America's greatness and the curse of universality

America's greatness and the curse of universality

by Pininvest Analysis

US S&P 500 ETFs on

  • 21 constituents
  • 41.7% 1y performance
  • 16.1% volatility
Check the investment theme exit_to_app

Make America great again (author unknown)
America was always great (quoted from Mrs. M. McCain’s eulogy for her father)


As they go, all political rallying cries are cheap and hollow and have always been…In fact, we suspect the politician uttering the slogan knows this full well and, truth be told, in their heart of hearts, so do the supporters

Sooner or later, the few words that united people in hope will end up where all broken promises are swept up, on the dust heap of history, with much defensiveness all around as long as expectations remain alive, in the forlorn attempt to keep them so just a bit long

There is a risk, assumed by the grieving Mrs McCain, in asserting political promises are nothing more than a false dawn

The true believers will gather around their star

Competing churches will point fingers and cry out it is all a sham

And no one will be the wiser because, when the premise is false, there is nothing gained in arguing the assumption

The premise is false

For half a century, since the end of WWII, the United States have been dominating the world’s economy, but America’s expanding reach across the earth forced the ever-present US national interest in an ambiguous balancing act

By its very global influence, of which the ubiquitous dollar is a surrogate, the US has been caught in a web of contradictions in time and space

  • Immediate domestic concerns may, and often do, run into strategic international commitments
  • Reserve currency allocations and demands of US dollars, beyond Federal Reserve control, may, and often do, impede domestic monetary options
  • International trade, rather than concatenated national interests, should be, and rarely is, viewed as a single breathing entity – the rupture of one lung affecting the domestic interests of all

All told, America is not, was not and will not be great in isolation but only because of artfully managed national interests in a globalized world

Therein lies the paradox – in isolation, America just is – and in a globalized world of which the country has been the main actor for so long, push-back in novel forms, quite distinct from the times of cold war, are bound to occur – and in fact are occurring as we write


The curse of universality

By ‘ruling the waves’, the British Royal Navy founded an Empire and then lost it … and historical events have been reenacting the difficult exercise of fine-tuning the balance of power times and again

HMS Owen Glendower, 1808

As surely as a dominant power will know no boundaries to its urge to expand, as surely will its universal ambitions be framed in terms of national interests

It is true America has been having a great run, sharing universal values from war-torn Europe after 1945 to Japan, creating almost single-handedly a global market place pulling millions out of poverty and, all the while, advancing national interests with brilliance and determination

And today, there is no need to argue that the root cause of America’s malaise is overreach: the simple fact, understood for some time from Millville (NJ) to Omaha (NE) to Sausalito (CA), is that national ambitions are running out of space in a globalized world

In so many words, universality is out, the difficult search for a balance of power is in



The logic of balance is incontrovertible but the tentative search of an acceptable compromise between national interests is fraught with conflicted demands

The rise of China and the unveiling of the country’s international ambitions in Asia confront the US, for the first time in living memory, with the reality of a new power balance (setting apart the Cold War power sharing ‘understanding’)

Thinly disguised as trade war, the abuse of which China stands accused is not about the price of steel, cars or Christmas decorations… It is about strategic and economic influence in South East Asia, Pakistan and possibly India – give or take 2 billion people…

Map Source: A Rand McNally map appended to the 1914 edition of The New Student's Reference Work.

Slowly coming to fruition, accelerating in a burst of top-down activism from the China command, subsumed in the infrastructure programs initiated by China, the power struggle is epochal and the players on both sides are new to the intricacies of a fine-tuned balance

The insecurity of the American people – expressed outwardly by rants about immigration – is sweeping across the political spectrum, taking the Chinese authorities off guard

Unable to evaluate to what extremes defensiveness will take America, China cannot confidently harmonize its calculations with the most probable American response – and conversely, America is blind to the actual timeframe and intent of China


An unstable equilibrium

Open military conflict about the balance of power may remain off limits because too much is at stake

But in uncertain times, the tentative search of an equilibrium is riddled with potential conflicts as the parties to the power balance attempt to come to terms with each other’s calculations and security priorities, involving not only the US and China but Japan and the very populous countries of South East Asia

The great game will take time to unfold and while some assertiveness will play out aggressively in the open, strategies aiming at each country’s ultimate goals are not inconsistent with stability-seeking initiatives from all parts in the duration

All things considered, the challenge confronting America is indeed one of ‘greatness’ – maybe not exactly the ideal some of its proponents have in mind but more of a balancing act to preserve the tremendous network of goodwill and shared interests with America spanning the world, the true source of the country’s future welfare


Looking ahead, our notes will attempt to address some of the complexity with a focus on