{"id":46550,"date":"2019-06-06T06:10:31","date_gmt":"2019-06-06T11:10:31","guid":{"rendered":"https:\/\/olduvai.ca\/?p=46550"},"modified":"2019-06-06T06:10:34","modified_gmt":"2019-06-06T11:10:34","slug":"the-us-economys-dirty-secret","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=46550","title":{"rendered":"The US Economy\u2019s Dirty Secret"},"content":{"rendered":"\n<h3 class=\"wp-block-heading\"><a href=\"https:\/\/www.project-syndicate.org\/commentary\/american-growth-global-slump-interest-rates-by-todd-g-buchholz-2019-06\">The US Economy\u2019s Dirty Secret<\/a><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Relatively strong US growth amid sluggishness elsewhere is not what economics textbooks would predict. But persistently low interest rates and weak inflation bring multiple benefits to American firms and consumers, while the adverse impact of the global slowdown on US exports should not be overstated.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">SAN DIEGO \u2013 There is a dirty little secret in economics today: the United States has benefited \u2013 and continues to benefit \u2013 from the global slump. The US economy is humming along, even while protesters in the United Kingdom&nbsp;<a href=\"https:\/\/www.bbc.com\/news\/uk-england-tyne-48339711\" target=\"_blank\" rel=\"noreferrer noopener\">hurl milkshakes<\/a>&nbsp;at Brexiteers, French President&nbsp;<a href=\"https:\/\/www.project-syndicate.org\/columnist\/emmanuel-macron\">Emmanuel Macron<\/a>&nbsp;confronts nihilist yellow-vested marchers, and Chinese tech firms such as Huawei fear being&nbsp;<a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2019-05-19\/google-to-end-some-huawei-business-ties-after-trump-crackdown\" target=\"_blank\" rel=\"noreferrer noopener\">frozen out of foreign markets<\/a>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Last year, the US economy&nbsp;<a href=\"https:\/\/www.reuters.com\/article\/us-usa-economy\/u-s-economic-growth-in-2018-misses-trumps-3-percent-target-idUSKCN1QH0HO\" target=\"_blank\" rel=\"noreferrer noopener\">grew by 2.9%<\/a>, while the eurozone&nbsp;<a href=\"https:\/\/ec.europa.eu\/eurostat\/documents\/2995521\/9573370\/2-14022019-AP-EN.pdf\/74195ad7-ce17-4c2f-b86c-c990c938bf30\" target=\"_blank\" rel=\"noreferrer noopener\">expanded by just 1.8%<\/a>, giving President Donald Trump even more confidence in his confrontational style. But relatively strong US growth amid sluggishness elsewhere is not what economics textbooks would predict. Whatever happened to the tightly integrated world economy that the International Monetary Fund and the World Bank have been advocating \u2013 and more recently extolling \u2013 since World War II?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The US economy is in a temporary but potent phase in which weakness abroad lifts spirits at home. But this economic euphoria has nothing to do with Trump-era spite and malice, and much to do with interest rates.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Borrowing costs are currently lower than at any time since the founding of the US Federal Reserve in 1913, or in the UK\u2019s case since the Bank of England was established in 1694. The ten-year US Treasury bond is&nbsp;<a href=\"https:\/\/www.marketwatch.com\/story\/a-2-10-year-treasury-is-in-sight-as-the-mortgage-benchmark-plunges-through-forecasts-2019-05-29\" target=\"_blank\" rel=\"noreferrer noopener\">yielding about 2.123%<\/a>, and in April, the streaming service Netflix issued junk bonds&nbsp;<a href=\"https:\/\/variety.com\/2019\/digital\/news\/netflix-raises-2-2-billion-junk-bonds-1203197332\/\" target=\"_blank\" rel=\"noreferrer noopener\">at a rate of just 5.4%<\/a>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u00a0\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The US Economy\u2019s Dirty Secret Relatively strong US growth amid sluggishness elsewhere is not what economics textbooks would predict. But persistently low interest rates and weak inflation bring multiple benefits to American firms and consumers, while the adverse impact of the global slowdown on US exports should not be overstated. SAN DIEGO \u2013 There is [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[124,303,431,8402,26018,827],"class_list":["post-46550","post","type-post","status-publish","format-standard","hentry","category-economics","tag-central-banks","tag-fed","tag-interest-rates","tag-project-syndicate","tag-todd-g-buchholz","tag-united-states"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/46550","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=46550"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/46550\/revisions"}],"predecessor-version":[{"id":46551,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/46550\/revisions\/46551"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=46550"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=46550"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=46550"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}