by Gary Alexander

November 23, 2021

During Thanksgiving week, it’s good to pause and give thanks for our blessings.

Billions have emerged from poverty since 1990, in large part due to the fact that 30 years ago this month, the 20th Century’s longest-lasting Evil Empire collapsed. President Ronald Reagan took a great amount of flak for using that Star Wars phrase when referring to the Soviet Union on March 8, 1983, so his enemies took delight in calling Reagan’s nuclear shield plan (announced March 23, 1983) a “Star Wars” fantasy, but the Soviets (not the Russians) were indeed evil, as voluminous historical documents have revealed.

After the Soviets’ hardline coup failed in August 1991, one after another of their Eastern European satellites and member nations declared independence from the Soviet orbit, and on November 6, 1991, Russia’s new President Boris Yeltsin outlawed the Communist Party. By the next day, even Russia’s domestic papers referred to “the former” Soviet Union. The final nail in the Soviet coffin was hammered on December 1, 1991, when a Ukrainian popular referendum resulted in 91% of voters affirming their independence. (Ukraine was second only to Russia in economic and political power in the old USSR.)

On December 8, the leaders of Russia, Ukraine, and Belarus secretly met and proclaimed the Soviet Union had ceased to exist and announced formation of a Commonwealth of Independent States (CIS), a loose association with minimal powers, and a formal dissolution of the USSR as of Christmas Day 1991.

Amazingly, the bulk of celebrity “intellectuals” from the 1930s through the 1950s defended the Soviet Union as at least a noble experiment, if not a preferable way of life to the greedy capitalism of the West. In his 1999 book, “Twilight of the Intellectuals,” Hilton Kramer profiled 18 such writers, and their naïve words are astounding. In Russia, wrote one, “Everyone has a personal freedom that we never dreamed of.”

The press was no better. Walter Duranty of The New York Times ignored the Ukrainian famine, which he saw killing several millions, and he won a Pulitzer Prize for it. Kramer cites another correspondent from The New York Times in Moscow in the late 1930s who wrote approvingly of Stalin’s show trials of 1937-38, in which up to one million military and intellectual apparatchiks were murdered. The literary editor of The New Republic also wrote often in defense of those trials, even favorably reviewing their transcripts.

The Evil Empire Images

Something similar happened in my college years, when kids wore Che Guevara T-shirts or carried Mao’s Little Red Book, blissfully unaware of the personal murders carried out by Che or the mass murders of Mao’s Great Leap Forward (about 40 million starved) or the Cultural Revolution (about 10 million dead).

America is not perfect, but we remain the world’s haven, not its torture chamber. I grew up reading books like “The Ugly American,” portraying us as unwelcome meddlers, but my experiences differ from such books. My wife’s family lived in The Philippines, 1959-60, and the Filipinos adored Americans for saving them from the Japanese in World War II. When we toured China in 1996, we heard the same story from older Chinese in Sichuan province about the Flying Tigers who volunteered to protect inland China from Japanese invaders (pre-Pearl Harbor), who murdered four million Chinese citizens. Numerous older Chinese on the streets thanked our older veterans for saving them from the Japanese invaders in the early 1940s. The same is now true in Vietnam. As unpopular as American involvement was then, what came after America left was far worse, as Vietnamese “Boat People” and Cambodia’s “Killing Fields” testify.

Going further back, the endless trench warfare of World War I only ended when America entered the war. Then, we won two wars on two continents in World War II after enduring 12 years of a Great Depression.

Invest in Freedom – and in America

Back in 1961, the year the Berlin Wall went up, in the seventh edition of his popular Economics textbook, Paul Samuelson said that the Soviet Union’s GDP, which he said was then half that of the U.S., would surpass the U.S. as early as 1984 but no later than 1997, due to their higher levels of economic growth.

In the 1980 edition, Samuelson pushed the Soviet’s triumph out to 2002 to 2012. Apparently, he bought into the official Soviet GDP figures (blue bar, below) rather than our CIA of the day or later revisions.

Soviet National Income Growth Bar Chart

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

The 1989 edition of Samuelson’s perennial best-selling Economics textbook, still used in many colleges today, relentlessly praised the Soviet economic system, saying, “The Soviet economy is proof that, contrary to what many skeptics had earlier believed, a socialist command economy can function and even thrive.” My wife, daughter, and I visited the Soviet Union along with 20 other high school students in 1986, and we could tell that was false. How could Samuelson miss it? Had he never visited the place?

Something like that may be happening now in China. Their GDP numbers have been record-setting, with double digit increases many years, and NO recessions, but their stock market seems to go nowhere. Their buildings also go nowhere. They are empty. It’s possible to create growth by erecting empty buildings, I suppose, with speculators investing in those husks, but what does that do for the middle class of China?

China's Slowing Economy Charts

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

Meanwhile, Europe’s “Democratic Socialism” has saddled them with cradle-to-grave entitlements, while most of their defense costs were offloaded across the Atlantic to their senior NATO partner, the U.S. President Trump partially succeeded in getting Europe to start ponying up their fair share for their defense, but Europe is now defenseless in energy supply, held ransom to Middle East and Russian sources … with winter coming.

After the Berlin Wall fell, Europe staged a momentary surge, but Europe actually suffered through a second post-2008 recession in 2011 – and numerous financial crises in the PIGS countries (Portugal, Italy, Greece, and Spain) – while the U.S. prospered. The U.S. keeps beating Europe in both GDP and market performance.

United Kingdom Equities Lagged Developed Market Alternatives Chart

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

American stocks have more than doubled the rest of the world in the decade from 2010 to 2019, pre-COVID, and U.S. markets have also recovered to new highs since COVID, while most other markets have trailed us.

United States Gross Domestic Product Growth versus European Gross Domestic Product Growth Chart

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

Bringing us up to date economist Ed Yardeni reminds us in his Monday newsletter (November 22, 2021), that “The US MSCI index has now risen in six of the past seven weeks.” Year to date, the U.S. is up 24.3% vs. All Countries (AC) ex-US, up only 6.8%. Latin America is down 14.7% and the BRIC nations are down 7.4%.

One lesson over this Thanksgiving weekend is that it pays, financially and personally, to invest in freedom.

All content above represents the opinion of Gary Alexander of Navellier & Associates, Inc.

Please see important disclosures below.

About The Author

Gary Alexander
SENIOR EDITOR

Gary Alexander has been Senior Writer at Navellier since 2009.  He edits Navellier’s weekly Marketmail and writes a weekly Growth Mail column, in which he uses market history to support the case for growth stocks.  For the previous 20 years before joining Navellier, he was Senior Executive Editor at InvestorPlace Media (formerly Phillips Publishing), where he worked with several leading investment analysts, including Louis Navellier (since 1997), helping launch Louis Navellier’s Blue Chip Growth and Global Growth newsletters.

Prior to that, Gary edited Wealth Magazine and Gold Newsletter and wrote various investment research reports for Jefferson Financial in New Orleans in the 1980s.  He began his financial newsletter career with KCI Communications in 1980, where he served as consulting editor for Personal Finance newsletter while serving as general manager of KCI’s Alexandria House book division.  Before that, he covered the economics beat for news magazines. All content of “Growth Mail” represents the opinion of Gary Alexander

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