The world is in the midst of an economic boom that is raising living standards, creating jobs and improving the quality of life for billions of people.
That's not the story or picture we see on the nightly news shows, where the world is torn by civil war, terrorism, death, destruction and unending poverty. There is certainly much of that, but there is another compelling story that needs telling, too, because it has a lot to do with our economy and future well-being.
The past week's wealth-creating run-up in the stock markets, where the Dow Jones industrial average was breaking records and nearing 13,000, is the latest manifestation of the Bush economy's continuing strength and resilience. But its strong performance was also the result, increasingly so, of the global economy's growth -- from which we benefit as a nation of merchants and exporters selling our goods and services to the world.
"The good news on U.S. jobs highlights a welcome global phenomenon. Unemployment rates have fallen to lows in Europe, Japan, China, India, Brazil and many other areas," Bear Stearns economist David Malpass wrote earlier this month in The Wall Street Journal. "While the U.S. itself is less openly exuberant than in the 1990s, most of the world is much better off economically." But let's not sell the U.S. economy short. The unemployment rate has dropped to 4.4 percent, disproving gloomy forecasts it would rise. More of us are working at increased pay scales (the average hourly wage was up to $17.22), which has been the driving force behind the rise in consumer spending and increased investments.
The dark, almost hysterical predictions that the collapse of the subprime home mortgages along with the decline in the housing market generally would send the economy into a recession have not born out. And the global economy's growth, denied by economic nationalists and leftist ideologues who see it as an evil force of exploitation and poverty, is helping us weather our housing and construction downturn.
Among the best-performing stocks last week were Caterpillar and other heavy earth-moving machinery corporations -- who turned in higher-than-anticipated quarterly earnings reports. The reason: record sales overseas from Asia to South America, which are in the midst of building booms.
Thus, while construction equipment sales were falling here because of a downturn in new housing starts and construction generally, they were booming globally: boosting profits and jobs here at home and benefiting working class 401(k) buy-and-hold investment portfolios.