From the Economist: “….America’s sluggishness stems above
all from pre-crisis excesses and the misshapen economy they created. Until 2008
growth relied too heavily on consumer spending and house-buying, both of them
financed by foreign savings channelled through an undercapitalised financial
system. Household debt, already nearly 100% of income in 2000, reached 133% in
2007. Recoveries from debt-driven busts always take years, as households and
banks repair their balance-sheets.
Nonetheless, in the past three years that repair has
proceeded fast…..New strengths have also been found. One is a more dynamic
export sector. The weaker dollar helps explain why the trade deficit has shrunk
from 6% of GDP in 2006 to about 4% today. But other, more permanent,
shifts—especially the growth of a consuming class in emerging markets—augur
well. On the campaign trail, both parties attack China as a currency-fiddling,
rule-breaking supplier of cheap imports (see Lexington). But a richer China has
become the third-largest market for America’s exports, up 53% since 2007.
And American exporters are changing. Some of the
products—Boeing jets, Microsoft software and Hollywood films—are familiar. But
there is a boom, too, in high-value services (architecture, engineering and
finance) and a growing “app economy”, nurtured by Facebook, Apple and Google,
which employs more than 300,000 people; its games, virtual merchandise and so
on sell effortlessly across borders. Constrained by weakness at home and in
Europe, even small companies are seeking a toehold in emerging markets.
American manufacturers are recapturing some markets once lost to imports, and
pioneering new processes such as 3D printing….
Wait….wait…there’s more at http://www.economist.com/node/21558576
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