Four Fings I Fink I Fink

It’s the 4th of July so here’s an extra special three things…

1) Nike is Being Unpatriotic Again?…So, Nike decided not to release a new shoe with the Betsy Ross flag on it. They said that the flag was perceived by some as being a symbol of the slave era. Apparently this decision was influenced by Nike spokesperson Colin Kaepernick. Naturally, everyone lost their shit over this because that’s what we do these days – we lose our shit over things that we shouldn’t be losing our shit about.

Anyhow, Nike was just catering to their base customers (progressive Millennials). It’s good branding and the stock market agreed as NKE jumped 1.5% yesterday. But then Conservatives came out saying that Nike is anti-American and Fox News ran countless hours of free Nike advertising which is exactly what Nike wanted them to do. Honestly, it all sounds like a bunch of political pandering to me. If Nike wants to rally their base customer with political pandering then go for it. And if you want to believe Nike is suddenly anti-American because they responded to the criticisms of their customers then go for it. But in the end, Nike doesn’t care what your politics are. They are just trying to make money. And whatever they’re doing is working.

2) Here Comes the Military Parade. So, everyone is losing their shit because Trump rolled a bunch of tanks into Washington DC. And now they’re claiming that he’s just like Kim Jong Un because that’s the sort of thing that dictators do. Honestly, this seems like more faux outrage. Look, I don’t really like Trump. It’s not that I hate all of his politics so much as I think he’s kind of a bad person. But we need to stop overreacting to every little thing he does. Trump’s power is very much checked by Congress and the courts. We’ve seen this time and time again. The system works. So, let Donnie have his big parade. He probably needs the self esteem boost.¹

3) Brexit V. 1.0 and The Tea Drinking Celebration. Alex Morgan scored the go-ahead goal against England in the USA’s World Cup match the other day and everyone lost their shit over her celebration. She appeared to sip a spot of tea in a mocking fashion. I’ve touched on this before and I think it’s great. I wish there was more outlandish sports celebrations and emotion during sporting events. Professional athletes are adults. They can be emotional without overreacting to every dumb thing their competitors do. And let’s be honest – if the rest of us, the spectators, get upset over someone scoring an amazing goal and pretending to sip some tea then we don’t have enough real problems in our lives.²

4) US Corporations are EVIL! Wait, Cullen, you’re actually going to talk about finance now? What. The. Hell?

Here’s a Bloomberg article arguing that US corporations are “draining value” from the US economy. They show the blue line version of the below chart to argue that US corporations are earning more of national income and that this is threatening capitalism. Except this chart is mostly a fallacy of composition. The correct chart should should show US corporate profits relative to the rest of the world (the yellow line below which doesn’t look nearly as alarming). After all, no one in Europe is running around complaining about this because earnings per share has been flat in Europe for 15 years. That is, in part, because US corporations are eating up more of the pie:

So, you have a misleading conclusion in the article that says there’s not enough competition and that capitalism is failing. Except, you could have made the exact same argument in Europe 10 years ago and then a bunch of big US tech companies would have come in, eaten your lunch by outcompeting you and then when you want to make a political statement about the state of capitalism you get to ignore what’s happened in Europe and focus your narrative on the USA. Hmmm.

Anyhow, I am not going to sit here and pretend that corporations can do no wrong, but when viewed thru the proper macro lens it is clear that capitalism has done a great amount of good for the world. It just so happens that people in the developed world are seeing a relative shrinking of the pie because capitalism is redistributing much of the relative gains to emerging market economies. But make no mistake – the total pie is still growing and aggregate global living standards are higher than they’ve ever been. And even in the USA, where the improvements in living standards are slowing, there is still no better time to be born an American than today.

Happy fourth of July!

¹ – I might be biased here (or just immune to military activity) because I live a few miles from Camp Pendleton and I spend half my day listening to tanks firing and planes flying overhead. Also, who are kidding? Tanks are fun. 

² – If you want a problem to solve I would like to invite you over to my house remodel which is coming up on its 2.5 year anniversary.