As President Trump explained this week why we don’t need to worry about climate change, because “the world will start getting cooler”, an article on CNN lamented “America’s devastating divorce from science”.
However, as the US president tries to ignore the effects of climate change and a raging pandemic, it seems that not only is America becoming divorced from fact-based science, it is becoming divorced from respect for right and wrong, especially in the intertwined worlds of politics and business and big money.
But is Trump infecting the country with his cavalier attitude towards facts and honesty, or has America’s culture simply reached its zenith with his election? Does he exemplify what America has become?
It may or may not be coincidence but also this weekthe electric truck company Nikola has been forced to prove it is not a fraud (it admitted to rolling its prototype truck down a hill) and it was revealed that Boeing engaged in a shocking and fatal cover-up of design flaws to get its 737 Max fast-tracked into production.
Whilst we are constantly warned by the White House to watch out for dishonest Chinese companies, America has had its fair share of its own scandals. It is worth remembering that the originator of the ponzi scheme, Mr Charles Ponzi, was inspired by the American dream to become a millionaire, albeit fraudulently, even if he was Italian.
Bernie Madoff operated his sham investment business successfully for nearly 50 years in the supposedly heavily regulated American financial system before receiving a 150-year prison sentence. And the whole sub-prime mortgage crisis was based on a series of lies about income and exaggerations of credit quality that eventually caused a global financial crisis.
Where money is involved, people are prepared to ‘believe’ and will go along with behaviour that, at other times, might appear to be absurd or even immoral. If data warehousing company Snowflake comes to market in an IPO valuing it at $34 billion, does it matter that it doesn’t make any money?
It is hardly alone these days and each new IPO at incredible multiples of sales (few have earnings, only losses) validates the last one, with the smart money (early VC investors) using it as an opportunity to sell to the dumb money (day traders).
We wait with bated breath for the stock market debut of Palantir, which has never made a profit since it began in 2003 and which is rumoured to be worth $30 billion.
There might come a time when we look back on all these multi-billion dollar fundraisings and say ‘This was all a fraud”. In future, we might find that the term ‘unicorn’ applies to the mythical profits these companies never generated rather than the ‘rare’ start-up that achieves a multi-billion dollar valuation.
The contrast with the IPO market and the real world was also brought home this week by the Vice Chairman of Blackstone, which is one of the largest investment companies in the world, who said that the next 10 years could be a lost decade for equity returns.
On the one hand, tech stocks are valued as though the world is experiencing an economic boom, but on the other we are told that the good times are behind us.
The US President says the economy has rebounded like a super-v, whereas the 30 million Americans on unemployment benefit see things differently.
These are very different points of view about something that ought to be clear. The next few months could be even harder for investors to navigate, as the US election in November threatens to create a mess of historic proportions, with some even predicting the outbreak of civil war.
We will discover whether enough Americans care about truth, science and honesty to eject Trump decisively from power, or whether we can expect America’s reputation as a (relatively) safe place to invest to spiral even lower into the abyss.