The Greatest of Times?

Despite dysfunction in Washington, an empty suit in the Oval Office, and a political class that is tearing itself apart, people are still getting richer than ever in Silicon Valley and on Wall St. We’re still living in the greatest of times. As the market closes at record highs, more wealth was created in the last five years during this bull market than any earlier five year interval in the history of human civilization. The world is awash with more liquidity than ever before and with the U.S. GDP at $17 trillion dollars, what are you going to do to claim your share? Look at Snapchat. From conception to a $3 billion valuation in less time than it takes someone to graduate college. In today’s meritocracy, there are no miracles, guarantees or excuses – only decisions, actions and their consequences. Smart college graduates will join the creative class – an elite few that can be the business, technology, and economic leaders of tomorrow. In a world is ruled by dinosaur bureaucrats they are round pegs in the square holes. They can mold the economy instead of being subjugated by it. They can control the direction of the national dialogue instead of being spectators. What makes the American experiment – our constitutional republic – a success is how it rewards people that create value through the free market. But America also has a large welfare state and a growing parasitical class to draw from it.

America’s underclass are like the Zerglings in Starcraft. They are weak, but there are a lot of them and they reproduce quickly – not by the consumption of crystals like in the the computer game – but by the consumption public resources that enable their reproduction. Instead of swarming your base, they swarm the welfare offices, hospitals, and public schools. They sometimes create crime, diving down real estate and causing the rich to flee. What they lack in power, they make up for in vast numbers – millions upon millions of them, a growth rate that shows no sign of slowing. Romney alluded to this trend in his remark about half the country not paying taxes. Looking for handouts, they (the parasites) vote in droves, and, in the process, put wealth spreaders like Obama in office. This is why Jeffersonian Democracy model of making voting accessible for the masses and the separation of church and state is wrong, as opposed to the Federalists of John Adams and Alexander Hamilton that wanted only economic stakeholders to have influence in the appointment of leadership roles. If anything, we need to make voting harder, not easier.

Can America still remain exceptional with this underclass headwind? Yes, only because the top 1% – the cognitive elite – are productive enough to compensate. The cognitive elite, including the creative class, create the greatest companies in the world like Google and Facebook as well run the day-to-day affairs of the economy – making America a safe place foreigners want to invest in, which helps keep rates low when other countries struggle with high inflation and civil unrest. That’s why we need supply side economics, to give the creative class financial incentives to keep innovating. That’s why we need more STEM majors. That’s why we need more high-tech immigration, in order to counter the economic drain of the overpaid and government dependent, while benefiting shareholders. George W. Bush famously remarked that America is where families find hope, where wings take dream. It can still be that place.

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