Be thankful — sensible solutions do exist for U.S. problems
By Fareed Zakaria,
WashPost
Published: November 23
This might seem a tough time to celebrate Thanksgiving. The national mood is pessimistic. The economy continues to limp along. The failure of the supercommittee has come to symbolize the breakdown of not just governance but democratic politics. Yet there are reasons to be cheerful about the United States this week.
The United States continues to have the most dynamic economy in the developed world. We are enamored of Germany for having maintained its manufacturing base through timely reforms. That’s good, and we could learn a lot from other countries. But let’s note that Germany’s great companies are products of the second industrial revolution — from the early 20th century — clustering around cars, chemicals and machine tools. Germany has one notable company in the information economy, SAP. The post-industrial, information economy is dominated by the United States. The industries of the future, from biotechnology to nanotechnology, are dominated by the United States. The best research centers, universities and companies remain American.
We also have the most dynamic society in the developed world. While Japan has entered and Italy and Germany are approaching a demographic death spiral, the United States remains young, vibrant and active. Demographics is not destiny, but it helps mightily to have a growing society, with a healthy share of young workers — who are also taxpayers. This country still attracts the most immigrants and most investment in the world.
The United States has gone through a big bust, which has cast a long shadow on its economy. But to put it in perspective, it is not nearly as bad as the one that crippled Japan almost two decades ago. In a recent debate, former Treasury secretary Lawrence Summers pointed out that housing prices in Japan dropped not by a third (as they have here) but by 85 percent; that the Japanese stock market plunged to a level that would be equivalent to the Dow falling to 2,600; and that the Japanese output gap — the difference between GDP growth and projected growth before the crisis — was 50 percent, not the 6 or 7 percent in the United States.
(More here.)
WashPost
Published: November 23
This might seem a tough time to celebrate Thanksgiving. The national mood is pessimistic. The economy continues to limp along. The failure of the supercommittee has come to symbolize the breakdown of not just governance but democratic politics. Yet there are reasons to be cheerful about the United States this week.
The United States continues to have the most dynamic economy in the developed world. We are enamored of Germany for having maintained its manufacturing base through timely reforms. That’s good, and we could learn a lot from other countries. But let’s note that Germany’s great companies are products of the second industrial revolution — from the early 20th century — clustering around cars, chemicals and machine tools. Germany has one notable company in the information economy, SAP. The post-industrial, information economy is dominated by the United States. The industries of the future, from biotechnology to nanotechnology, are dominated by the United States. The best research centers, universities and companies remain American.
We also have the most dynamic society in the developed world. While Japan has entered and Italy and Germany are approaching a demographic death spiral, the United States remains young, vibrant and active. Demographics is not destiny, but it helps mightily to have a growing society, with a healthy share of young workers — who are also taxpayers. This country still attracts the most immigrants and most investment in the world.
The United States has gone through a big bust, which has cast a long shadow on its economy. But to put it in perspective, it is not nearly as bad as the one that crippled Japan almost two decades ago. In a recent debate, former Treasury secretary Lawrence Summers pointed out that housing prices in Japan dropped not by a third (as they have here) but by 85 percent; that the Japanese stock market plunged to a level that would be equivalent to the Dow falling to 2,600; and that the Japanese output gap — the difference between GDP growth and projected growth before the crisis — was 50 percent, not the 6 or 7 percent in the United States.
(More here.)
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1 Comments:
The US will remain exceptional if we can retain our individual freedoms and resist the temptation of slumping further towards a nanny state.
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