Recent polls show that Americans are unhappy with the state of the nation.
It’s not hard to see why. Turn on the news and you’ll hear the same litany of woes: a slowdown in China, political dysfunction in Washington, extreme weather events, layoffs in the oil sector, war in Syria and Iraq, refugees streaming into Europe, and – as you may have noticed – a sinking stock market.
It’s enough to make you wonder if there is anything right with the world these days.[ad#Google Adsense 336×280-IA]There is. Plenty, in fact.
It’s just that the national media delivers the world through a dark prism, emphasizing all the bad stuff while giving the good news short shrift.
Consider, for example:
Science and technology continue to give us more computing power at ever-lower cost.
Right now, all information-based technologies are on exponential growth curves: They’re doubling in power for the same price every 12 to 24 months.
This is why an $8 million supercomputer from two decades ago now sits in your pocket and costs less than $200.
(The average smartphone today carries a quarter-million times the data-storage capacity of the computer onboard Apollo 11, the spaceship that went to the moon.)
Revolutionary change is also showing up in networks, sensors, cloud computing, 3-D printing, genetics, artificial intelligence, robotics and dozens more industries.
New drugs and medical devices are saving and extending our lives. As Ronald Bailey writes in The Wall Street Journal, “Lipitor tunes our artery-clogging cholesterol; Plavix our blood-clotting platelets; Prozac our depressed dopamine receptors; Cardizem our irregular heartbeats; and Gleevec toggles down our leukemia.”
And let’s not forget about new heart valves, CT scanners, MRIs and pacemakers. Thanks to advances in medical science, we can expect to live far longer than any previous generation.
As for the economy, you hear a lot about the low labor participation rate these days, but not so much about all the new jobs being created.
The U.S. job market is the best recession indicator of all, and it isn’t flashing trouble. In the past 50 years, every recession has seen the number of jobs in the economy decline by at least 1%. But jobs increased by 2.7 million last year and over 292,000 in December alone.
For over a decade, the dollar tumbled against most major world currencies, diminishing our purchasing power and raising the cost of imports and travel abroad. But the dollar is up 15% over the past year and 23% over the past two years.
The housing market went through a terrific bust a few years ago. For many homebuilders, it was a depression. Yet total sales in 2015 were the most in nine years, and the median sales price rose 6.8% to $222,400.
Prices are higher, in part, because American homes have never been bigger. The average new home climbed to 2,720 square feet. (That’s 1,300 feet larger than the median home built in 1992.) Almost half of the homes built last year had four or more bedrooms, and one out of four had garages with room for three or more cars.
When I was young man looking to buy my first house, mortgage rates were in the double digits. That made homeownership prohibitive. Today the average 30-year fixed-rate mortgage is just 3.7%. And 15-year fixed-rate mortgages average just 3%. In inflation-adjusted terms, you’ve rarely been able to buy so much house for so little.
Eight years ago, the price of oil was closing in on $150 a barrel. Prices at the pump were near $4 a gallon and pundits insisted we had to end “our addiction to foreign oil.”
But thanks to new technologies like fracking and horizontal drilling, we have surpassed Russia to become the largest oil and gas producer in the world. Now we have such an oversupply we’re swimming in it. Oil is at a 12-year low and gasoline is under a buck and a half a gallon in many places.
Natural gas is near a 20-year low too. That has pushed electricity prices to the lowest level in more than a decade.
You’re paying less to drive, less to fly, and less to heat and cool your home.
Even academia is in good shape. U.S. colleges and universities raised $40.31 billion in donations last year. That’s up 7.6% from the previous year – and an all-time record.
Yes, we can beef about the cost of a college education, but educational attainment in this country has never been greater. More than 57% of Americans have some college. Forty percent have a bachelor’s degree. Moreover, there is a vital and growing world of online education that is revolutionizing post-secondary instruction… and at a fraction of the cost.
In a recent op-ed in The Wall Street Journal, JPMorgan Chairman and CEO Jamie Dimon writes, “America’s future has never been brighter. The U.S. has the best universities, hospitals and businesses on the planet, and our people are the most entrepreneurial and innovative in the world, from the factory floor to the executive suite. We have by far the widest, deepest and most transparent capital markets, and a citizenry with an unparalleled work ethic and ‘can do’ attitude.”
Yes, we have problems. Wage growth has stalled. There has been gridlock in Washington. The U.S. needs to address its fiscal problems, simplify the tax code and reform runaway entitlements.
But this is an election year, and if we get the right people in office we can clear many of these hurdles.
In sum, science, technology and free markets have led to unprecedented achievements in knowledge, life expectancy and affluence.
We are living in an era of rock-bottom interest rates, near-zero inflation and ultra-low energy prices.
So, yes, be aware of the negatives. But recognize all the positives too.
To an investor, these things matter. Successful risk-taking requires a certain degree of optimism.
But you can’t be optimistic if you don’t have all the facts.
Source: Investment U