Kevin Drum waxes gloomy about the economic outlook for 2012, concluding “2012 may be a good year compared to 2011, but that’s grading on a curve.”
The thing is, economic growth is all about grading on a curve. Everyone knows the economy was terrible in 2009 and great in 1999 but I promise you that the United States was a richer more prosperous society at the depth of the recession than at the height of the tech boom:
By the same token, the only way to make the Chinese economy look good over the past decade is to grade on a curve. For all their impressive growth, China is still much poorer than Portugal, and nobody’s pointing to the Portugese growth miracle. Rapid growth, however, is nothing more than improvement. To say that I’m anticipating decent growth in 2012 is just to say that things will be better in twelve months than they are today, not that things will be great in twelve months in some absolute sense.