July 28, 2014
ONE ECONOMY TO RULE THEM ALL:
The Non-Eclipse of America (Norton A. Schwartz and John K. Hurley, JUL 28, 2014, Project Syndicate)
Posted by Orrin Judd at July 28, 2014 6:14 PMPerhaps the best indication of America's enduring stature is the dollar's dominance in international financial transactions. Last year's Foreign Direct Investment Confidence Index, based on a survey of more than 300 executives from 28 countries, showed that, for the first time since the Iraq War began in 2003, foreign investors view the US as the world's most attractive destination for future investment.The ability to project power internationally begins at home. And, despite its historically slow economic recovery, there is plenty of reason for optimism in the US.According to the US Federal Reserve Board, the index of industrial production, which had declined by 17% during the recession, returned to its pre-crisis peak in the fourth quarter of last year. The US has also made some progress in "on-shoring" manufacturing activities, and the energy sector is booming, owing to a sharp increase in natural-gas production.Moreover, new discoveries in life sciences, particularly biotechnology, are nearing commercial breakout. Reforms in primary education, especially at the state and local levels, have bolstered test scores. And American institutions of higher education, though often prohibitively expensive, consistently rank among the best in the world. [...]According to the International Monetary Fund, the recent recession is the first in the US since the early 1980s to be followed by a significant recovery in the GDP share of value-added manufacturing. The report cites factors like a weaker dollar relative to emerging-market currencies, a narrowing gap between labor costs in the US and emerging economies, and a significant reduction in domestic energy prices.