If you saw the Oscars Sunday night, youll remember Jon Stewarts psychological take on the dark, depressing slate of movies up for awards this year: Does this town need a hug? With more and more depressing economic and financial headlines these days, maybe the country needs a hug as well. Pounded by news about mortgage foreclosures, credit crunches, and corporate layoffs — and constantly reminded of our dire economic predicament by presidential candidates — Americans have shut their purses and are battening down the hatches. Which, of course, adds to the grim news.
And Americans arent just worried about a temporary economic downturn: We're concerned about our place in the world in the 21st century as well. In a recent blog, former Council of Economic Advisors chief Greg Mankiw highlighted a Gallup poll that says more Americans think China is the worlds leading economic power than think their own country is. This, even though Americas GDP (about $14 tri. in '07) is almost triple that of Japan (the No. 2 economy) and quadruple that of China (the No. 4 economy).
Which just goes to show that as a society we tend to get caught up in the political and media hysteria of the day. And we're oblivious to good news. Like the recent International Trade Administration fact sheet that announced our annual trade deficit in 2007 declined for the first time since 2001. Because of the value of the dollar overseas and the continued competitiveness of U.S. manufacturers, exports grew 12% last year — including an 18% increase in shipments to China. In all, we exported $1.6 trillion worth of goods and services — more than the entire GDP of Russia (to name a former superpower).
Hollywood may need a hug, but America really doesn't. We just need to ensure those who create wealth in our society — our businesses, and in particular our manufacturers — remain competitive in an increasingly global marketplace.