The American economy has left other rich countries in the dust(economist.com)
economist.com
The American economy has left other rich countries in the dust
https://www.economist.com/special-report/2024/10/14/the-american-economy-has-left-other-rich-countries-in-the-dust
148 comments
Everything you've listed is apparent in other countries and even more so. Even today, anybody ambitious would kill for the kind of opportunities Americans have.
"anybody ambitious would kill for the kind of opportunities Americans have"
That's probably true for the very ambitious. I think the US doesn't work as well for people who just want to have a decent life.
That's probably true for the very ambitious. I think the US doesn't work as well for people who just want to have a decent life.
It’s a better place to achieve something in than to live in… but how nice is Western Europe going to be to live in if it continues to be outgrown by the US and have to compete with Asia?
[deleted]
You're talking about the lottery winners, comparing the wealth and opportunities of the top 50,000 Americans to the average joes of the world and overlooking the reality of the other 369,950,000 Americans who have roughly the same quality of life that the people in your country do.
I'm from Pine Ridge Indian Reservation, the poorest location in America. I have memories of my uncles sleeping in the snow, 14 people stuffed into a 2 bedroom home, dirty streets and boredom being the norm, no jobs and what little money was to be had spent across state lines in White Clay for cheap liquor.
There are far more of people like us than there are the people living the lifestyles of the rich and the famous. Don't stab your brother in the back in hopes of being one of them.
I'm from Pine Ridge Indian Reservation, the poorest location in America. I have memories of my uncles sleeping in the snow, 14 people stuffed into a 2 bedroom home, dirty streets and boredom being the norm, no jobs and what little money was to be had spent across state lines in White Clay for cheap liquor.
There are far more of people like us than there are the people living the lifestyles of the rich and the famous. Don't stab your brother in the back in hopes of being one of them.
This comment is as out of touch with middle class Americans as those "top 50k" are with the middle class.
There is a huge gulf between the poorest 10% and the top 50%.
There is a huge gulf between the poorest 10% and the top 50%.
Half of the American population are contained in the bottom 10% of wealth in America.
Every other American is in the bottom 10%, and 1 in ~7,500 are in the top 10%.
If I were a gambling man I wouldn't take those odds.
Every other American is in the bottom 10%, and 1 in ~7,500 are in the top 10%.
If I were a gambling man I wouldn't take those odds.
1 in 10 Americans are in the top 10%.
1 in 10 Americans are in the bottom 10%.
1 in 10 Americans are in the bottom 10%.
I'm pretty sure GP was talking more about which groups own which percentage of wealth in America
i.e., the bottom 50% of Americans population-wise own 10% of the overall wealth, while the top 7,500 people (0.002% population-wise) own 10% of the overall wealth.
That said, those numbers are actually overly optimistic. The wealth chart offered up by the federal reserve show the bottom 50% population-wise only own 2.5% of the wealth. Particularly alarming (though not surprising) is how much that share has shrunk in the last 20 years.
See: https://www.federalreserve.gov/releases/z1/dataviz/dfa/distr...
i.e., the bottom 50% of Americans population-wise own 10% of the overall wealth, while the top 7,500 people (0.002% population-wise) own 10% of the overall wealth.
That said, those numbers are actually overly optimistic. The wealth chart offered up by the federal reserve show the bottom 50% population-wise only own 2.5% of the wealth. Particularly alarming (though not surprising) is how much that share has shrunk in the last 20 years.
See: https://www.federalreserve.gov/releases/z1/dataviz/dfa/distr...
Oh that makes much more sense, thanks for clarifying.
Still, a quick google search says Europe's bottom 50% own only 1.2% of the wealth there.
Still, a quick google search says Europe's bottom 50% own only 1.2% of the wealth there.
Maybe. But they have free healthcare and a better living.
American exceptionalism is strong in this one.
No, most of us would not like to live and work in the USA.
As always, you guys think too high of yourselves.
No, most of us would not like to live and work in the USA.
As always, you guys think too high of yourselves.
I disagree.
I am ambitious and from Europe. I live in Switzerland and I love it here.
There is no way I would wish to move to a dysfunctional country like the US(no offense).
I am ambitious and from Europe. I live in Switzerland and I love it here.
There is no way I would wish to move to a dysfunctional country like the US(no offense).
Switzerland is great and I live there too, but the USA is hardly dysfunctional and we shouldn't overpraise Switzerland. This is a country that now has basically only one big bank, for a country that was once famous for banking! And look at how many well paid tech jobs in .ch are with US firms. Try and create a tech startup in Switzerland and you will quickly figure out why.
Switzerland is no good because they don’t have enough banks or tech startups? I’m not sure everyone would agree that those are the most important metrics.
Switzerland actually has plenty of banks still.
Not sure why parent was making such a big deal out of Credit Suisse going bankrupt.
That's not what I've been hearing from European co-workers. Switzerland and London being somewhat of an exception, the vibe I get there are few if any good jobs and few good and ambitious developers left in Europe. Everyone who is any good and ambitious moves to London, or the US unless they have special circumstances.
People from France, Spain etc. tend to be more polite about it, but specifically 3 people from German speaking regions in Bay Area - 2 natives and one who moved to the US via Germany from Eastern Europe - basically said the above directly :)
I myself looked into moving to Austria / North Italy for the nature and good cities, but the salaries and cost of living are just too much of a joke, even for non-developer. In Austria back then I'd be making less than my wife makes as a teacher in the USA. Switzerland is somewhat better, but still pretty bad, even for a developer
People from France, Spain etc. tend to be more polite about it, but specifically 3 people from German speaking regions in Bay Area - 2 natives and one who moved to the US via Germany from Eastern Europe - basically said the above directly :)
I myself looked into moving to Austria / North Italy for the nature and good cities, but the salaries and cost of living are just too much of a joke, even for non-developer. In Austria back then I'd be making less than my wife makes as a teacher in the USA. Switzerland is somewhat better, but still pretty bad, even for a developer
Don't forget you are talking to the people who left and their reason for leaving, not the group that stayed and are happy.
I loved London for nearly 2 decades, but moving out to the countryside was the best thing I've done - huge house, cheap mortgage and nearly (but not quite) as many well paying job opportunities. I could go back to London and maybe even double my wages. But to have the life I love now in terms of just housing and location I'd have to quadruple or more my outgoings.
But I'm sure I'd give you a great story for why I was in London if I ever moved back there.
I loved London for nearly 2 decades, but moving out to the countryside was the best thing I've done - huge house, cheap mortgage and nearly (but not quite) as many well paying job opportunities. I could go back to London and maybe even double my wages. But to have the life I love now in terms of just housing and location I'd have to quadruple or more my outgoings.
But I'm sure I'd give you a great story for why I was in London if I ever moved back there.
As an Italian, that's the reason I left. The salaries have been the same for like 20 years
Yup, most countries in Europe are better to live in than USA. Americans just don't want to be told they're not special.
We have 45M+ immigrants in the US. This does not count children of immigrants, only people who were born in another country and now live in the US.
That is 5x the total population of Switzerland.
And no offense taken, I've heard Switzerland is an amazing place!
That is 5x the total population of Switzerland.
And no offense taken, I've heard Switzerland is an amazing place!
I’m not for sure what you are trying to say with that statistic, but Switzerland has a much higher percentage of immigrants.
40% have a migration background, you can see the stats here: https://www.bfs.admin.ch/bfs/en/home/statistics/population/m...
40% have a migration background, you can see the stats here: https://www.bfs.admin.ch/bfs/en/home/statistics/population/m...
I wasn't really trying to compare immigration between the two, more just trying to illustrate the scale of US immigration vs the OP's anecdote
What's your point?
Your personal immigration preference is not worth mentioning since we have actual statistics on the subject
Life expectancy is definitely not trending down in a lot of other developed countries, that's quite unique to the USA in that cohort.
Purchasing power is up, actually.
Life expectancies are not a conventional measure of "the economy" but also (IMO) likely to improve in the medium term with widespread use of GLP-1 drugs.
As far as young people -- I'm not sure. There is certainly a Taylor Lorenz adjacent crowd of "doomers" but I don't think they're representative of the median young adult.
Life expectancies are not a conventional measure of "the economy" but also (IMO) likely to improve in the medium term with widespread use of GLP-1 drugs.
As far as young people -- I'm not sure. There is certainly a Taylor Lorenz adjacent crowd of "doomers" but I don't think they're representative of the median young adult.
No, purchasing power is down. Costs of living have gone up more than median wages. How much gold can you buy with USD today vs. 10 years ago? Less because the USD is worth less than it was. How much housing can you buy with $100,000 or with 1,000 hours of labor? Less housing.
Young people are objectively doing bad. Not trying to be depressing, but economically, behaviorally, health-wise, (at the median) they are worse off than their parents.
Young people are objectively doing bad. Not trying to be depressing, but economically, behaviorally, health-wise, (at the median) they are worse off than their parents.
> No, purchasing power is down. Costs of living have gone up faster than wages.
No, you're wrong on the facts. CPI-adjusted wages are up.
No, you're wrong on the facts. CPI-adjusted wages are up.
Not only is he wrong, but folks with his worldview consistently ignore the dramatic improvement in what it means to be alive today vs any time before.
It's incredible how much purchasing power the average middle class person has when you look at what you're buying and what you're able to buy compared to previous generations. The power and functionality of consumer devices like computers and TVs to the fuel efficiency and cleanliness of transportation options have all drastically improved, but people tend to become numb to how amazing things are very quickly. Magic becomes mundane in days or weeks or months, which is really sad.
It also completely ignores how valuable it is to have a mobile supercomputer in our pocket, wirelessly and globally connected to every other computer, with access to the sum of human knowledge. To not factor this stuff in is to completely skew any real perspective of how far we've come.
There are people who are excited to see global poverty and child mortality plummet, and there are those who whine about anecdotes and artificial metrics. It's true that houses are less affordable, but there was no reality in which earnings were ever going to keep up with the housing bubble which is fueled by an entirely different set of perverse incentives.
TL;DR: yes, things are pretty good, actually. And trending towards better every day.
It's incredible how much purchasing power the average middle class person has when you look at what you're buying and what you're able to buy compared to previous generations. The power and functionality of consumer devices like computers and TVs to the fuel efficiency and cleanliness of transportation options have all drastically improved, but people tend to become numb to how amazing things are very quickly. Magic becomes mundane in days or weeks or months, which is really sad.
It also completely ignores how valuable it is to have a mobile supercomputer in our pocket, wirelessly and globally connected to every other computer, with access to the sum of human knowledge. To not factor this stuff in is to completely skew any real perspective of how far we've come.
There are people who are excited to see global poverty and child mortality plummet, and there are those who whine about anecdotes and artificial metrics. It's true that houses are less affordable, but there was no reality in which earnings were ever going to keep up with the housing bubble which is fueled by an entirely different set of perverse incentives.
TL;DR: yes, things are pretty good, actually. And trending towards better every day.
Agree. No amount of hedonic adjustment in calculations accounts for this.
Taylor Lorenz is also 40 and spoiled. Not a young adult, she's middle-aged.
I agree with your sentiment though. I just want to point this out because Taylor is a dogshit human being.
I agree with your sentiment though. I just want to point this out because Taylor is a dogshit human being.
Let's not forget:
- US Military patrolling the world's shipping lanes-- with US Citizens & Companies tax dollars directly subsidizing the price of oil & international goods for a significant portion of the world (the prices would be higher without some outside country prividing protection)
- US Military bases-- 750 in 80 countries-- with US Citizens & Companies tax dollars directly subsidizing the security of a significant portion of the world
As an American, I really wish we left the world to their own devices, and paid for their own security and shipping lane protection. The world takes the US for granted. I think we should let them squabble for a few years, then beg us to come back-- when we have them leaning over a barrel, then we charge high fees :P
- US Military patrolling the world's shipping lanes-- with US Citizens & Companies tax dollars directly subsidizing the price of oil & international goods for a significant portion of the world (the prices would be higher without some outside country prividing protection)
- US Military bases-- 750 in 80 countries-- with US Citizens & Companies tax dollars directly subsidizing the security of a significant portion of the world
As an American, I really wish we left the world to their own devices, and paid for their own security and shipping lane protection. The world takes the US for granted. I think we should let them squabble for a few years, then beg us to come back-- when we have them leaning over a barrel, then we charge high fees :P
The US gains far more than it loses. Shut down the Suez Canal and the Malacca Strait and the US economy would collapse. Not as badly as everybody else's economy would collapse, but it would collapse none the less.
The world economy would collapse *
This phrase gets repeated a lot, “U.S. patrolling the worlds a shipping lanes” but what does it mean, concretely? Which shipping lanes and how? They’re certainly not doing a stellar job of it in the Red Sea, for instance.
The US has been borrowing money from the world to pay for the world policing duties. Leaving the debate over those for another day, I'm worried the world will stop borrowing dollars that subsidize that service, and the US will be left holding the bag for the cost of it.
The terrible reality for the world is that the world needs the US more than the US needs the world. Unless of course the idea of China running the global stage is appealing.
[deleted]
If the US military won't patrol world's shipping lanes, I'm sure the Chinese military would take over that job.
then why aren't they doing so now? it's a zoo in the red sea...
Why waste money/resources if their cargo still gets to its destination?
I think you might underestimate how much this is an important factor in the strength of the US economy.
As a non-American I also really wish you left the World alone :)
Sometimes, I wish the U.S. should suddenly leave the world alone, including NATO. That's when people will realize that the EU is too militarily weak to tackle Russia's aggression, and the Middle East will fall into chaos.
People who yap so much about America frankly deserve a real-life lesson to correct their brains.
People who yap so much about America frankly deserve a real-life lesson to correct their brains.
As someone from the Middle East, I honestly wonder, when Americans say things like that, have they ever read a book, attended a lecture, or even done online research about the history of American intervention in the Middle East? It’s baffling to me that someone would believe that, given America’s track record. I’m not asking sarcastically, I’m genuinely wondering.
[deleted]
Well this is about comparing with other countries, isn't it?
Also [citation needed] for purchasing power is down. Again, comparing with other countries, US disposable incomes are in a completely different ballpark. I wasn't aware of them going down.
Also [citation needed] for purchasing power is down. Again, comparing with other countries, US disposable incomes are in a completely different ballpark. I wasn't aware of them going down.
[deleted]
Actually in the US, real wages increased in the last several years (adjusted for inflation) so actually purchasing power is up on average. The data is always changing, good to keep up to date!
Then take note of GDP-per-capita growth. The whole of the developed world had to deal with inflation and financial repercussions of covid. What's exceptional is the US recovery and the fact is economic conditions in the US has improved at a more rapid pace.
> young people's expectations of the future are down
Relative to?
> birth rates are down
Absent GDP, this matters because...? The country is growing as a matter of policy through immigration.
> Purchasing power is down
Wages are recovering
> young people's expectations of the future are down
Relative to?
> birth rates are down
Absent GDP, this matters because...? The country is growing as a matter of policy through immigration.
> Purchasing power is down
Wages are recovering
Since US firm invented and mastered the improperly called 'shadow banking' (they're not banks, banks issue and destroy new money. Shadow intermediary maybe?), GDP is a worsening indicator of consumption+investment (or overall production if you will).
The reason is simple: GDP grow with money velocity, and 'shadow banking' artificially increase that number, with very low impact on the real world (I'm not saying null, this boosted the US car consumption a lot with easy car credits, but the effects aren't in the same order of magnitude)
The reason is simple: GDP grow with money velocity, and 'shadow banking' artificially increase that number, with very low impact on the real world (I'm not saying null, this boosted the US car consumption a lot with easy car credits, but the effects aren't in the same order of magnitude)
You seem to be totally overlooking the fact we had a major once a century or so event—the Pandemic. Purchasing power is quickly recovering, birth rates have been down for decades, life expectancies are only down because of covid and quickly returning to where they were before, young people will do fine and adjust, or if they vote they can get more populist policies on the books rather than wring their hands over it. When people realize it’s the 99% vs 1% they will do quite a bit better.
Those phrases refer solely to how well the stock market is doing.
Right. Our food lines are merely shorter than those in other countries. Sigh.
> birth rates are down
Good. Zero population growth is what the world needs. Not more of a people that consume far more than everybody else.
Good. Zero population growth is what the world needs. Not more of a people that consume far more than everybody else.
This is like claiming to know the future.
Nobody knows how much population growth we need. In the future we might not have enough bright minds around to solve our resource crises. We might have a global epidemic that causes us to miss critial population thresholds that severely drop our quality of life.
I think that if we want our species to escape this rock before our sun wipes us out (or sooner), people should be having kids.
Nobody knows how much population growth we need. In the future we might not have enough bright minds around to solve our resource crises. We might have a global epidemic that causes us to miss critial population thresholds that severely drop our quality of life.
I think that if we want our species to escape this rock before our sun wipes us out (or sooner), people should be having kids.
> In the future we might not have enough bright minds around to solve our resource crises.
This myth/meme also needs to die. It is ignorant beyond belief.
You don't just get more geniuses when you increase population, you also have to free people from the drudgery and suffering of survival in a resource-poor environment.
Given a constant population, humanity would have fewer geniuses if our energy consumption dropped by half.
This myth/meme also needs to die. It is ignorant beyond belief.
You don't just get more geniuses when you increase population, you also have to free people from the drudgery and suffering of survival in a resource-poor environment.
Given a constant population, humanity would have fewer geniuses if our energy consumption dropped by half.
Except you literally have no evidence of this.
We're experiencing less drudgery than ever experienced by humans on this planet... Our energy output to labor ratio is the greatest it has ever been... And yet there's no evidence that we're advancing exceptionally faster than previous generations.
If you view through the lens of history it is typically warfare and societal upheaval that provides the environment for significant advancement.
Let's just compare the pace of technology today to 60-100 years ago. I'm ashamed to hold up fucking cryptoshit, javascript frameworks and high volume distribution of pornography in comparison against all of THAT.
We're experiencing less drudgery than ever experienced by humans on this planet... Our energy output to labor ratio is the greatest it has ever been... And yet there's no evidence that we're advancing exceptionally faster than previous generations.
If you view through the lens of history it is typically warfare and societal upheaval that provides the environment for significant advancement.
Let's just compare the pace of technology today to 60-100 years ago. I'm ashamed to hold up fucking cryptoshit, javascript frameworks and high volume distribution of pornography in comparison against all of THAT.
> Average wages in America’s poorest state, Mississippi, are higher than the averages in Britain, Canada and Germany.
This doesn't sound right.
Googling around, the median income (a much better metric than average) between Mississippi and Germany are about the same.
A huge difference: Britain, Canada and Germany don't have to pay for health care and education. I'm not sure how to factor that in, but something tells me if you do you'll find our Canadian and European friends are doing drastically better than those in Jackson, MS.
This doesn't sound right.
Googling around, the median income (a much better metric than average) between Mississippi and Germany are about the same.
A huge difference: Britain, Canada and Germany don't have to pay for health care and education. I'm not sure how to factor that in, but something tells me if you do you'll find our Canadian and European friends are doing drastically better than those in Jackson, MS.
> but something tells me if you do you'll find our Canadian and European friends are doing drastically better than those in Jackson, MS.
This will show a lot of selection bias. Any Europeans with American friends who are in the forum are unlikely to be representative of the median German/Brit.
I have a cousin who is a mid-level manager in a steel plant in southern Illinois near near Missouri and he lives like a petty king. I've known FedEx drivers with lake houses in low cost of living areas. Middle income people in low cost of living states often live quite well in the US.
This will show a lot of selection bias. Any Europeans with American friends who are in the forum are unlikely to be representative of the median German/Brit.
I have a cousin who is a mid-level manager in a steel plant in southern Illinois near near Missouri and he lives like a petty king. I've known FedEx drivers with lake houses in low cost of living areas. Middle income people in low cost of living states often live quite well in the US.
>Britain, Canada and Germany don't have to pay for health care and education
That is not true: British taxpayers have to pay for the health care and education of Brits.
The point is that when you add the money the government spends on you plus the money you spend on yourself, America has significantly more money per-person to go around.
What you should have written is that although America spends more money on health care per person than Britain does, Americans have worse health, so the money is spent less efficiently than in Britain.
(It is also true that America spends more on "criminal justice", e.g., prisons, but has more crime, so the criminal-justice money must be being spent less efficiently.)
That is not true: British taxpayers have to pay for the health care and education of Brits.
The point is that when you add the money the government spends on you plus the money you spend on yourself, America has significantly more money per-person to go around.
What you should have written is that although America spends more money on health care per person than Britain does, Americans have worse health, so the money is spent less efficiently than in Britain.
(It is also true that America spends more on "criminal justice", e.g., prisons, but has more crime, so the criminal-justice money must be being spent less efficiently.)
> but something tells me if you do you'll find our Canadian [...] friends are doing drastically better than those in Jackson, MS.
Perhaps true, but also keep in mind that Canada and the US were on more equal standing until the last five years or so, when we started to see a significant divergence emerge. You can ride on the past for a while. Assuming the trend continues, it may simply be that it is too early to see Canada turn into Mississippi.
Perhaps true, but also keep in mind that Canada and the US were on more equal standing until the last five years or so, when we started to see a significant divergence emerge. You can ride on the past for a while. Assuming the trend continues, it may simply be that it is too early to see Canada turn into Mississippi.
Europeans and Canadians might be healthier and better educated, but its very unlikely they'll earn more than an American electrician.
The European has paid leave and a somewhat existing medicare system. I do not think this is taken into the equation?
GDP calculations capture the difference between paid / unpaid leave, and government healthcare spending.
It can be argued that Europeans are happier than Americans, but not that they're wealthier than Americans.
It can be argued that Europeans are happier than Americans, but not that they're wealthier than Americans.
I have no idea what you mean by "somewhat existing." Public health expenditure in the US is more per capita than any other country's public + private spending combined.
This does not mean the US is healthier (after all absurdly high spending is in part to cover health issues). But money per se is not remotely the problem and public health expenditure very loudly exists.
https://commons.wikimedia.org/wiki/File:Life_expectancy_vs_h...
This does not mean the US is healthier (after all absurdly high spending is in part to cover health issues). But money per se is not remotely the problem and public health expenditure very loudly exists.
https://commons.wikimedia.org/wiki/File:Life_expectancy_vs_h...
> but its very unlikely they'll earn more than an American electrician.
what's he going to be putting his money to, if not being healthier and smarter?
otherwise he's just fatter, dumber, and full of plastic kitch manufactured overseas, much of which is now floating around his bloodstream in microscopic form.
but hey, at least he's got a big truck.
what's he going to be putting his money to, if not being healthier and smarter?
otherwise he's just fatter, dumber, and full of plastic kitch manufactured overseas, much of which is now floating around his bloodstream in microscopic form.
but hey, at least he's got a big truck.
Median income can also be misleading. If the government is taking on lots of debts to pay for things like health care or education, that's not necessarily sustainable economics.
GDP Per Capita is overall the best metric when thinking on a long-term economic scale.
As to how the people in Jackson, MS are doing - a lot of this comes down to what communities are doing with that wealth. There are lots of young professionals having decent lives, even in Mississippi - but a lot of that wealth disappears into cars and big private properties and other unequally distributed things.
GDP Per Capita is overall the best metric when thinking on a long-term economic scale.
As to how the people in Jackson, MS are doing - a lot of this comes down to what communities are doing with that wealth. There are lots of young professionals having decent lives, even in Mississippi - but a lot of that wealth disappears into cars and big private properties and other unequally distributed things.
I lived in Ontario for ~18 years. While national healthcare is fantastic (and the US should totally have it), Canadians are getting squeezed, and have been for the last 5-6 years.
When I lived in Ontario 20 years ago, Ontarians were getting squeezed and complaining then to.
There used to be something like 3 MRI machines across the entire province. The province containing 1/3 of the country's entire population. Wait times for screening procedures could be months. My exe's entire family drove down to New York to get their dental care, paying out of pocket, when it mattered. (UB's College of Dentistry became the 7th best dental school in the nation & 11th in the world largely on the back of this trade)
It's better now, but not better _than what can be bought_ in the United States. Does the US need to improve? Certainly.
There used to be something like 3 MRI machines across the entire province. The province containing 1/3 of the country's entire population. Wait times for screening procedures could be months. My exe's entire family drove down to New York to get their dental care, paying out of pocket, when it mattered. (UB's College of Dentistry became the 7th best dental school in the nation & 11th in the world largely on the back of this trade)
It's better now, but not better _than what can be bought_ in the United States. Does the US need to improve? Certainly.
Canadians are getting squeezed by the same things that are squeezing America -- and much of the world. Just slower, and with a few more safety nets.
The ability of people to actually receive free medical services has certainly been in a downward trend over the last decade or so.
You'd think The Economist would know better than to use the average there. Stats 101. Geez.
A truck driver in Oklahoma makes more than a doctor in Portugal
Doctor in Portugal has healthcare and won't die at 55 from a preventable heart attack.
Instead, OK guy gets to have a Ford F-150, so he can drive a truck when he's not driving his truck.
And he doesn't have to pay high taxes, which is nice because it means his kids only get school 4 days a week: https://okcfox.com/news/local/rural-school-district-district...
Of course that means he has to be thousands more in daycare, but at least it's not the gubrment!
Instead, OK guy gets to have a Ford F-150, so he can drive a truck when he's not driving his truck.
And he doesn't have to pay high taxes, which is nice because it means his kids only get school 4 days a week: https://okcfox.com/news/local/rural-school-district-district...
Of course that means he has to be thousands more in daycare, but at least it's not the gubrment!
A lot of the charm of this kind of triumphalism wears off when one spends time in those other rich countries. It becomes rather sharply obvious on one’s return what America has traded off while min-maxing its GDP score.
Those other countries' wealth is often mostly composed of the kind of thing that is easy to enjoy as a tourist and hard to enjoy as a resident.
E.g. beautiful real estate that is owned by the same family that owned it hundreds of years ago. An American tourist can rent space there and enjoy but a resident can never hope to earn enough to buy a piece of that.
or amazing public transit, which to a resident is just a commute to work but an American tourist sees the novelty in
E.g. beautiful real estate that is owned by the same family that owned it hundreds of years ago. An American tourist can rent space there and enjoy but a resident can never hope to earn enough to buy a piece of that.
or amazing public transit, which to a resident is just a commute to work but an American tourist sees the novelty in
> E.g. beautiful real estate that is owned by the same family that owned it hundreds of years ago. An American tourist can rent space there and enjoy but a resident can never hope to earn enough to buy a piece of that.
The US housing market is ossifying rapidly and will likely be exactly the same within a generation. Canada and Australia are as well.
The US housing market is ossifying rapidly and will likely be exactly the same within a generation. Canada and Australia are as well.
I live in a city that tourists visit in America, I'm not getting starry-eyed on account of some old buildings.
> when one spends time in those other rich countries
Visitors usually get a warped view of the places they visit. You can't judge the UK by London, for example.
Visitors usually get a warped view of the places they visit. You can't judge the UK by London, for example.
The Economist is a british magazine. It's not triumphalism if they claim that the US is doing better then the rest of the world.
It's triumphalism if a magazine in Airstrip One claims that Oceania is doing better than Eurasia and Eastasia.
The Economist is a pro-market publication, so yes, this is absolutely triumphalism on their part.
America is the ultimate example of fortune favors the fortunate.
A well diversified economic powerhouse with a friendly neighbor to the north and a cheap labor neighbor to the south, comparatively politically stable, and annnddd its energy independent?
America is ridiculously OP from an economics standpoint. Even more over it only looks like the position is going to strengthen, at least until either AI or climate change upend everything.
A well diversified economic powerhouse with a friendly neighbor to the north and a cheap labor neighbor to the south, comparatively politically stable, and annnddd its energy independent?
America is ridiculously OP from an economics standpoint. Even more over it only looks like the position is going to strengthen, at least until either AI or climate change upend everything.
neat. when is any of that going to trickle down?
[deleted]
The important thing being missed here is that America, unlike the rest of the G7 or China against which it is being compared, is not aging as rapidly.
Take the book with a massive grain of salt, but the mechanisms are well described in The Accidental Superpower.
Take the book with a massive grain of salt, but the mechanisms are well described in The Accidental Superpower.
It is ridiculous on its face to compare America with other nations by raw numbers as if there were some single measure like that... dozens of quality-of-life and cost-of-living indicators in many regions of the USA are strongly in the opposite direction for many real households.
ten percent of people are vastly wealthier while fifty percent plus of people are worse off and more so ..
the machinery of economics are driving their own numbers. ref Piketty https://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Ce...
ten percent of people are vastly wealthier while fifty percent plus of people are worse off and more so ..
the machinery of economics are driving their own numbers. ref Piketty https://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Ce...
Nobel Prize winner of 2024 Simon Johnson interviewed:
Johnson told the AP that economic pressures were alienating many Americans.
“A lot of people who were previously in the middle class were hit very hard by the combination of globalization, automation, the decline of trade unions, and a sort of shift more broadly in corporate philosophy,” Johnson said. “So instead of workers being a resource to be developed, which they were in the 19th and early 20th century, they became a cost to be minimized … Now, that squeezed the middle class.’’
“We have, as a country, failed to deliver in recent decades on what we were previously very good at, which was sharing prosperity,” Johnson said.
One key for the future, Johnson said, is how societies manage new technologies such as artificial intelligence.
“AI could go either way,” he said. “AI could either empower people with a lot of education, make them more highly skilled, enable them to do more tasks and get more pay. Or it could be another massive wave of automation that pushes the remnants of the middle down to the bottom. And then, yes, you’re not going to like the political outcomes.’’
Johnson told the AP that economic pressures were alienating many Americans.
“A lot of people who were previously in the middle class were hit very hard by the combination of globalization, automation, the decline of trade unions, and a sort of shift more broadly in corporate philosophy,” Johnson said. “So instead of workers being a resource to be developed, which they were in the 19th and early 20th century, they became a cost to be minimized … Now, that squeezed the middle class.’’
“We have, as a country, failed to deliver in recent decades on what we were previously very good at, which was sharing prosperity,” Johnson said.
One key for the future, Johnson said, is how societies manage new technologies such as artificial intelligence.
“AI could go either way,” he said. “AI could either empower people with a lot of education, make them more highly skilled, enable them to do more tasks and get more pay. Or it could be another massive wave of automation that pushes the remnants of the middle down to the bottom. And then, yes, you’re not going to like the political outcomes.’’
Yes, the US really leaves the bottom third behind
If you look at incomes for graduates in the US vs the UK, it's far higher. [0]
For non-graduates it's the same, and the social safety net in the UK is far better.
This ties into median wage in the UK being barely above minimum wage.
What this tells me is "don't bother educating yourself, just leave school asap and get a crap job stacking shelves"
The UK just isn't an attractive place for graduates to work in, and the few that are there (mainly in London and the south east [1]) massively subsidise the wealthy retired and the minimum wage jobs.
[0] https://www.ft.com/content/570d23b3-d286-4cb9-a319-b49cc4056...
[1] https://www.ft.com/content/e5c741a7-befa-4d49-a819-f1b0510a9...
If you look at incomes for graduates in the US vs the UK, it's far higher. [0]
For non-graduates it's the same, and the social safety net in the UK is far better.
This ties into median wage in the UK being barely above minimum wage.
What this tells me is "don't bother educating yourself, just leave school asap and get a crap job stacking shelves"
The UK just isn't an attractive place for graduates to work in, and the few that are there (mainly in London and the south east [1]) massively subsidise the wealthy retired and the minimum wage jobs.
[0] https://www.ft.com/content/570d23b3-d286-4cb9-a319-b49cc4056...
[1] https://www.ft.com/content/e5c741a7-befa-4d49-a819-f1b0510a9...
> and the few that are there
Completely wrong as roughly 25% of the UK population has a university degree. The U.K. has lots of problems but a lack of graduates isn’t one of them.
Completely wrong as roughly 25% of the UK population has a university degree. The U.K. has lots of problems but a lack of graduates isn’t one of them.
the few places that are attractive.
A graduate of pretty much any degree working in Hull in pretty much any job is not attractive. They would earn far more in other countries, and earn little more than a minimum wage school dropout.
A graduate working in fintech in London is fine, but they are subsidising the rest of the country and bring up the "graduate salary" and "total earnings" across the board.
The problem isn't the lack of graduates, its the lack of well paid jobs. We don't value an educated workforce (which is at a similar level to France, the US, Ireland, Australia etc)
A graduate of pretty much any degree working in Hull in pretty much any job is not attractive. They would earn far more in other countries, and earn little more than a minimum wage school dropout.
A graduate working in fintech in London is fine, but they are subsidising the rest of the country and bring up the "graduate salary" and "total earnings" across the board.
The problem isn't the lack of graduates, its the lack of well paid jobs. We don't value an educated workforce (which is at a similar level to France, the US, Ireland, Australia etc)
But we’re talking about economic output, not a qualitative assessment.
America has lower transaction costs, a better regulatory environment (e.g the EU with AI), better access to lending and investment, and a more robust consumer market. The US is clearly doing some things better.
America has lower transaction costs, a better regulatory environment (e.g the EU with AI), better access to lending and investment, and a more robust consumer market. The US is clearly doing some things better.
Not convinced that AI is doing things better. And transaction costs in what sense? The US banking system is an international joke, so I'm guessing you're talking the lack of language barrier?
It's attracting a lot of investment not only from the Americans but also from outside investors. Even if most of those companies do not end up profitable, the workers that participated in the effort will have already gotten paid and the money will be absorbed by the economy.
And if it pays off some day, well there you go.
And if it pays off some day, well there you go.
crypto got a lot of outside investment. various facebook-for-dogs did too. housing pre-2008 did too.
very few of the workers in the economy outside of the data center and tech-bro market will ever see any money from this
very few of the workers in the economy outside of the data center and tech-bro market will ever see any money from this
Exactly. If the US economy is 10x larger but 90% of the economy is benefiting only the richest 0.1%, what's the point? Too many mainstream media pieces focus on overall GDP when they should be focused on averages.
The end of the article handwaves away this criticism.
> Many critics of America’s economic model contend that it is intrinsically flawed, beset by extreme inequality and ever-more dominant companies crushing competitors. But these are exaggerations. There may be scope for a fairer distribution of the country’s wealth without undermining America’s growth, but the widely held belief that the top 1% are taking it all is overdone.
Handwaving.
> As for tech behemoths such as Apple and Amazon, their potential for dominance must be watched and, if necessary, curtailed, but it is also true that they have generated incredible value in daily life and shaken up stodgy industries. And they face fierce competition to stay on top.
Where's the fierce competition? Apple and Google have a phone duopoly.
Measuring the economy is not measuring quality of life or health of the population.
The end of the article handwaves away this criticism.
> Many critics of America’s economic model contend that it is intrinsically flawed, beset by extreme inequality and ever-more dominant companies crushing competitors. But these are exaggerations. There may be scope for a fairer distribution of the country’s wealth without undermining America’s growth, but the widely held belief that the top 1% are taking it all is overdone.
Handwaving.
> As for tech behemoths such as Apple and Amazon, their potential for dominance must be watched and, if necessary, curtailed, but it is also true that they have generated incredible value in daily life and shaken up stodgy industries. And they face fierce competition to stay on top.
Where's the fierce competition? Apple and Google have a phone duopoly.
Measuring the economy is not measuring quality of life or health of the population.
American economy is really about cheap oil/gas. They had a leg up in semiconductors and then that led to mega tech corps.
Average GDP per capita looks good on paper, but heathcare and education are really expensive. They increase the GDP because money is spent but in Europe it's a lot cheaper so they seem poorer but by purchasing parity they are richer.
If you earn in USD for US company and spend in another country, then yeah the money goes further, otherwise median American isn't doing that much better.
Average GDP per capita looks good on paper, but heathcare and education are really expensive. They increase the GDP because money is spent but in Europe it's a lot cheaper so they seem poorer but by purchasing parity they are richer.
If you earn in USD for US company and spend in another country, then yeah the money goes further, otherwise median American isn't doing that much better.
I'd love to learn more about exactly why Europe fell behind. Only a few decades ago Britain and France had competitive or higher GDPs per capita than the US.
Many people argue the stricter business and environmental regulations hampered European growth, but these things were mostly even stricter 30 years ago.
Whatever the cause is, it's something that's happened in the last 15 years or so.
Many people argue the stricter business and environmental regulations hampered European growth, but these things were mostly even stricter 30 years ago.
Whatever the cause is, it's something that's happened in the last 15 years or so.
Peak oil in the north sea(2007), peak gas in the north sea (2006). While the US found out extracting their massive shale oil/gas reserves eROI was finally competitive.
Combo of energy and better capital markets and banking system
'better' is a funny word. Like I said in another post, it's due to a 'banking' revolution called 'shadow bank' (they aren't bank, they cannot print nor destroy money, but I guess it's close enough). From what I saw, its main effect is to decorelate GDP from production. A house sold 200k can produce 400k of GDP over a year if enough intermediaries put their hand in the pie. And I'm just talking about the mortgage here, not the house.
GDP is increasingly a poor measure of economic well being, as wealth inequality becomes so bad a handful of individuals capture the lion's share of growth.
Sometimes I like to think of GDP as a measure of economic (productive) power more than well-being. But other indicators are more important for the long-term, such as those on demographics, education, debt levels, etc. You probably don't want to sacrifice those for a transient boost in GDP.
GDP-per-capita is a thing
[deleted]
And highly misleading if there's significant income inequality.
GDP-per-capita still doesn't capture inequality.
Look at wages and household income. The wealthy don't rely on them, they have capital.
This is the perfect example of why, when you read "the economy" in a mainstream publication, you should replace it with "rich people's yacht money".
In the past the Us making other countries poor via the printing press was very often the applicable explanation.
Is it now any different?
Is it now any different?
[deleted]
But the us american economy is subsidized by everyone on the planet that trades in us currency and thus buys up the money its able to print. So those numbers are- dubious baseball stats at best?
I don't buy the assumption that others are "subsidizing" the USD when they choose to use it -- they're choosing to use USD for their own benefit.
I disagree with OPs conclusion but not the thesis.
I do, currently, think there is some level of “subsidizing” (wrong word) happening in the west.
USD is the wests reserve currency. It’s held by many western countries and much of western trade is denominated it in.
When the US prints money, they dilute the western reserve currency. It lets the US spend the value of every USD holder (including the value of debt denominated in the currency).
In other words, I think the US can spend the value of a large slice of the western economy (not just its domestic economy) on its own infrastructure and military projects through inflation by printing money.
I do, currently, think there is some level of “subsidizing” (wrong word) happening in the west.
USD is the wests reserve currency. It’s held by many western countries and much of western trade is denominated it in.
When the US prints money, they dilute the western reserve currency. It lets the US spend the value of every USD holder (including the value of debt denominated in the currency).
In other words, I think the US can spend the value of a large slice of the western economy (not just its domestic economy) on its own infrastructure and military projects through inflation by printing money.
> USD is the wests reserve currency.
Kinda. US treasure bills are the main world's reserve actives.
But the world also holds other kinds of active, and none of that is exactly caused by the dollar denominating trade.
Trade denomination causes some inflation exporting that can mess with other economies due to price stickness. But again, that's nothing like the OP claims.
Kinda. US treasure bills are the main world's reserve actives.
But the world also holds other kinds of active, and none of that is exactly caused by the dollar denominating trade.
Trade denomination causes some inflation exporting that can mess with other economies due to price stickness. But again, that's nothing like the OP claims.
Choosing is the wrong word as there aren’t many other choices.
The US Dollar is an export.
It'll be hard for our economy if we stop exporting it, but that's true of any export.
It'll be hard for our economy if we stop exporting it, but that's true of any export.
U.S. dollar is reserve currency for a significant portion of the world. This means when U.S. can inject a lot higher fraction of the GPD into the economy for the same inflation cost. As a matter of fact U.S. wants some inflation to devalue high amount of debt they have - so there is an incentive to print USD.
This feels not even wrong.
The American economy is generating massive amounts of goods and services. This is a relatively hard fact.
The effect of the dollar being a worldwide currency is complex and not so straightforward. Strong demand for dollars actually would increase dollar value, which would increase borrowing costs, ceteris paribus. The US then increases money supply, to accommodate. It’s unclear that this dramatically increases GDP.
Unless your assertion is that the financial industry is overdeveloped? I don’t think it’s more than 10% of GDP off the top of my head.
The American economy is generating massive amounts of goods and services. This is a relatively hard fact.
The effect of the dollar being a worldwide currency is complex and not so straightforward. Strong demand for dollars actually would increase dollar value, which would increase borrowing costs, ceteris paribus. The US then increases money supply, to accommodate. It’s unclear that this dramatically increases GDP.
Unless your assertion is that the financial industry is overdeveloped? I don’t think it’s more than 10% of GDP off the top of my head.
What makes that dubious? It makes this advantage rest on a single factor, but the advantage is still there, no?
I'm the furthest thing from an economist, but I'm guessing that it feels like we're in a vulnerable position.
I.e., that it indicates our "wealth" could be pulled away from us on very short notice.
Contrasted to, e.g the wealth being from sales of some commodity that the rest of the world will need for the next decade: crops, certain metals, or (maybe) oil/LNG.
I.e., that it indicates our "wealth" could be pulled away from us on very short notice.
Contrasted to, e.g the wealth being from sales of some commodity that the rest of the world will need for the next decade: crops, certain metals, or (maybe) oil/LNG.
Well the US is a net exporter on oil and LNG, pretty much even on agriculture and every few months a new "world's largest deposit" of some critical material article comes up.[1,2] So I think we really are debating whether the chicken or the egg came first, and the answer is that dinosaurs were laying eggs before chickens started clucking.
[1] https://finance.yahoo.com/news/worlds-largest-deposit-lithiu...
[2]https://www.theearthandi.org/post/estimated-2-34-billion-met...
[1] https://finance.yahoo.com/news/worlds-largest-deposit-lithiu...
[2]https://www.theearthandi.org/post/estimated-2-34-billion-met...
It's not just that. Compare the GDP per capita of individual US States to other countries. Even the poorest performing US State is still doing better than most of Europe.
I'd invite you to visit Mississippi and then any of the top five EU countries and let me know which one you'd rather live in.
Oh I am well aware, but that's more of a slam on those countries for having such poor economic product. Low GDP means lack of growth and lack of opportunity in the future.
Then consider that Luxembourg and Ireland only top the list as a result of being tax havens for the world's rich. The picture looks grim.
Mississippi isn't well populated but most European countries are...so while those countries may be nicer places to live now, Mississippi's future looks brighter.
20 years of totally flat GDP growth capped by a brutal recession was more than enough for Sweden to switch gears and backpedal on an enormous amount of social welfare policy in the early 90s.
Then consider that Luxembourg and Ireland only top the list as a result of being tax havens for the world's rich. The picture looks grim.
Mississippi isn't well populated but most European countries are...so while those countries may be nicer places to live now, Mississippi's future looks brighter.
20 years of totally flat GDP growth capped by a brutal recession was more than enough for Sweden to switch gears and backpedal on an enormous amount of social welfare policy in the early 90s.
Some people who actually live in Mississippi do so by choice, ya know, and feel that it's important to contribute to the improvement of the citizenry. But yeah, take the local minimum and compare it, apples to oranges, to a local maxima of a top EU country. Even so, there's still a lot going for Mississippi.
This is a terrible, terrible understanding of how international trade works. It's also not even relevant when comparing GDPR per capita.
Does this translate into better quality of life for the majority of the population? I don't think so.
Long personal anecdote deleted (it was too personal)
Lies like this story, which I can't afford to read, are why absolute bullshit artists like Trump are able to get votes at all.
Consider this, and the more than 1 gun per person state of the US population, and things don't look good for the future.
Civil wars are horrible, but they do boost the profit of the arms industry.
Lies like this story, which I can't afford to read, are why absolute bullshit artists like Trump are able to get votes at all.
Consider this, and the more than 1 gun per person state of the US population, and things don't look good for the future.
Civil wars are horrible, but they do boost the profit of the arms industry.
Interesting, is it better for the economy to have fewer guns per person? How do the graphs look for that metric across countries?
You didn't read the story but conclude it's a lie? The Economist is a respected publication, the type that cites factual stats rather than spin BS like many mainstream news outlets.
The lede paragraph was all I could see, so I had to draw conclusions from that.
As I said
> this story, which I can't afford to read
As I said
> this story, which I can't afford to read
And yet it doesn't make the top 20 in happiness.
https://worldpopulationreview.com/country-rankings/happiest-...
Really makes you think.
https://worldpopulationreview.com/country-rankings/happiest-...
Really makes you think.
Money doesn't make you happy, although it helps. This is common knowledge.
That's a very privileged attitude. Certainly someone already wealthy will not get much more happiness from gaining more wealth, but for many Americans a few thousand dollars could be a life-changing amount of money.
Yes. Insufficient money can make you unhappy. After caring for needs, money won't make you happy.
I spent the first 12 years of my adult life making barely over minimum wage and never having more than $1,000 in my checking account.
I now make $215K/year and can spend $500 on a really nice dinner on a whim for me and my wife and not even feel the need to budget for it. I can have a top-of-the-line gaming PC and play all my games at 100+ fps with maximum detail settings.
I'm a fuckton happier now than then.
The way I see it, there are really only two people that truly believe (or at least claim to believe) that money doesn't buy happiness:
1. Business owners that use it as an excuse to keep wages low. Just convince the workers that a higher wage won't make them happier!
2. Poor people that tell it to themselves to cope with being poor.
Certainly, you reach a point of diminishing returns. $100M won't make you 10x as happy as $10M. But I know there's some article that's been passed around a LOT that says the diminishing returns begins at $70K/year, and that's just flat out wrong. $70K/year won't even buy a house in most cities.
I now make $215K/year and can spend $500 on a really nice dinner on a whim for me and my wife and not even feel the need to budget for it. I can have a top-of-the-line gaming PC and play all my games at 100+ fps with maximum detail settings.
I'm a fuckton happier now than then.
The way I see it, there are really only two people that truly believe (or at least claim to believe) that money doesn't buy happiness:
1. Business owners that use it as an excuse to keep wages low. Just convince the workers that a higher wage won't make them happier!
2. Poor people that tell it to themselves to cope with being poor.
Certainly, you reach a point of diminishing returns. $100M won't make you 10x as happy as $10M. But I know there's some article that's been passed around a LOT that says the diminishing returns begins at $70K/year, and that's just flat out wrong. $70K/year won't even buy a house in most cities.
Your personal anecdote/experience doesn't translate into everyone's reality.
Here's another anecdote: many ultra-rich people have committed suicide because they were unhappy. If money bought happiness, they wouldn't have done it.
Happiness is a complex thing. You can visit remote third-world villages and find people living very difficult lives yet very happy because that's all they know and don't bother comparing their situation with others.
Here's another anecdote: many ultra-rich people have committed suicide because they were unhappy. If money bought happiness, they wouldn't have done it.
Happiness is a complex thing. You can visit remote third-world villages and find people living very difficult lives yet very happy because that's all they know and don't bother comparing their situation with others.
[deleted]
"[...] specifically monitoring performance in six particular categories: gross domestic product per capita, social support, healthy life expectancy, freedom to make your own life choices, generosity of the general population, and perceptions of internal and external corruption levels."
US ranks pretty high in GDP-per-capita. Given the remaining factors, I imagine the obesity rate and intensified political polarization is skewing the result. The perceptions might be informed in large part by rate of consumption of news media content on social media (other developed countries have this problem, but lesser polarization may mute the impact).
Among good news is that the obesity rate has stalled in recent years, iirc.
US ranks pretty high in GDP-per-capita. Given the remaining factors, I imagine the obesity rate and intensified political polarization is skewing the result. The perceptions might be informed in large part by rate of consumption of news media content on social media (other developed countries have this problem, but lesser polarization may mute the impact).
Among good news is that the obesity rate has stalled in recent years, iirc.
Also known as - starvation due to poverty
Huh. An incendiary article about the economy, a few weeks from election day.
Who would've guessed?
Who would've guessed?
IMHO this is entirely miss-measurement or miss-characterization.
Probably if you look at dollar gains of stocks, land prices, etc you'll find Americans leading, but look at the actual lives of average people, and they are not so much better off, if at all. In other words it's mostly accounting/financial mirages.
Probably if you look at dollar gains of stocks, land prices, etc you'll find Americans leading, but look at the actual lives of average people, and they are not so much better off, if at all. In other words it's mostly accounting/financial mirages.
Purchasing power is down, birth rates are down, life expectancies are down, young people's expectations of the future are down. We should account for things we care about when we talk about how the country is doing.