New York Times columnist David Brooks is impressed with Summers’ warning about where the U.S. economy is headed. But he offers several points of optimism, admittedly from a longer-term perspective:
the World Economic Forum and the International Institute for Management Development produced global competitiveness indexes, and once again they both ranked the United States first in the world. . . it leads the world in . . .higher education and training, labor market flexibility, the ability to attract global talent, the availability of venture capital, the quality of corporate management and the capacity to innovate.
The U.S. . . has successfully absorbed more than 20 million legal immigrants over the past quarter-century, an extraordinary influx of human capital. . .Birthrates are relatively high, meaning that in 2050, the average American will be under 40, while the average European, Chinese and Japanese will be more than a decade older. . .The U.S. standard of living first surpassed the rest of the world’s in about 1740, and . . . the country has resolutely refused to decay.
Between 1991 and 2007, the U.S. trade deficit exploded to $818 billion from $31 billion. Yet . . . during that time the U.S. created 28 million jobs and the unemployment rate dipped to 4.6% from 6.8%. . . Every quarter the U.S. loses . . . seven million jobs, and creates a bit more than seven million . . . the essence of a dynamic economy.
2 comments:
Hi Dad,
I don't really consider David Brooks' cheerleading to be in any way equivalent to real economic analysis, as discussed in your previous post.
As for reasons why the next few years are likely to be economically ugly here in the US - look no further than this chart from the LA Times, over on my blog.
Aloha,
Derek
It's the facts that interest me, including Brooks' facts. As to the falling real estate values you project from the chart, both Summers and the article you reference limit their dire predictions to at most a 25% fall.
Your article also says, "median home values fell 15.1% in Riverside County but only 3.8% in Los Angeles County, according to DataQuick Information Services." The Riverside declines might eventually reach 25%--which is awful--but the LA declines, limited for the reasons the article explains, are for an area 5x larger.
Summers offers several steps to avoid a crisis. As someone said, "Hope for the best, and prepare for the worst."
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