The American Dream
Edwin L. Good, President
Good Wealth Management
(2011 original, 2019 update)
To commemorate the 4th of July, I am writing my thoughts as a financial advisor about the blessings and opportunities as a citizen of the United States of America, founded 243 years ago.
Recent news headlines are proclaiming that the American dream has died. If you Google the phrase “the end of America,” you get over 2 billion hits! We are being bombarded by a constant barrage of newsletters and videos portraying doom and gloom, pointing to the end of America and the imminent destruction of our quality of life.
Sure we have problems, but to call for the end of America smacks of sensationalism meant to sell newsletters. So, are you expecting in America “…riots in the streets, arrests on an unprecedented scale, and martial law?”
But if you’ve watched “The End of America” video, or read one of the all-to-frequent gloom and doom newsletters, you might be nervous that this scenario is just around the corner.
To paraphrase Mark Twain, the rumors of the demise of America and the US dollar are greatly exaggerated.
Writing in 1931, historian James Truslow Adams said,
The American Dream is that dream of a land in which life should be better and richer and fuller for every man, with opportunity for each according to ability or achievement. This dream has lured tens of millions of all nations to our shores in the past century (for an opportunity) to grow to fullest development as a man and woman.
Eighty seven years later the American dream is very much alive. America still offers great opportunities for success and personal development. Millions are still seeking admittance into our great country with its unique opportunities and freedoms.
Doomsayers are trying to scare us that China is going to take over the world. They say that the Chinese will own us. The twenty-first century is the Chinese century. The US dollar will be replaced as the world currency by the Chinese Yuan. The Euromonitor International produced a report a few years ago predicting that China would overtake the USA to become the largest world economy in 2017. (Didn’t happen!)
Why was this prediction was/is hogwash?
Compared to the rest of the world, including China, Americans are blessed with abundant resources and tremendous advantages.
The future of the world belongs to those countries that have adequate farmland, water, and energy. The USA is blessed with all three in abundance. We feed ourselves and export food to the world. We are blessed with clean and abundant water. We have enough oil and natural gas for 100% of our needs if we can find the political will to responsibly extract these resources.
China, not so much. The Chinese, under autocratic and unaccountable Communist rule, have been horrible stewards of their environment. Their arable land is being destroyed, they are running out of clean water, and they have less energy resources. The future does not belong to China in these terms.
Social and Human Resources
The economic advantages of a well-established rule of law, the (relative) transparency and accountability within our political and business systems, and the protection of our personal and religious freedom cannot be understated.
The freedoms and opportunities and legal protections of our society continue to attract the brightest and best to our shores. James Fallows writes in the Atlantic Monthly,
Immigration has brought in a disproportionate share of the nation’s creative talent. Half of the members of the National Academy of Sciences are foreign-born. America benefits from attracting more than our ‘fair’ share. China has never won a Nobel Prize in the sciences [as of 2009*] ; the Chinese-born scientists who received prizes were honored for work they did overseas, largely in the United States.
Also, the US has great advantages in educational resources especially at the university level. James Fallows says, The public and private research-university network, apart from producing an educated, high-end workforce and drawing talent from around the world, has been the incubator for most high-value technologies…. The gap between U.S. universities and those in the rest of the world is still enormous, (and) should remain a significant wealth generator.
Americans are among the most entrepreneurial, creative, and hard-working people on earth. We are problem solvers. We work together. Our social and religious freedoms provide the framework for problem-solving and creative cooperation.
World Currency (Best House in a not-so-great Neighborhood)
The US owes too much to foreigners. We have bought too many things we don’t need with dollars we don’t have, mainly from the Chinese and Japanese. We also have wasted stimulus spending. Admittedly this is sadly true. And we are paying the price in terms of a recession and slow growth following the bursting of the credit bubble.
However, the Chinese have been squandering the money they have collected from us. They have wasted more in stimulus spending relative to the size of their economy than the US. They have built entire cities that no one lives in and the world’s largest mall that remains empty. Their hastily constructed road and rail projects are already beginning to deteriorate.
Dear reader, the dollar will remain standing as the world’s reserve currency for many years to come. Not the Yen, the Yuan, the Euro, or any other currency. You cannot underestimate the advantages this presents to the United States economy.
Responding to Challenges
The world is facing huge economic challenges and difficulties. Recessions will come and go. But I feel fortunate to live in the country best positioned to face and find solutions to these problems. There is no place I would rather be. There is no place I would rather be invested.
In times of financial crisis, the world’s money flows into the currency considered the safest. That is our American dollar. Will we have hyperinflation in the US? No way. Inflation? Yes. Don’t expect that the dollar (or any other paper currency) will be a store of value. It is a means of exchange, and has the advantage of being the world’s currency standard.
So, save your money and cancel your subscriptions to the gloom and doom newsletters. Instead, surround yourself with the wisest folks you know about how to preserve purchasing power through wise investments.
We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness. Declaration of Independence, July 4, 1776.
Based on these personal freedoms as envisaged by our founding fathers 243 years ago and still protected by our form of government, I am confident that the American Dream can continue to be experienced by all those who still dare to dream and to work hard to accomplish their dreams. Opportunities abound in our great country. The ingenuity of the American people and the accountability of our political system will lead us to make the changes necessary to rebuild our economic and social systems. In the end, freedom and the American Dream will prevail.
Originally published in the Daily News Record in 2011.
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