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Wherever I turn these days, it seems I'm repeatedly met with the same dire drumbeat. It goes something like this: The U.S. has seen its best days and is now in a state of decline.
Some folks echoing this sentiment focus on the rise of emerging markets like China and India. Others talk of the U.S. being mired in a terrible depression. Some even go as far as to compare the U.S. to the Roman Empire right before its epic fall.
I'm not sure the best way to express my view on this in a family friendly way, so I'll just say that it's all absolute poppycock. Sorry for such harsh language.
One interesting gauge of American business comes from the annual "Best Global Brands" list that brand expert Interbrand compiles. Nine of the top 10 global brands hail from the U.S. Here's a look at a few:
|1||Coca-Cola (NYSE: KO )||United States||Beverages||$70.4 billion|
|2||IBM (NYSE: IBM )||United States||Business Services||$64.7 billion|
|4||Google (Nasdaq: GOOG )||United States||Internet Services||$43.6 billion|
|5||General Electric (NYSE: GE )||United States||Diversified||$42.8 billion|
|6||McDonald's (NYSE: MCD )||United States||Restaurants||$33.6 billion|
|7||Intel (Nasdaq: INTC )||United States||Electronics||$32.0 billion|
If the U.S. is in an interminable decline, somebody forgot to tell that to the consumers around the world religiously drinking Coke, eating McDonald's hamburgers, and using Intel-driven computers.
Of course, the presence of brands like Coke and General Electric -- which seem to have been around since time immemorial -- doesn't necessarily help our case much. They could be shrugged off as simply aging pillars that are waiting to crumble (even if they're not).
What's more interesting is that on a list that includes venerable brands that are more than a century old, like Coca-Cola, Mercedes Benz, and Budweiser, we see the brands of U.S. companies that are far younger. Cisco and Dell (numbers 14 and 41) are just 26 years old. Amazon.com and Yahoo (numbers 36 and 66) are still in their midteens. And of course the No. 4 brand in the entire world, Google, is a mere 12 years old.
Maybe just as impressive are the older brands that have significantly reinvented themselves. While IBM still carries the same brand that it has for decades upon decades, the services-and-software-focused company of today is very different from the mainframe giant of the past. And today's Apple (Nasdaq: AAPL ) brand, which has been jolted by iPhones, iPads, and iPods, bears little resemblance to the company that sold the Apple IIe I had in the early '80s.
Not all of these brands will have positive momentum in the years ahead. Dell, for instance, has had a bumpy ride of late. But looking across many of these other dominant and growing American brands the idea that the U.S. is in a state of collapse begins to seem fairly silly.
Hold the confetti
This isn't to say that everything is perfect for the U.S. Smart, talented entrepreneurs from places like China and India could create businesses that will provide tough competition for American companies. Our current sticky unemployment problem could cause problems for the domestic side of U.S. businesses. And, at least in my opinion, our competitiveness will only be hurt by the extent to which our best and brightest are attracted to get-rich-quick schemes in the financial world.
In other words, there's no room for us to fall asleep at the wheel.
But much of the direst rhetoric is coming from folks that have something to sell you -- whether that's gold coins, bomb shelters, financial advisory services, or a political ideology. If Peter Schiff gave up on the idea that the dollar -- and the U.S. as a whole -- could be headed for a complete collapse, his opportunities for shameless self-promotion would plummet. And is it likely that an upstart political movement would grab many ears if it wasn't telling a goosebump-inducing story about how the U.S. is headed for utter calamity?
Tempting for a reason
A cognitive bias called the "recency effect" explains why people are more tempted than ever to buy into scary predictions of a U.S. collapse. This bias causes us to put more weight on the most recent events and information and put less weight on what happened further in the past. That means that today many are squarely focused on the gut-wrenching turmoil of the past few years and massively discounting a long history of innovation and growth.
But just as the Internet boom didn't really mean that supercharged growth would take us to untold heights, it's highly unlikely that the recent challenges mean that we're going to end up anywhere near what the doomsayers are jabbering about.
Think I'm off my rocker? Head down to the comments section and let me know why.
Bearish talk has many investors hating the stock market. But perhaps that's a good thing.