First there was the G-7. Then came the G-8. But this week’s meeting by leaders of the G-20 makes it clear that in order to solve the world’s problems, it will take more than efforts by the U.S., Western Europe, Japan and Russia. Together, the G-20 nations account for approximately 85% of world economic activity.
And on the issue of economic recovery, what country will lead the way? Maybe it’s China this time. After five months of contraction, the Chinese reported that manufacturing activity rose in March. Since so much of China’s output is consumed by the U.S., Western Europe and other developed countries, the news out of China demonstrates that somebody somewhere is buying again.
Personally, I think when we all look back on the Great Recession of 2007-2008, we’ll discover it ended in December, 2008—about the same time the U.S. Government declared that we had been in a recession for 12 months! Of course, with unemployment in the U.S. at a 26-year high, it will take years before a growing economy can chip away at unemployment that currently exceeds 5 million.