An American century?
Spengler optimistic?
"For the past two decades, the United States wasted the lion's share of its resources, first in pursuit of the Internet bubble and then in service of the housing bubble. The country's smartest kids were groomed for investment banking from childhood - literally. Now that the bubble has popped, it can't be excluded that Americans will go back to fundamentals. America always does the right thing, Winston Churchill observed, after it has exhausted the alternatives.
Nearly four years after the crash, the market value of China's economy languishes at around half its January 2008 level, while the American stock market has recovered to almost 90% of its pre-crash peak. Why should that be the case, when China is growing at 9% a year and America at 2% or 3%, with an administration hostile to business and the world's highest corporate tax rate?
A simple answer is that it is safer to buy the stocks of American companies that sell to China than to buy Chinese companies. The world learned in 2008 that even the freest and most transparent large economy, the United States, might crash due to the negligence and cupidity of regulators, congress, ratings agencies, and financial institutions. Without an open and rambunctious democracy that responds to errors and corrects them in the full light of day, modern capital markets don't work."
Update: David Goldman, who channels Oswald Spengler for his columns, has a new book out: How Civilizations Die (And Why Islam Is Dying Too) - Thanks, David.
"For the past two decades, the United States wasted the lion's share of its resources, first in pursuit of the Internet bubble and then in service of the housing bubble. The country's smartest kids were groomed for investment banking from childhood - literally. Now that the bubble has popped, it can't be excluded that Americans will go back to fundamentals. America always does the right thing, Winston Churchill observed, after it has exhausted the alternatives.
Nearly four years after the crash, the market value of China's economy languishes at around half its January 2008 level, while the American stock market has recovered to almost 90% of its pre-crash peak. Why should that be the case, when China is growing at 9% a year and America at 2% or 3%, with an administration hostile to business and the world's highest corporate tax rate?
A simple answer is that it is safer to buy the stocks of American companies that sell to China than to buy Chinese companies. The world learned in 2008 that even the freest and most transparent large economy, the United States, might crash due to the negligence and cupidity of regulators, congress, ratings agencies, and financial institutions. Without an open and rambunctious democracy that responds to errors and corrects them in the full light of day, modern capital markets don't work."
Update: David Goldman, who channels Oswald Spengler for his columns, has a new book out: How Civilizations Die (And Why Islam Is Dying Too) - Thanks, David.
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