I come from one of the only countries in the world that has moved from the ranks of the developed world to the less developed world. Argentina´s GDP per capita was higher and better distributed when I was born in the 60s than now. And as recent as 2002 the country was in the ropes with nearly half of the population living below the poverty line, the largest default in human history (3 times the size of Enron) and enormous unemployment. Yet, declaring default and mostly not paying its foreign debt turned out to be an incredible blessing to the country which saw most credit disappear and now lives in a mostly cash, equity economy. Argentina has very little consumer credit, very little foreign debt, very little national debt, very little corporate debt and very little mortgage debt. In Argentina cash really is king as the other forms of payment are practically non existent. So as the world goes into a US promoted credit crunch Argentina finally finds itself in a lucky position which is that of mostly having no debt isolated from global financial problems. In a way it is interesting that USA has been going around the world promoting credit as the cure to all problems using the IMF and the World Bank as its flagships and now finds itself drowning in its own medicine .  In the meantimeformer failed states such as Argentina discover that a mostly equity economy it´s much better in times of financial crisis than the indebtedness that the US was predicating for decades.  Especially when the country while in an all cash diet has been growing at 9% for the last 5 years.

PS: due to my many activities I don´t have time to research this subject but if you are an economist I would be interested in cowriting a study on all equity economies as I would be interested in studying the subject in depth.  I believe that mostly equity economies are likely to outperform heavily indebted economies as the USA in the future.

Three years ago (maybe 4) I met Erik Wachtmeister, the founder of A Small World and heard about his idea to start the social site for the jet set. I liked it, I figured that great parties would come out of it but I immediately thought that something more interesting that getting jet setters in a web site would to get the smartest people in the world in a web site. And together with my friends Andrew McLaughlin (Chief Policy Officer of Google) and Joshua Ramo of Kissinger Associates we thought of starting A Smart World.  The concept was a social site for intellectuals, scientists, writers, professors or anyone who his peers would consider a “relevant, creative thinker”.  But the idea never got off the ground as we were all very busy with our own jobs and projects. But recently I came across examples of A Smart World in different formats. One is BigThink, the vlogging site for the “smart” (horribly designed btw). Another one is Culture Hub, Stan Stalnaker´s project (I ran into Stan at a party in Jose Ignacio, Uruguay this week).  Yet nobody seems to get it totally right.

Disclosure: I am on the board of trustees of the Clinton Foundation. Having said this I would like to comment on Obama´s recent rise in the polls. Personally I think USA and the world is more likely to be a better place with the Clintons back in power. If that means more of what we had in the 90s, if that means “nothing new” so be it.   As far as I am concerned the 90s were a period of mostly peace and prosperity. This decade instead has been a time of mostly war and economic bankruptcy. But as things go maybe we won´t have the Clintons back in power. We may get Obama instead. And that would be fine. I like most of what Obama stands for. But my fear is that Obama turns out to be a Carter. A well meaning yet ineffective President. Moreover I think that the Republicans are more likely to beat Obama than the Clintons. Presidential politics is less about Presidential power per se, which is only great in foreign affairs, and more about the ability of the President to convince Congress, Governors, Mayors and others to implement policies that can steer USA in the right direction. Hillary Clinton and the Clintons in general know how to do work with local politicians better than anyone to get things done. Obama mail fail at that.  But in any case the good news is that whoever wins, even McCain, will be better than George W Bush. In the meantime the whole Republican News machinery Fox included is behind Obama so we are likely to see more of him in weeks to come.

Still on a wonderful family vacation in Jose Ignacio, Uruguay I find out that Meraki has raised 20 million dollars to build a WiFi network with a Fon like system in San Francisco.  Meraki is imitating the Fon model with a twist and that is adding a repeater or meshing function that came out of MIT for its wifi stations.  At Fon we also have had a meshing function for a while but we see difficulty in extending meshing in developed countries (meshing is good where availability of connections is low).  Meshing is opposed by our partners, the telcos because one person buys a connection and many use it for free while at Fon the principle is that if you pay for your connection and donate you roam the world for free, but not that you do that if you don´t donate.  Fon is in any case very active in San Francisco and we have many Fonspots everywhere and what makes sense to me is that Fon and Meraki find a way to roam and collaborate.

We all make our promises and I made mine which was not to blog during this wonderful vacation in Jose Ignacio, Uruguay.  It was my children´s request.  And it did not only involve blogging but also being on the internet in general.  But I think that my kids will understand if I brake the promise just to thank my readers for your insightful comments and wish you all a very happy 2008!