for the “decline” of American power, influence, economy, etc. Let's see, in the 80's it was Japan, Inc. that was going to take over, then in the 90's it was the rise of China, now it is our reduced currency or our “image” in the world (as though image is the most important thing) or some such other nonsense.

    Meanwhile, the wealth of the USA continues to climb, our conventional military power has only grown in its dominance to where now there isn't an army in the world that seriously thinks it can win in a conventional conflict. Its deterrence effect as a result of this capability is more than most people understand. For example, when we began speaking with Iran 6 months ago, it was no coincidence that we dispatched a second carrier group to sit right off the Iranian coast, and effectively said, “Would you like to discuss your cooperation in Iraq while we send another 30K troops there?” And within months the violence in Iraq dropped like a rock as al Qaeda in Iraq was shown the door. (Our mainstream media, with their 24 hour news cycle and shallow reporters (Katie Couric?), doesn't have a clue.)

    Our political power waxes and wanes with the perception of threats around the world. While our adversaries make problems in various regions and fair weather allies complain about us when they aren't threatened, things change quickly when the threat to their self-absorbed worldview comes into view. All of a sudden they become friendly to the US (France under Sarkozy).

    Our economic power continues to outpace the world. Even though sometimes it's painful to go through the necessary Schumpeterian creative destruction, the US gets through it quickly and comes out the other side stronger. Meanwhile, China is growing in manufacturing toys…while we invent new industries, clean technologies, new advances in technologies. Russia has its natural resources (which will run out) and a few programmers. The great economic rising now is India, a natural ally of the US with its 300 million english speaking population and history of rule of law. Sure, technology advances are being dispersed throughout the world, but that's because the US, which is driving technology, is an open society, giving its gift of openness to the world. BTW, what does Soros think would have happened if mother Russia was the fount of technology, and Putin had his hands on the apparatus?

    I'm secretly glad to hear that others are defensively questioning America pre-eminance, as I'd rather be underestimated in a competition. They'll be proven wrong again, just as in the past.

  • Tom

    I learned a few things from this blog post:
    – I llke George Soros more than I thought I did
    – Davos has the most interesting and expensive hot air in the world
    – “Post-Edwardian” America feels not-too-wrong
    – I wanna dance with Julie!

  • http://www.ajira.com Nari Kannan

    While it is always good to reflect back on history and the “chicken little” examples of the past like the Rise of Japan that did not happen, it is also good to reflect upon what was then and what is now. Back then, Government expenditure on basic and applied research was much more, seeding a lot of technology related high wage jobs. Currently we have very high deficits, Toyota is beating the %^& out of American Car industry, China owns most of the U.S debt, we are fighting a war that does even not get us the Oil we wanted from Iraq and that too at a very high cost (oh let's cut the bull about democracy – does not fool anyone outside the U.S).

    Unless we invest a lot in 10-20 year research efforts like Green Energy, BioTechnology, etc, we will see erosion of white collar jobs just as we saw the erosion of blue collar jobs the last 25 years. If you think this is already not happening, walk down Wall Street and ask them where their hedge fund research is being done now. Quite likely it is Mumbai!

    Like Andy Grove said “Only the paranoid survive”. Greatness comes only from long term thinking and investment. Just being yourselves does not guarantee anything!

  • http://tachophobia.com Rick

    I thought we had our post-Edwardian England moment back in the 80s when the Japanese bought all our skyscrapers?

  • http://www.venturedeal.com Don Jones

    Nari,

    You're right about the need for investment. Remember that many technological innovations come from the military, and that sector of government spending is highly elevated – and not just fighting wars.

    The Internet came from ARPA Net – funded by the Department of Defense. GPS came from military spy satellites. On a smaller level, as an example I invested in a startup that is the leading provider of gunshot detection systems to law enforcement and the military – they make a great product, and are continually improving their technology on the government's dime. It doesn't show up as an “R&D” line item, though.

  • Don Jones

    Every decade or so there is some new reason that anti-Americans trot out for the "decline" of American power, influence, economy, etc. Let's see, in the 80's it was Japan, Inc. that was going to take over, then in the 90's it was the rise of China, now it is our reduced currency or our "image" in the world (as though image is the most important thing) or some such other nonsense.

    Meanwhile, the wealth of the USA continues to climb, our conventional military power has only grown in its dominance to where now there isn't an army in the world that seriously thinks it can win in a conventional conflict. Its deterrence effect as a result of this capability is more than most people understand. For example, when we began speaking with Iran 6 months ago, it was no coincidence that we dispatched a second carrier group to sit right off the Iranian coast, and effectively said, "Would you like to discuss your cooperation in Iraq while we send another 30K troops there?" And within months the violence in Iraq dropped like a rock as al Qaeda in Iraq was shown the door. (Our mainstream media, with their 24 hour news cycle and shallow reporters (Katie Couric?), doesn't have a clue.)

    Our political power waxes and wanes with the perception of threats around the world. While our adversaries make problems in various regions and fair weather allies complain about us when they aren't threatened, things change quickly when the threat to their self-absorbed worldview comes into view. All of a sudden they become friendly to the US (France under Sarkozy).

    Our economic power continues to outpace the world. Even though sometimes it's painful to go through the necessary Schumpeterian creative destruction, the US gets through it quickly and comes out the other side stronger. Meanwhile, China is growing in manufacturing toys…while we invent new industries, clean technologies, new advances in technologies. Russia has its natural resources (which will run out) and a few programmers. The great economic rising now is India, a natural ally of the US with its 300 million english speaking population and history of rule of law. Sure, technology advances are being dispersed throughout the world, but that's because the US, which is driving technology, is an open society, giving its gift of openness to the world. BTW, what does Soros think would have happened if mother Russia was the fount of technology, and Putin had his hands on the apparatus?

    I'm secretly glad to hear that others are defensively questioning America pre-eminance, as I'd rather be underestimated in a competition. They'll be proven wrong again, just as in the past.

  • http://intensedebate.com/people/tom tom

    I learned a few things from this blog post:
    – I llke George Soros more than I thought I did
    – Davos has the most interesting and expensive hot air in the world
    – "Post-Edwardian" America feels not-too-wrong
    – I wanna dance with Julie!

  • Nari Kannan

    While it is always good to reflect back on history and the "chicken little" examples of the past like the Rise of Japan that did not happen, it is also good to reflect upon what was then and what is now. Back then, Government expenditure on basic and applied research was much more, seeding a lot of technology related high wage jobs. Currently we have very high deficits, Toyota is beating the %^& out of American Car industry, China owns most of the U.S debt, we are fighting a war that does even not get us the Oil we wanted from Iraq and that too at a very high cost (oh let's cut the bull about democracy – does not fool anyone outside the U.S).

    Unless we invest a lot in 10-20 year research efforts like Green Energy, BioTechnology, etc, we will see erosion of white collar jobs just as we saw the erosion of blue collar jobs the last 25 years. If you think this is already not happening, walk down Wall Street and ask them where their hedge fund research is being done now. Quite likely it is Mumbai!

    Like Andy Grove said "Only the paranoid survive". Greatness comes only from long term thinking and investment. Just being yourselves does not guarantee anything!

  • Rick

    I thought we had our post-Edwardian England moment back in the 80s when the Japanese bought all our skyscrapers?

  • Don Jones

    Nari,

    You're right about the need for investment. Remember that many technological innovations come from the military, and that sector of government spending is highly elevated – and not just fighting wars.

    The Internet came from ARPA Net – funded by the Department of Defense. GPS came from military spy satellites. On a smaller level, as an example I invested in a startup that is the leading provider of gunshot detection systems to law enforcement and the military – they make a great product, and are continually improving their technology on the government's dime. It doesn't show up as an "R&D" line item, though.