[Essay] 🇺🇸 America, on the 5th visit: 20 notes from a continent

Dear WIMM Reader,

here is the schedule for this week:

There is a particular irony I encountered repeatedly during 2 weeks across the United States this April. I have, by simple geographic accumulation, seen more of America than most of the Americans I met. A bus from Atlanta to San Diego some years ago, all West Cost and most of the East Coast, repeated visits since, and now Washington for the 3rd time (the Heritage Foundation, the Cato Institute), Kansas (the State University, our deepening partnership), and 4 final days sitting in classrooms at Harvard and MIT.

Florida and Hawaii remain unseen, but the rest of the map has been walked. What follows is what that walking taught me, 20 observations, organized in the only way long-term thinking can be organized, which is to say structurally rather than narratively:

1. America is not a country. It is a continent with several civilizations on it, lightly federated by a constitution and a currency. Of those civilizations the Midwest, Kansas, in particula, is the most legibly European to my eye: ordered and with faith, agrarian-industrial, civically dense, conversationally patient. The coasts are something else. The South is a third thing, while the mountain West is a fourth. Treating these as one country is the analytical equivalent of treating the EU as France.

2. Growth will continue, and the 21st century will still be American. This was a fashionable contrarian opinion in 2010 and is now, increasingly, the consensus…but consensus is not the same as priced in. Demographics, energy, capital depth, university research, and platform companies all compound in the same direction. China's structural deceleration only widens the gap. Just take a look at the US growth rate (between 2 & 5% each year!)

3. AI has become a synonym for the United States, and San Francisco is being reborn around it. A city written off twice in 5 years is now the densest concentration of frontier-model talent on earth. The Bay Area is doing what the Bay Area has always done: collapsing under one wave, then surfing the next one before anyone else has spotted the swell.

4. Everything is cheap. Food, gas, diesel, clothing … broadly half what a European pays. This is not a small fact. Cheap inputs are the substrate of consumer surplus, of household formation, of risk-taking. A society where the basics cost half as much is a society where the marginal dollar is free to chase ambition rather than survival.

5. Half the food is poison; the other half is abundant, equal-or-better quality with Europe, and dramatically cheaper. Both halves are true and both halves matter. The American supermarket is simultaneously a public health crisis and a logistics miracle. Europeans are correct about the seed oils and high-fructose corn syrup. They are also wrong about how much choice and freshness an American middle-class shopper actually has.

6. Costco and Walmart belong in any serious portfolio, and I need to act on this. Costco is a cult …and cults, in retail, are durable moats. Walmart is a behemoth: distribution, network, and now an advertising business riding on top of the infrastructure. They are two of the most defensible consumer franchises ever assembled. One of them soon joins my portfolio. I shopped in both (e.g. Levi’s jeans at 29 USD…can’t beat this)

7. The teaching at Harvard and MIT is at the level of what I teach (or think I teach 🙃) at BA, MA, and MBA — sometimes behind, in quantitative disciplines. What they have is not better material, but it is nearly infinite resources. A strong economy produces a strong stock market (stock exchange) produces wealthy alumni produces endowed chairs and naming gifts and grant pipelines. The teaching gap is small. The funding gap is enormous. This is the lesson European universities refuse to learn.

8. American customer service operates at a level Europe does not approach and arguably cannot. It is structural, not cultural, and works on the assumption that the customer's time is the most valuable variable in the transaction. Europeans tend to moralize this away. They should study it instead.

9. I saw less visible homelessness than I expected, but the red-state/blue-state, red-city/blue-city gradient is now impossible to miss. Crime, infrastructure, basic public order …. the divergence is a real thing, not a Fox News artifact. Long-term capital and long-term talent are quietly moving along that gradient.

10. Boston sits on the latitude of Barcelona and Rome but lives in the climate of Vienna. Europeans do not sufficiently appreciate the Gulf Stream, ie. a single ocean current that subsidizes their entire civilization. It is the largest unpriced gift in the global economy.

11. American memory of the Eisenhower era (eg., Normandy, the Greatest Generation, the war dead) is preserved with a seriousness I did not see at home (I had the chance to visit it in Abilene, Kansas). The presidential library system is one of the most underrated civic institutions in the world. Nations that remember their sacrifices behave differently from nations that don't.

12. The military is part of the economy and part of the family structure. Almost everyone expects to know someone in uniform. This produces a society where defense spending is not abstract policy but a sibling, a cousin, a paycheck, which makes it politically untouchable in a way Europeans persistently underestimate.

13. Energy independence is the quiet foundation under everything else. The shale revolution turned the United States from energy importer to net exporter inside fifteen years. Cheap, domestic, abundant energy is what makes points 4, 5, and 6 mathematically possible. Europe priced its way into the opposite outcome.

14. Capital markets are deeper here than anywhere on earth, and the gap is widening. Venture capital, private credit, public market liquidity, and a still-functioning IPO pipeline. A European founder with the same idea as an American founder gets a fraction of the capital at a fraction of the speed. Compound that for a decade and you get the company list of the S&P 500.

15. Immigration remains the single most undervalued American competitive advantage. Despite the political theater, the United States still attracts more top-decile global talent than any other country. As long as Stanford, MIT, and the Bay Area exist, the talent pump runs. It is the only structural lever China cannot pull.

16. The dollar is the operating system of the world economy. Reserve currency status, SWIFT, Treasury market depth… these compound into a financial soft power that no rival currency, including the renminbi, is positioned to challenge in this century. Sanctions are an instrument of policy precisely because the dollar is plumbing.

17. English is a network effect. The default language of business, science, software, and culture lowers transaction costs for every American firm and raises them for every foreign competitor. This is a moat measured in trillions and never on a balance sheet. Everybody worldwide speaks English (broken or not, it doesn’t matter).

18. Federalism creates regulatory competition, which creates dynamism. Texas competes with California and Florida for residents and headquarters. The European equivalent (ie. 27 sovereign tax codes) produces fragmentation; the American version produces optionality. The difference is a single market underneath the competition.

19. Cultural exports are an underrated industrial policy. Hollywood, Netflix, Apple, Nike, Levi’s, the NBA … American soft power is delivered every evening into 1.5 billion living rooms. There is no European Marvel, no European Taylor Swift, no European Top Gun. There almost cannot be.

20. Geography is destiny, and America has the best geography on the planet. Two oceans on the flanks, two friendly neighbors on the borders, the Mississippi as a continental highway, more arable land per capita than any major economy, and natural ports on both coasts. Every other great power had to build defense in depth. The United States was born with it.

Take points 1 through 20 together and the picture is not of a country in decline being held up by AI hype. It is of a continent-sized polity sitting on top of energy, capital, talent, language, currency, geography, and institutional memory, all of which compound. The United States has problems, some of them serious, most of them visible to anyone who walks through a blue-state downtown. But the long-term investor, the long-term scholar, the long-term partner does not bet against compounding.

After 5 visits, I am increasingly convinced the right question is not whether America will lead the 21st century. It is what kind of partner the rest of us choose to be while it does.

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Thanks for your support & have a wonderful day!