August 19th, 2010
Please pardon my getting political but since there’s nothing really very interesting or pleasant taking place in the stock market and because this is my blog, I want to get something off my chest.
I’m a history buff (what true chartist wouldn’t be?) because it provides context within which to better understand current events. I recently finished reading, for example, “The First Tycoon: The Epic Life of Cornelius Vanderbilt” by T. J. Stiles (I highly recommend the book to anyone interested in knowing how the United States evolved from a collection of disparate states into a linked nation of commercial interests).
Vanderbilt was an astute young man, unrecognized by the establishment in the 1830’s for his business acumen in applying steam power to river transportation (and later to railroads). The debate at the time was between progressives who saw a need for public investment in transportation and communication infrastructure in order to further territorial expansion and conservatives committed to the traditionally individualistic, independent and agrarian roots of the country.
As described in a PBS special about the Mexican-American War of 1846-48:
“People in the United States [in the 1830’s and 40’s] had a reputation that they were in awe of nothing and nothing could stand in their way. The word was boundlessness — there were no bounds, no limits to what an individual, society, and the nation itself could achieve. There was a reform spirit involved in the spirit of the age. It was a period of tremendous, exciting change.
The period was really the kind of coming of age of the United States, for the American people and their institutions. There were drastic changes in political ways, economic development, and the growth in industrial establishment in this country with technological advances that made individual lives easier than they had ever been before.
One example is the application of steam power to transportation. The United States often times was referred to as a “go-head nation” — a “go-ahead people” with the locomotive almost as a symbol. The railroad became a metaphor for American ingenuity and development.
In printing, the rotary press in 1846 made possible the mass production of newspapers more cheaply than ever before, enabling newspapers to produce for and circulate in the national market rather than just regional or local markets.
Some of the things that were happening bordered on the miraculous, such as the magnetic telegraph in 1844. The very thought of sending words over wires — it just couldn’t be. It was a wonder of the world, even surpassing the application of steam power to transportation on land and sea.
While railroads and communication were the technological sparks for the 19th century, the 20th Century, according to a recent survey of scientists, also had 20 top scientific and technological advances (see Wikipedia):
- Water supply and Distribution
- Radio and Television
- Mechanised agriculture
- Air Conditioning and Refrigeration
- Household appliances
- Health Technologies
- Petroleum and Petrochemical Technologies
- Laser and Fiber Optics
- Nuclear technologies
- Materials science
Whether it was railroads, steel or oil in the 19th century or any of the above developments in the 20th, each represented sparks that drove industrial advancement and, indirectly, the stocks of companies in those industries that lead markets higher.
But what about the 21st Century? So far, there seems to be little leadership in any field, be it technology, business or politics. Since entering the new millennium, our country was attacked for the first time since Pearl Harbor, we’ve been stuck in two wars (the longest in our history), we’ve had two financial bubbles burst and, as a result of one, suffered the worst recession in nearly 70 years. Finally, at the risk of sounding political, the country has been without leadership and direction through two administrations.
No wonder the stock market can’t move ahead. And it won’t until it finds new technologies, new industries, new growth vehicles, new catalyst to spark this century’s “go-ahead” enthusiasm. That’s where the country’s leaders should be focused. Rather than looking out for the interests of minorities (those without health insurance, those who aren’t legal aliens, those who default or are underwater on their mortgages, those who are on unemployment insurance, those who haven’t saved up enough for retirement, those who want to build a mosque near WTC site) – they should focus on the rest of us.
Rather than focusing on the minority, they should fund technological innovation, incentivize capital investment, reward risk taking and innovation, spur hiring in ways that help the majority. That’s what made the country great 1800’s and 1900’s and that’s what will help it not fall too far behind in this century.