Looking West (and South) Toward Tomorrow

Posted on January 31, 2012

If the U. S. economy is to successfully navigate its current perilous course, attention must move from the baggage of the past to the opportunities and challenges of the future.  Nothing symbolizes that better than the comparison of Europe’s ongoing economic morass with China’s relentless growth.

Our friends at McVean Trading consistently produce one of the most insightful newsletters on global economic trends.  They’ve been generous to share their recent analysis reprinted below of the global trading shifts that have led to China’s current export dominance. We’ve reprinted the article in full below.  The article includes a interesting analysis of inflation trends in China, but the most important takeaway is that the Chinese surge is not an isolated event, but a continuum of trends that began almost forty years ago, first with Japan’s export boom, then with the Korean, Malaysian and Taiwanese Miracles and more recently with the strength of the Chinese manufacturing economy.  These are all part of a global movement to equalization of economic opportunity.

Far from dragging down the American economy, China’s boom is better viewed as the extension of trends that started more than 200 years ago when Samuel Slater (unfortunately no relation) memorized the technology developed in England for mechanization of the textile industry and brought it to the U. S.  Andrew Jackson gave Slater credit as being the Father of the American Industrial Revolution.  Of course today the shoe is on the other foot and he would more likely be branded as an intellectual property pirate.

Over time the seat of textile manufacturing moved from New England to the American South and eventually on to China.  It would be hard to argue that, over the longer term, New York or Boston has suffered as a result of the shift in their regional economies from strength in clothing and … read the rest

Categories: Economic Growth, Economic Stimulus, Economics, Globalization, Innovation

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