"The Economist" picks up on the transformation theme

This weeks "Economist" has a "14-page report on rebalancing the American economy". The article mirrors the thought of many including the post here yesterday as it reiterates that "this was no ordinary recesssion" and one from which "some of those jobs will come back but many of them will not".

The article suggests that a major transformation of the U.S. economy is essential. To quote, "America's economy will undergo one of its biggest transformations in decades. The macroeconomic shift from debt and consumption to savings and exports will bring microeconomic changes too: different lifestyles, and different jobs in different places. This special report will explain that transformation, and explain why it will be tricky."

The report is full of facts and opinions, at times repetitive and at times familiar, but overall it is a provocative piece of reporting relative to anything else published. One thing, perhaps uniquely American, that the report misses is the political and social ramifications of the breakdown of the old expected class divisions, or maybe class expectations is a better expression, as discussed here yesterday. Maybe a British publication doesn't quite see the significance of that, but overall it hits most targets and the idea of structural change is more or less synonomous with their rebalancing. It closes by saying, "Rebalancing may be highly desirable, but that does not mean that it is inevitable. It took a long time for America to reach the debt-laden state that brought on the crisis. It will take time, and lots of luck, for it to recover in full."