Elephantstrunk

A little while ago I wrote about Tyler Cowen and Jane Galt partly because they were uncritically triumphalist about the US economy. Today the news brings the following headlines:

• Eurozone unemployment falls to record low
• Dollar slides further on US manufacturing data
• Economic Storm Signals

This doesn’t prove anything much but it does make it look perverse to take for granted that the the US economy is stronger than Europe’s. Playing by the rules of Tyler Cowen’s comments there is a lot of fun to be had.

Here goes. Jane and Tyler have got it all wrong. The major advantage of the US has been its abundant natural resources and the scale of its single market. This applies to computer making, investment banking, pharmaceuticals, plane building and Hollywood. Now however it is clear that its scale has been trumped. Soon the EU, China and India will all beat it on scale. Computer making is already mostly done in Taiwan and China, the EU is on level terms in planes and Boeing has transferred considerable technology to China. Pharmaceuticals is a struggling industry and is no longer the driver of medicine and the US is not a healthy country. Investment banking is increasingly moving to London and Hong Kong with New York looking more like Tokyo all the time — large but staid and inward looking. Hollywood ought to be the last to go but already we have Martin Scorsese making me-too versions of Chinese films.

That will leave a lot of old aged old money USians using borrowed money to pay Mexicans to build houses for them and care for them in their unhealthy old ages and little growth outside those two sectors.
Or maybe not