Posted by
Always To The Right on Tuesday, January 01, 2008 3:35:08 PM
AMERICANS DON'T APPROVE of their president (approval rating 36 percent), even more heartily disapprove of their congress (approval rating 18 percent), say their confidence is in free fall, believe their children will be no better or possibly worse off than they are. Three out of four think their country is "on the wrong track." So they say.
Surprise: the American economy added over one million new jobs in the
year that is now coming to a close. It grew at an annual rate of
between 3 percent and 4 percent. Share prices rose by over 5 percent,
with tech shares up by double digits, these gains being recorded in
weeks in which the financial markets are said to be in turmoil. Exports
soared, bringing down the long-standing trade deficit. In November,
supposedly traumatized consumers splurged, increasing spending by the
largest amount in 3 1/2 years. Final figures for Christmas are not yet
in, but my guess is that early pessimistic estimates will prove wrong.
. . . Most important of all, unlike their counterparts in most industrialized
countries, Americans have enough confidence in the future to make lots
of babies. Hardly a society in the winter of its discontent, no matter
what Americans are telling pollsters.
Through it all, the world learned to be careful what it wished for.
International institutions and foreign governments have been berating
Americans for "unbalancing" world trade by running huge trade deficits.
Finally, the markets agreed, and drove down the dollar. The result has
been an increase in the competitiveness of made-in-USA goods in foreign
markets, and a decline in the competitiveness of foreign-made goods in
the showrooms of America. The world got what it wished for: a decline
in the U.S. trade deficit. So BMW is laying off thousands of workers as
the dollars it gets for the cars it sells in America no longer buy
enough euros to meet its payroll; Italian designers are reduced to
using cotton where once they would consider only silk; and European
hotels and restaurants are pining for a return of the gauche but
high-spending Americans who have switched vacation plans to American
resorts, where the dollar is still king.
Foreigners also
complained that America was presiding over an era of too-easy credit.
Complain no more. Your wish has been granted. Mortgages are harder to
come by, credit card applications are being turned down in record
numbers, and banks around the country are being sniffier when
discussing possible deals with borrowers. The effect of this
tightening, and of the collapse of the sub-prime mortgage and related
markets, is just what the doctor ordered to put a stop to the lending
so many of America's critics railed against, and quite properly, too.