America Is Still Exceptional

Charles Murray, unwavering defender of inconvenient truths in the face of political correctness and beloved by millions of millennials and smart people all over America, has become an institution unto himself. His most recent book, The Curmudgeon’s Guide to Getting Ahead, has become ‘required reading’ and the ‘bible’ for the smartest generation, which is whom the book is intended for. On smart sites such as as Reddit, 4chan and Daily Elite, Charles Murray has attained a legendary almost cult-like status as a exponent of empiricism and IQ, like that of Richard Feynman and Carl Sagan. And like Steven Pinker, his writings and videos have inspired millions of young, intelligent people to consider biological explanations for social problems, to think more empirically, and to embrace the meritocracy.

In a recent video, he questions America’s exceptionalism:

Unfortunately, this is one of the few times Charles Murray is wrong, because as hard as it may be to believe with all the negativity in the headlines, premature pronouncements of America’s demise and that the majority of Americans still think we’re in a recession, America is still exceptional, and will remain exceptional for the foreseeable future.

Many people, including liberals, subscribe to the ‘America is doomed’ worldview. Some conservatives believe America is doomed because of too much debt. Some liberals think we’re doomed because of too much wealth inequality. Both are wrong. Wealth inequality doesn’t pose a threat to the economy and thanks to historically low treasury yields and a rising dollar, the debt binge is still sustainable. Although the national debt is very high, Japan, an economy that is worse-off than America, has an even higher debt to GDP ratio and their economy hasn’t imploded due to hyperinflation. In fact, despite all this debt, their biggest concern has been deflation. That’s the power of reserve currency status, on of many things that makes America exceptional.

Debt becomes an issue when you don’t have reserve currency status and your economy is small and volatile – some notable examples being Greece, Portugal, Spain, Turkey, and South Africa.

America has the best consumers in the world, the most attentive central bank, the best performing stock market, the best policy makers that are there in times of crisis but otherwise don’t rock the boat and let the free market run on its own, low regulation that attracts business formation, biggest and most profitable multinationals, the most research institutions and volume of academic output, and is home of the biggest, fastest-growing, profitable and most innovative tech companies in the world such as Microsoft, Google, Tesla, Apple, and Facebook. The most viral web 2.0 startups, such as Uber, Snapchat, Air B&B, Dropbox and Tinder, are worth a combined $100 billion and all originated in America, but more specifically the Silicon Valley. Rich foreigners, tech billionaires, and private equity can’t get enough Silicon Valley real estate and are bidding up even the quaintest of dwellings into seven figures in all cash bidding wars.

For example, over the past five years, the S&P 500 has crushed its global peers. Nothing even comes close:

As Europe teeters on a triple-dip recession, America is still growing steadily:

As part of the ‘flight to quality/safety’, the US dollar is surging:

This wouldn’t be happening if market participants and institutions didn’t have such strong faith in our currency and the economy of America. After the wildly successful bank bailouts, remember those predictions of hyperinflation and dollar collapse? So much for that.

Thank the always reliable US consumer, especially the wealthy consumer, for being a tailwind on the economy:

The wealthiest 10% percent of America accounts for half of consumer spending. As always, the media’s reports of the death of the consumer still premature.

On the other hand, China has now become the biggest manufacturer in the world, but America is still 2x of Japan and 4x Germany:

America clearly ranks #1 in scientific research output:

Paypal announced they will integrate bitcoin payments. It’s hard to accept that America is in decline or no longer exceptional when you have all this good news and examples of exceptionalism.