This is an extract of Joel Kurtzman’s interview :
Much has been written about the decline of the U.S. as a world leader
since the financial crisis. But despite relatively high unemployment and
a widening income gap between the rich and everyone else, growth is
accelerating, debt is declining and the banking sector is relatively
healthy.
Economist Joel Kurtzman, who is also a senior fellow at the Milken
Institute, says America is not in decline and actually on the verge of
resurgence.
The author of the new book Unleashing the Second
American Century: Four Forces for Economic Dominance, Kurtzman cites
"four transformational forces" that will lead that to resurgence:
tremendous creativity--"we produce more new ideas ... than any other
country" -- tremendous energy reserves, reserves of capital and a
re-shoring of manufacturing.
Myth #1: America is broke
America's private sector is in
better shape than it's been in years, and the American consumer is
healthier than she or he has been in the past 35 years, says Kurtzman.
"On the private side of the balance sheet America is doing just fine,"
says Kurtzman. The public side is another story, but it's improving. The
money America uses to pay its debt has been declining as a portion of
GDP every year, "and it's very manageable," says Kurtzman.
Myth #2: High unemployment rates are here to stay
Kurtzman says the high jobless rate is concentrated in people without a
college education and those under 25. The unemployment rate for someone
over 25 who's college educated has held steady at around 4%.
Myth #3: China is ascending while America is declining
"China is coming of age at probably the worst time in history for a
country that wants to be a manufacturing power," says Kurtzman. China's
strategy involves having 200 million people a decade working in
manufacturing, says Kurtzman. "They can't accommodate that," says
Kurtzman. The U.S., meanwhile, has moved from a manufacturing-centric
economy to a service-focused one--a transition that China will
eventually have to make, says Kurtzman. "That will be very difficult for
them."
Myth #4: America is a spent power
Kurtzman says the U.S.
is in a great position for growth because it remains the world's leading
military and manufacturing power, has trillions of dollars in capital
to deploy and is now less dependent on imported oil given the
development of its own energy reserves.
Myth #5: America doesn't make anything anymore
This is
simply not true, says Kurtzman. America is the dominant manufacturing
power in the world if you include what we make overseas. But if you just
look at just what we make in America, we make 20% of everything
produced. That's about the same as China but China makes low value-added
products such as towels and clothing. We make airplanes, radar,
turbines -- the big expensive stuff.
Conclusion: As you know
the KLCI has recently broke the all time high record and like most
investors, I too have the fear that the market might crash soon. After
you have read the above extract, you must come to the conclusion that
the US stock market will not crash so soon and our stock market will
also not crash so soon.
I hope I have given you more confidence to invest and play the game.
Get this book if you wanted to learn more from Joel Kurtzman, a Senior Fellow at the Milken Institute, a non-profit non-partisan think tank.
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