Opinion

This year proved positive for American economics

As the New Year approaches, talk turns toward the future. For many, pessimism reigns supreme. Even so, there are some bright spots: the world economy, the American economy in particular, has had a year worth celebrating. The future is less certain, but still not as worrisome as it may appear.

This has been a year to remember, which is remarkable considering how few people realize it now. Though it has been overshadowed by political events, the economy is at one of the strongest points it has ever been. In the words of Andy Bernard from “The Office,” “I wish there was a way to know you were in the good old days before you actually left them.”

Make no mistake: these are the good old days and this will be a year to remember for the American economy. In the same way that we talk about how 2005 was a joyous period before the last recession, or how we refer to the Roaring Twenties before the Great Depression, if there is another recession on the horizon, then we will talk about 2015 in the same way.

Despite a dip in August and September, this year, the S&P 500 has reached its highest point ever and is still going strong. The same is true of both the Dow Jones Industrial Average and the NASDAQ as a whole. Unemployment is at 5.5 percent and is dropping consistently. Low gas prices are boosting the economy, even if they do cause headaches for producers. All signs point to these optimistic trends continuing, at least in the short term.

Certainly, good times can’t last forever. The discussion has turned to what will cause the next downturn. The most obvious possibility is debt, similar to how the last recession was caused by the bursting of the housing bubble. The Federal Reserve is lined up to raise interest rates in December, which could make lending more attractive and in turn cause others to upwardly adjust the interest rates they expect. This has a slim potential to spell disaster. The rate increase is probably not going to be much more than a quarter of a percent or so, which means that any disasters would only, at best, be accelerated by this action, not created because of it.

A more likely possibility is that any new calamities will come from outside America. This year has revealed deep weaknesses at the heart of the world economy. China, for instance, is no longer seen as the standard-bearer of growth it once was. Similarly, the European Union is showing political cracks that could create economic problems in the future.

Overall, the risks are not as large as they may appear. It is easy to be cynical because there will always be problems to validate our trepidation, but talk of being “overdue” for another recession is a waste of time. Economic downturns are not set to any clock. Calamity could strike tomorrow or in 10 years, but that doesn’t mean it has a deterministic schedule.

Andrew Langen is a junior majoring in economics and math.

December 6, 2015

Reporters

Andrew Langen


Around the Web
  • Miami Herald
  • UM News
  • HurricaneSports

The Atlantic Coast Conference Baseball Championship schedule is set. The No. 4 seed Miami Hurricanes ...

The first regular season of Gino DiMare’s head-coaching era ended Saturday at Mark Light Field. But ...

The Miami Hurricanes’ hopes for hosting an NCAA regional were damaged a bit on Friday night by a 12- ...

It took a long time for Dewan Hernandez to reach a point of acceptance for what happened to his juni ...

The life of a fullback isn’t always glamorous, even 15 years ago before the position was essentially ...

The University of Miami is shaping the future of education by using innovative approaches that drive ...

Six short films created by University of Miami film students will be screened in Los Angeles this we ...

Researchers from 16 Latin American and Caribbean countries, hosted by the Institute for the Advanced ...

Two University of Miami a cappella groups, Tufaan and BisCaydence, celebrated big wins in different ...

After Alabama’s governor signed into law the most-stringent anti-abortion bill in the nation, UM exp ...

The Canes are the top team in Pool D, joined by No. 5 North Carolina and No. 9 Virginia. ...

The matchups are set for the NCAA Singles Championship and NCAA Doubles Championship at the USTA Nat ...

Chris McMahon struck out six over five shutout innings to earn his first win since April 6. ...

Miami's Second Varsity Four earned a bronze medal at the 2019 ACC Rowing Championships Saturday ...

Estela Perez-Somarriba of the Miami women's tennis team is the ITA Southeast Region Arthur Ashe ...

TMH Twitter
About TMH

The Miami Hurricane is the student newspaper of the University of Miami in Coral Gables, Fla. The newspaper is edited and produced by undergraduate students at UM and is published weekly in print on Tuesdays during the regular academic year.