US President Donald Trump accused Joe Biden of hiding in a bunker during the coronavirus outbreak. Who’s hiding in a bunker now, Donald?
The unseemly sight of a sitting president denying democracy and accusing his own institutions of corruption are music to the ears of America’s opponents. Even so, the nation’s institutions are so strong that Biden will be sworn in as the 46th president on January 20.
All eyes were on America as the counts dragged on, although in 2000 the result took 35 days. In 1876, it took four months.
The last Indian general election took 5½ weeks for a result, and Belgium has only recently formed a government after going without for 16 months with no apparent difficulty. America delivered an accurate, clean and transparent ballot in a reasonable time, no matter what the incumbent claims.
For the past few years, the United States has looked like an omnishambles. A country that prides itself on freedom of speech meant that the president was constantly ridiculed about his ridiculing. It was neither distinguished nor respectful, though he brought it on himself.
The US is an emotional country, a cultural melting pot, a country built on immigration where almost everyone is a something-American. Biden identifies as an Irish-American, holding a stale antipathy towards Britain.
To integrate the world’s immigrants and build a unique America, the US is obsessed with fairness, regulation and opportunity, mixed with a liberal use of litigation. Trump’s building walls and his assault on democracy and kindness run contrary to the essential line from Emma Lazarus’ The New Colossus, “Give me your tired, your poor, your huddled masses yearning to breathe free”.
The US has its shortcomings – primitive gun laws and access to health care as well as deep clusters of poverty, deprivation and vulnerabilities among people of colour and poor whites. Biden has a mountain of problems with the pandemic, state laws, the US Supreme Court, and other long-festering issues. Climate change will end up on the too-hard pile, coming second to sweeping up Trump’s messes.
There is no doubt the country’s brashness, interventions and soft-power exports have generated envy, admiration and hate in equal measure. One of my many gloatingly anti-US friends asked whether Americans were more unequal, dogmatic, corrupt, hypocritical and traitorous than other cultures.
The answer is no. Having lived on all the continents except Antarctica and Australia, I can say humans are the same. It’s just that Americans don’t hide it.
America is open, transparent and willing to wash its underwear in public in the name of individualism, free trade and the frontier spirit. This openness can be difficult to understand by those who haven’t experienced it.
It is an attribute usually seen as a threat. It is exploited by opponents, but it is also America’s strength – forcing periodic introspection, cleansing and renewal in public.
The memory of the immigrant struggle in America’s DNA is the drive for enduring success in its institutions, business, the economy, universities, technology and its soft power. Today’s American dream is a foreign student who reached the top in one generation.
They run or have run companies such as Google, Microsoft, Adobe, Citibank, IBM and MasterCard. Women, often foreigners or minorities, run or have run AMD, eBay, Facebook, Fidelity, General Dynamics, General Motors, Heinz, Hewlett Packard, Lockheed, Oracle, Xerox and Yahoo. Except for Europe, the chance of a foreigner becoming a CEO elsewhere is less than Trump winning in 2024.
It is even more important today for investors to understand America. Not because the US is the world’s largest economy at US$21.4 trillion, as post-virus China is catching up rapidly and now only US$7 trillion behind, but because it bosses the financial markets.
The stock market has traded continuously for 228 years, behind Britain’s 450 years but ahead of Mumbai’s 145 and Shenzhen’s 30. Duration and size matter in investment.
The US is 54 per cent of the global equity market and 40 per cent of the global bond market. More important is that the volume traded in 2019 in US equities was US$35 trillion versus US$19 trillion on the major Chinese exchanges.
Nearly 100 years of open trading has earned the US dollar the right to be the world’s reserve currency and so US interest rate policy dominates global economies. The US expects to show leadership, and it delivered in the global financial crisis where fast decisions by professionals saved the day. Of course, it was tough to see that happening under Trump.
Investors must understand the US if you are going to invest anywhere. It is an open textbook. There you can see the importance of the bond markets, the valuation techniques, the investing algorithms, bubbles, busts and their reasons.
In 1869, the lawyer John Godfrey Saxe said, “Laws, like sausages, cease to inspire respect in proportion as we know how they are made.” It is easy to disrespect the US but very risky to feel superior.
Richard Harris is chief executive of Port Shelter Investment and is a veteran investment manager, banker, writer and broadcaster, and financial expert witness