My 2 week in DC have been a formidable learning experience. However I came away slightly disenchanted, I do not feel the Federal machine will be up to the task no matter who the next president is going to be. US Corporations are well run, US Universities, States and Cities are also probably well run, but the Federal System does not work as well as it should. And the Federal Government will not easily change. A wiser, more relevantly experienced President might be able to do something. But there is no such person on the horizon. So a severe crisis will be necessary to achieve change and crises can be the cause of many bad changes as well as of good ones. I am sure a crisis will come, and at that time, leaders will need to know the truth and have some good ideas for change. And probably the crisis will hit thru a massive US$ devaluation. Having said that the Federal government is not working well, among States and cities it’s a mixture. Some are very well governed and some very badly governed. One thing that helps is the fact that the states cannot be completely irresponsible regarding their budgets. Essentially they have to balance them over reasonable periods of time. This enforces some discipline and the crazy partisanship that characterises government in Washington is not as strong at the state and municipal level. States don’t enjoy the reserve currency status (or curse) to the extent the Federal Government does. Also States and Cities are by definition closer to the needs of the people and do not deal with semi-abstract concepts like security threats, anything that happens in the world poses a threat to the US, is it possible? Almost everywhere a great innovative economy is associated to a great university. The extraordinary association of talent from universities, money from finance, inborn pragmatism and the management experience accumulated allows US corporations to be the best in the world. Washington is a playground for them, they can do and undo what they want, the talent gap and the financial power they enjoy is no match for anyone in DC. Nowadays when foreign leaders come to the US they go thru Silicon Valley or Seattle. Nowadays foreign policy is made by US Corporations as much as by the State Department. When US CEOs’ travel to China they get to see Xi, they have better access than the Secretary of State, they get huge crowd in top universities when they speak, they are extremely popular!! This is a relatively new phenomenon and getting bigger, watch it!!
The United States is angry, but the capital lives in a bubble far away from its real problems. Trump or Hillary won’t make a big difference because Congress will remain divided with a Democratic Senate and a Republican House. Meanwhile, corporations will continue to dictate the agenda. American consumers don’t buy anything anymore, companies aren’t investing because there’s no demand, but no one dares to propose a more progressive taxation system or imposes duties on fuel to finance big infrastructure projects. And to say that it was Roosevelt and his New Deal who showed the world when they lifted the American economy from the abyss of the Great Depression. We’ll probably see a more isolationist US, but one that’s more present in Europe. Many have understood that Obama’s “Pivot to Asia” was really Japan’s war on China, which is likely already underway, and in which the US doesn’t want to be involved. Even China needs its “vital space,” it’s naive to deny it. Instead, many in Washington are worried about Europe’s disintegration in which they see the disappearance of their most trustworthy ally since forever, and the eruption of Putin and Isis onto the global stage. But when it comes to paying the bill, don’t hold your breath for another Marshall Plan.