U.S. emerges as one of the few bright lights on the economic horizon

Bloomberg is reporting that one of the biggest take-aways from Davos is the world’s movers, shakers and opinion shapers have stopped resenting and ridiculing the U.S. for its leading role in the financial crisis of 2008-09 and are looking at it as one of the very few bright lights on the economic horizon.

For Americans who’ve grown accustomed to laments about the country’s decline, the turnaround can be disorienting. After a slow and uninspiring recovery from the depths of the recession, it’s still difficult to embrace the idea that the U.S. economy is booming again—which is one reason President Obama devoted much of his State of the Union address to extolling it. “Since 2010,” Obama said, “America has put more people back to work than Europe, Japan, and all advanced economies combined.”

Of the 10 most valuable companies in the world, eight are based in the U.S. The shale oil revolution, which was born and remains centered in the U.S., has broken the back of the Organization of the Petroleum Exporting Countries, halving the world price of crude since last summer. And the U.S. remains a cultural powerhouse. “You walk down the street in Davos, and they’re playing Unbroken and Boyhood,” notes Vaclav Smil, a Czech-born professor emeritus at the University of Manitoba. China may be growing faster, but it lacks the magnetism of the U.S., he adds. “The U.S. is still the indispensable country. Who wants a green card to go to China?”

Does all this mean the U.S. is really, truly back? Yes and no. The recent performance is impressive when compared against much of the rest of the world. But this isn’t the Olympics, and the global economy isn’t a zero-sum game in which a win for one country is necessarily a loss for another. If the U.S. hopes to sustain its growth, let alone improve on it, then the world’s other economies need to grow, too, so they can buy more of what America makes.

Meanwhile, the U.S. itself still has serious long-term challenges. The technology and globalization that are enriching some Americans are impoverishing others. It’s not enough to do better than the rest; the U.S. needs to find a way to create shared prosperity by equipping all Americans to thrive. If it manages to do that—no easy task—it can once again become an engine of growth that will benefit the world.


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