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The Middle Class Revolution in Emerging Markets—Antidote for America’s Sick Economy?

Photo Credit: China Mike

Let’s face it—our economy is sick.  With official unemployment hovering close to 10% and GDP growth of around 2%, the United States is barely creating enough jobs for new entrants into the job market.  And let’s not forget about the 8 million jobs that were lost during the Great Recession.  Those jobs have evaporated.  The casualties can be found in almost every neighborhood across the United States, from shuttered factories in Ohio to the eerie silence of abandoned construction lots in Nevada.

As we further survey the landscape of today’s American economy, we find a nation continuing to face unpleasant realities and suffering from chronic ailments.  The housing market is a mess.  Although the latest numbers show an easing of the foreclose rate, the reality behind the numbers may have more to do with the muddled foreclosure process that only serves to prolong the housing crisis.  Housing prices are now at their lowest level since the crisis began in 2006.  This makes Americans feel poor and hinders consumer confidence.  Weak consumer confidence impedes hiring by the private sector.  The vicious cycle continues.

Oh, and did we mention the looming financial crisis among state and local governments?  States such as California, New York and Illinois are at severe risk to default on their loans.  They simply do not have the money to continue paying for programs they cannot afford.  States cannot print money and Uncle Sam cannot scratch any more checks to the states without further adding to our national debt.  The federal government is on the brink of facing a “sudden fiscal crisis” as warned this week by the Congressional Budget Office’s latest study.  If the United States continues with its profligate spending and Congress maintains its adolescent behavior, investors will eventually lose faith in our system and we could see a Greek-style crisis. 

United States = Greece?  Theoretically, yes, it is possible that we are on the precipice of a financial crisis similar to Europe and risk sustained economic misery.  But it doesn’t have to be that way.  In fact, we at Atlanta Pacific Group envision a United States in the long-term that is even stronger and more prosperous than the one our parents and grandparents enjoyed.  According to former Prime Minister of the United Kingdom, Gordon Brown, in the interview posted below, “there are choices available to us.”  We have the power to determine our own future, and Mr. Brown discusses a growth plan for the next 10 years that can pull us out of our economic stagnation. 

In the interview, he explains that the biggest “driver of growth over the next 10 years is going to be the growth of middle class consumers in Asia, Brazil, Russia and elsewhere.”  And he goes on to say that those “companies that are export oriented, that see the future, will do very well.”  But we must make investments in education and develop our people so that America remains the leader in innovation and technology.  We must also promote international travel and study abroad opportunities for young people so that they main gain cultural insight and knowledge of emerging markets. 

It is through these means that we will have future leaders of science and business that will have the knowledge and education to develop products and services for the world economy.  America has a choice: Will we rise to the challenge and invest in our future to become a great export nation again or will we bury our heads in the sand and become isolationist, thereby accepting mediocrity and decline?  We at Atlanta Pacific Group believe in the future of America and will do our part to reinvigorate our economy and spur the next great round of American prosperity.

For more discussion about the growth of consumer markets overseas and the opportunities they present for the United States, please check out this insightful Charlie Rose interview with Gordon Brown:

http://www.charlierose.com/view/interview/11343

Questions or comments? Please email Michael Fenton at mfenton@atlantapacificgroup.com

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