"So you had a situation in which Asia was focused on exporting, saving, investing, and the U.S. focus was on consumption. The driver of the U.S. economy was consume, consume, consume. And all of our incentives in the U.S. were aimed at consuming... I think there's going to be a huge rebalancing in which more of what Americans consume is going to be produced in North America. And at the same time, Asia is going to have to find a way to allow and to enable its own consumers to begin consuming so that Asia can achieve growth through the growth of its domestic economy. We're in a crisis right now. And it's painful, and it's going to get more painful. But the good news is that, at least for the United States, we're going to have a manufacturing renaissance. Jobs in production are going to come back to the U.S. because the only way for the U.S. to achieve sustainable, long-term growth is for the U.S. to produce more here, export more, relatively, while Asia imports more relatively. So I see this as the beginning of a long-needed shift in the base of the U.S. economy."
This is as insightful an observation as I've seen recently, but there is still no explanation of how limited natural resources can support "sustainable, long-term growth" driven by increasing consumption around the world. The incoming administration's plans for a green buildup are commendable, but I wonder if they have any modeling or calculations that tie resource productivity to economic growth.
The other interesting point here is the likelihood that production can't be concentrated in one part of the world, and that local production (and more balanced trade) might come back. One of our simulation studies suggested this outcome in the face of resource constraints in the future, but it may well happen earlier due to more immediate economic constraints.