The day’s headlines can be terrifying: Trade wars, missile launches, oil tanker bombings. The media’s hit parade of horrors seems never-ending.
While it may seem like we’re going to hell in a nasty handbasket, the truth is that life, in general, is better than it’s ever been.
In a recent letter to Berkshire Hathaway shareholders, billionaire Warren Buffett talked about the “American Tailwind.” He was referring to our country’s growth and resilience despite periods of adversity. As a case in point, the Oracle of Omaha shared a story from his youth.
In 1942, at eleven years old, young Buffett invested his entire savings of $114 in stocks. Seventy-seven years later, that initial investment would be worth over $600,000. Had he invested $1 million, it would be worth over $5.3 billion, at an 11.8% rate. That same amount in gold would be worth roughly $4,200. So, betting on stocks, in this scenario, made a 5,288 to 1 difference.
During those 77 years, there were numerous calamities. Our country’s national debt ballooned to 400 times what it was in 1942 – that’s a 40,000% increase! The economy tanked during the Financial Crisis of 2008 and had recessions and corrections all along the way. As to politics, Buffett puts the issue best in his letter:
“Since 1942, we have had seven Republican presidents and seven Democrats. In the years they served, the country contended at various times with a long period of viral inflation, a 21% prime rate, several controversial and costly wars, the resignation of a president, a pervasive collapse in home values, a paralyzing financial panic and a host of other problems. All engendered scary headlines; all are now history.”
Yes, the American Tailwind is strong.
And, I believe there is a Global Tailwind roaring along at the same time.
Because we live in the United States, the most stable, the most entrepreneurial, the hardest-working, and the most enterprising country in the world, we can tap the power of this Global Tailwind. Now more than ever, American companies are harnessing progress, both at home and abroad. And, the global market and the general state of other countries around the world keep getting better.
Headlines are written for the day, but the macrocosm of our growth is written year by year.
Here are just some of the ways the world is getting steadily better over the long-term:
Freedom – Political freedom is difficult to measure. The statistics from Max Roser, an Oxford University economist, in his work, Our World In Data, incorporate an index for democracy that looks at the number of autocratically ruled nations and how they’ve increased or decreased over time.
With all the news of dictators around the world, it’s easy to form mistaken beliefs about global freedom. In reality, we are much farther down the road towards establishing civil liberties and political freedom than we were 200 years ago. According to Roser’s research, 56% of people are living in freedom today, versus only 1% in 1820.
Health – In 1800, more than 40% of newborns died before the age of five. Now, only a tiny fraction meet that fate. We now (gratefully) live in the age of modern medicine, germ theory, and sophisticated medications. Couple that with access to safe housing, sanitation, and nutritious food, and things are extraordinarily better than they used to be.
And, in the campaign to understand and treat cancer, we have made significant progress. The death rate in the US from cancer has been steadily declining for the past 25 years, according to data from the American Cancer Society. From 1991 to 2016, the rate has dropped by 1.5% per year, which translates into 2.6 million lives saved.
Education – Both education and knowledge have significantly improved globally. What’s even better is that Our World In Data forecasts continued growth in this arena: “With the great importance of education for improving health, increasing political freedom, and ending poverty, this projection is very encouraging.”
Energy – I’m always surprised how little attention this topic gets; there’s massive news here. Only ten years ago, the US was Number One on the list of energy beggars – we needed other countries’ oil and natural gas. But today, the tide has turned. Our energy exports now match – and will soon exceed – what we import from the rest of the world. We’ve experienced growth of more than a 100% increase in just a decade! Technology led to this astounding leap. The average output of a frack well is up ten times since 2008, and the cost of drilling is down seven times. That’s efficiency, and that’s American innovation.
Hunger – As of 1970, 28% of the people on earth were malnourished. Today that number is only 11%.
Extreme Poverty – Living in extreme poverty means today (after adjusting for inflation) that you have less than $2 a day to live on. In 1800, 85% of the world lived in extreme poverty. In 1966, things were better, with 50% of the world in extreme poverty. Today, poverty of this magnitude touches only 9% of our global population.
Clean Water – In 1980, just over half (about 58%) of the world had access to clean drinking water. Today, almost 88% of people across the planet have access.
Immunizations – In 1980, only 22% of the globe’s population had been vaccinated against major diseases. In 2016, that number leaped to 88%.
Number of Nuclear Warheads – In 1986, there were about 64,000 nuclear warheads. Today, there are 15,000. Yes, it only takes one or a few to wreak havoc, but this is a move in a very positive direction.
Plane Crash Fatalities – In the early 1930s, there was an average of 2100 deaths per 10 billion passenger miles. Today, that number is has decreased dramatically, down to only one death per 10 billion passenger miles.
Fatalities from Natural and Technological Disasters – In the 1930s, about 971,000 deaths per year happened as a result of natural or technological disasters – from things like earthquakes, malaria, locusts, tsunamis, gas leaks, fires, explosions and building collapses. Today, that number has dropped to 72,000, representing a 92% decrease.
Crime – According to Gallup Polls going back three decades, the vast majority (about 70 – 85%) of Americans believe that crime is getting worse. Not so. Since 1990, the number of crimes reported in the US has dropped from 14.5 million to under 9.5 million, representing 5 million fewer crimes.
Mobile Phones and Internet – In 1980, 0.003% of people had a mobile phone. Today, 65% of folks across the globe have one. As for web access, in 1980, 0% of folks could get online, while 48% had online access as of 2017.
Our list of amazing improvements goes on and on. Why did we not know how much our world has changed for the better? Perhaps because these upticks are simply too slow and methodical to be noticed at the moment. Perhaps, again, because we don’t hear these types of stories on the news.
But there’s power in understanding what’s really going on in the world around us, and in the bigger picture.
Our takeaway is this: there is an American Tailwind, and there is also a Global Tailwind. Both are strong, and the US is garnering more and more energy from global progress. So, don’t let a gloomy attitude influence you for the next decade, year, or even day. There is so much progress happening; I’m sure you won’t want to miss it.