Here is a news item from Thursday’s Wall Street Journal (1/4/07–fast as ever, am I!) that caught my eye. It was in Justin Lahart’s “Ahead of the Tape” section and was titled, “Global Economy Gets Momentum Outside U.S.” Here are selections (emphasis mine):
After years of depending on the U.S. economy for support, the world economy may finally have its own legs to stand on…
In the past, a U.S. slowdown would portend a global slowdown. But economists have been ratcheting up their growth forecasts outside the U.S. For the euro area, they expect GDP to grow 2% in 2007, more than the 1.9% growth they projected in June. Forecasts for China have risen from 8.6% to 9.3%.
Economists like to call this decoupling. The U.S. and other economies seem to be going down different paths…
Purchasing manager reports for more than a dozen other countries show stronger manufacturing activity than the U.S. Only Greece lags.
I am reminded of German economist Gabor Steingart’s observation that the U.S. doesn’t produce much any more, thus lacking in a key fundamental of real value for a nation. (Though purchasing manager reports may not be the most reliable indicator of such a state — I do not know.)
It should be noted that the article reports that, “Deutsche Bank economists say it’s too early to declare an end to the world’s dependence on U.S. growth.” But it does look like an end to that dependence is on the way.
How would the American economy fare when its success is no longer a necessary ingredient for global success? Some might say that this is a huge monkey off of America’s back, and that a world that can stand on it’s own two feet without us will only benefit us. It might help the U.S. that its “consumer power” is no longer needed, and that other countries might begin buying more from us than we buy from them — potentially shrinking our currently ghastly trade deficit, as suggested in the article.
It seems to me, though, that “consumer power” has been our most reliable commodity to “sell” for quite some time, though. Do we have enough to offer to make up for its lack? Hard to imagine if “[o]nly Greece lags” the U.S. in manufacturing activity.
I can’t help but wonder if America can weather the loss of the world’s addiction to its success. Again, as Gabor Steingart pointed out, that addiction is part of what is currently keeping us and our dollar afloat. We are, in a sense, addicted to the world’s addiction. And should the world shake it’s habit, I fear that it is the U.S. that will suffer from withdrawal.
Jeremiah 30:14 says of Israel & Judah, “All your lovers have forgotten you; they do not seek you; for I have wounded you with the wound of an enemy, with the chastisement of a cruel one, for the multitude of your iniquities, because your sins have increased.” This prophecy was given well after Israel (though not Judah) had already been completely taken into captivity, and it applies to modern Israel today — the U.S. and British-descended nations. America’s “lovers” will forget her when they need her no more. Whether a global economic “decoupling” is a portent of such a state remains to be seen.