The Decline Of America?

The Decline Of America?
Photo by chefranden

Lots of rule….Cape May lifeguards.  get people out of the beach and put them back in.  constrains free enterprise – supposedly state or local laws won’t let firms rent beach chairs and umbrellas after 5pm.  But the sun is still very strong at 5pm.  So basically state law is pro-skin cancer.  (It was a very white beach and a much different racial make-up than my native DC. )

DC has changed.  It used to be that there was tons of space in post-1968 riots downtown.  Now there’s not enough space to hold gigs, unless there’s money involved according to my musician / brother.  All the cool people are supposedly moving across the xxx river to Anacostia – the thin strip of DC to the southeast of the xxx river and for all my time knowing it as a ‘no go’ zone for the middle class.

While DC of my youth was mostly a hodge-podge of different religions (Jewish Christian), and race (white black), according to locals it’s becoming much less so.  Rich kids at old high school supposedly eat out at Chipotle and other off-campus places, with the only kids at the cafeteria being those that need government subsidized lunches.

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This bifurcation seems to parallel the hollowing out of America’s middle-class that we read about, but don’t really experience in Asia.  And makes sense/explains why so many are mad despite what appears to be favorable macro economic data.  Essentially the baby boomers – now in positions of power – are fine to let the nation become more divided racially, economically, etc.

But perhaps the most depressing realization of the trip to the US was from my sister a doctor in Iowa.  For those that don’t know Iowa is in the middle of the US and famous more for bacon and corn than anything else.  It’s the kind of place that those in the Northeast beleive to be the ‘heartland’ where one doesn’t need to lock their doors, neighbors are friendly and everybody smiles.  Not a Payton Place, but not far away.

Instead my sister described emergency room ‘lock-down’.  A new term for me it means that the hospital’s emergcy room get’s locks so nobody is allowed to go in or out of it.  The reason for this is when a gang member’s been shot or hurt, but not dead, and the rival gang want to finish off their poor work at the hospital. Supposedly this happens about once a month or so.

An even more depressing news comes from her report of wide-spread and very legal opiate abuse.  Essentially the same stuff that killed Prince is wide-spread, covered by insurance, and pushed through commercials and good-looking (female) pharmaceutical sales/reps.  It’s basically sickening what’s happening, but with so many profiting from it at the expense of non-drug takers, it’s doubtful that things will change anytime soon.

Very nasty numbers can be found here:

the increase in opiod use since 20xx has not decreased overall pain in america

three fo the top ten richest lobbying groups are linked to the medical and drugs profession.

And one wonders how all the regulations are making things safe.  Just a few weeks ago there was a large explosion in an apartment building that killed seven people n the middle of the night.  There were an official 7 people reported dead, but personal contacts put the real number at over 20 as many of those that would normally come foreward to report a death  were illegal immigrants.  And this is in Montgomery County, America’s eleventh richest according to a Wikipedia article:

This wealth is depressing.  the same article lists several of the counties surrounding Washington DC as being the richest in America.  I find this depressing because washington DC is for the government.  Shouldn’t business centers like new York, Chicago and Atlanta be richer?  They’re the ones that are actually makign things that people want rather than surviving on government contracts and ‘consulting’. Sure DC is a nice place to live, but a lot of that niceness is due to government subsidies that other states many not get.  And all those highly paid consultants need more rules and regulations to justify their existance.  This is in addition the the ‘non-profits’ that need some cause to champion.  All this means that the special interests lobbies are likely to continue to thrive at the expense of the whatever middle class remains.

Another proplem is the structure model.  DC’s metro is a case in point.  A few years ago it was winning awards and admiration as a model transportation systems.  Turns out it was mostly creative accounting and – what else- government subsidies.  There’s a lot the US and the rest of the world can learn from Hong Kong’s MTR company.

America was not cheap.  Every year I make a list of things to buy here.  It’s either things I can’t get in Asia (Banana Republic, deoderants), better selection (big shoes), and things that are cheaper (vitamins).  While selection of bigger clothes is better in the US, things are not cheap here. Even discount retailers such as Costco and Target were not much cheaper than what I can get in ‘expensive’ Hong Kong.  I found this odd given all the talk of low inflation / deflation in America and other places. Perhaps I’m missing something, but America is not cheap like it seemed to be 5-10 years ago.

Talk of the upcoming presidential election was surprising little.  It’s a pretty clear
Unfortunately there’s no mention of the libertarian candidate Bill Gray, perhaps the most centrist, sane national politician that I’ve remember.  Like me and I suspect the majority of American’s, he’s fiscally conservative, and socially liberal.  Given this I wonder how free the US press really is.  A recent ranking lists it at 41, and below countries like Jamaica, Slovakia, and Estonia.

Infrastructure is also a problem. Roads continue to be very well used.  Airlines are still playing tricks.  Flights are cancelled at the last minute with little notification.  And nobody on the other side to help with rerouting (moral for international travelers – avoid all US airlines as the service absolutely sucks.  Further, try to fly in and out of the city you want to visit rather than transfer in the US).

Updated on

Michael McGaughy, CAIA, manages assets and consults to asset managers, funds and research organizations through Yuan Asset Management Ltd ( An award-winning analyst, Michael has a diverse financial background spanning buy- and sell-side equity research, private equity fund management, and fund-of-hedge funds management. He first came to Asia as an exchange student in 1985 and has been involved with the region ever since, having lived and worked in Beijing, Hong Kong, and Singapore, for different companies including HSBC, the old Crosby Group and StoneWater Capital.
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