McKinsey Pines For World War Three

In a textbook example of not seeing the forest for the trees, the McKinsey Global Institute, a research arm of the global management consulting firm, dourly announced last week that the U.S. economy is slowing down and has been for decades. They fear (in vast detail!) that we as a nation have lost our productivity mojo and without some drastic change our economic growth will be mediocre from here on. Maybe so. But if it’s so, that’s not because of any systemic management error or government policy or even because of declining population in certain key markets. It’s because we haven’t yet had World War Three.
Last week’s MGI paper makes the point that historical U.S. economic growth has been around 1.3% annually, but starting in 1950 the United States was able to increase economic growth dramatically to an average of around 3.8% annually up until the Great Recession of 2008. Which rate is normal ask the McKinseys? And if we’ve lost whatever it was that made productivity soar in 1950 and after, are we doomed as a nation to low growth and declining greatness from here on?

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