According to Bloomberg BusinessWeek’s Rich Miller there are two economic theories about the future of the United States.
“Mohamed El-Erian and his colleagues at Pacific Investment Management Co. coined the phrase “the new normal” to describe their vision of America’s economic future. The chief executive of the world’s largest bond fund argued that retrenchment by debt-laden consumers and tougher regulation of the financial-services industry would leave the U.S. with tepid annual growth of around 2% for years.”
Miller reports that Joseph Carson, an economist with AllianceBernstein (AB) in New York “posits” his new mix view that the economy will be “powered more by exports and business investment than by the traditional drivers of consumption and housing.”
I want to be the optimist about the future of the United States. It’s hard to be positive when unemployment in California is at 12.5 % and the signs of growth are few and far between. However, I found one outstanding example of new growth today. Boeing Company has reported they will speed up production of 747 and 777 models. The vast majority of the increased business will come from carriers in Latin America and Asia. This event supports Joseph Carson’s theory.
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