Guess Who’s Still On Top?
I typically don’t believe in painting a pretty picture just to make people feel warm and fuzzy, but I also don’t believe in jumping on the end-of-the-world bandwagon when there’s reason not to. Usually, I find that the truth lies somewhere in between.
So in that spirit, since my first commentary today was so miserably depressing - and I still stand by it - I figured I’d offset it with equally valid but more positive news.
I’ve been following economic thought and dialogue on whether America’s market monarchy is over for months now, and it’s been a very interesting read to say the least.
Countries such as Russia, Iran and Venezuela have been quick to point fingers and hail our glory days as over. That isn’t surprising, since they hate us - or at least very strongly dislike us - and have made little show of hiding it in recent times. On that subject, I don’t take their opinion into very high account.
What was more depressing at the time, was when certain well-respected members of our allied countries solemnly declared the same. Germany’s Finance Minister Peer Steinbrueck, for one, stated last month that, “The U.S. will lose its superpower status in the global financial system” this time around.
And as usual, many U.S. citizens were quick to accept a negative opinion about their own country. If you’ve read comments on any financially minded sites, you know what I mean. Not to say that some of the harsh critique wasn’t justified, but I will never understand how people can interpret the negative data we’ve been admittedly bombarded with, with the complete collapse of everything American.
At the risk of sounding like a blonde, high school cheerleader: Whatever.
Stupidity Shouldn’t Be Rewarded, But When Nobody Else Is Smart…
We’ve gone through financial crises before and I’m confident that we’ll pull through this one in time, even though we’re admittedly not used to dealing with situations of this magnitude.
I did think however, that maybe this time around our mistakes would kick us off of the top notch we’ve been enjoying for so long. The theory that we’d have to share the financial world with one or two powers seemed likely, but that was before Europe and Asia started caving in right alongside us.
And since then, even at our seeming worst, when our stock markets have tumbled 400, 500, and 700 points at a time, and our rallies - while refreshing to some degree - haven’t been able to make up for the losses, it seems that somehow we’re still number one. Whether we deserve that status or not is another story.
Personally, I would say a country that didn’t spend beyond its means, showed responsibility instead of overwhelming greed, and relied on wisdom and foresight instead of then-convenient blinders deserves that position. The problem is though, that overwhelmingly, our fellow wealthier nations traipsed right along in our destructive footprints and lived to regret it. So who does deserve the status? I have no idea.
Despite The Negative Data, Economists Largely Agree
Thanks in part to that, and the fact that we’re all so intricately and intrinsically locked together in this growing global community, economists still see the bright side for the country, even while they readily acknowledge the consequences of our actions.
I like how CNNMoney.com staff writer Steve Hargreaves put it:
But economists… are nearly unanimous: The United States won’t lose its position as the world’s financial superpower because foreign economies are slowing just as fast as America’s, their debt levels are just as high, and the developing world is too reliant on the U.S. market to achieve significant growth on its own.
How aptly put.
And here’s the thing: it isn’t just our economists such as Nobel Prize recipient Joseph Stiglitz of Columbia University and Irene Finel-Honigman of the same who think that the U.S. will retain it’s (tarnished) stardom.
To quote Lex Hoogduin, chief economist with Dutch investment firm Robeco:
It’s overdone to think the credit crunch itself will mark the end for the U.S. as the world’s most powerful capital market. It’s popular in political or left-leaning circles, but I don’t think they will be proven right.
The recently published Global Competitiveness Report agrees completely. Out of the 134 countries surveyed this year, America remains in 1st place with Canada, Singapore and Japan the only other non-European countries to make the top ten.
To paraphrase Steve Hargreaves as quoted above, the reason why we’re not sliding is because it’s just as bad or worse elsewhere.
Wednesday, October 29, 2008 — by Jeannette Di Louie, Assistant Editor of Mt. Vernon Research
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