America's Decadent Decline and-or Creative Destruction?

Image by Calidonia via Flickr

One of the benefits, I think, of being a History major (or at least have a classical liberal arts background) is that you tend to look at current events in the frame of past ones.

Certainly, the interpretation and analysis may be off to an extent, but if you are even somewhat accurate, you can feel better prepared for the changes underfoot.

A previously cited "anvil" among the FOJ community is Josh Rogers, who dropped by the another night while swinging through the area.

As far as strategic thinkers go, he is way up there. It may not be saying something that he helped his clients avoid many of the massive losses that others had in the market (that's not to say they didn't lose money, they just lost a lot less), but I think it goes to his high degree of acumen.

In discussing the current economic climate, we came upon a few conclusions.

1. The odds are high that the US is at the beginning points of the "decadent decline" that all great empires encounter. We did not think that we would see total destruction of the US within our lifetimes, but we certainly questioned whether our kids or grandkids would.
   
   
2. A 'decadent decline' is not necessarily a foregone conclusion because, we felt, at the core of America, there exists some elements which are unique in world history. These include the freedoms we enjoy and a spirit and culture of entrepreneurship/reinvention and immigration.
   
   
3. As a build off of this, however, we were concerned that policies which lower the  incentives for disruptive innovation, i.e. new technologies by raising taxes and making it more difficult for businesses to grow and prosper would be the exact wrong move to make. 
   
   The reason people come to America from all over the world is precisely because they can make a ton of money (the proverbial American dream) if their innovation-based insights prove marketable.  Make that more difficult and we cut off the oxygen at the core of our economic success.
   
   There are a few troubling signs that we are headed in the wrong direction in this regard, including:
   
   
1. A growing desire for Protectionism at the expense of recognizing that we are living in one global market now.
   
   
2. More and more, the government is getting involved in running private business. As noted VC (and big Obama supporter), Fred Wilson writes, when that happens, "it messes everything up."
   
   
4. That being said, as students of history, we were also excited (that is, after we were really depressed.) Because, if somehow, we can get on the right course and avoid the 'decadent decline,' then we are  witnessing (and I've been saying this for 12 years,), the modern day equivalent of the Industrial Revolution.
   
   Joseph Schumpeter, as in 'creative destruction,' lives, and how it will play out is going to be fascinating.
   
   For example (and these are only the most recent ones)
   
   
1. Michael Eisenberg challenges the idea that we even need banks anymore.
   
   An idea echoed by Marc Andreesen (he, the creator of Netscape, see min: 50 of the Charlie Rose interview) And Andy Sernovitz says that it is time for the credit unions to take over.
   
   
2. Fred Wilson says that the 'blue chip' stocks of yesteryear are gone.
   
   
3. Mitch Joel points to the complete shut down of the Rocky Mountain News, the signature paper of Denver for years.

So, if we can make it through this by doing the right things (and yes, I am opinionated on it), the world on the other end...and it may not even be one that we live to fully see- will be so vastly different from ones in which most of us were born. That will be exciting.

If, on the other hand, we can't. Well, as another friend said, "then it comes down to who has the most guns."