*** American dreamers and schemers are not worried, and here, in his own words, is the mad prophet of the Great Tech Bubble himself, King George of the Gildered Age:
"A balance of trade or a balanced budget is not necessarily desirable at all. Indeed, a trade gap signifies a capital surplus. It means that people want to send us money. It means they trust the stability and order of the U.S. economy. You can see how this works when you realize that one-third of global GDP is in the United States. The United States generates fully one-third of global GDP.
"But the market caps of our companies represent 57% of global market cap. In other words, people all over the world want to invest in the United States and this is because the United States has the most stable environment for investment. It has the deepest and most creative capital markets. It's got the largest and most liquid stock markets and it has the rule of law, we hope, rather than the rule of lawyers which threaten it.
"So, the way to think of this is: a foreigner with a dollar can do two things with it. He can buy an American good - buy an apple exported from the United States, for example - or he can buy an asset in the United States. If he purchases the apple, he eats it and we don't have it anymore. If he purchases the asset in the United States, we keep it."
But do we really "keep it" when a foreigner buys a U.S. Treasury note? Or, do we just "get it" good and hard? Of course, God doesn't care who owns U.S. debt, U.S. factories, or U.S. ports. He is neither xenophobe, nor patriot.
As Americans go further and further into debt to our friends in the Far East, and sell off more and more U.S. assets, they transform themselves - from creditors into debtors, from capitalists into post-industrial serfs, and from independent citizens (who could tell the rest of the world to drop dead) into modern wage slaves. They are so deep in debt to the foreign-owned company store that they have to stand on tiptoes to kiss the derriere of a Chinese duck!
*** Is it really true, dear reader? You may have wondered yourself. Do things really work the way they're s'posed to work? Does virtue really triumph over evil? Do prudence in investing and honest toil on the job really beat reckless day trading and a government job?
Maybe George Gilder is right. Maybe the trade deficit is nothing to worry about. Spend, spend, spend...whoopee!
It just doesn't matter. Sin, debauchery, or debt - in this new Information Age, everything will work itself out...right? Play the tambourine, let the little ones dance about, refi and refi again. Save money? Forget it! Max out the credit cards, get a convertible, buy a Miami condo on credit, and still go down to the beach with a young blonde on our arm, in peace.
But wait. Is that the world we want to live in? There's the rub, isn't it? If we were able to do what we wanted - and get away with it - everyone else could, too. And what a depressing mess that would be. What if being naughty isn't so much fun after all? What if we didn't get away with it? What if we don't go to the beach in peace? And, what if the burden of it floats on our soul like a dead fish at low tide - stinkin' to high heaven?
What if we run out of time? Out of credit? Out of good humor? What if bad dreams disturb our sleep - or demon worries trouble our digestion? No thanks; it doesn't seem worth the risk.
