The End of American Capitalism? Please

We still have an amazingly strong economy.


I was just on MSNBC, and the anchor asked whether all this turmoil marks the end of American capitalism. Pretty sure it doesn't. As I wrote the other day:

More evidence of the truth of this analogy comes from the World Economic Forum—the Davos people—who for the second straight year judged the United States as possessing the most competitive economy in the world. (Then came Switzerland, Denmark, Sweden, and Singapore.) Among America's strengths: innovation, flexible labor markets, and higher education. Not surprisingly, though, our institutions ranked a dismal 29th. (Thanks, Wall Street.)

The WEF also listed what our biggest problems are. Check out these top three, in descending order: tax rates, tax regulation, and inefficient government bureaucracy. That's right. The horrible handiwork of Uncle Sam is our big "problemo."...

And remember, the core U.S. economy is in far better shape than it was in the 1970s. Productivity, the key measure of an economy's strength, consistently grew at less than 2 percent in the 1970s and stayed weak until the tax cuts, deregulation, inflation fighting, and corporate restructuring of the 1980s blossomed into the tech and productivity boom on the 1990s and beyond. Productivity has averaged about 2½ percent since 1995 and is now running closer to 3 percent year over year, including 4.3 percent in the second quarter. So, yeah, the Main Street fundamentals are sound. It's Wall Street and Washington that are the problems.