Alternative Visions – Debunking the Myth of American Economic Exceptionalism – 04.04.15

Dr. Jack Rasmus turns the focus of today’s show from the global economy to the USA economy specifically. Is the USA economy ‘exceptional’, i.e. growing robustly while the rest of the global economy slows or stagnates?  Rasmus explains that assumption of US Economic Exceptionalism is a myth.  The myth is based on US GDP growth last summer 2014 of 4-5% in GDP terms and the creation of more than 200,000 jobs a month throughout last year.  Rasmus looks at the data and economic forces behind the two arguments of exceptionalism—2014 GDP and jobs—to show the arguments were based on temporary factors which have already come to an end: GDP growth in fourth quarter 2014 already fell to 2.2%, and Rasmus predicts it will decline to well less than 1% GDP when first quarter 2015 GDP numbers are reported in May. Today’s latest jobs report for March is also a return to a sub-par 126,000 jobs created, when forecasts by economists were for 248,000.  Rasmus explains that 2014 temporary economic effects from manufacturing exports, government defense spending before elections, another business false inventory buildup, the shale industrial boom, and household retail and auto sales have dissipated in the past three months, with the result of the US economy returning to its longer term, below average, long term growth trajectory of 2% or less in GDP terms for the rest of 2015—i.e. more of the ‘stop-go’ scenario that has been the US case the past six years. First quarter GDP data, and lagging job data to come, will show US recovery has once again failed to ‘take off’. A scenario basicallyl no different than that for Japan and Europe (and now emerging markets that are sliding into recessions as well).  The USA economy is simply continuing to ‘stagnate’ at a 1%-1.7% long term growth level, while Europe and Japan stagnate and a lower growth level, Rasmus argues. There’s nothing at all ‘exceptional’ going on going on with this US economic scenario; just more of the same that has been occurring for six years—and not unlike the stop-go in Europe and Japan.

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