Somebody is always going to eat our lunch.
Last few years the lunch-munchers were the Chinese. The news magazines and various pundits told us the Chinese economy would swamp ours. Experts filled columns and wrote books to tell us the "Chinese Miracle" would humiliate us. Right.
When I was a kid it was the Germans. West Germany’s surging economy was going to embarrass us. And for a while it was the Soviet economy. It was growing apace and spreading its influence around the world. Kruschev promised the world that the USSR would bury us. Right.
Next at the chow line: the Japanese. Dan Rather could hardly contain himself as he chronicled how Japan’s economy was rocketing ahead so fast that it would leave ours in the dust. Why those Japanese were buying Pebble Beach and Rockefeller Center and half of Hawaii. We were bound to be doomed to second place. Right.
Lately, of course, it has been the Chinese who have been eyeing our soup and sandwiches.
How about we consider a few scraps of news. In the first half of 2008 the Chinese closed 67,000 factories. That is not a misprint.
In the first seven months of last year half of China’s toy factories shut their doors.
In one province alone three million Chinese workers were fired in the last 12 months or so. Workers have been rioting, attacking government offices. New foreign investment in China has evaporated.
The Chinese are not about to eat our lunch. And for a very good reason. They are running out of lunch for their own people. And it is America that provides that lunch. The Chinese desperately need America to be economically healthy. Without our buying power they will be wearing their woks.
China ran a trade surplus of $262 billion last year. About $6 billion of that came from trade with other countries. The remaining $256 billion came from trade with us.
A better-built economy would fall back on its own resources. That is, it would rev up consumer spending at home. To make up for the losses in exports. China cannot do this very easily. That is because it focused on exporting soooo much for soooo long. (Japan made the same mistake years before.) The result is that their own consumers only constitute 35 percent of their economy. The Chinese cannot turn to their own consumers to rescue their economy because there is not enough buying power there.
The Chinese are not going to eat our lunch. They are going to eat humble pie.
And so it will be the Americans, once more, who rescue others. If our economy falls into deep recession, others will suffer depression. If our economy recovers, others will recover. Our economy is the leader, period. There is no other economic leadership in the world, period. No other economy has the vibrancy, the strength, the resiliency, the ability to withstand difficult times and recover the way ours does.
So why is it we get the same old predictions, every ten years or so, that our economy is headed for the showers?
One reason is that our pundits rarely bother to read history. And they rarely bother to learn much about what makes this country and its economy tick. If they did they would not make such silly predictions.
Another reason is that a lot of our pundits hate to see America do well. For whatever reason they are uncomfortable with us being the economic leaders of the world. They do not like our system. They feel guilt when they see people grow rich. And so when there is an opportunity to sell America short, they do.
Read history. Read about free market economics. Read about how this country works and why it succeeds. Avoid the anti-America propaganda. You will save yourself a lot of grief. And you will win a lot of bets with the guys who tell you that somebody is going to eat our lunch.
From Tom ... as in Morgan.
For more columns and for Tom’s radio shows (and to write to Tom): tomasinmorgan.com.