There is an old expression, "The best way to not know what is happening in the world is to read the news."
Never in my 20 years in the business and as a student of the financial markets has that statement been more true than right now. To read most of the business and financial press these days is not only mostly an exercise in self-flagellation, but also gives the general public an incredibly distorted view of what is really happening in corporate America and in global finance.
The amount of media coverage and prophesies of doom regarding the consequences of failure of the big three automakers would be comical if it wasn't so sad. Manufacturing in America has been in decline for decades.
I grew up in Central Massachusetts in the 1970's -- a few years after the closing of most of the major shoe factories in the area and their moving to Asia. Like today, the tale was, "If we don't make shoes in America, what is going to happen to us?"
Well, what happened to us and the area in the 1980s was the computer revolution, soon followed by the biotechnology and drug discovery revolutions, followed by another technology boom. And all that time, the standard of living of the vast majority of the people in the area increased significantly (bigger homes, bigger cars, fancier vacations, etc.)
And the same will be true in Michigan no matter what happens to the automotive industry. The industrious, hard-working people of the area will move on to new opportunities, new challenges, and new businesses. Yes, the transition will be painful for some, but there won't be people starving in the streets. And those with ambition and drive and work ethic will have, as they have always had in America, great opportunity to advance themselves and their families.
What is vastly and consistently under-reported is the massively net positive impact of technology and innovation on our standard of living, our quality of life, and the inter-connectedness of our world. The productivity and quality of life improvements of the Information Age are so ubiquitous that they are taken for granted. Word processing, email, and cellular phones have revolutionized the speed and efficiency of communications. The Internet has created great fortunes for tens of thousands of entrepreneurs, employees, and investors that were lucky enough to be involved with these companies early, and to share in their growth.
And what of the healthcare and drug discovery revolution? Tens of thousands of families can share in my story here. My mother was diagnosed with cancer more than 10 years ago. If it wasn't for a wonder drug developed by Genentech just a few years previously, she would have had only months to live. Instead, she is as healthy as ever and watching her grandchildren grow up. So my family has won AND the shareholders of Genentech have done very, very well also.
Now, were some companies displaced by all of the technological and scientific advances described above? Was the transition for some of the folks involved in those businesses difficult? Yes it was, and we should be sensitive and empathetic to their challenges. BUT -- and this is a big BUT -- the net of these advances has been indisputably a massive positive for America and the world.
A word to describe this system is capitalism. A phrase to describe it is the entrepreneurial economy. Never has capitalism and the entrepreneurial economy provided more opportunity for breakthroughs and wealth-building than they do right now. Why? Because NEVER in human history have there been as many scientists, as many engineers, and as many entrepreneurs, as there are right now. Their stories should be featured on the front pages of the newspapers and talked about first on the evening news, because they are the ones that will be MAKING the kind of news and the kind of history that is worth writing about.
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