Bets are always on the US

The juggernaut that the US is, I expect it to easily keep moving along for a very long time. 

In responding to this post blogged by a friend from the other side of the planet, I commented:

My long-term bets, if I were a betting man, will always be on California and not on, say, Oregon, just as the bets will favor the US over any other country in the world.

Of course, I have written about this earlier too, like here.  The more I read and think about this, the less I am convinced that the juggernaut will be stopped in its tracks anytime soon. 

So, what I did read to trigger these additional remarks?  For one, The Economist concludes, after reviewing two books on this topic:

All things considered, America looks remarkably strong. I will be very surprised if another large country is richer and more stable than it two decades from now.

Of course, there is plenty wrong with the US--from bombing the shit out of innocent families to an increasingly dysfunctional political system where a majority vote in the Senate is often broadcast in the media as a bill having failed to pass to ... well, the list is quite endless.    

Yet, it is the US that I would bet on.  At one level, the logic is quite simplistic, similar to how in the bad old days the pinks and the reds would be asked a rather simple question: how many people in the world would rather immigrate to the US versus immigrating to the USSR?  Sometimes such Occam Razor-like thoughts, as simplistic as they might sound, carry a great deal of weight.

There is also plenty going well for the US, which the Economist also points out:

[One] thing that is often underappreciated about the place is its remarkable economic and institutional flexibility. When Michigan's economy implodes, that's bad—but people find it remarkably easy to pack up and move to sunnier climes. When Congress can scarcely keep the money for highway repair flowing, the city of Chicago pioneers new public-private sources of infrastructure finance. America's federal government is often a wreck. Luckily, America's success isn't driven almost entirely by the choices and actions of the federal government. China's success is really remarkable in so many ways, and I don't pretend there is nothing America can learn from its success. As a special report this week indicates, it is in many ways a surprisingly resilient economy. Its institutions are well-equipped to handle a major macroeconomic shock. Yet every government makes mistakes, and an economy built on the assumption that the government won't make too many mistakes is putting itself at risk for eventual stagnation, or perhaps collapse.
Meanwhile, American innovation is proving as impressive as ever. The golden age of the Space Race may be long gone, but private firms in America are putting ships into orbit. Apple is the envy of the world, and rightly so. Google is doing pioneering work on autonomous vehicles, which could revolutionise transport. IBM's Watson, and things like it, could change medicine and many other fields besides.

 To quite an extent, this Houdini-like magical performance of the US was probably what led the taxi driver in Nagercoil to remark that it is amazing that America always comes out on top.

As Branko Milanovic points out in his wonderful book, The Haves and the Have-Nots, even if the US grows at a mere 2.5% a year, while China and India grow at 7% a year, well, catching up won't be easy.  Furthermore, as countries reach that middle-income sweet spot, it becomes difficult to maintain high growth rates.

If one considers California as a barometer, a leading indicator, of what lies ahead for the US, Dowell Myers, whose class I have had as a graduate student, cautions that we do not believe any tales of the Golden State's gloomy future.  Even when it comes to population dynamics:

When it comes to retaining native sons and daughters, California has the fifth-strongest attraction of all 50 states. Among California-born adults who were at least 25 years of age and old enough to have moved away, fully 66.9 percent were still choosing to reside in the Golden State in 2007, the last year of high migration before the recession held people down. Texas, with 75.1 percent of native Texans still living in the state, has the strongest loyalty, and the other three rounding out the top five are Wisconsin, North Carolina, and Georgia. California’s top-five ranking is all the more impressive when you take into account the state’s high living costs and other negatives. We must have something going for us.

A variation of that old question comparing the US and USSR, would one rather go to, or be in, California, versus living in, Utah?  Is it any wonder why Facebookistan would be headquartered in California, though the authoritarian founder is a New Yorker!  Here, too, it is not that everything is well in California, but my bets are on that state.

But, would I ever want to move back to California?  Sure, to La Jolla, if I can afford it :)