January 27, 2023


Supportive Business Potential

America is doing better than you think

Americans are in a foul mood. Consumer confidence is at recessionary levels, even though there’s no recession. Seventy percent of Americans think the nation is heading in the wrong direction, with only 23% saying it’s on the right track.

Okay, fine. Inflation is a pain. Politics are toxic. COVID may never end. But the United States is doing better than just about any other place in the world, at a time of war and other massive disruptions. If you don’t like it here, ask yourself, where are things better?

The US inflation rate is 8.5%, and probably on the way down. In Europe, it’s 8.9% and probably on the way up. In the UK, inflation is 10.1%. Europe is either in a recession or about to enter one. In the United States, growth has slowed, but the job market remains remarkably strong and employers still can’t get enough workers.

The Ukraine war is likely to generate mayhem in Europe’s energy market this winter, because of Europe’s heavy dependence on Russian oil and natural gas. Russia has stopped supplying gas through its main pipeline to Europe and could cut off gas supplies completely, forcing radical measures such as rationing, price caps and government intervention in energy markets. Gas prices in Europe are already seven times higher than they were a year ago and 14 times higher than they were two years ago. Imagine a monthly energy bill comparable to your rent or mortgage payment.

China is eating our lunch, right? That’s what Donald Trump said over and over when he was president, given China’s rapid growth and its manufacturing dominance. Yet China has hit the skids amid a bewildering series of COVID restrictions and long-festering policy mistakes. China supposedly has a zero-tolerance policy on COVID, with the communist government forcing lockdowns every time there’s an outbreak, which seems to be always. At the moment, 313 million Chinese, nearly equivalent to the whole US population, are under lockdown. That’s depressing China’s once unstoppable economy.

“China’s COVID-19 stagnation has no end in sight,” Foreign Policy recently declared.

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China’s home-grown COVID vaccines are less effective than the Pfizer and Moderna vaccines used in the West and much of the rest of the world. With the Chinese vaccines, people in subpar health are still at risk of severe illness or death, as in the early days of the pandemic here. That requires ongoing lockdowns to keep the death rate low, which limits exposure to COVID but also prevents the type of herd immunity that’s taking hold in the United States. Nobody knows when it will end.

People chat through gaps in a barrier at a sealed area, amid new lockdown measures in parts of the city to curb the coronavirus disease (COVID-19) outbreak in Shanghai, China June 16, 2022. REUTERS/Aly Song

Even without COVID, China’s economy is bound to slow because the old one-child policy has now left a dearth of young workers. China’s working-age population has been shrinking since 2016, according to Oxford Economics, and that problem is very hard to fix with policy levers. A real-estate bust is also ravaging China’s inflated property sector, which accounts for about 25% of GDP. All rapidly growing emerging-market economies slow at some point, but Oxford Economics thinks China is leveling off at prosperity levels considerably below the economies of South Korea and Taiwan at similar points in their development. It once seemed inevitable that China’s economy would grow larger than America’s, but economists now have doubts.

Japan has high living standards, but the government is so concerned about COVID that it still has travel restrictions in place. Some Americans think the grass is greener in Canada, but even north of the border there’s high inflation, recession risk and a hyperactive central bank jacking up interest rates. Scandinavia consistently ranks as the world’s happiest region, yet they also have to contend with the world’s worst neighbor, Russia.

If you had an audio filter able to tune out bad news and bluster, you might notice some things going right here at home. Congress has passed the biggest package yet to address global warming, and another bill meant to boost American’s competitive advantage against China. Another bill passed last year to rebuild much of the nation’s infrastructure. All this, yet the US tax burden is among the lowest in the world.

The US economy has fully regained all the jobs lost during the COVID downturn, and economic output is higher than pre-COVID levels. The US economy has recovered faster than any other. Gas prices, which hit $5.02 per gallon in June and depressed the entire nation, have plunged in recent weeks and are now at a more manageable $3.72.

Updated MTA / public transportation signs are unveiled informing the general public that masks are optional during a press conference held by New York Governor Kathy Hochul updating on the state's coronavirus endemic in New York, U.S., September 7, 2022. REUTERS/David 'Dee' Delgado

Updated MTA / public transportation signs are unveiled informing the general public that masks are optional during a press conference held by New York Governor Kathy Hochul updating on the state’s coronavirus endemic in New York, U.S., September 7, 2022. REUTERS/David ‘Dee’ Delgado

The portion of Americans with health insurance has crept up to 91%, about 7 points higher than 10 years ago. The US poverty rate is close to record lows, and the child poverty rate has dropped dramatically during the last 30 years. COVID lingers, but nearly all vaccinated people now survive without hospital care and the government is shifting to a flu-like strategy of annual boosters. Mask requirements are largely gone.

Sure, there’s plenty that’s wrong. Our levels of gun violence are insane. Illegal immigration is in intractable problem. While health care coverage is improving, costs are double the average for wealthy countries. The national debt is astronomical. The root problem, usually, is politicians who lack the spine to do anything risky. Many voters are newly disgusted with a conservative Supreme Court that overturned abortion protections this year, in defiance of public opinion.

But if you think it’s better anywhere else, looking into moving there, and report back. You’ll most likely find there are a few idyllic pockets in the world, but virtually no large country that muddles through and cleans up as well as the United States.

Everything is politicized these days, so everything that happens, good or bad, must have a political cause, at least if you watch cable news. But America’s main advantages are geographic and geologic, as they’ve always been. Oceans are a priceless buffer against the kind of instability Europe faces now, with Russia’s barbaric invasion of Ukraine. Vast amounts of natural resources, including fossil fuels, are an economic buffer against the chaos satanic figures such as Russian President Vladimir Putin seek to sow. American-style capitalism can be cruel, but it’s also the most dynamic and innovative economic system in the world.

Biden deserves some credit for getting the United States back on track after the tumultuous Trump years. He has restored a measure of professionalism to government after Trump used it as a bureau of personal enrichment. Biden also shepherded infrastructure and climate legislation Trump couldn’t have, or wouldn’t have.

More importantly, Biden is quietly and competently directing a massive aid program for Ukraine that is simply indispensable. Ukraine is finally pushing back the Russian invaders, and it’s hard to imagine this would have been possible without billions in US military aid and other types of support. Europe couldn’t do it alone, absent US leadership. Trump, who has praised Putin and tried to shake down Ukraine for political gain, might have invited Putin to send his troops all the way through Ukraine, right up to NATO’s back porch, making Putin an even bigger menace than he is now.

Every American has the right to be unhappy, so fuss if you must. Biden is old and out of step, and the Democrats are still beholden to socialists like Bernie Sanders. Republicans are Trump puppets obsessed with white male patriarchy. Big business doesn’t care about the little guy and the system is rigged. Yet things can be okay, if you want them to be.

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