Is there reason to be optimistic about our country’s future?

As an individual whose family roots in our country go back nearly 500 years, I have a unique sense of pride and ownership in my country, what it is, and what it can be. As the founding fathers envisioned organizing a federation of initially thirteen states, they recognized as recent immigrants themselves, that they and others who would come in the future, could together build a nation where “all men” would be equal under the eyes of both God and the law, and essentially that everyone who comes to this country could pursue what later became known as the “American dream.” 

Since both the discovery of, and the formation of, the United States of America, our country has evolved and has become the greatest nation in the world, despite the tensions, imperfect behaviors and actions that have challenged us all along the way. 

Today, we find ourselves at a major crossroad where economics, politics, social values, and world engagement have all converged, and at times are at odds. I am optimistic that our country can find the right path if the “true North” of our compass remains our shared commitment for others to continue to come to this great country and pursue their American Dream without limitations, a country where capitalism makes it possible for virtually anyone to create wealth and prosperity.

So, why should I be optimistic?

For starters, I believe we are learning from our experiences and can leverage that learning into actions. We are learning how racial tensions, which have exacerbated in the last several years, can harm our country. We’ve experienced what the Divided States of America looks like versus our United States. We now know that the greatest income disparity in our history has fueled anger and hopelessness, and has catalyzed a fading economy, reflected in our GDP, impacting all Americans. Over-concentrations of wealth and power have never been the paragon of optimism, enthusiasm, and entrepreneurism.  

Given what we now know, I’m optimistic we can reinvigorate our country where all people, regardless of who they are or where they come from, can achieve and experience what America is supposed to stand for – life, liberty, and the pursuit of happiness…all under the auspices of true capitalism. 

What makes me think that’s realistic?

I’ve had the good fortune of leading and running three, very large companies in the three different corridors of the world, dealing with people from different cultures, with different norms, different forms of government, and I’ve learned a consistent truth. That truth is that the countries that tend to experience the greatest success, are those where the entire population are valued, and are participating in the economic ecosystem.

Unfortunately, since the Great Recession, the top 5% income group is the only group in America that has gained wealth. In the world rankings of income inequality, the U.S. is now 108th out of 159 countries, ranked similar to Venezuela and Haiti, and significantly worse than Russia, Iran, and Kenya. We must face that reality and deal with it in order to heal many wounds so many in our country have felt. Our economy needs all of us to thrive, not simply the top 5%.

If you look at our economic growth over time, it becomes clear that not only has wealth become concentrated in fewer and fewer people and companies, our nation’s GDP has fallen, wages have stagnated, upward mobility is stymied, and even our family farms have dwindled. Too many Americans, whether Black, Latino, or non-Latino, have been left out of the “system” and are living near or below poverty. We have to make capitalism work for all if we want to maximize our country’s economic growth potential.

So, what’s the solution?  

Getting more people employed and working in the system, paying them livable wages, assuring access and connections to capital , and making it possible for everyone, not simply a chosen few, to create wealth, and enjoy increased consumption, is the goal of capitalism. 

Our country’s GDP, the true measure of how well our economy is working for everyone, was experiencing nearly 4% growth in the 80s and 90s. However, by the beginning of 2020, GDP growth had fallen to nearly 2%, and since COVID, the GDP is now in negative growth territory. What we have seen is that the growth of GDP is highly correlated with the labor force growth rate, which is now near zero at just one-half percent growth. The chart below demonstrates the correlation of labor force growth to average GDP growth by administration.

Fortunately, our country has had leaders, such as Ronald Reagan, who understood the value of a diverse and growing population, and whose immigration policies provided a sustainable platform for growth that no other aging economy in the world enjoys, which is a robust and growing cohort of immigrants in America, now with roots here, citizens who happen to be our country’s most prolific entrepreneurs over the last fifteen years. I’m referring, of course, to the U.S. Latino cohort.

My optimism in our future is buoyed by knowing we have this burgeoning U.S. Latino population that is the most youthful, entrepreneurial, and fast-growth cohort in our country. This cohort’s GDP, if it were a stand-alone country, equates to the eighth largest economy in the world, on track to quickly move up to number five or six. In a recent study, the U.S. Latino GDP, compared to the GDP’s of all of the world’s developed economies, has become the fastest growing in the world. 

Yes, but can one cohort be all things to all people, you ask.

No cohort can, of course. But this cohort can facilitate the growth of all other cohorts, and provides a foundation on which our entire economy can grow and be sustained for decades to come. Why do I say that? Because, for example, U.S. Latinos are already purchasing over fifty percent of all new home mortgages taken out in America. Clearly this sector of the economy creates millions of jobs every year. 

Another testament to the importance of this cohort is that it has been responsible for 80% of net new businesses created during the past decade. That means, while U.S. Latinos have accounted for over 80% of the net growth in our labor force and filling vacant jobs, they have also been creating jobs. 

Their income growth has outpaced all other cohorts, and along with that so has their growth in consumer spending. It has been shown that this cohort has been driving the net growth in just about every sector of our consumer goods economy, and as a result has been responsible for the growth in jobs across the country, from food, to durable goods, to health care, to communications, to retail, and beyond.

The fact is, however, even this economically robust cohort that is driving the New Mainstream Economy, isn’t enough to return our country to its historic average of 3.5 percent annual GDP growth on its own. The simple fact is, our country needs a growing workforce as the data have made clear. Unfortunately, as an aging society, the growth in our workforce has nearly reached zero, given the drop in birthrates in the last two or three decades, and the more recent negative immigration policies. That is critical because when employment recovers as COVID recedes, we will quickly return to the millions of unfilled jobs we had in this country pre-pandemic, which will put the brakes on sustaining economic growth. 

But, I am optimistic about our future because of what I see as priorities of our new administration, including:

• Prioritizing immigration reform and enabling new workforce growth
• Prioritizing policies that assure access and connections to capital for small business and entrepreneurs, especially those that are Latino-owned who are growing faster than any other cohort, and also the most under-capitalized
• Focusing on GDP as the economic measure of our economic performance, rather than just the stock market

Our country has taken its eye off the ball when considering our economic well-being. Too much focus has been given to the DOW, NASDAQ, S&P, which are great measures for those who can afford to buy stocks, and which mostly measure the economic growth of the top 10 percent. Our focus should, instead, be on GDP, which is the true measure of how well our economy is doing for all Americans. GDP is the measure of job growth, wage growth, business start-ups, workforce growth, farm income, consumer spending, and productivity, all the things that reflect how well we’re making capitalism work for “the many,” not just “the few.”

With a new national focus, and keeping our eye on the ball, I believe we have an opportunity to build a future where everyone thrives by leveraging the robust diversity all of our cohorts provide. Collaboration across all cohorts, political parties, beliefs, and traditions can multiply the economic return on the diverse human capital that makes America unique in the world. 

In closing, I have had the opportunity to live abroad, lead companies in all three corridors of the world, and deal with governments of all types - communist, autocratic, other democracies, as well as monarchist. Our country has had a unique and differentiated position that has enabled it to become the greatest country in the world. It is imperative, in my opinion, for all of us to put our country first, and embrace our form of democracy, and our capitalism, as they have taken us to that pinnacle. But like all structures and ecosystems, there are times when diversions, mistakes, and inefficiencies emerge, and it is imperative for leaders to come together to solve for, and deal with, whatever those challenges may be. 

I am optimistic we have the resources and capabilities, and can inspire the national will, to build a better future for the many, not just the few, for decades to come … assuming our leaders, and all Americans, are willing to put their country first, consistent with our values, principles, and beliefs.