Despite gloomy predictions that the United States economy would suffer a sharp decline in growth in 1999 and possibly fall into recession, the U.S. did quite well in the first quarter of this year. The job market is still favorable, inflation is at a bare one percent, consumer spending has outpaced expectations, the Dow Jones index is moving toward an incredible 10,000 points and unions are negotiating contracts with a decent package of wage increases and benefits — and this in the ninth year of a sustained economic recovery.

Meanwhile, unemployment, poverty and hunger plague much of the rest of the world, particularly in developing nations where capital investment, once abundant, has dried up. Their economic growth last year was only 2 percent, about half its 1997 level. The social and political turmoil that has gripped Indonesia threatens to spread elsewhere in East Asia and Latin America. The Russian economy is still in free fall, and Japan remains in the throes of recession. The United States and Europe are the only two regions in the world where there is steady and healthy economic growth. But for how long?

It is true that the U.S. has not been shielded from economic turmoil around the globe. Farmers have suffered by the cancellation of orders for meat, fruit and grain from abroad. So have manufacturers who depend on export trade. And the steel industry has suffered because of the dumping of cheap Japanese steel on the American market. But these negative factors, plus an expanding unfavorable balance of trade, have not inflicted serious damage on what still is a robust economy.

Interestingly, it may be that the United States.has been benefitting from the economic woes that so many countries are now enduring. Big-time investors and speculators, having fled Thailand, Indonesia, Brazil, Russia and other countries where they had formerly put their money, keep on looking for good markets for secure, profitable investment. And what better market than the U.S.? That may be why there is sufficient capital available to our industries for expansion and technological development. It may also explain the unprecedented rise in the stock market.

Traditional economists are perplexed that even in a tight economy with low unemployment, inflation has not risen considerably, but remains at a record low of 1 percent. Here too, the economic misery of developing countries has boosted our economy. A flood of low-priced goods and services from these countries has benefitted our consumers, preventing steep price increases that would have been almost inevitable without foreign competition.

No one can predict that the U.S. economy will remain so strong indefinitely. The global market is still in a volatile state and will remain so, at least for the foreseeable future. There are no controls over international investors and free-wheeling speculators who can shift tens of billions of dollars from country to country with a few taps on a computer keyboard.

American workers have made some headway in obtaining long-delayed wage increases, but they still have not yet caught up to their earnings of two decades ago. What most worry about is the insecurity of their jobs, even in good times, and their fear about the economy turning sour. They are also troubled about the uncertainties of the global job market, where they may have to compete with workers who earn a fraction of their wages.

While the United States is still a prosperous island in a world that is suffering severe economic dislocations, there is no guarantee how much longer we can remain immune. Predictions by mainstream economists and political pundits, whether optimistic or pessimistic, have generally been unreliable. The most frightening aspect of the situation is that there is no realistic plan to deal with the expanding process of globalization, and it all appears out of control.

Whether you agree or disagree with this article, we welcome your opinions. You write it and we'll print it in our next issue. — Ed.