Rolling Wave

Bull or Bear? Let History Be the Guide

The fundamental driver of the exceptional post WWII growth was the increasing demand of these emerging consumer class in the US, Europe and Japan - about a billion people. The uneven growth of the first half of the last century lacked that economic driver, and secure base to generate growth.

1900-50 is not comparable 2000 to 2050 - the latter period will have roughly 2 billion new consumers in China/India and elsewhere in Asia embracing and joining the middle class in real terms. In the big picture, the effective global market will triple the billion consumers that the US, Europe and Japan let loose from 1945-50 to drive the growth of the past half century. This new surge will provide, with the inevitable bumps and mistakes (from governments to greed and corruption) an engine of growth that will pressure commodity prices (current 15 year uptick), then new tech goods and services to new levels of growth.

Only issue is whether US will continue to embrace global opportunities this represents, or let small interest groups (like the million US farmers which scewered the Doha trade round two weks ago) protect their comfortable and uncompetitive monopolies and subsidies. It was US business which led the charge to globalization since 1950, with huge benefits for American prosperity and consumers. Only question is whether US business will continue to exploit these emerging market growth opportunities.

My conclusion argues against the article - that average growth can stay above the 50 year trend, if American business seizes their share of future growth....my bet is yes, regardless of the initial hesitation about the adjustment pressures this will foce on the old economy players, and the bumpiness of the ride.