In my estimation, The Economist weekly newspaper (yes, that’s how they refer to themselves) is the single best read for world economics and politics. The newspaper favors centrist governments and has little reporting bias and rigorous fact checking. What they said recently in a front page section on America is both unexpected and encouraging.
- America is in a gloomy mood today. According to The Economist, 80% of Americans think their children will be worse off economically than they are. Our problems are many: Unequal income distribution, declining life expectancy versus other developed countries, an inadequate safety net, rising nationalist or anti-immigration feelings, and toxic politics. Readers can name many more problems, I am sure.
- But flip the coin over and you find: America makes up 4% of the world’s population and back in 1995, was 25% of the world’s total economy. Even after the Tech Crash of 2000 and the Great Recession of 2008, America still produces 25% of the world’s total output.
- America has a younger population and a higher fertility rate (although coming down) than other rich countries and has a higher share of immigrants as a percentage of the workforce – 17%.
- America has 30% more workers than 30 years ago (Western Europe and Japan
have about 10% more) and America’s workers have more college education and graduate degrees.
- The typical U.S. worker produces five times the economic value of a Chinese worker, and more than workers in Japan, Canada, or Britain.
- The five biggest corporate sources of Research & Development are all American. We developed the best-selling electric vehicle (Tesla), the hottest smart phone (Apple), and even the currently most advanced AI entrant (ChatGPT, developed by a non-profit now controlled by Microsoft).
- Income per person in America was 24% higher in 1990 than in Western Europe. Today it is 30% higher.
- America is blessed with size and location. It has no major enemies on its borders, enormous natural resources, and the most liquid and deep financial markets in the world.
- And finally, $100 invested 30 years ago in the S&P 500, the index of America’s largest companies, has grown to $2,300 today, four times what it would have earned in other developed stock markets.
We are realists here and don’t want to sugarcoat America’s problems and the fact that we could easily lose our edge in the future. But it is important at times to step back and see our strengths and not just the darkness in the night sky.
