There's a larger point worth more consideration. Americans are entering this recovery with a current account deficit equivalent to 4.5 percent of GDP -- an astonishing figure. A decade ago the current account was approximately in balance; in 2000 it was more than US$400 billion in deficit, and last year it probably approached US$450 billion. The forecast for 2003 is a deficit of more than US$500 billion.
It can't go on forever. America's role as consumer of the world's output is the flip side of Asia's role as global workshop, and they are equally overripe. So the ducks are lining themselves up: Fundamental change of the kind long urged in this column is coming. Movement toward it now, in my view, is at last measurable.
Demographics will play their part. The baby boomers are approaching retirement, and because they haven't saved enough, they have nowhere near the resources required to retire. Apart from the fact that there's already a Zip drive in nearly every pot, this cohort -- mine, to bring things to a personal level -- is likely to start saving like Scrooges in the not-distant future.
Shifts of this sort in economic patterns are never quick to arrive. Two years ago the Europeans thought they were at last breaking free of their dependence on the American locomotive and developing a capacity to generate economic growth on their own.
Right thought, wrong setting on the clock.
It's a long slog ahead for Asia. But it's none too soon to stop putting so much emphasis on financial market flows and start putting more on plain old job-generation policies that put wages in people's pockets and enable them, as Henry Ford thought essential, to buy some of the things they make.
My friend Philip Bowring at the International Herald Tribune, a smart guy except when he's playing tennis, also urges policies that enhance agricultural productivity. Again, unsexy but wise, it seems to me.
The point is to know where we are on history's time scale.
Investing heavily in more-of-the-same export parties at the expense of serious policy adjustments is shortsighted folly, however many motherboards Americans may need this year.
RSS