Betting on recovery? Perhaps you should think again. Consider what the chart suggests: that investment has yet to “recover” in any meaningful sense—in fact, it’s still cratering. Instead, from a structural perspective, America’s still pursuing what I call in The Manifesto dumb growth: growth driven by (debt-driven hyper) consumption (mostly, of “consumer goods”—trinkets and gewgaws). That kind of “growth” is dumb for many reasons—but the biggest is the simplest: rather than creating real wealth, it simply transfers it (from the poor to the rich, the young to the old, and from tomorrow to today). The real challenge? Shifting to a model of smarter growth, driven by investment, not consumption. Why? Because the industrial age’s tired, rusting diminishing returns assets are tapped out (think a decaying, obsolete national physical infrastructure, or, at a more advanced level, financial market microstructure, social infrastructure, etc). Investing in the foundations of a 21st century economy is the single most powerful key to reigniting prosperity.  Real recovery begins with smartening up yesterday’s dumb growth.

Betting on recovery? Perhaps you should think again. Consider what the chart suggests: that investment has yet to “recover” in any meaningful sense—in fact, it’s still cratering. Instead, from a structural perspective, America’s still pursuing what I call in The Manifesto dumb growth: growth driven by (debt-driven hyper) consumption (mostly, of “consumer goods”—trinkets and gewgaws). That kind of “growth” is dumb for many reasons—but the biggest is the simplest: rather than creating real wealth, it simply transfers it (from the poor to the rich, the young to the old, and from tomorrow to today).

The real challenge? Shifting to a model of smarter growth, driven by investment, not consumption. Why? Because the industrial age’s tired, rusting diminishing returns assets are tapped out (think a decaying, obsolete national physical infrastructure, or, at a more advanced level, financial market microstructure, social infrastructure, etc). Investing in the foundations of a 21st century economy is the single most powerful key to reigniting prosperity. 

Real recovery begins with smartening up yesterday’s dumb growth.