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The American economy has left other rich countries in the dust
- RickJWagner 2y agoHuh. An incendiary article about the economy, a few weeks from election day. Who would've guessed?
- rcarr 2y agohttps://archive.md/VHpcm https://archive.md/VHpcm
- mistrial9 2y agoIt is ridiculous on its face to compare America with other nations by raw numbers as if there were some single measure like that... dozens of quality-of-life and cost-of-living indicators in many regions of the USA are strongly in the opposite direction for many real households. ten percent of people are vastly wealthier while fifty percent plus of people are worse off and more so .. the machinery of economics are driving their own numbers. ref Piketty https://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Century https://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Ce...
- oceanplexian 2y agoBut we’re talking about economic output, not a qualitative assessment. America has lower transaction costs, a better regulatory environment (e.g the EU with AI), better access to lending and investment, and a more robust consumer market. The US is clearly doing some things better.
- ta1243 2y agoNot convinced that AI is doing things better. And transaction costs in what sense? The US banking system is an international joke, so I'm guessing you're talking the lack of language barrier?
- falleng0d 2y agoIt's attracting a lot of investment not only from the Americans but also from outside investors. Even if most of those companies do not end up profitable, the workers that participated in the effort will have already gotten paid and the money will be absorbed by the economy. And if it pays off some day, well there you go.
- red-iron-pine 2y agocrypto got a lot of outside investment. various facebook-for-dogs did too. housing pre-2008 did too. very few of the workers in the economy outside of the data center and tech-bro market will ever see any money from this
- ta1243 2y agoYes, the US really leaves the bottom third behind If you look at incomes for graduates in the US vs the UK, it's far higher. [0] For non-graduates it's the same, and the social safety net in the UK is far better. This ties into median wage in the UK being barely above minimum wage. What this tells me is "don't bother educating yourself, just leave school asap and get a crap job stacking shelves" The UK just isn't an attractive place for graduates to work in, and the few that are there (mainly in London and the south east [1]) massively subsidise the wealthy retired and the minimum wage jobs. [0] https://www.ft.com/content/570d23b3-d286-4cb9-a319-b49cc4056f52 https://www.ft.com/content/570d23b3-d286-4cb9-a319-b49cc4056... [1] https://www.ft.com/content/e5c741a7-befa-4d49-a819-f1b0510a9802 https://www.ft.com/content/e5c741a7-befa-4d49-a819-f1b0510a9...
- klelatti 2y ago> and the few that are there Completely wrong as roughly 25% of the UK population has a university degree. The U.K. has lots of problems but a lack of graduates isn’t one of them.
- ta1243 2y agothe few places that are attractive. A graduate of pretty much any degree working in Hull in pretty much any job is not attractive. They would earn far more in other countries, and earn little more than a minimum wage school dropout. A graduate working in fintech in London is fine, but they are subsidising the rest of the country and bring up the "graduate salary" and "total earnings" across the board. The problem isn't the lack of graduates, its the lack of well paid jobs. We don't value an educated workforce (which is at a similar level to France, the US, Ireland, Australia etc)
- mperham 2y agoExactly. If the US economy is 10x larger but 90% of the economy is benefiting only the richest 0.1%, what's the point? Too many mainstream media pieces focus on overall GDP when they should be focused on averages. The end of the article handwaves away this criticism. > Many critics of America’s economic model contend that it is intrinsically flawed, beset by extreme inequality and ever-more dominant companies crushing competitors. But these are exaggerations. There may be scope for a fairer distribution of the country’s wealth without undermining America’s growth, but the widely held belief that the top 1% are taking it all is overdone. Handwaving. > As for tech behemoths such as Apple and Amazon, their potential for dominance must be watched and, if necessary, curtailed, but it is also true that they have generated incredible value in daily life and shaken up stodgy industries. And they face fierce competition to stay on top. Where's the fierce competition? Apple and Google have a phone duopoly. Measuring the economy is not measuring quality of life or health of the population.
- mistrial9 2y agoNobel Prize winner of 2024 Simon Johnson interviewed: Johnson told the AP that economic pressures were alienating many Americans. “A lot of people who were previously in the middle class were hit very hard by the combination of globalization, automation, the decline of trade unions, and a sort of shift more broadly in corporate philosophy,” Johnson said. “So instead of workers being a resource to be developed, which they were in the 19th and early 20th century, they became a cost to be minimized … Now, that squeezed the middle class.’’ “We have, as a country, failed to deliver in recent decades on what we were previously very good at, which was sharing prosperity,” Johnson said. One key for the future, Johnson said, is how societies manage new technologies such as artificial intelligence. “AI could go either way,” he said. “AI could either empower people with a lot of education, make them more highly skilled, enable them to do more tasks and get more pay. Or it could be another massive wave of automation that pushes the remnants of the middle down to the bottom. And then, yes, you’re not going to like the political outcomes.’’
- InDubioProRubio 2y agoBut the us american economy is subsidized by everyone on the planet that trades in us currency and thus buys up the money its able to print. So those numbers are- dubious baseball stats at best?
- ambicapter 2y agoWhat makes that dubious? It makes this advantage rest on a single factor, but the advantage is still there, no?
- CoastalCoder 2y agoI'm the furthest thing from an economist, but I'm guessing that it feels like we're in a vulnerable position. I.e., that it indicates our "wealth" could be pulled away from us on very short notice. Contrasted to, e.g the wealth being from sales of some commodity that the rest of the world will need for the next decade: crops, certain metals, or (maybe) oil/LNG.
- sickofparadox 2y agoWell the US is a net exporter on oil and LNG, pretty much even on agriculture and every few months a new "world's largest deposit" of some critical material article comes up.[1,2] So I think we really are debating whether the chicken or the egg came first, and the answer is that dinosaurs were laying eggs before chickens started clucking. [1] https://finance.yahoo.com/news/worlds-largest-deposit-lithium-may-231936498.html https://finance.yahoo.com/news/worlds-largest-deposit-lithiu... [2]https://www.theearthandi.org/post/estimated-2-34-billion-metric-tons-of-rare-earth-minerals-discovered-in-us https://www.theearthandi.org/post/estimated-2-34-billion-met...
- LUmBULtERA 2y agoI don't buy the assumption that others are "subsidizing" the USD when they choose to use it -- they're choosing to use USD for their own benefit.
- recursivedoubts 2y agoAnd yet it doesn't make the top 20 in happiness. https://worldpopulationreview.com/country-rankings/happiest-countries-in-the-world https://worldpopulationreview.com/country-rankings/happiest-... Really makes you think.
- indoordin0saur 2y agoMoney doesn't make you happy, although it helps. This is common knowledge.
- slowmovintarget 2y agoYes. Insufficient money can make you unhappy. After caring for needs, money won't make you happy.
- DEADMEAT 2y agoThat's a very privileged attitude. Certainly someone already wealthy will not get much more happiness from gaining more wealth, but for many Americans a few thousand dollars could be a life-changing amount of money.
- Sohcahtoa82 2y agoI spent the first 12 years of my adult life making barely over minimum wage and never having more than $1,000 in my checking account. I now make $215K/year and can spend $500 on a really nice dinner on a whim for me and my wife and not even feel the need to budget for it. I can have a top-of-the-line gaming PC and play all my games at 100+ fps with maximum detail settings. I'm a fuckton happier now than then. The way I see it, there are really only two people that truly believe (or at least claim to believe) that money doesn't buy happiness: 1. Business owners that use it as an excuse to keep wages low. Just convince the workers that a higher wage won't make them happier! 2. Poor people that tell it to themselves to cope with being poor. Certainly, you reach a point of diminishing returns. $100M won't make you 10x as happy as $10M. But I know there's some article that's been passed around a LOT that says the diminishing returns begins at $70K/year, and that's just flat out wrong. $70K/year won't even buy a house in most cities.
- roughly 2y agoA lot of the charm of this kind of triumphalism wears off when one spends time in those other rich countries. It becomes rather sharply obvious on one’s return what America has traded off while min-maxing its GDP score.
- ahmeneeroe-v2 2y agoThose other countries' wealth is often mostly composed of the kind of thing that is easy to enjoy as a tourist and hard to enjoy as a resident. E.g. beautiful real estate that is owned by the same family that owned it hundreds of years ago. An American tourist can rent space there and enjoy but a resident can never hope to earn enough to buy a piece of that. or amazing public transit, which to a resident is just a commute to work but an American tourist sees the novelty in
- roughly 2y agoI live in a city that tourists visit in America, I'm not getting starry-eyed on account of some old buildings.
- red-iron-pine 2y ago> E.g. beautiful real estate that is owned by the same family that owned it hundreds of years ago. An American tourist can rent space there and enjoy but a resident can never hope to earn enough to buy a piece of that. The US housing market is ossifying rapidly and will likely be exactly the same within a generation. Canada and Australia are as well.
- amadeuspagel 2y agoThe Economist is a british magazine. It's not triumphalism if they claim that the US is doing better then the rest of the world.
- NoGravitas 2y agoIt's triumphalism if a magazine in Airstrip One claims that Oceania is doing better than Eurasia and Eastasia.
- anvil-on-my-toe 2y agoPhrases like "the American economy is booming" or "America is out-performing Europe..." are simplistic and ridiculous. My least favorite part of getting a degree in economics was the endless story-telling that pretends to be scientific. "America" is not equivalent to the asset portfolios of the richest 1% of the population. Just say what you're measuring (rich people's wealth) and don't try to dress it up as a measure of a thriving nation. Don't call it "America" or "the economy", call it GDP. Purchasing power is down, birth rates are down, life expectancies are down, young people's expectations of the future are down. We should account for things we care about when we talk about how the country is doing.
- corimaith 2y agoEverything you've listed is apparent in other countries and even more so. Even today, anybody ambitious would kill for the kind of opportunities Americans have.
- rqtwteye 2y ago"anybody ambitious would kill for the kind of opportunities Americans have" That's probably true for the very ambitious. I think the US doesn't work as well for people who just want to have a decent life.
- hamster77 2y agoIt’s a better place to achieve something in than to live in… but how nice is Western Europe going to be to live in if it continues to be outgrown by the US and have to compete with Asia?
- BizarroLand 2y agoYou're talking about the lottery winners, comparing the wealth and opportunities of the top 50,000 Americans to the average joes of the world and overlooking the reality of the other 369,950,000 Americans who have roughly the same quality of life that the people in your country do. I'm from Pine Ridge Indian Reservation, the poorest location in America. I have memories of my uncles sleeping in the snow, 14 people stuffed into a 2 bedroom home, dirty streets and boredom being the norm, no jobs and what little money was to be had spent across state lines in White Clay for cheap liquor. There are far more of people like us than there are the people living the lifestyles of the rich and the famous. Don't stab your brother in the back in hopes of being one of them.
- mjamesaustin 2y agoGDP is increasingly a poor measure of economic well being, as wealth inequality becomes so bad a handful of individuals capture the lion's share of growth.
- slothtrop 2y agoGDP-per-capita is a thing
- NoGravitas 2y agoAnd highly misleading if there's significant income inequality.
- Sohcahtoa82 2y agoGDP-per-capita still doesn't capture inequality.
- slothtrop 2y agoLook at wages and household income. The wealthy don't rely on them, they have capital.
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- sheefrex 2y agoSometimes I like to think of GDP as a measure of economic (productive) power more than well-being. But other indicators are more important for the long-term, such as those on demographics, education, debt levels, etc. You probably don't want to sacrifice those for a transient boost in GDP.
- GavinGruesome 2y ago[flagged]
- rqtwteye 2y agoDoes this translate into better quality of life for the majority of the population? I don't think so.
- Workaccount2 2y agoAmerica is the ultimate example of fortune favors the fortunate. A well diversified economic powerhouse with a friendly neighbor to the north and a cheap labor neighbor to the south, comparatively politically stable, and annnddd its energy independent? America is ridiculously OP from an economics standpoint. Even more over it only looks like the position is going to strengthen, at least until either AI or climate change upend everything.
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- red-iron-pine 2y agoneat. when is any of that going to trickle down?
- rubymancer 2y ago> Average wages in America’s poorest state, Mississippi, are higher than the averages in Britain, Canada and Germany. This doesn't sound right. Googling around, the median income (a much better metric than average) between Mississippi and Germany are about the same. A huge difference: Britain, Canada and Germany don't have to pay for health care and education. I'm not sure how to factor that in, but something tells me if you do you'll find our Canadian and European friends are doing drastically better than those in Jackson, MS.
- bradleyankrom 2y agoYou'd think The Economist would know better than to use the average there. Stats 101. Geez.
- mistermann 2y agoThe ability of people to actually receive free medical services has certainly been in a downward trend over the last decade or so.
- ch4s3 2y ago> but something tells me if you do you'll find our Canadian and European friends are doing drastically better than those in Jackson, MS. This will show a lot of selection bias. Any Europeans with American friends who are in the forum are unlikely to be representative of the median German/Brit. I have a cousin who is a mid-level manager in a steel plant in southern Illinois near near Missouri and he lives like a petty king. I've known FedEx drivers with lake houses in low cost of living areas. Middle income people in low cost of living states often live quite well in the US.
- spacebanana7 2y agoEuropeans and Canadians might be healthier and better educated, but its very unlikely they'll earn more than an American electrician.
- jhoechtl 2y agoThe European has paid leave and a somewhat existing medicare system. I do not think this is taken into the equation?
- legitster 2y agoThe important thing being missed here is that America, unlike the rest of the G7 or China against which it is being compared, is not aging as rapidly. Take the book with a massive grain of salt, but the mechanisms are well described in The Accidental Superpower.
- jacknews 2y agoIMHO this is entirely miss-measurement or miss-characterization. Probably if you look at dollar gains of stocks, land prices, etc you'll find Americans leading, but look at the actual lives of average people, and they are not so much better off, if at all. In other words it's mostly accounting/financial mirages.
- jhoechtl 2y agoIn the past the Us making other countries poor via the printing press was very often the applicable explanation. Is it now any different?
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- spacebanana7 2y agoI'd love to learn more about exactly why Europe fell behind. Only a few decades ago Britain and France had competitive or higher GDPs per capita than the US. Many people argue the stricter business and environmental regulations hampered European growth, but these things were mostly even stricter 30 years ago. Whatever the cause is, it's something that's happened in the last 15 years or so.
- orwin 2y agoPeak oil in the north sea(2007), peak gas in the north sea (2006). While the US found out extracting their massive shale oil/gas reserves eROI was finally competitive.
- hamster77 2y agoCombo of energy and better capital markets and banking system
- orwin 2y ago'better' is a funny word. Like I said in another post, it's due to a 'banking' revolution called 'shadow bank' (they aren't bank, they cannot print nor destroy money, but I guess it's close enough). From what I saw, its main effect is to decorelate GDP from production. A house sold 200k can produce 400k of GDP over a year if enough intermediaries put their hand in the pie. And I'm just talking about the mortgage here, not the house.
- NoGravitas 2y agoThis is the perfect example of why, when you read "the economy" in a mainstream publication, you should replace it with "rich people's yacht money".
- mikewarot 2y agoLong personal anecdote deleted (it was too personal) Lies like this story, which I can't afford to read, are why absolute bullshit artists like Trump are able to get votes at all. Consider this, and the more than 1 gun per person state of the US population, and things don't look good for the future. Civil wars are horrible, but they do boost the profit of the arms industry.
- kyleee 2y agoInteresting, is it better for the economy to have fewer guns per person? How do the graphs look for that metric across countries?
- blackhawkC17 2y agoYou didn't read the story but conclude it's a lie? The Economist is a respected publication, the type that cites factual stats rather than spin BS like many mainstream news outlets.
- mikewarot 2y agoThe lede paragraph was all I could see, so I had to draw conclusions from that. As I said > this story, which I can't afford to read
- nojvek 2y agoAmerican economy is really about cheap oil/gas. They had a leg up in semiconductors and then that led to mega tech corps. Average GDP per capita looks good on paper, but heathcare and education are really expensive. They increase the GDP because money is spent but in Europe it's a lot cheaper so they seem poorer but by purchasing parity they are richer. If you earn in USD for US company and spend in another country, then yeah the money goes further, otherwise median American isn't doing that much better.