It’s entertaining to watch and to read reports in the corporate media about the current stock market decline, which over the course of the last six business days erased $2.1 trillion in the market value of stocks of publicly-traded US corporations (and in a lot of ordinary Americans’ retirement savings).
CNN, in an article on Wednesday, had a piece on its CNN Money website saying not to worry about the market crashing, because, “At the moment, the US economy looks healthy. It’s on track to grow about 2% this year, and unemployment is back at the low levels it was at prior to the Great Recession.”
The New York Times, also on Wednesday, did acknowledge that there were some issues that had been “overlooked” that were now getting attention, but the article focussed entirely abroad, not at the US itself. It argued that the US economy is not as immune from global economic slowdowns as many analysts had believed. For example, while trade with China may only account for some 2% of US GDP, much of the rest of the world, including large parts of Asia and Australia, as well as Europe, are heavily dependent upon trade with China, and the US economy is linked to all of them. So, the article concluded, if China’s economy stalls, as appears to be happening, most of the world stalls, and that would cause problems for the US too.
Let’s look at both of these arguments more closely though.
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