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The composition of the US economy is very different with manufacturing taking a smaller role. The US imports deflation from China through cheap manufacturing. N
by DisjointedHunt 4y ago
The composition of the US economy is very different with manufacturing taking a smaller role. The US imports deflation from China through cheap manufacturing. Not necessarily labor alone. The US also is a NET EXPORTER of energy and is not hostage to energy suppliers as much as Germany is due to their economy being reliant on Natural gas that can’t be easily replaced in the short term and even in the long term has immense transportation costs compared to cheap pipelines in geographic proximity.
The thing to watch here is, the knockover effects and 2nd, 3rd order effects. When there is a gas shortage in Germany. . . Everyone suffers. A much higher portion of their GDP goes to compensate. When gas prices go up in the US, a section of the population “suffer”, but there is a lot more economic tolerance built in.
- lumost 4y agoMy point was more that the economic composition of the US is not immune to similar effects. The US is highly dependent on Asian manufacturing, which in turn is dependent on global energy prices rather than local energy prices. The price of labor in Asia is also increasing substantially (something that should be celebrated). Arguably, there is no economic zone in the world which is internally well balanced today. This will translate into unique and difficult to navigate problems across the globe due to deferred consequences of past crises, geopolitical conflict, global climate change, and changing demographics.