Lessons from Uncle Sam

The era of America’s dominance over the global economy continues. The U.S. Commerce Department announced that the U.S. economy registered annualized growth of 5 percent in the third quarter, in sharp contrast with the U.K.’s 0.7 percent and France’s 0.3 percent over the same period. Housing prices rose in America and oil prices continue to fall. The Dow Jones Industrial Average exceeded 18,000 points for the first time ever. Higher consumer confidence, employment rates and other indicators suggest a virtuous cycle in the economy: from economic recovery to wage hikes to increased consumption to investment expansion.

The Korean economy is stuck in a lethargic rate of growth, so we must carefully watch the meaningful economic turnaround in America.

The United State’s unrivaled growth has changed the rules of the game. As China loses economic steam, the eurozone struggles with nearly zero percent growth. While Japan worries about negative growth even after years of Abenomics, Russia runs the risk of debt default if America raises its interest rates rapidly. The shale gas revolution in America virtually de-fanged the once-powerful Organization of Petroleum Exporting Countries (OPEC). All of that means America has emerged as the only game-maker.

The cause of America’s growth is increased consumption and lower oil prices. Thanks to the shale gas revolution, U.S. citizens are spending more and that helps revitalize the economy. The Fed injected liquidity of $4 trillion into the market since the 2008 financial meltdown. And despite criticism, the U.S. government and monetary authorities didn’t budge: They kept their eye on rejuvenating the economy.

Seoul must learn from Washington’s immigration policy. America is the only superpower without the problem of a rapidly aging population thanks to young talents immigrating from all over the world. Korea on the other hand, despite having a fast-ageing population and a low birthrate, still turns up its nose at immigrants.

A revived U.S. economy is a crisis and an opportunity. Our economy can suffer critical damage if the economies of other countries, including China, are on a downward spiral. The government must find ways to minimize unwanted repercussions from the recovery of the U.S. economy while learning lessons from America.

JoongAng Ilbo, Dec. 29, Page 30