23rd July 2012
The decline of western countries' economic power with recession and depression saw a flurry of stories on power shifting to the East, and China specifically was singled out as the economy set to knock the US off its powerful pedestal.
But new reports suggest a host of significant factors that are putting the US is back on track as the superpower of the future, and a profitable punt for long-term investors.
So what are these green shoots?
There are many positives being reported. New technology, for one, is driving a US industrial comeback with the future of manufacturing in America, not China, says this report. It remains a force of innovative strength.
"All of these advances play well into America's ability to innovate, demolish old industries, and continually reinvent itself. The Chinese are still busy copying technologies we built over the past few decades. They haven't cracked the nut on how to innovate yet."
"I think that the basic measures of power indicate that the United States really is just as strong as it's ever been," says Kagan, "People have talked themselves into this notion that we no longer have the capacity to play the role we've been playing."
Kagan doesn't deny that countries like China, whose international power is clearly growing, are a threat to America, but argues this threat is nothing new. "We tend to sort of fantasize about the past, a past when the United States was allegedly able to do whatever it wants whenever it wanted to, and that past never existed."
Even gloomy Ben Bernanke, US Federal Reserve chairman, was recently cautiously optimistic over one key area of concern: the housing market. He said this is "one area where we have seen modest signs of improvement…"
Many commentators, including Ben Bernanke have cited the US housing market as the key to unlocking global recovery.
We also reported that America could realistically achieve energy self sufficiency, which has the potential to create millions of jobs, revolutionise the US economy and redraw the geopolitical map with the US as a global oil and gas exporter.
But news reports remain conflicting
These can confuse on whether there are truly green shoots for the US economy, and there are the hard stats that show it continues to struggle with Bloomberg reporting that weekly jobless claims rose 34,000 to a three-week high of 386,000. Meanwhile, there's more negativity on Reuters with warnings of a crop apocalypse; news is that crops in America are suffering from the searing heat and drought conditions that are set to continue baking already scorched corn and soybean crops.
Earlier this month there was an article entitled Signs We Are Approaching a Zombie Economy, with concern about U.S. fiscal policy, the eurozone debt crisis and slow growth in places like China and India, turning the U.S. economy into "what feels like a slow-moving zombie, leaving businesses and consumers hesitant and reluctant to act."
While some say that data definitely shows there is an upturn, others argue to the contrary. And with the election on the way and Obama's favoured media profile readers should take care to refocus through the media bias for the real story.
As psychologist Jonathan Haidt insightfully discusses in this Ted talk, there is a left and right political split that forms the basis of our choices. This is reflected in the slant news reports will give in the run up to a presidential election, so it's important to refocus before reading reports and consider what lies beneath the social psychology that has informed the piece.
What do you think as a result of the facts? Will America wear its superpower crown far into the future?
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