THE US ECONOMY

THE US ECONOMY

I/ A VERY DYNAMIC ECONOMY

US were not predestined to be that dynamic, actually in the 18th century it was less than Europe. Also there was a big trauma which delayed the industrialisation: the Civil War (1881-1865). It was not a given that US will become such a dynamic and healthy country.

Here the factors that makes US so dynamic:

US RESILIENCE

Resilience is the capacity to bounce back from difficulties.

Ex: 2008 crisis, US bounce back in few years (even if it faces a lot), whereas in Europe were still confronting effects.

Risks:

Lot and main contractions (economy that slow down)

Ex: Stock Exchange Crash 1929, which led to Great Depression

Threaten by globalization: lot a factory jobs have gone to China, Mexico, etc.

Trump: in economic term because of his volatility of his decisions, his election actually brought the stock market down for few months

Advantages: that others country doesn’t have

Immense territory : almost a size of a continent in which there is an abundance of every resources

Abundant labour supply: most thanks to immigration that has made what US are today (because it’s a cheap force) to produce a lot, contrary to Europe were labour force is more expensive.

Today US are the leader of the industrial countries: its GDP has been grown by 3% every year, there is a very low unemployment rate 3.5% (6% last year) whereas in France it’s almost 10%.

Trump is right: US is doing very well.

BIG FLEXIBLE FIRMS

Flexibility is a real advantage, it’s easier to react.

Fortune global 500 / Fortune 500: most of these companies are super huge ones, multinational, with an annual revenue in millions dollars every year, they are very flexible in terms of the workers they have: when there is a slowdown they simply fire worker (not very good system for workers but useful for companies).

The most powerful are located in the retail sector, and recently healthcare and insurance companies: there was a shift since few years; it’s no longer the traditional industries.

Wal-Mart (retail)

Berkshire Hathaway (conglomerate holding)

Apple (high-tech)

Exxon Mobil (oil)

McKesson (pharmaceuticals)

II/ THE PRINCIPLES OF INDUSTRIAL CAPITALISM

Capitalism mean:

No government interference: if a company is struggling, the government isn’t helping (not always true), companies have to compete and the best win.

Market determines price of goods: as the compete they are going to low the prices

Government regulates and protects: protect who? Worker or companies?

Freedom of enterprise: free to create their companies they want

A part of the explication why the US are such a success

SEMI-GODS? AMERICAN ENTREPRENEURS

Calvin Coolidge, 30th US President: “The chief business of Americans is business. They are profoundly concerned with producing, buying,

...