James Rogan
In the 1950s and 1960s, professor Paul Samuelson was arguably America’s preeminent economist. His textbook for introductory economics was used at colleges and universities across the United States. He was a close adviser to President John F. Kennedy.
In 1961, Samuelson predicted that the then Soviet Union would overtake the United States in economic size somewhere between 1984 and 1997. By 1980, he continued to suggest that the Soviet Union would become the world’s largest economy within a few decades.
Obviously, Samuelson was wrong. He did not understand that extreme authoritarianism and the rejection of free market capitalism would consign the Soviet Union to the dustbin of history.
Today, however, other respected academics are making Samuelson's mistake in their assessments of Communist China. They opine that in the current century, China will become the dominant global economic power. One researcher from Princeton University wrote recently in the New York Times that the battle for global economic superiority is being “decisively” won by China and that the U.S. is becoming economically irrelevant.
Let's be clear, researchers who predict the ascendancy of China are wrong.
Yes, some of President Donald Trump’s economic policies are misguided and, in the short run, will impede economic growth. But over the coming decades, economic history and current data say the U.S. will continue to be the world’s largest economy.
Financial markets have a way of sorting out political nonsense. Over the past 10 years, the S&P 500, the U.S. benchmark equity index, is up 170% or so. In stark contrast, a broad index of Chinese equities is flat. U.S. equities have soared on optimism about the future of the U.S. economy. Chinese equities have done nothing, reflecting the enormous buildup of debt in China, its demographic decline, and the deep real estate recession that continues to plague the country.
No comments:
Post a Comment