Monday, September 15, 2008
What are the fundamentals of an economy?
John McCain earlier today: "Our economy, I think, is still -- the fundamentals of our economy are strong, but these are very, very difficult times,'' McCain said."
Leonard on Salon.com sharply points out that this is effectively nonsense. "Unemployment is at a five-year high, consumer spending is predicted to decline this fiscal quarter for the first time in 17 years, and we are currently undergoing the worst housing bust since the Great Depression."
Gas prices. Health care costs. Wall Street nightmares. Our ailing infrastructure and our limping cities.
Our shrinking manufacturing base and the implosion of Detroit. Looming consumer debt.
If you're talking about actual economic fundamentals, the immediate nuts and bolts of building prosperity, the picture is very, very, very dim.
However! While he is not my choice for president, I think McCain's statement has a little kernel of validity.
We still have a growing population, a world class higher education system, a democratic, entrepreneurial society, and a wealth of natural resources like agricultural land and water. These leave us better positioned than many other nations out there, including the BRICs who are supposed to be the new superpowers, to face down the scary 21st century global economic threats of massive social unrest and global warming.
We need much better approaches to managing our human capital and our natural resources over the next decade. We need a better social safety net, improved education policies, and sustainability measures, aka the new carbon economy. This will determine whether America will see renewed prosperity or will muddle through a "long emergency" of breakdown and even chaos.