Monday, October 28, 2024

American Economy Has Left Other Rich Countries in the Dust

Special report: Expect that to continue, argue Simon Rabinovitch and Henry Curr

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More from the article...

... Even more striking is how America has outperformed its peers among the mature economies. In 1990 America accounted for about two-fifths of the overall GDP of the G7 group of advanced countries; today it is up to about half (see chart).

On a per-person basis, American economic output is now about 40% higher than in western Europe and Canada, and 60% higher than in Japan -- roughly twice as large as the gaps between them in 1990. Average wages in America's poorest state, Mississippi, are higher than the averages in Britain, Canada and Germany.

And America's outperformance has accelerated recently. Since the start of 2020, just before the covid-19 pandemic, America's real growth has been 10%, three times the average for the rest of the G7 countries.

Among the G20 group, which includes large emerging markets, America is the only one whose output and employment are above pre-pandemic expectations, according to the International

Monetary Fund.

Coupling this growth with the dollar's strength translates into heft for America and wealth for Americans. That can be seen in the huge numbers of Americans travelling and spending record sums overseas.

A decade ago (as Chinese travellers too were demonstrating their wealth) many analysts thought that China would, by now, have overtaken America as the world's biggest economy at current exchange rates. Instead its GDP has been slipping of late, from about 75% of America's in 2021 to 65% now.

Endowed with gifts

This special report will explain why American growth has been so strong for so long, and why it can be expected to continue. ...



#1 | Posted by LampLighter at 2024-10-27 06:13 PM

Could Biden have been more aggressive with reducing price-gouging, even if it had hurt the economy somewhat? Based on my anecdotal social media readings, some people from my hometown are voting to "send a message" about high grocery prices. When rent and groceries are all that people can afford to care about, that might affect their votes. (even if the proposed policies by TFG on immigration and tariffs will screw up prices even more, but they never saw that Tweet)

#2 | Posted by hamburglar at 2024-10-27 07:29 PM

@#2 ... voting to "send a message" about high grocery prices. ....

Oh, I agree.

So long as there is inflation, no matter how low, even the 2% goal, prices are going to rise.

But the question I ask is ...

OK, if you want prices to fall, do you really want what you are asking for?

That is, deflation and the usual recession that accompanies deflation? (Look at the character-building China is currently going through)


I remember when my parents moved to a small town in upstate New York. I used to go on walks with my Dad around town. During those walks we passed an old, closed, gas station. I looked at the pumps.

The price per gallon on the pump was 29.9 cents per gallon.

So, yeah, prices are higher now than they were.

Welcome to reality.

Now, the problem I see is that the income of some folk may not have kept up with those increases in prices. (as indicated by a resurgence of the labor movement).

And what may have caused that trailing of income vs prices?

Corporate and company owner greed in wanting to extract more profits at the expense of not paying their workers?




#3 | Posted by LampLighter at 2024-10-27 07:53 PM

plus its continued robbery of Africa and everywhere else.

#4 | Posted by fresno500 at 2024-10-27 08:59 PM

@#4

Nice deflection attempt ....

China's Investments in Africa: What's the Real Story? (2016)
knowledge.wharton.upenn.edu

... Is China exploiting Africa for its natural resources, or is it aiding the continent's development? ...


Russian mercenaries exploiting Africa to fund war in Ukraine' (2022)
www.theguardian.com


#5 | Posted by LampLighter at 2024-10-27 09:06 PM

"Pardon my dust!" - Dark Brandon

#6 | Posted by Corky at 2024-10-28 10:09 PM

We have a huge and powerful xenophobic poliyical force risibg in Ameerica led by people like Donald Trump who have tried for years to convince immigratiion are draining resources and wealth when actually they are very entrepreneurial and very hard working people trying to realise the American dream but now he says we need to deport 15 million of them creating a huge humanitarian disaster in their birth countries but no benefiting this country in any way. Like I have been telling people right here ; we don't have a problem when working people want to come to America; we'll have a problem when they don't want to come here! This anti-immigrant crap is really just a method to stir up hate which Republicans seem to thrive on! It really gets the juices flowing for stupid white ---------! The recent Madison Square Garden rally demonstrates Trump's strategy based on stirring up hate!

#7 | Posted by danni at 2024-10-28 11:42 PM

"Now, the problem I see is that the income of some folk may not have kept up with those increases in prices. (as indicated by a resurgence of the labor movement). And what may have caused that trailing of income vs prices? Corporate and company owner greed in wanting to extract more profits at the expense of not paying their workers?"

From the article:

"On a per-person basis, American economic output is now about 40% higher than in western Europe and Canada, and 60% higher than in Japan"roughly twice as large as the gaps between them in 1990. Average wages in America's poorest state, Mississippi, are higher than the averages in Britain, Canada and Germany."

#8 | Posted by madbomber at 2024-10-29 01:59 AM

Yeah, but our health care system is super expensive, and we're 37th in the world.

#9 | Posted by Alexandrite at 2024-10-29 02:00 AM

"Based on my anecdotal social media readings, some people from my hometown are voting to "send a message" about high grocery prices. When rent and groceries are all that people can afford to care about, that might affect their votes."

Two things. First, the profit margins for publicly traded grocery stores are very low. I think the highest is 1.4%. So increases are likely a result of what is going on in the commodities market, which is pretty much un-gougable. I would say that there is no such thing as price-gouging to start with, but that's a different story. Bottom line is that the increased prices are a reflection of market activity left of the grocery store.

Second, if you look at housing, the trend for decades has been bigger and bigger. The per square foot cost of a house hasn't changed all that much. A new trend is emerging where demand is shifting to smaller houses, which will inevitably cost less, all other things being equal.

#10 | Posted by madbomber at 2024-10-29 02:20 AM

Oh, and I don't think it will happen, but Harris offering $25k to new home buyers is most definitely not going to do anything to bring down housing costs. Quite the opposite.

#11 | Posted by madbomber at 2024-10-29 02:21 AM

#8 | Posted by madbomber

I am not following the what you are trying to say here.

American people produce 40% more than most of our competitors. Their wages have NOT kept up with the price increases. There is without doubt price gouging going on but other factors have crept in too (like avian flu wiping out egg production and drought causing cattle farmers to slash their herds).

#12 | Posted by GalaxiePete at 2024-10-29 10:13 AM

#1 | Posted by LampLighter

One thing I do know is in industry in the US there has been a huge focus on automation. As an example, all our new machinery for the past 6-7 years has featured auto loaders and this is not just limited to my particular company or industry but manufacturing in general. The problem is it takes more and more skilled folks to operate it. Good stuff and long needed but that alone has been a huge bump in productivity per worker but it is also not free. I believe it drives up the average cost of our production machinery about 20% per machine - huge payback over time but huge upfront cost.

What is interesting and one of the reasons for the predictions about China is China built most of their industry with Automation. I think there are multiple factors as to why it has not worked out. I remember watching I believe a 60 minutes or Ted Koppel episode at least 15 years ago now where they were making something like Sauder furniture in a plant. The whole plant 100k square foot plant was run by 3 engineers. Nobody else. The yard with the raw trees however was full of people manually peeling bark all day. They had to put unskilled labor to work... Same for the roads. Man and wife teams digging footings for highway support columns - 100% by hand with buckets and shovels. I am not even going to get into the culture piece...

A few years ago, our executive team saw Chinese competitors with massive facilitates full of the latest production machinery from the same sources we buy from. I mean hundreds of machines. But it was virtually all sitting idle - maybe making it more intimidating. The problem is those machines still require skilled labor to operate. An average operator takes about 3 years to be able to work on their own mostly and 5 to be considered somewhat skilled. It hobbles our production. Then there is the whole repeatability and quality bit. At least one wanted to partner with us, we train them and they produce it... Sound familiar? Anyhow move forward several years, we did not do that (Made in 'Muhrica!) and they have not come for our business yet and the machine manufacturers have pulled back hard on working with them.

And honestly, companies are learning what it means to send things to China. The old GM Steering Gear became part of Delphi and then sold to the Chinese and operates as "Nexteer" moved the ancient ball bearing production equipment for steering pumps to China about 6-7 years ago. They can't make a pump that lasts since then. I know the 2500, 3500 and bigger GM trucks were some that were still reliant on them instead of electric. A LOT were failing at 30k miles or less. They came to the US plant for inspection to determine what was wrong. Just poor quality they have worked for years to improve in China and it has been a complete failure. I know this through an acquaintance that up until recently worked at Nexteer, used to operate that old machinery and moved into quality when they pulled it.

#13 | Posted by GalaxiePete at 2024-10-29 10:42 AM

But hey, the stock market's doing fine...

#14 | Posted by MSgt at 2024-10-29 06:45 PM

"... Even more striking is how America has outperformed its peers among the mature economies. In 1990 America accounted for about two-fifths of the overall GDP of the G7 group of advanced countries; today it is up to about half (see chart)."

This all goes back to the lies of economic statistics. For example, CA GDP in 2000 was $1.2T. Now, it is $3.9T. That is a 3x increase or a growth rate of over 5% per year over this time and population only grew from 34M to 39M, so per capita the increase was from $34K to $100K.

Now, if you know anyone from CA, they will tell you that the schools were better in 2000, the roads were better in 2000, there was way less homeless people in 2000 - so, quality of life was WAY BETTER in 2000.

Now, homes are unaffordable and you must pay an extra $20k/year to send your kid to private school.

Yet, in our Western concept, this is an improvement and advancement.

Now, Europe is a special case of self-imposed destruction due to energy policies and adopting socialist work policies that frankly make them non-competitive in the world. Their entire 'new economy' was based on selling old world luxury goods to rich Chinese. Now that China has slowed, their economies have predictably collapsed.

#15 | Posted by deadman at 2024-10-29 11:40 PM

@#15 ... Now, homes are unaffordable and you must pay an extra $20k/year to send your kid to private school. ...

Sending your kid to private school is too expensive?

You current alias has just outed itself.


Congrats for that admission.

And, welcome to the world of the working people who want wages to to enable them to make ends meet.



#16 | Posted by LampLighter at 2024-10-29 11:51 PM

"Sending your kid to private school is too expensive?"

I never said it was 'too expensive' moron. It is your next generation and you should fully invest in them. I said it is an EXTRA $20K/year as in years past, you could send your kid to public school and still get a quality education (you are paying for this whether you use it or not). Now, if you send your kid to public school in CA, it is a sign that you don't love them.

"And, welcome to the world of the working people who want wages to to enable them to make ends meet.
#16 | Posted by LampLighter"

And how is that working out in CA? We have the nation's highest hourly wages and the HIGHEST poverty rate in the US adjusted for cost of living. We have the largest homeless population (in both absolute numbers and per capita). And the beauty is, you CAN'T BLAME ANYTHING ON THE GOP as you have 100% control of this state and it is a mess. Pretending that Democrat policies help the 'working people' is the biggest piece of crap lie possible and we have California to prove it.

#17 | Posted by deadman at 2024-10-30 12:01 AM

@#17 ... I never said it was 'too expensive' moron. ...

But your current alias did seem to complain ...

... you must pay an extra $20k/year to send your kid to private school. ...

So, I'll ask, how does that comment, i.e., talking about the cost of private schools, relate to what the workers of the Country face in their day-to-day bill paying?

I mean, really, talking about $20,000 private schooling costs, and saying that the $20,000 is not too expensive, when people are just trying to put food on the table for their families? And then calling me a moron for citing that aspect of your current alias' comments.


Thank-you for your current alias's candid views of the economic problems that face Americans.



#18 | Posted by LampLighter at 2024-10-30 12:20 AM

"@#17 ... I never said it was 'too expensive' moron. ...
But your current alias did seem to complain ..."

Gee, I am complaining because I have to shell out an extra $20k per kid for a service I am already paying for? Damn right.

"So, I'll ask, how does that comment, i.e., talking about the cost of private schools, relate to what the workers of the Country face in their day-to-day bill paying?"

Because in your Democrat paradise (which California is the logical end state), the problem only gets worse, not better. You can apply this to any sort of cost I pay now that I am already supposed to be receiving - such as the private security for my community despite paying for police already in my taxes.

"I mean, really, talking about $20,000 private schooling costs, and saying that the $20,000 is not too expensive, when people are just trying to put food on the table for their families?"

I value my children. Therefore, it is not TOO EXPENSIVE. I am pissed because it is an EXTRA expense that I should not be having to pay if the government was competent AT ALL. For people that can't out food on their table, probably stop voting for Democrats in CA on the local, state, and national levels as the problems only get worse and as other states start to look like CA.

"Thank-you for your current alias's candid views of the economic problems that face Americans.
#18 | Posted by LampLighter"

This country has horrible problems and YES, it is failing. Forget if we are better now that 4 years ago, are we better now than we were 30 years ago. I think about 90% of people would gladly go back to the Bill Clinton years. Things were affordable, public schools worked for the most part, illegal immigrant was under control, budget and federal debt were manageable, wars were at a low other than covering for BJs in the Oval Office, and race relations were quickly becoming a post-racial nation.

You compare that to now, and yes, the nation is a mess. Working people are getting killed by the 20M+ illegals suppressing wages for unskilled Americans. Public schools are little more than bilingual daycares and prison pipelines. We are on the cusp of WW3 when Iran retaliates in the next few days, budget and deficit are the worst in the country's history, and we are on the cusp of an internal race war.

All of this was brought to you by liberal policies implemented through 8 years of Clinton, 8 years of Obama, 4 years of Biden, and 8 years of Neocon W Bush (which is not surprising he and Cheney support Kamala now as they are ideologically aligned).

#19 | Posted by deadman at 2024-10-30 12:41 AM

@#19 ... Because in your Democrat paradise (which California is the logical end state), the problem only gets worse, not better. You can apply this to any sort of cost I pay now that I am already supposed to be receiving - such as the private security for my community despite paying for police already in my taxes. ...

Wow.

... the private security for my community ..

Complaining about the cost of private security for your community?


Oh dear, how will you ever survive?



#20 | Posted by LampLighter at 2024-10-30 01:16 AM

".. the private security for my community ..
Complaining about the cost of private security for your community?
#20 | Posted by LampLighter"

In a civilized state, I would not need security. However, now in CA, any half way decent community hires private security to stop the Democrat voting block from vandalizing property and breaking into cars and homes. Further, our community trails reek of weed and we see random Democrat voting homeless guys wandering around on our streets - many with mental illnesses (beyond the mental illness of liberalism that is).

When the government cannot provide basic services, sooner or later, people start to think the solution is the government doing less of these functions with less funding as they have proven incompetent at doing them despite the ever increasing tax burden.

#21 | Posted by deadman at 2024-10-30 02:08 AM

In a civilized state, I would not need security. However, now in CA, any half way decent community hires private security to stop the Democrat voting block from vandalizing property and breaking into cars and homes.

So. More guns on the streets didn't solve the "problem"?

Who could have guessed?

Just like "mass deportation" won't solve any of your problems either.

#22 | Posted by donnerboy at 2024-10-30 02:11 PM

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