Contrary to reports in the popular press, neither Chinese stock market swings nor the sub-prime mortgage market are likely to stop the American expansion.
Will there be more foreclosures, bankruptcies and sad stories? Yes, yes and yes. Will it bring down the current expansion? Unlikely – the diverse and flexible nature of the $13 trillion U.S. economy gives it a depth and sturdiness that is vastly under appreciated.
See this good column from our friend Ashby Foote on the sturdiness of the U.S. economy.