The economy expanded at a 3.5 percent rate in the third quarter even though the unemployment rate is high, incomes aren't going anywhere, and consumers are shaky. Why is the stock market improving while the domestic economy stalls? Dan Gross at Slate says it’s because our public companies buy and sell a huge and growing portion of their goods overseas; ie, the Dow, S&P and NASDAQ reflect attitudes about the future of the global economy, not the domestic one. The implication is not good for Main Street.Meanwhile, The Atlantic’s Megan McArdle is worried that sticky demand for American debt has deluded the markets and our government into being comfortable with a big deficit. That could lead to drastic action to avoid a default, a big and real threat, which would cause the stickiness to wear off and send lots of debt out of the market. It seems neither Wall Street or the administration is looking after America's domestic future.
What’s this mean for the venture capital world? Given that the stock market is not a good reflection of the future of America’s Main Street, whose prospects remain bad, someone needs to transition America’s young workers into this new global economic future. The only hope, it seems, is to somehow tie us more closely to the global economy. America’s competitive advantage is its entrepreneurial chutzpah. As the VC industry shrinks, what should all those (former) venture fund managers do? Here’s an idea: find a way to train and educate more of America’s workers into small global business entrepreneurs capable of coordinating small multinationals, and do this on a much broader scale than before. How? Well, VatorAcademy is one idea.
