Thomas J. Gordon's  Instablog

 Ask yourself a question.  Why did Google (goog), Microsoft (msft), WalMart (wmt), Intel (intc),  and Johnson and Johnson (jnj) get their start, grow at phenomenal rates, and become category killers in the United States of America?  These companies are the envy of the world.  They have multiple buildings teaming with people earning six figure salaries.  Any country would give its’ eye teeth to have these companies based in their country, and yet they are all in the U.S, why?  I would propose that the answer to this question is that the voters in the U.S. are, over time and on average, the most economically literate voters in the world.   

I am arguing that U.S. voters, on average and over time, have resisted the urge to tax/confiscate the fruits of the entrepreneurial class for short term gain better than any other nation on earth.  They may not vote this way because they have an advanced understanding of economics.  It may just be that the words of a country song “Hard work pays off the way it should” resonate for them when they enter the ballot box.   The voters in the U.S. seem to resist the deadly sin of Envy/Jealousy better than the voters of any other nation.   Socialist/Communist temptations have been offered U.S. voters since the founding of the Republic and they have been generally resisted.  Voters in the U.S. have upheld the idea that the United States stands for equality of opportunity, not equality of results, better than the voters of any other country.

Some would argue I am giving too much credit where none is due.  U.S voters just followed common sense and deserve no special accolades.  I beg to differ.  The French sent their entrepreneurs to the guillotine, the Chinese paraded their intelligentsia down the streets in dunce caps, and the Russians sent anyone who had a different view of the future than the appartik’s to the gulag .  Resisting the urge to take from or tax, someone who has done better than you takes self control and personal discipline.  To resist that urge on a societal level and as an expression of the common will, is very rare indeed.  U.S. voter’s have been rewarded for their economic insight.  The U.S. went from being a vassal of the British empire to the worlds’ economic super power in two centuries.   The United States easily has the highest per capita GDP of any large nation in the world.

So what does this mean to investors?  It means that the ebb and flow of politics in the United States generally ebbs in a way that promotes productivity and progress.   So the United States is a safe place for your money and the indexed expressions of American capitalism (spy, dia,  mdy, and vti) will work for you in the long run.

Disclosures:  The author is long spy, dia, intc, jnj, and msft.