"The 21st century economy" (Cover Story, Aug. 24-31) reinforces the idea that America has entered the New Economy. Our era, however, seems eerily similar to the late 1980s--when the "Massachusetts Miracle" was announced. America in 1998 appears to be at a cyclical high point. Come a slowdown or recession, some Americans may be claiming "depression," as they did during the 1990-91 recession.

America does have strengths: low unemployment, steady growth, and overall wage growth. Nonetheless, the long-term trends of slow growth and high inequality remain. Both are no better than in the 1980s. In fact, inequality has increased more under Clinton than under Reagan.

Japan appears to be entering a financial situation similar to the U.S. in the 1930s, while the U.S. takes Britain's position (its '30s depression remained mild). Japan and Asia maintain fundamental strengths in production, while America's production strength diminishes (1988 saw record trade deficits with both Japan and China). Is this a historical coincidence or a harbinger of America's true future role in the New World Economy?

Drew Millet

Vestal, N.Y.

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