Standalone Economy Part Two

Strong is good. Weak is ungood.

   Evidence is piling up that while the U.S. economy is "expanding at a solid pace," as the Federal Reserve put it, much of the rest of the world is struggling. Even with a sharp drop in oil prices, "the world economic outlook is still subdued," according to the International Monetary Fund. Last week, the IMF revised downward its forecast for global growth, despite cheaper oil and faster U.S. growth.
   And in the financial sector, while a strong dollar may be a boon for travelers and tourists, the reverse is true for American exporters. Why? Because while a "strong" dollar enables American tourists to buy more stuff while overseas, U.S. firms that export stuff suffer because that same "strong" dollar means their prices are relatively higher.
   For the coming year, the IMF boosted its forecast for American economic growth to 3.6 percent, but cut its forecast for euro-area countries down to 1.2 percent. And for Japan, which fell into recession in the third quarter, the IMF pegged its forecast at just 0.6 percent for the coming year.
   In the U.S., the latest survey from the Fed showed "strong job gains and a lower unemployment rate," adding that household spending "is rising moderately" as "declines in energy prices have boosted household purchasing power." Which is to say that as gasoline prices drop to the neighborhood of $2 a gallon, families can drive further, take longer vacations and buy more stuff.
   However, even after unemployment and inflation rates stabilize at target levels, the Fed noted that it will keep interest rates low "for some time."
   What does that mean? It translates to this: The U.S. is doing well, but troublesome economic signals in the rest of the world could well drag U.S. prosperity off the high road and into a ditch.
   As noted here a month ago, "Superpatriots will wave the flag and insist that they don't need anyone else in order to prosper. Close the borders, they say, and we'll bootstrap ourselves to prosperity." No nation in a modern economy can stand alone. International trade and cross-border movement means every nation is financial and economically intertwined.
   And even if America does maintain its prosperity as other nations suffer, that can only mean an increase in workers coming to America looking for jobs. Why do they come? This is where the jobs are, especially as those already here refuse to take jobs they consider menial and somehow "beneath them."
   But there will be people willing to take those jobs, even if it means leaving their homes, following the guiding light of the "lamp beside the golden door." Moral: Don't shut the door to workers who are needed.
   And even if the American economy does stumble, the homeless and tempest-tossed may still come, because finding work in a stumbling economy is better than trying to find a job in an economy that has fallen flat.