Apocalypse Now

Paul Samuelson doesn't think there is much to be thankful for this Thursday. He is not enthusiastic about the economy and proposes some preemptive Depression-era intervention.

“Maybe such innovations will turn out not to be needed. But keeping in mind worst-case scenarios of the freezing-up of banks and other lending agencies, exploratory planning is worthwhile insurance.”

This seems excessively bleak and a bit brash, but who am I to argue with a Nobel Laureate? I’m more concerned about how he describes the future.

“The U.S. population is 5 percent of the global total, yet it enjoys per person about 20 percent of total global output. That's the picture now. Will this last? When I come to write a newspaper article like this 10 years from now, I believe America may still be leading the pack in per-capita affluence. But in all probability, the China that has already displaced Japan as the economy with the second biggest total gross domestic product will likely have a total GDP equal to America's.”

Why the doomsday scenario? The average American gets frightened by this talk. But why should they? The rest of the world getting richer does not necessitate America getting poorer. In fact, America will stand to benefit as more foreigners can afford our products and American consumers will be able to enjoy the fruits of foreign labor as their economies grow and they become better equipped to exploit their comparative advantage. Wealth, no matter where it blossoms, is a good thing. Does anyone really think the rest of the world has suffered, on average, from America's prosperity over the last 200 years?

Even better, as foreign countries prosper they will become less of a security concern. The countries that pose a real threat to the United States are those who have an impoverished, oppressed citizenry. People who have spare change in their pockets also tend to have some spare time to criticize their government.

And, yes, Nancy Pelosi does need a hobby!

Thanks to Gregory for the pointer.