laws of capitalism (jim o'connor)

Doug Henwood dhenwood at panix.com
Mon Jun 21 08:22:47 PDT 1999


Rakesh Bhandari wrote:


>Oh...you have alerted us many times to the importance of exports.

Whose exports? From Gretchen Morgenson's column in the Sunday New York Times biz section:

<quote> EVERYBODY knows that the American consumer has been the high-octane fuel behind the nation's decadelong economic boom. Retail spending, after all, accounts for two-thirds of the output of the United States.

But it is becoming increasingly apparent that American shoppers are also fueling the recoveries just starting to be charted in depressed economies overseas. And this alarms James W. Paulsen, chief investment officer of Wells Capital Management in Minneapolis, who believes that a slowdown in consumption here could stop the improving economies elsewhere dead in their tracks.

''The American consumer has taken the globe from deep contraction back to flatness to recovery,'' Mr. Paulsen said. ''If he slows down at all, we're going to feel the world weak again.''

Evidence of just how dependent the world has become on the American consumer shows up in this country's imports as a percentage of the growth in world output. In 1995, such imports were about 4 percent of the industrial world's gross domestic product. Today the figure is 7.5 percent; fully 1.5 percentage points of that gain has come since the Asian crisis began.

So while the economic turmoil overseas was a nightmare for the rest of the world, it meant a big windfall for Americans as prices of goods and money dropped. And much of that windfall was spent at the mall. </quote>

Doug



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