THE INDEPENDENT: China and India may be growing faster but in technical innovation there's no contest
Americans may be glum about their political situation but they are becoming less so about their economic one. So much of the reporting from and within the US has focused on the discord in Washington that the wall of sound has obliterated the signals from the economic heartland. Such signals that have come through have been largely negative and have been reported though a political prism.
It makes a good headline to write that employment has failed to respond to the increase in output and it makes a good picture to show the decaying homes on abandoned developments. Such positive stories that have been around, of which the recovery in share prices is the most obvious, have almost made matters worse, for they suggest that the few on Wall Street are again benefiting from the tax dollars of the many on Main Street.
Dig a little deeper though and you can sense that American corporate self-confidence is returning: a sense of optimism, almost of swagger, that is quite absent from the prevailing mood in Europe and the UK. Quite suddenly, after all the despair, the fears of financial meltdown have evaporated. America, or at least Business America, is back. Why?
Well part of it is what has been happening in financial markets. Markets both reflect the prevailing mood and help shape it. If the financial services industry is making money then it becomes easier for the rest of industry, "real" industry you might say, to get investment funds, think of possible acquisitions and resume planning for the future. Six months ago it was still a question of survival. Now that is past.
The dollar has helped too, not in the sense that a strongish currency is good for business but rather that it shows that, whatever the problems of the US, at least the currency is not bowed down by the concerns that have been plaguing the euro and the pound. Rationally California may be in an even bigger financial mess than Greece and at some stage pretty soon the country will have to come forward with credible plans to tackle the Federal deficit. But for the moment at least the dollar remains a safe haven and in that sense carries the message that the US is a safe haven for global savings. >>> Hamish McRae | Wednesday, March 10, 2010
