Following the first installment of a year-end interview on the global outlook, I turn in the second installment to the domestic economy.
Part 2. The US Economy
Q – As economic adviser to President Clinton, you oversaw one of the most prosperous periods in recent U.S. history. How do you assess the economic strategy of the Obama administration? What would you have done differently were you an adviser?
I am posting in three parts the results of an interview on the year-end outlook. (The questions come from Chosun Daily, leading Korean newspaper. The interview is to be published there in January.)
Part 1. The Global Economy in 2015
Q: Around this time next year, which countries do you predict will be the winners, and which will be the losers of the year?
A: The big gainers will be oil-importing economies, particularly China, India and other Asian countries.
Russia will be the big loser. It has now become clear to all how fragile and vulnerable the Russian economy was, especially with respect to world oil prices. It is easy to forget that commentators a few months ago were declaring Russia less vulnerable to Ukraine-related sanctions than Western Europe. Before that, they were judging the $50 billion 2014 winter Olympics in Sochi a triumph.
This morning’s US employment report shows that July was the 34th consecutive month of job increases. Earlier in the week, the Commerce Department report showed that the 2nd quarter was the 16th consecutive quarter of positive GDP growth. Of course, the growth rates in employment and income have not been anywhere near as strong as we would like, nor as strong as they could be if we had a more intelligent fiscal policy in Washington. But the US economy is doing much better than what most other industrialized countries have been experiencing. Many European countries haven’t even recovered from the Great Recession, with GDPs currently still below their peaks of six years ago.