Why the Economy Is Better Than You Think

Thanks for your sobriety

Nicely done. I hope you're right. The most compelling part of your argument is the invitation to trade the US economy with China's, India's et al.

Dale of AL @ Jun 09, 2008 15:47:25 PM

I'm confused by your definition of good

1. Workers will bare the brunt of increasing prices, with their wages stagnent in the face of rising prices. Oh, yes, happy days indeed, for the top 1% of Americans who own 50% of stocks.

4. Smart tax cuts, which turned surpluses into deficits, leaving nothing in the bank for a rainy day. Gloriuous deregulation, mother of the fun fun fun housing market colapse. You haven't lived until you've experienced a forclosure.

and to "The Economy", most people, especially those who lived through it, consider the great depression a complete failure of our economy.

hugh graham of IL @ Jun 09, 2008 15:45:53 PM

Read This "The economy is doign just fine..."

I told you so....

drew of UT @ Jun 09, 2008 15:41:24 PM

Great Points

You are absolutely correct. Also add that the end of the credit/housing crunch is in sight. The US policitcal economy, as long as we keep domestic marxists/socialist out of office (and preferably out of the country!), will always be flexible and bounce back from down turns.

of CT @ Jun 09, 2008 15:35:26 PM

Lay off the crystal meth

Someone here needs to lay off the drugs and wake up to the dose of reality as the effects of Bush's failed economic policies sets in. The dollar is in the toilet. Oil is $130+ per barrel, the financial system is in disarray and income inequality is higher than when Bush took office. Since the government already gave out huge tax cuts to the rich while fighting an immensely expensive war of choice, the defecit has ballooned making our macroeconomic choices limited to unpalatable choices. Enough of you fools trying to blow smoke up our a@$ . We need to bite the bullet once and for all and say goodbye to something for nothing republican ideology.

of NY @ Jun 09, 2008 15:32:48 PM

Good news

My hat off to you for writing good news. Bad news sells and bad news helps to sell aspirin.

Florida Counts of FL @ Jun 09, 2008 15:25:32 PM

The Economy

Yes, the economy has survived considerably worst shocks, e.g., WWII, the Great Depression,numerous other wars and business cycles and has come out on top. The problem is choosing the time span for discussion. In the long run, the economy has outperformed the pessimists, but we only live in the comparitively short run, and there, alas, lies the difficulty.

Ernest Freeman of MD @ Jun 09, 2008 14:48:58 PM

Productivity growth is indeed the key

Productivity growth is indeed the only way that we can solve more of our problems. This is actually true by definition, greater productivity means deploying our resources for more utility (i.e. more problems solved per unit of resources consumed). There may be quibbles over how this utility is measured, but all reasonable measures largely agree.

Why is the US so competitive? Certainly not because Americans are genetically superior, or deserve (by virtue of citizenship) more wealth than others have. It is because we have developed and attracted more capital, deployed more effectively, per worker. But there is no guarantee that this situation will persist, capital can be redeployed and it can be destroyed.

There is no reason why a third world child cannot be raised and educated, at very low cost, to be a productive worker for a US capitalist investing abroad, or for any foreign capitalist. Labor, apart from such investment, is very nearly fungible. Capital is deployed here because, historically, we have been the most friendly nation for capitalists to deploy that capital.

We are thus a nation of capitalists and global employers. However the left sees this as an evil situation. They think that for us to be the owners of capital and the employers of the world means that we are "exporting jobs", as though our workers have a fundamental right to exploit the private capital of others in the society. The results are policies designed to reverse this "job loss". I don't think they really want to turn us, conversely, into a nation of employees of foreign capitalists, but rather to weaken private capital and to bring it under government control. As capital begins to flee to nations like Ireland and India that have begun to adopt the policies of Milton Friedman, look for legislation designed to punish people and corporations for investing elsewhere.

So I would choose the US economy, as you would. But let me ask you this, if there arises somewhere in the world an economy that is freer than the US economy, with fewer constraints on global trade and on the deployment of capital, and with fewer of the market distortions of central planners, then even if that economy starts at a lower base and has fewer natural resources to exploit, wouldn't you bet on that economy to overtake the US economy in the longer term, and for its people throughout the economic spectrum to end up better off than the people of the US?

Mazzula of VA @ Jun 09, 2008 13:23:42 PM