Five Charts That Show American Exceptionalism Is a Myth
Jeremy Grantham, chief investment strategist at GMO, has some bad news for Americans.
From health care, to politics, to education, to the economy, the U.S. is far from a standout, he says.
And before the nation can resolve its challenges, Americans must first acknowledge them.
"We are dealing today with important issues, one so important that it may affect the long-term viability of our global society and perhaps our species," the strategist writes in his latest quarterly letter. "It may well be necessary to our survival that we become more realistic, more willing to process the unpleasant, and, above all, less easily manipulated through our need for good news."
In the letter, Grantham presents a dozen exhibits that cast doubt on the notion of American exceptionalism. We've highlighted five that jumped out:
Other advanced economies—especially France—are crushing the U.S. when it comes to real wage growth, Grantham says:
"For the 50 years I have been in America, Business Week and The Wall Street Journal have been telling us how incompetent at business the French are and how persistently we have been kicking their bottoms," he writes.
Inefficient health care
"And watch out for when the Turks, Poles, and Czechs cut back on smoking, for then we may find our way to the bottom of the list," quips Grantham.
"The probability of a bill passing through Congress is affected by the general public’s enthusiasm or horror. In a nutshell, not at all!" he writes. "The financial elite, on the other hand, can double the chance of a bill passing or, much more disturbingly, can completely block passage."
Are our children learning?
The U.S. doesn't crack the top 10 in two segments of the STEM educational grouping.
Illusions of foreign aid grandeur
"Now, I do not think I have met a single American who does not believe that the U.S. government is generous in its foreign aid," writes Grantham. "Yet, it just ain’t so, and by a remarkable degree."
However, there's one area in which the U.S. has been exceptional: corporate profitability. And that enduring dynamic has been crimping GMO's returns, as Ben Inker, co-head of asset allocation, readily admits.
"As a firm that has consistently underweighted the U.S. versus non-U.S. markets for the last couple of decades, what we at GMO seem to have gotten wrong is continually fading U.S. profitability back toward that of the rest of the world and its own longer history, while U.S. profitability has instead moved higher," he wrote.