For the time being, the United States has escaped a recession, as has Japan, the world’s third largest economy as measured by gross domestic product, just behind China. The recovery in the U.S. remains threatened by events tied to the fiscal cliff. The extent of the possible economic drag is anyone’s guess. Housing and consumer confidence have come back so strongly that year’s end may be only a bump in the American road.
The solution to the European problem seems to be to talk it to death. The U.S. has not offered to outright buy sovereign debt of troubled nations there. Neither has China, although it has dropped hints. No other developed nations, including Australia or Canada, have made even a modest gesture. And not one major corporation based in any of these developed countries has offered to move jobs to Europe. Most companies are hardly willing to commit to keeping their current global head counts at present levels.
Europe may pull the balance of the world’s economy down. And it may be that this will happen because no government or company from outside was willing to throw it a lifeline.
Douglas A. McIntyre
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