I’ve just spent 18-days on the east coast of America. My journey included visits to the towns of Williamsburg, Hudson, Ithaca and Niagara Falls and the cities of New York and Washington D.C.
Along the way, I saw Mennonite farmers plowing fields with horses in upstate New York. I got lost in the Hasidic Jewish community of Williamsburg in Brooklyn, New York City and I learned from Al, a military veteran and former law enforcement officer at a Bass Pro Shop, why a 20-gauge shotgun would be the better choice for me if considering home defense than a 12-guage. In sum, I learned a lot.
Having not visited America for nearly 15-years I was surprised at how much catching up I had to do and, as I traveled, made notes of some of the things that struck me.
First – The Big Big Picture
America, for all its faults, is still the most wonderful country in the world. It is, and will remain for many years, the most inclusive, dynamic, progressive, wealthy and vigorous society on the planet. Comparison with China is a fun parlor game but to compare America, in almost any regard, with China is meaningless. If both were in a marathon China would be not steps but miles behind.
This fact, and it is a fact, is often passed over by boosters and hawks alike. For the boosters arguments have more weight if you suggest China is on the cusp of eclipse. For hawks the threat is more urgent if played up. An examination of the reality however, and just a few days in the place remind, that China may be evolving but America’s gold-standard of progress is unlikely to be bested, by China or anyone else for that matter, for many decades to come.
China investors should be particularly encouraged on this point and I’ll explain why later.
Now – The Other Stuff
Inflation is coming. It’s as plain as the comb-over on the Commander in Chief’s head. Everywhere, from the New York City Fire Department to coffee shops in Ithaca, ‘Help Wanted’ signs are out. This is at a time when the economy is running hot and the government is simultaneously restricting the flow of foreign labor AND access to competitively priced foreign goods. There’s only one outcome to the solve-for-Y of this; and it’s only a matter of time before inflation becomes a problem in plain sight (its always a problem BTW).
Gas and energy in general is too cheap. It’s said Americans love their cars but it’s probably more accurate to say they love cheap gas. The economy runs on it and the U.S. foreign policy in the Middle-East of the last five-decades is explained by just a small amount of time on America’s roads. Seen from these roads are the many now propane fueled houses that scream energy-use-inefficiency; and this matters when trying to understand America’s attitude to efforts to curb global warming. Reducing energy consumption (and production) is, manifestly, not high up on the minds of the average American.
Civility. Whether it’s Fox News, CNN or the BBC, ‘the media’ have no interest in moderate discourse. If, as I have to mostly, you follow events in America via established news channels you get a very distorted and unfair picture. The reality is that America is an incredibly civil place at the personal level and there’s a broader point here. Civility is the hallmark of highly developed and affluent societies. In Asia Japan is notoriously civil and my home town brims with it (please, come visit, take a map out on any street corner and see how long it takes before someone offers help). The contrast with mainland China is stark and is just one of many indicators that reveal, in truth, how far China is behind a developed-world curve.
Personal freedom. In America I realized how much of a frog in a warming pot I’ve become living in Hong Kong. Americans don’t live in fear of their government; people in China and Hong Kong do. It’s a fact, we no longer have free speech in Hong Kong and the local administration, business-people and academics live in various degrees of apprehension about how their conduct will be reviewed by China’s central government. This is perhaps only crystal clear when you observe a society where personal freedom is so manifest. There are issues with this abundance of freedom, sure, but the benefits surely outweigh the problems longer term.
Prosperity in depth. China is still a place where affluence is an urban thing. 50-kilometers outside any of China’s major conurbations things get very basic very fast. I was flabbergasted by how much ‘stuff’ Americans have, wherever you go. RVs, ATVs, boats, ride-on lawn mowers, leaf blowers, swimming pools, two car garages, second homes and, the most telling affluence guide of all choice, are ubiquitous. On the subject of choice (American friends are free to laugh at me here) at a modest rest-stop between Ithaca and Niagara Falls I noted a choice of 11 brewed coffee types (and all for only U$2 per cup!). Choice is another hallmark of true prosperity and here again China is decades behind.
Food. It’s, mostly, terrible and I came back from my trip several pounds lighter. This may be the biggest social issue America has to tackle in the next decade. The impact of a poor diet is everywhere to see. Young people using canes to relieve the pressure their abnormal bulk is placing on knee joints, ride-on shopping carts in Walmart for people who either can’t or won’t walk the aisles and TV adverts with ‘all-you-can-eat’ deals as a restaurant’s main attraction; the spectacle is shocking. Perhaps Americans will tell me I didn’t know where to look? I found Whole Foods of course. With their organic and non-additive credentials a key selling point I was disappointed to discover these ‘qualities’ mostly Potemkin. As for their cheese selection? Don’t get me started. Seriously though, bad food is an epidemic and the picture here makes the point.
I’ve taken this chart from here where you can highlight progress by state. I chose to highlight California as, intuitively, you’d think it was one of the more health conscious areas but, as you can see, the trend there isn’t much better than for the rest of the country.
In Conclusion
In my summary above I’ve left out a lot of the bad that we know there is in America because I didn’t experience it. As I like to remind China-cynics there’s 95% good and 5% bad in the place but if you go looking for the bad it’ll be 100% of your experience; and the same is true almost anywhere. America included.
For this China investor though my trip to America was an inspiration. To be reminded how far China is behind is to be exhilarated about how much more is possible and how far China has yet to travel. America may have passed its ‘Golden Age’; China, by comparison, may be only just entering theirs.