Economy better than old days

But still has some of the same weaknesses, study shows

COLUMBUS, Ohio (RWN) - The economy of the Islamic States of America is better than it was in the days immediately after the transition, but still shows some of the same weaknesses, a study released today said.

"We have a more stable economy," the study's author, Wayne El-Rakim wrote, "but that does not mean we have a significantly stronger economy."

The country has moved from a technology exporter to a technology importer and mainly exports raw materials.

In the days after the transition, the economy was fueled by speculation in the real estate market and betting on which cities would be hurt worst in the civil war between the Islamic States and the breakaway Bible Belt.

"The fundamental problems of the transition economy were laid well before the transition," wrote El-Rakim, an economics professor at Ohio State University. "The war in Iraq, combined with the massive recovery costs after hurricanes Katrina and Rita in 2005, drove the deficit to record levels. A bubble burst in the biotechnology industry after three popular, expensive-to-research treatments were found to be dangerous, and the bottom fell out of the stock market. Add that to the government's inability - or refusal - to regulate the oil companies, which resulted in wallet-breaking natural gas prices during the winters of 2006, 2007 and 2008, and it's easy to see why the economy wasn't stable."

With energy needs assured by the Islamic States in the Middle East, and an army that's not fighting abroad, the economy of the country is in better shape.

"But we still have problems," El-Rakim said. "Interest rates have been too low to try and keep the populace happy and able to purchase homes, and it's caused some inflation, ironically enough, in the housing market. And we've become a net importer, rather than a net exporter."

The import-export imbalance isn't an immediate economic problem as much as it is an intellectual one, El-Rakim said.

"We've always had a trade imbalance," he said. "Look at the old regime's trade with China or Japan. But America has always been an exporter of innovation. The last days of the old regime were days of great innovation. That spirit has been stifled, for a variety of reasons."

So, while the economy is stable and in fair shape, El-Rakim said, "it's like healthy body with a disease inside, slowly eating away."


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