There are many barometers that can be used to measure the overall health of the United States. Two of the most important ones boil down to this set of questions: 1) Is there any country in the world that wouldn’t trade our economy for theirs? 2) Are millions of people around the world still pining to become Americans?
The answer to both is an unequivocal “yes.”
Of course, many people would not agree with this assessment. If you’re a political party person and your guy isn’t in charge of the White House, you are likely prophesizing the imminent collapse of the U.S. economy. If your guy is in the White House, then you are probably declaring all U.S. economic indicators to be the greatest in human history. But there’s no getting around the fact that our country is again demonstrating its relentless ability to adjust, innovate and perform in all environments and in the face of all crises. The U.S. economy has rebounded from terror attacks, wars on multiple fronts, a global financial crisis and the COVID-19 pandemic, and barely seemed to break a sweat doing so.
The free-market system is powerful, garnering the best thinking and actions of business leaders and consumers, who are far quicker to adapt to changing conditions than centralized governments such as … China. Most Americans fear China. What they don’t realize is that China is in a heap of trouble.
For those of us who have memories that stretch back to the 1980s, we remember that Japan’s position was much like what we’re looking at today in China. Back then, Japan appeared ready to supersede the United States as the world’s trendsetting economy (crushing our auto and consumers electronics industries for a time), only to fall into a series of so-called lost decades. The problem? An ossified economic system incapable of change and a rapidly aging population.
China’s problems go far deeper. The nation’s problems are manifold and piling up on president Xi Jinping’s doorstep, many of them of his own making, including constant and mass COVID-19 lockdowns, which have slowed the nation’s growth.
But let’s consider China the juggernaut, the Asian giant poised to eclipse the United States as the world’s biggest economy. That inevitability isn’t looking so inevitable anymore. Some economists have pushed back the eclipse date, while others are questioning if China will ever outgrow the United States, thanks in part to Xi’s increasingly restrictive and centralized policies, as well as a fast-aging population that’s looking like a demographic timebomb. As some economists and demographers have been saying for years, China is going to get old before it gets rich.
Old economies do not perform like young, vibrant ones. And people do not demonstrate inspired performance while living in a surveillance state, the likes of which Xi has created.
On the immigration front, there are people who risk it all to become Americans. Two of them were my grandfathers, who crossed the ocean to come to Ellis Island. One opened a grocery store, the other worked for years in a shoe factory.
Alas, too many Americans see our appeal to the yearning masses around the world as a weakness. I would note that those people aren’t clamoring at the borders of Brazil, China, Iran, Kenya, Russia or most other nations.
It’s the magnetic affect the United States has on peoples around the world that has resulted in the “brain gain” that built Silicon Valley (largely with Chinese and Indian nationals), and the creation of many of the planet’s greatest companies. Nearly half (223) of Fortune 500 companies were founded by immigrants or their children.
It’s an impressive track record.
One of the most important things immigrants have done for the United States is keep our population relatively young. While our birth rate has declined, we have not become an aged country in the way Japan, Italy and Germany have. And, as I mentioned earlier, vibrant economies are built on the aspirations of the young, not the old.
Immigrants tend to be young, and for good reason — it requires the energy and optimism of youth to take the gargantuan risks associated with emigrating to another country. It has always been risktakers who have powered the U.S. economy.
As has always been the case, the future of the U.S. economy is standing at our borders asking to be let in. We just need to be selective about who gets bestowed with the honor of becoming an American.
Mike Consol (m.consol@irei.com) is editor of Real Assets Adviser. Follow him on Twitter (@mikeconsol) and LinkedIn (linkedIn.com/in/mikeconsol) to read his latest postings.
