David Levey and Stuart Brown have an antidote for global gloomsaying about the US economy in the latest issue of Foreign Affairs.

The U.S. dollar will remain dominant in global trade, payments, and capital flows, based as it is in a country with safe, well-regulated financial markets. Provided U.S. firms maintain their entrepreneurial edge -- and despite much anxiety, there is little reason to expect otherwise -- global asset managers will continue to want to hold portfolios rich in U.S. corporate stocks and bonds. Although foreign private demand for U.S. assets will fluctuate -- witness the slowdown in purchases that precipitated the decline in the U.S. dollar in 2002 and 2003 -- rapid growth of world financial wealth will allow the proportion of U.S. assets held by foreigners to increase....

...Only one development could upset this optimistic prognosis: an end to the technological dynamism, openness to trade, and flexibility that have powered the U.S. economy. The biggest threat to U.S. hegemony, accordingly, stems not from the sentiments of foreign investors, but from protectionism and isolationism at home.

Ah the same famous American well-regulated financial markets, the ethical political system, and the flexibility that permitted Enron. Oh yeah, and that teeny, tiny national debt thing.

Yup, you're safe as houses. No worries.

Boy, you people just can't get over Enron, can you?

Social Security is a much bigger scam than that, and it's one that we're forced to invest in, but I don't hear you complaining about that. Of course, not being an American, perhaps you don't care. How much Enron stock did you own?

Europeans are fine ones to be lecturing about debt.

Not just Enron, Rand. There was also Worldcom, Lucent and several less well known cases. Some minor damage control was done, but the people and the culture responsible for these cases are still pretty much in control. HP is showing more of the same. It had the same CEO that used to run Lucent, who was curiously in Bush's Moon-Mars commission. Those people put the current administration in place and pushed the new California governor to the spot.

Social Security is not a scam. If it was, so would be Auto or Life Insurance. The scam is corporate interests want a finger on the Social Security pie, just like they wanted a finger in the securities pie before. The monster of capital needs more capital. These people managed to remove the old regulations that placed securities out of their reach before. They started back when Clinton was still in charge, by dropping the Glass-Steagall Act. Now they are digging for gold.

Regarding the USA's science and engineering advantage, I have to ask you, on what? Europe makes leading edge machine tools and design equipment. As does Japan. Airbus is beating Boeing. The Chinese are eating up the computer business.

So where is the science and engineering advantage in the commercial sector?

ITEM ONE

David Levey and Stuart Brown said, "Only one development could upset this optimistic prognosis: an end to the technological dynamism, openness to trade, and flexibility that have powered the U.S. economy."

So if I am reading this right, two world class economists, both PhD's, writing in Foreign Affairs magazine, say "...ONLY ONE DEVELOPMENT COULD..". They then state THREE (3) things that would cause this change.

1. an end to the technological dynamism

2. openness to trade

3. flexibility that have powered the U.S. economy

Those are three (3) different and distinct things, in and of themselves. Different ideas and actions, NOT one (1).

Now I am NOT economist, however, I can read a simple sentence, and glean the meaning, using the verbs, nouns and other parts of speech used to construct that sentence, and I can count to three (3).

Perhaps the problem in modern economics is world class economists who think three (3) items are one (1).

ITEM TWO

I am with Rand on the ENRON thing, I am sick of hearing how ENRON was somehow the fault of the government, and in general the people of the U.S. The people who stole that ENRON money and the ones from the telecoms, and now maybe Kirspy Kreme, were crooks. Plain and simple, they are crooks.

What I don't understand, is when the nay sayers are talking about all these corporate crooks no one ever says NORTEL.

Why NOT!!!???

Because NORTEL is from Canada. Nothing bad ever happens in Canada!! Eh?! BULL HOCKEY!!

John Roth and the board of directors at NORTEL, a Canadian company not a U.S. company, dismantled a company that then lost BILLIONS of dollars for its investors and threw THOUSANDS of employees out of work. While voting themselves bonuses and retirment plans. I have some personal experience here so don't write in and tell me I am wrong on this. My wife WAS an employee at NOTEL.

Some of her fellow employees, after being assured by the company that the initial drop was a fluke, lost ALL their retirement savings. They had invested ALL their retirement funds in NORTEL Stock. Now, that was not a smart way to invest, but they lost BECAUSE the upper echeon at NORTEL gutted the company. I am sure that Roth and the ex-board are NOT scurrying trying to figure out what kind of cat food to buy during retirement.

So Ian and the rest of you ENRON shouters out there, either add in some of these extra - U.S. companies who shafted their employees and investors, or just let it go. The U.S. IS NOT the only home of White Collar, Money Stealing, Lying Croked Bastards!!

BTW how much did any of this corporate theivery cost you Ian?? You seem awfully caught up in this for somone who is just a bystander.

Steve, you misread it. The ONE THING that could "upset this optimistic prognosis" was AN END TO those three things.

I can read a simple sentence...

I guess the sentence wasn't as simple as it looked...

Me? I never owned Enron stock. OTOH I used to work for Nortel :-(

Let's be clear, I didn't bring up Enron for any reason other than it was a poster child for the basic problem: that many of the American systems have a great deal of hidden and explicit institutional corruption, and even some allegedly leading academics have written papers saying that that's perfectly alright.

On the contrary, it isn't alright and corruption inevitably harms the economy.

And I see the same things happening in the EU. Currently it isn't as bad as it will get, it isn't as bad as in America yet, because the individual states still have a certain amount of power. For example I'm in the UK, which has better checks and balances than America; quite low limits on campaign donations and so forth. UK politics isn't exactly an open book, but it's way, way, *way* better than American politics.

As the EU consolidates corruption will increase more. With less representatives, it is easier to bribe or knock them down. Not to mention that by increasingly placing them away from their electorate, via distance or more layers, the representatives also get more susceptible to corruption.

The EU Commission and Council can be quite corrupt at times because of this. Jacques Santer's already went down for corruption. Signs of things to come.

At least for now the EU is a confederation rather than a federation.

I had been an investor in the US technology sector via mutual funds and directly in stocks since long before I came here (6 years ago).

At least as far as the technology sector goes, the dynamism never picked up again after the bubble burst. Actually that goes for the Dow and Nasdaq generally (aside from a period of about a year's growth when the Iraq war started). And with a currency that will have to gradually devalue so that the economy can compete with China, what reasons are there to invest in the US right now?

Why all this came to be I will leave up to your own interpretations. But I will say that as an investor I have certain other concerns that make US investments less attractive to me.

> It had the same CEO that used to run Lucent, who was curiously in Bush's Moon-Mars commission.
> Those people put the current administration in place and pushed the new California governor to the spot.

Under direction of the Illuminati, no doubt.

McGhee,

In FACT I did read it, I just REREAD it, and I retain my point. My blurb wasn't about whether those factors could or could not, would or would not. My issue was about simple counting.

They state,"...ONE THING..", then gave three examples.

As we say here in the south, that ain't good science.

Enron? Or Parmalat? Which was bigger?

Worldcom? Or TotalElf?

But is there a counterpart to the various EU Commission scandals that have repeatedly made the EU central governing body out to be corrupt to the core?

Yes, there's corruption here. But somehow the counterparts in the Euro-context seem to fall by the wayside.

I never said the top EU echelons were not every bit as corrupt as the ones in the USA. But this is not supposed to be a contest to see who is more corrupt. I merely point at crud that needs cleaning.

"We aren't doomed" REVISITED:

http://www.freeindiamedia.com/america/28_feb_05_america.htm

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Excerpts:

It is quite ironic: only a decade or so after the idea of the United States as an imperial power came to be accepted by both right and left, and people were actually able to talk openly about an American empire, it is showing multiple signs of its inability to continue. And indeed it is now possible to contemplate, and openly speculate about, its collapse.

The neocons in power in Washington these days, those who were delighted to talk about America as the sole empire in the world following the Soviet disintegration, will of course refuse to believe in any such collapse, just as they ignore the realities of the imperial war in Iraq. But I think it behooves us to examine seriously the ways in which the U.S. system is so drastically imperiling itself that it will cause not only the collapse of its worldwide empire but drastically alter the nation itself on the domestic front.

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Enron? Or Parmalat? Which was bigger?

Worldcom? Or TotalElf?

Enron and Worldcom are bigger particularly when you consider that combined at their respective peaks Enron and Worldcom were valued roughly a couple hundred billion more than they are now. Total on the other hand has risen in value despite the scandal.