Who Needs Horatio Alger, We Have Hamilton!

Peggy Noonan recently reviewed  a hip hop play.  "Hip hop?" you day, "Has she flipped her wig?"

Actually she has tipped her wig figuratively to a Broadway biography of one of our bewigged founders: Washington's right hand man, a triumvir of the Federalist Papers, and our first Treasury Secretary: Alexander Hamilton.

The U.S. economy achieved its takeoff into sustained economic growth by 1840, long before all but two countries in the world.  Yet a betting man or woman in 1780 would have found little to choose among our new fledgling republic strung along the Atlantic compared to Argentina, Canada, Mexico, and Brazil in terms of who would have been economically successful. Richard Sylla, perhaps our preeminent financial historian of U.S. financial markets, makes a compelling case that Hamilton's financial reforms enabled the emergence of a sophisticated financial system.  That financial system financed the young republic's emergence as an economy.  Thus economic takeoff took place here and not somewhere else.

Alexander Hamilton is one of my favorite Founding Fathers.  More to the point he exemplifies what makes America America and nowhere is it better expressed than in this very 2015 Broadway musical, "Hamilton"  Listen to Lin-Manuel Miranda, its playwright and star, as he performs "The Hamilton Mixtape" at the White House Evening of Poetry, Music, and the Spoken Word on May 12, 2009. He is accompanied by Alex Lacamoire:




As always, Peggy Noonan expressed it well: "Why did they weep? Why was everyone so moved?
Because it hits your heart hard when you witness human excellence. Because the true tale of how an illegitimate, lowborn orphan from the West Indies went on to become an inventor of America is a heck of a story. And because it is surprising yet perfect that that story is told in a hip-hop/rap/rhythm-and-blues/jazz/ballad musical whose sound is pure 2015 yet utterly appropriate to the tale."

Miranda read Ron Chernow's biography and wept because he identified with a great story of a great man who overcame all odds, yet a man made with feet of clay. Read it and drink in the story of our country.   

If Americans in 2015 can listen to this tale without a dry eye, then we know the revolution has spent its course and it is time to learn Mandarin. 

An "Ordinary Man" to Build a 180 Mile Canal Across Nicaragua. We Will See.

When the United States was deciding how to cut the passage from the east to the west it considered two alternatives: Nicaragua and Panama.  Thanks to fortuitous events and the opportunism of Panamanian patriots, it chose Panama.  The idea of a canal through Nicaragua is being revived by a Chinese businessman.

John Paul Rathbone wrote in the Financial Times that Nicaragua's "congress voted to give Wang Jing the go ahead to build a new canal in its country.  On June 13th, Daniel Ortega left-wing Sandinista government gave HKND, the newly-registered group [a] 50-year concession' to study the feasibility and build a canal."   So HKND is a special vehicle for this $40 billion project.  Furthermore "HKND is working on the feasibility study for the giant project with McKinsey as well as China Railway Construction, a large state-owned group."

Nicaragua is ruled by the left wind Sandinistas under Daniel Ortega.   Mr. Wang is a good friends of President Ortega's son.

And who is Wang Jing? Rathbone described Mr. Wang as a "40-year-old businessman...who also heads Beijing Xinwei, a midsized telecoms company."  The FT's Kathrin Hill interviewed this self described "very ordinary Chinese citizen" for its "Beyond the BRICs" blog. Hille tells us, "he lives with his mother, his younger brother and his daughter in Beijing."


Hille talks with Wang in this video about his plans and asks whether his US$40bn project is a front for the Chinese government's ambitions to extend its influence in the US's backyard:


This is a project not without risks.  Rathbone warns, "[a]lthough global trade is growing, the Panama Canal is nearing the end of a $5bn expansion plan to double its capacity, while global warming means melting ice packs in the Arctic could make a northern route a viable alternative to crossing the central American isthmus by canal."

Surprise: Institutions Matter and Ours Are going Downhill!

The decline of America's institutions, and the related rise in red tape that hinders business, may spell the nation's economic doom. Harvard's Niall Ferguson talks to WSJ's Charles Forelle about the theory outlined in his new book The Great Degeneration (Penguin Press, 174 pages, $26.95):



On June 20th, George Melloan reviewed Ferguson book in the Journal. Melloan characterizes it as a jeremiad, but warns, "Doomsayers are never popular, but sometimes they're right."

Down with Bono; Up with Kiva

Why is Africa such an economic basket case? Is there hope for the Dark Continent? Are Hollywood celebrities and foreign aid destroying Africa? For a non conventional answer listen to Dambisa Moyo, an economist with degrees from all the right places and until recently a Mistress of the Universe for Goldman Sachs (no she doesn't resemble Sherman McCoy or Tom Hanks who was physically miscast as him in the movie. The movie still worked in its own right.) Dambisa Moyo says no aid, no celebraties, and if you want to finance jobs, cut out the middlemen and women through microfinance like kiva.org.

"I wish we questioned the aid model as much as we are questioning the capitalism model. Sometimes the most generous thing you can do is just say no."

Attack of the worms

In the developing world simple things have enormous impact. Worms (the kind you get inside you) reduce productivitiy whether we are talking about manufacturing or learning in school. Nicholas D. Kristof writes in the International Herald Tribune that "Here in Congo, one study found that 82 percent of children have worms, and partly as a consequence 70 percent are anemic."

The whole editorial is well worth reading.