Saturday, February 13, 2016

Understanding Why America Is No Longer, and Perhaps Can Never Be, As Great As It Was

People either go on about how great America is, or they lament that America is not as great as it used to be.  In the first case, people typically ignore reality.  In the second case, they often ignore fundamental factors. 

When people say that America is great, they are either referring to the strength of our military (which is a fact), the size of our economy (which is a fact), or the things America stands for (which is also a fact, at least in theory).  

However, while we unquestionably have a strong military it does not serve its purpose of protecting American interests because our enemies are not cowed by our might nor do we have the political willingness or financial ability to send our military everywhere it is needed to protect our interests.  Thus we are not really as strong as our size and might would make it appear.  American strength is somewhat of a facade.

Our economy is also the largest in the world, even though the Chinese have been rapidly catching up with us.   We also have the most stable and strongest domestic economy in the world.  But our corporations, and as a result our financial well-being, have become so interconnected with the stability of the rest of the world economy that our economy is not as strong/stable as it was.  

Further, because of stagnant wages and loss of middle-class jobs, financial inequality in America has soared and become damaging and our middle class, which was the bedrock of our consumer economy, has been eviscerated.  The American people are hurting even as its corporations are prospering.  Then there’s the fact that the rest of the world, in particular China, holds most of the debt that we have incurred spending more than we take in, especially as a result of the disastrous Bush II tax cuts and the Iraq war.

As to American exceptionalism being a function of our ideals, as I’ve noted in prior posts, this exceptionalism is mostly a myth (see “American Exceptionalism - A Myth Exposed”).  America has never lived up to the ideals expressed in the Declaration of Independence or the 14th Amendment.

On the other hand, when people speak of America not being as great as it was, they often speak of America not being respected because our military needs to be stronger.  But the lack of respect has little to do with the strength of our military.  It is more because America has not for many years had the moral authority that it once had, even if it was based on an illusion.  Also, as noted above, our guerrilla enemies are not scared of our military prowess.

When they speak of our economy being weaker, they do focus on the issues I raised above, but the underlying context is not addressed.  The economy is not as great as it was because the world has changed and America has changed.  

The world has changed because 3rd world countries are no longer just producers of raw material (with the glaring exception of most of Africa).  And so they produce products that would pose competitive problems for U.S. production even without the free market trade agreements that have proliferated at the behest of both economists and corporations.  Unless the U.S. would enact high protective trade barriers to keep many foreign products out of the U.S.  But that would create a different problem … the combination of not having inexpensive foreign-produced items to purchase and a reasonable growth in U.S. workers’ wages would lead to high inflation rates that would damage our economy.  (Also, the inevitable trade war fight that would ensue would harm our exports.)

But America has changed in significant ways as well.  During the first stage of explosive growth in our economy, much of the country was still unsettled frontier leaving room for  a huge expansion of economic activity accompanied by huge increases in population through immigration from all parts of the world.  During the second stage, from the turn of the 20th century into the initial post-WWII period, America was unequaled because the rest of the world’s developed economies were minuscule by comparison and China and most of the non-European world were undeveloped, not even developing.

None of that is true today.  And so, because of all of these factors, the way often cited for the American economy to regain its strength is through American creativity or innovation.  And many think we’ve done just that.  

But while we have seen lots of American technological innovation in the last few decades, it has only fueled American corporate profits, not worker wealth, since the products are all produced overseas, and so the economy has not really been strengthened.  Only if those jobs were brought back would it make a real difference.  

As for creativity, since the creation of the computer chip, there really hasn’t been much creativity, just innovation.  Even nanotechnology is innovation, not creativity.  But regardless, unless creativity resulted in good, middle-class jobs for U.S. workers, it would not help strengthen our economy.

But this discussion begs the question, “Does America have to be great?”  Economically, given the size of our population and the standard of living that we were used to 40 years ago and would like to reacquire, that answer is unfortunately, yes.

Thus, bottom line, figuring out how to bring American jobs back or create new ones without creating other major economic disruptions such as high inflation is a task that corporations and workers/unions need to sit down at the table to discuss, probably at the behest of government.  One point seems clear.  To significantly increase the number of American middle-class jobs, wages will have to be lower than they once were, but that would still result in a benefit for both workers and the economy.

The only other way that America will either be or viewed as the great nation it once was economically is if much of the rest of the world implodes and the U.S. finds a way of disconnecting itself from that calamity.  I think recent history shows that it would be prudent to prepare for that eventuality.

Militarily, America certainly needs to be strong.  But what that means in the context of current or projected international conflicts has been a subject of some debate.  Many argue that we need a leaner and more flexible military rather than an updated version of the current dinosaur.

As for being great from a moral authority perspective, while there is no need to be great, it certainly would be very beneficial from many perspectives for the U.S. to regain its moral authority.  President Obama certainly tried to move in that direction in the beginning of his first term.    But to regain that authority, much would have to change both within this country as well as how it engages the rest of the world. 

If the advice I have given in many of my posts on this site were followed, it would go a long way to regaining our moral authority.  But that, unfortunately, is highly unlikely because to bring about that change means changing who holds power in Washington … ending the control that corporate America and the wealthy have over our policies.  Although Bernie Sanders talks of such a revolution, achieving it is another matter … and he is the only candidate talking about it.

As has been the case in many of my posts, the final analysis is that we survive in an outdated, broken system and cannot be what we need to be in the future without major changes in our political, social, and economic structure.