"Perspective on the Current Problems"
Amidst all these problems in the United States, it’s worth recalling that for much of the world these are actually the best of times:
World poverty is falling. Between 1970 and 2006, the global poverty rate has been cut by nearly three quarters. The percentage of the world population living on less than $1 a day (in PPP-adjusted 2000 dollars) went from 26.8% in 1970 to 5.4% in 2006 (Figure 1).
Even as the developed world remains mired in recession, China is growing like gangbusters. And the Economist points out that it’s not just China:
Powerful structural factors will continue to reinforce the relative strength of the emerging world. Jonathan Anderson of UBS points out that even if you exclude China and India, emerging economies grew some four percentage points faster than rich economies during the recession, about the same growth gap that existed before the crisis. Some emerging economies, especially those that relied on foreign debt finance, will face prolonged problems. The World Bank argues in a new report that tighter financial conditions, thanks to tougher regulation and higher risk aversion, could reduce developing countries’ trend growth by 0.2-0.7 percentage points over the next five to seven years. Even so, the hit to potential growth in the rich world is likely to be bigger.
American politics is, naturally, going to remain focused primarily on the problems of Americans. But ultimately the problems of poor people in the developing world are much more severe than any of our problems, and growth in poor countries is extremely good news.