What are we investing in?
When most people think about investments, they think about how to find a hot stock and make the most money. In the stable world we have enjoyed since 1989 and with the revolutionary impact of new technology, this approach has created extraordinary wealth and retirement savings for millions of Americans.
Here is a thought most of us do not recognize.
What people invest in is a far more powerful force in shaping our standard of living, the health of our democracy and our national security, than government legislation or political rhetoric.
Unlike other politcal systems, Americans believe our citizens can do a better job than our politicians in making the investments that will improve the well-being of our society.
We are in living in the midst of a historic revolution as we transition from an industrial society to a digital society. This revolution effects every aspect of American life: where we work, job security, wage growth, access to affordable healthcare and education, how we learn, relevant job skills, community, individual relationships, privacy, safety, a shrinking middle class, a growing concentration of wealth and global issues that threaten our children’s future.
So the question is: How are we investing to improve the life of the average American and secure our children’s future in the midst of so much change?
Let’s define Investment
When we invest in a business we are making a statement – “I believe in what you are doing.“
What follows are three questions that should be high priorities to American babyboomers – the wealthiest generation in the history of the human race. Our legacy will not be in how much we made, saved or gave away. It will be whether we invested wisely to leave our children a peaceful and prosperous future.
Are we investing in businesses that raise the standard of living for the average American?
This image explains what is right and wrong in America. This is a chart of the S&P 500 stock index, a composite of large corporations across a variety of sectors. It is a good representation of what businesses Americans are trying to grow with their investment dollars: Apple, Amazon, Google, Microsoft and Facebook.
The sad part is that most people don’t even know that their money is helping these businesses grow, because they invest through mutual funds. Mutual funds serve a useful purpose in helping small investors balance their risk. But as our assets grow, it is essential that we invest in businesses that build a better future.
So how are we doing? From 1990 to 2018 the stock market has gone from 5,000 to over 20,000, while the US has dropped from 6th to 27th in global education and health!
Technology is suppose to improve performance while reducing costs. Where is this investment in our education and healthcare systems? The answers are here, but our investment is not. Investing in big corporations is the surest way to preserve the status quo.
Not that long ago, Americans invested in the local bank, nursing home and grocery store. We need more of that. We need investment professionals to create investment vehicles that address the issues of our time.
We all need to look at what we are investing in before we complain about our children’s future.
Are we investing in the extraordinary 70 year record of the American-led world order?
History teaches us that humans are unteachable. Meaning that we keep repeating the same mistakes. If I had one New Years wish in 2019, it would be that we would all listen to Winston Churchill’s 17 minute speech at the Council of Europe in 1946.
At this point in time, Americans had a choice to make. Do our soldiers travel back across the Atlantic and Pacific oceans to settle within our borders, or do we lead a new world order? Prior to 1948, America had never signed a treaty to protect another nation and our citizens rarely made private investments in other nations.
In 1948-1949, America stepped into the position of world leader by overseeing the new German Constitution, sponsoring the Organization of European Economic Co-operation (predecessor of the EU), investing over $20 billion in 16 Western European countries (Marshall Plan) and founding NATO to keep Europe at peace.
The success has been beyond Winston Churchill’s wildest dreams. Instead of the nuclear anniliaton of all mankind, the world has experienced a stunning increase in prosperity on every continent. Look at the growth results of American-led peace and world order over the past 70 years.
Look at the green dots. No nation has benefited more from American-led world order than Americans.
There are 3 truths about American-led world order:
- America will always be criticized
- Nobody will pay for it
- If America ever retreats, the world will descend into chaos and war
How does America compete against Emerging Ideologies?
The defining geopolitical fact of our time is not in the Middle East or Asia, it lies once again in Europe, where the Chinese and Russian governments have clear strategies to tear apart the western alliances and usurp Ameican-led world order.
Augustine wrote that the sacking of Rome in 410 by the Visigoths was not just the victory of a competitive ideology. It was a victory of darkness over light. It is the same with the Chinese and Russian government threat to the west. These are digital dictatorships that limit the freedom of speech, imprison opposition and kill leaders that threaten the dictator.
America, like Rome, has it’s share of problems. But the American flag still stands alone on the earth for the truth that ‘all Men are created equal, endowed by their Creator with the inalienable rights of Life, Liberty and the Pursuit of Happiness.”
When America competes on these values in Europe, we will win every time. Sometimes we forget that Germany, Italy and Spain were all fascist dictatorships when America initiated the democratization of Europe in 1948. We forget about the real threat of Communist parties spreading into western and southern Europe after World War 2. Looking back, the success of nations receiving Marshall Plan investments is extraordinary.
The democratization of Europe is America’s greatest foreign policy success. Seventy three years of peace in Europe. Europe at is peace because democracties don’t start wars: dictatorships do. Now we need to finish the job.
The Central and Eastern European countries got started on the democratic path in 1990, 40 years later than the Marshall Plan countries. Under the security of NATO and integration into the European Union, young leaders are emerging to fulfill the promise of democracy over the upcoming decade – a vastly higher quality of life. Democracy require time and investment.
As NATO strengthens it’s forward presence and deterence against Russian intimidation, what these countries need the most is investment in the services that shape the quality of our life: healthcare, education and community design.
This is how America competes and completes the democratization of Europe – we need to invest in the services that dignify and empower human lives. This is our competition’s greatest fear.