A healthy dose of optimism

Gerard Baker of the UK Times offers the sort of viewpoint one rarely finds in the European press: decidedly pro—American. In this column, he sees the difficulties in Iraq as minor, and the strength of America as lasting. The whole thing is worth a read, but the following passages struck me in particular.

That Iraq shows the limits to American power is surely true. But the only real surprise in this is that we should be surprised about it. Asymmetric warfare from Algeria to Northern Ireland has shown the limitations of large immobile militaries. With accelerating nuclear proliferation, those limits are only going to grow, as we have seen with North Korea. What will determine America's ability to maintain its pre—eminence will be its flexibility and the willingness of its population to take on new burdens in the new warfare that confronts them. [,,,,]

Throughout its 220—year history, as the historian Robert Kagan points out in his brilliant new book, Dangerous Nation, America has been seen as a threat to global stability. But for most of that history, the US was just one of many powers. The angry backlash against it today is worse in large part because its dominance is greater than it has ever been.  [....]

If you want to understand the real enduring strength of America as a nation, look at the Dow Jones industrial average. Not the record 12,000 level reached this month — that may last no longer than a day or a week. Look instead at the 30 companies that make up the Dow index. Only two of the original 30 companies in the index in 1930 — General Electric and General Motors — are still there today. Most of today's Dow components — the Microsofts and Intels — weren't even around 50 years ago.

If you look at the relevant stock market indices for Germany, France or even Britain, you will find them dominated by companies that have been around for generations. America by contrast, has mastered the art of creative destruction.

Hat tip: Joseph Crowley

Thomas Lifson   10 28 06

Gerard Baker of the UK Times offers the sort of viewpoint one rarely finds in the European press: decidedly pro—American. In this column, he sees the difficulties in Iraq as minor, and the strength of America as lasting. The whole thing is worth a read, but the following passages struck me in particular.

That Iraq shows the limits to American power is surely true. But the only real surprise in this is that we should be surprised about it. Asymmetric warfare from Algeria to Northern Ireland has shown the limitations of large immobile militaries. With accelerating nuclear proliferation, those limits are only going to grow, as we have seen with North Korea. What will determine America's ability to maintain its pre—eminence will be its flexibility and the willingness of its population to take on new burdens in the new warfare that confronts them. [,,,,]

Throughout its 220—year history, as the historian Robert Kagan points out in his brilliant new book, Dangerous Nation, America has been seen as a threat to global stability. But for most of that history, the US was just one of many powers. The angry backlash against it today is worse in large part because its dominance is greater than it has ever been.  [....]

If you want to understand the real enduring strength of America as a nation, look at the Dow Jones industrial average. Not the record 12,000 level reached this month — that may last no longer than a day or a week. Look instead at the 30 companies that make up the Dow index. Only two of the original 30 companies in the index in 1930 — General Electric and General Motors — are still there today. Most of today's Dow components — the Microsofts and Intels — weren't even around 50 years ago.

If you look at the relevant stock market indices for Germany, France or even Britain, you will find them dominated by companies that have been around for generations. America by contrast, has mastered the art of creative destruction.

Hat tip: Joseph Crowley

Thomas Lifson   10 28 06