Yes, we did restructure - but we got a huge help from the currency. As that advantage recedes, foreign companies are learning the lessons from the restructuring of American industry - just as U.S. companies themselves learned from the Japanese in an earlier era. Daimler Benz, Germany's biggest manufacturer, says it plans to learn from these management skills when it buys the company. Perhaps most important, the expectations have been raised so high that it will be difficult for corporate America not to disappoint. The collective balance sheet of America's biggest companies is in solid shape.
Profitability is even more impressive.
Profit margins, lifted by the long economic expansion and tight control on labor costs, have also risen to levels last seen in the 1960s. Unusually, they have continued to grow in the late years of this economic expansion, though at a slower pace. American companies have continued to generate a far higher return on their investments than have rivals in countries like Germany and Japan. For a start, the rapid rise in profits has been flattered by the falling interest bills and low tax rates. Even before this year's slowdown, the rate of profit growth had fallen to 8-10 percent.