Photo: Kleiner Perkins
Kleiner Perkins partner Mary Meeker published a gigantic 460 page research report this morning, analysing the entire USA as if it were a company.”USA Inc,” she calls it.
Meeker’s verdict: “By the standards of any public corporation, USA Inc.’s financials are discouraging.”
“Our review finds serious challenges in USA Inc.’s financials,” she writes.
“The ‘management team’ has created incentives to spend on healthcare, housing, and current consumption. At the margin, investing in productive capital, education, and technology – the very tools needed to compete in the global marketplace – has stagnated.”
“In effect, USA Inc. is maxing out its credit card. It has fallen into a pattern of spending more than it earns and is issuing debt at nearly every turn.”
Fortunately, Meeker does more than just analyse USA Inc’s troubles; she also provides a thorough turnaround plan.
The centrepiece of this turnaround plan is a “focus on revenues.”
She touches on a need for USA Inc to trim expenses, but cautions: “while revenue is highly correlated with GDP growth, expenses are less so.”
Given that Meeker’s spent her professional career in technology, it is no surprise that she makes increasing investment in tech a centrepiece of her turnaround plan.
“Technology plus infrastructure plus education investments drove ~90% of labour productivity growth for past ~30 years,” she writes.
“However, USA Inc. has increasingly allocated resources away from productive technology plus infrastructure plus education investment spending toward less-productive entitlement program spending.”
This brief summary doesn’t do Meeker’s comprehensive argument justice. For that, Her turnaround plan really needs to be seen in its full context.
Business Insider Emails & Alerts
Site highlights each day to your inbox.