The Decline of America
Article Tools
-
18
Liked it 
Subscribe to RSS
How the American "Empire" collapsed.
It begins with a penchant for exploitation; I have to pay Americans $X by law, I can pay illegal aliens 1/2X and they can’t complain.
It continues with; I have to pay expensive utilities, taxes, transportation, I can avoid this by moving the factory to another country.
It persists with; I can sell these goods in America for ten times what they cost to manufacture.
It ends with Americans not buying the goods, the factory being taken over by the host government, and the raw profit, dwindling to less than what it had been when Americans worked in the factory in America.
The term “Recession” may be a far more generous description of the fall of the American empire. The likelihood of America going into a depression and taking parts of Europe with it, is not beyond contemplation. Too many mistakes at the same time can turn a misfortune into a catastrophe.
The “migration” of manufacturing to Third World countries tosses a large segment of the American population into poverty. Not all Americans are highly educated and skilled professionals, hence there needs to be a large number of blue collar jobs.
That a Cambodian works for 3c a day should not be factored into the equation, for that Cambodian can not buy the goods he manufactures. Americans, who no longer have jobs, can not buy the goods either.
Third World countries buy from China, a nation America assisted in producing goods so much cheaper. China, India, and other so-called “large markets” have gained the expertise and need no longer depend on American products, American factories, or American know-how creating their own, cheaper and often better.
Cheaper, because all costs, from labour to utilities are less, and without high taxes, sell for less.
This American microwave may sell for $300, this Chinese product sells for $200. It is the same product. The American manufacturer opened a factory in China, trained the workers, used local materials, and then, when the lease was up, the factory was taken over by the Chinese.
The Chinese received a “free” factory, “free” trained workers, and “free” technology. Recognising the vast “Third World” market, China did not seek to sell its goods to France but to Cameroon, not to Germany, but to Trinidad, and entrepreneurs from all over the world have been invited to China to become “middle men”.
America has found itself with merchandise that gathers dust on shelves, because when a consumer’s main expenses are food and fuel, one wears last year’s shoes, doesn’t buy that new flat screen T.V., and looks for bargains.
The first error America made was in moving production overseas. That error could of been addressed by reopening factories in America under a different set of rules. Letting workers become shareholders, moving to four day weeks, or double shifts, a trim management structure, etc. This would pump money into a community, and keep it there.
Associated businesses, i.e. those which produce the raw materials and components for the product would maintain viability, as well as all the random businesses which serve the worker and the factory, be they diners or bars, be they pharmacies or taxis, and the American economy would benefit.
This was never done, and although it will be at some future date, the time between now and then will see America dropping to the economic level of a nation like Mexico while India and China replace it. If there was no war in Iraq which eats money and produces nothing, the possibility of moving the “now” and “then” closer in time, offers hope.
However, whenever the war ends, the returning soldiers will find no jobs, no homes, and like a large segment of those who fought in Viet Nam, be “unnecessary.”
America’s wealth had a basis. Americans were innovative and productive. After World War II, where the rest of the world was struggling to rebuild, America was churning out products. After the halcyon days of the 1950s, Japan was able to gain a foothold due to American help, and went on to produce with a vengeance. South Korea joined Japan in American investment, so two economic powers were produced that later would challenge America’s market share. Europe returned to high productivity by the 60s, America gained another challenger.
The shortsighted policy of finding “cheaper” places to manufacture and a ‘cheaper’ workforce has proven quite expensive and has resulted in the disaster America now faces.
20 Comments
I believe that America is really facing a financial problem because of the wars Americans went through. Great article. God Bless You!
I hope you will also visit some of my sites.
Great article!
Thank you very much, I was a bit hesitant to write this as it
may be found uncomplementary to America; but it is factual.
This is nothing but drivel and completely ridiculous. I am not suggesting the USA does not face challenges. However, your solutions are sophomoric at best.
What should we become? The European Union? I think not…
Certainly not! You miss the point. If America
had not shipped so much of its production overseas
than it’s economy would dwarf others.
The factories would be producing, more jobs than
takers, and the workers pouring money into the
economy.
Simply put; if GE closes the factory that builds
microwave ovens in America and opens one in China,
all those people who worked at that factory have
no jobs, no money, and the town in which that
factory was dies.
The chap who ran the bar, the Mom & Pop who ran
the grocery, the little diner, they all die when
the factory dies.
Compound this with China ending GE’s lease, taking
over the factory and producing Microwave Ovens with
some other name besides GE.
These ovens sell all over the world for less than a
GE oven. Hence simply by moving one factory the loss
to America’s economy is in the millions.
Are you suggesting ‘lets be greedy and keep our wealth to ourselves’ as a solution? What is the problem of taking industry overseas? Companies end up spending less money there to hire, rather than spend much more money here for workers, and when they sell the products here, they make more money. Let’s try not to hinder other countries’ economies by blaming them for our country’s problems
In various parts of the world America opened
‘Free Zones’, these were virtually beyond
law.
The workers were paid little and the treatment
was harsh. In this way America could produce
cheaper goods.
The management structure, the concept of the
company remained the same, and the only reason
costs were lower was due to the exploitation
of the workers.
As the original ‘Free Zone’ nations ceased to
permit this, America was put into the position
of having to go to another country and repeat
the pattern.
Japan/Korea/India have prospered from the
exploitation of its workers, now can
produce cheaper than America because when
locals took over, they altered their
management structure, etc.
As there are few places left to exploit and
as the closure of so many factories has put
Americans out of work while the American company
can not do it cheaper to compete.
The Toyata, for example, based on Ford, has
exceeded Ford because the factories are more
efficient, the vehicles produced are better,
and the relationship of the workers to the
company is more positive.
In most countries in the world the roads are
full of Japanese vehicles as well as S. Korean.
Americans can not afford to buy the gas guzzling
American vehicles.
Or, we can Unionize the “Service Sector”, where job growth is continuing and redistribute wealth the old fashioned “Union Labor” way, then add a percent or two to the retail price of goods and do the green jobs and the rest in addition. Nobody thought of this yet, but it’s the same, why pay Auto workers and Coal Miners more money in the old days? We did it before, we will do it again, Union’s will come back in areas they were not in before, just watch, It’s the “American Way”, it just take getting “W” and his crew out, and that’s coming!
“Are you suggesting ‘lets be greedy and keep our wealth to ourselves’ as a solution? What is the problem of taking industry overseas? Companies end up spending less money there to hire, rather than spend much more money here for workers, and when they sell the products here, they make more money. Let’s try not to hinder other countries’ economies by blaming them for our country’s problems”-
But that is capitalism, survival of the fittest
Firstly, the ‘Free Zone’ paradigm does not help the host country’s
economy. It’s a Free Zone, it’s not part of the country. The workers
are paid very little for ‘conveyor belt’ jobs, i.e. sewing buttons
on cuffs. That’s all.
Secondly, the sweat shop/slavery situation is not beneficial in the
long run. As soon as International Media blitzes expose the slave
shops where Nikes or Tommy are produced, the blow back is serious.
Thirdly, When the economy is bad, people don’t buy new TVs or Micros,
hence, imagine this restaurant is attached to this factory. As long
as the factory is employing people, this restaurant is employing
people. Close the factory, close the restaruant.
The recession in America isn’t just the price of oil. Today the
major Copper company in the US has been sold to India.
I live in a Third World Country which for many years didn’t own
the sugar it produced. The workers, paid slave wages, kept in
substandard condition, the cane sold overseas, we saw nothing
from that. Tate & Lyle still owns must sugar production in the
Caribbean.
We were also told it would benefit us.
America is about to find out what it’s like to live in a
Third World Country.
Your page presents an interesting contrast. On the one hand, you show genuine interest in the survival of your country, its essential values, and its people – from top to bottom. Why express such concerns?
Simple. Orwell foresaw it last century: any country can morph into a Soviet Union, an Eastern Europe behind an Iron Curtain, an Imperial Japan, a Nazi Germany, fascist Italy, a Cambodia, Romania, or more recently a Zambia. Propaganda notwithstanding, such places are nobody’s Paradise. Everyone is slowly suffocated in a moral vacuum of self-righteous corrupt predation, nowhere really is safe for business, or anything else.
Yes, gated communities can be formed: but let’s face it by the time you require walls and barbed wire to feel safe – you are already in a prison.
Contrasted to your concerns and entirely ignoring the issues you raise are several literary souls, with attitudes resembling hyper-vexed Royalty, who write to you that you haven’t convinced them, absolutely must convince them, and that by the way, you cannot ever convince them, of anything you say. So there.
What compels them? Perhaps an ongoing hope that they possess some special tactical advantage so that whatever dire things could happen they will affect others first, and most.
As you point out, this is seldom the case when an elite group turns routinely conservative money-making ventures like manufacturing, banking, and stock market stability into an off-shore game of Russian Roulette.
For the last 30 years this game has continued spinning the chamber and pulling the trigger, ignoring the inevitability that yes, there is going to be a big boom – and it will be followed by a sudden entirely unwelcome collapse.
On this we agree. Those who cannot see it, won’t. Nor should it surprise you that the self-blinded proudly will march into an acre of quicksand simply because they refuse to believe anyone so impudent as to warn them that it is dead ahead.
Living in a 3rd World Country, the exploitation is evident; also
the factor that China has been able to flood our markets with
cheaper goods. Hence, if you did a survey, you would find very few
American vehicles on our roads, very few American manufactured
products in our homes, and that we may wear the American ‘name brands’ but they are manufactured in Asia.
We get our fuel from non-American sources, Venezuela and Nigeria for
two, and interestingly, one of our major concerns is milling wheat
flour which is brought here from America, as we don’t grow wheat,
milled, and sent back to America.
As you can see, America is no longer the centre of gravity.
http://en.wikipedia.org/wiki/Absentee_landlord
It’s a form, I think, of psychological contagion – when a ’slum lord mentality’ is preferred to saner economic policies. It describes corrupted empires at their imperial summit just before history records their sudden reversal of fortune.
As you point out above, what keeps a 3rd world country perversely at that level all too often is a first world country seeking to marginalize and control its own population’s demands for basic improvements. To do so it is useful to find despots elsewhere willing and happy to enslave their own populations for a nice bribe or two.
Yes indeed, such misconduct is profitable, until a Gandhi decides that maybe salt readily available by walking to the sea really isn’t a Viceroy’s monopoly after all. The elaborate house of cards begins to crumble. Doubtless this will also be the quicksand dashed into by Beijing if it is not there already.
In any country once the lust for maximum profits takes hold several problems are self-initiated.
To no one’s surprise China, with the amazing help of western governments and investor capital is now on course to abandon its financial parents. And why should they not? It is feasible.
Between India and China alone is a population of 2 1/2 billion potential consumers.
As the west continues to fudge and flounder and tank it will be all the worse that actual disposable income – due to accelerated costs for food and fuel – will no longer make China such a bargain. Worse, when the rush to Globalization began the advocates missed a critical precondition: for mass-transportation of goods to work – Oil – must remain stable and cheap.
There is no indication it will ever be so again.
That the west is by no means as competitive industrially and scientifically as the new powers is no one’s fault more than the myopic interests of business and government. In a rush to perfect a system which no longer seems plausible they have dropped the ball on their own toes.. As a result we do not hear of coherent solutions – but a general panic in the face of overwhelming disadvantages. Disadvantages the like of which every corporation must consider and counter with contingency plans.
Unfortunately there appear to be no contingency plans at the national level, nor international level, nor the slightest enthusiasm for starting from scratch to rebuild.
Instead, like the first world war’s ‘mobilization directives’ once initiated, and however absurd they may now seem – it will be: “Stay the course!”
Years ago a colleague in banking mention an anecdote about Marie Antoinette. She asked the Minister of Finance what was to be done to save the Franc.
His response was sublime: “Why nothing, Madame! The situation is far too serious!”
There are no contingency plans, that’s the miracle of it. One would have thought, for example, when the housing market began to collapse
a banker would say, okay; You can’t pay 1000, can you pay 500? And at
least keep the people in the house and get something.
No.
Foreclose and foreclose and people go in and vandalise and others
are on the street; and where is the logic? Where is the profit?
One would have thought as soon and toyotas began filling roads, that
America would compete with Toyota instead of making ‘hummers’. Guess
not.
A little eerie to come and read this now, after your prediction came true…
That is why I restumbled it. I wrote this 16 months ago. I could have written it 16 years ago, because the result is inexorable;
all one needs to see is some ‘factory town’ where ‘everyone’ worked at the factory; now that the factory is closed one isn’t seeing a middle class community, one is seeing an impoverished semi-ghost town.
dont hurt your arm patting yourself on the back. do you have any evidence at all that the moving of industrial jobs overseas has anything to do with the current recession? because that evidence would be very interesting to see. that’s ignoring the question of whether a recession- an event which recurs every decade or more frequently- can be identified with the “collapse of America”.
many people, including pretty much everyone with any sort of economic credentials and access to a public forum, sort of give the impression that the current state of affairs is pretty much global, and owes its existence more to an overheated US real estate market deflating, coupled with reckless leverage in large financial institutions.
your thesis might yet be correct, but your argument is entirely unsound. sweeping generalities and emotionally loaded language supported only by the weakest sort of post hoc fallacy.
What I find so remarkable about your post, Misanthrope, is that logic seems to have escaped you. The moving of Industrial jobs overseas means they are no longer available in the United States.
The recent recession is equated with that experienced in the 1930s. That is 70 years ago, hence your every 10 year argument seems to betray a dyscalcula.
Pretty much everyone with any sort of economic credentials, nether predicted this, understood it, knows how to get out of it, hence one would be rather chary of taking advice from them.
The idea that the whole world is impacted has to do more with remittances than anything else. 3rd world countries depend on the money their relatives overseas send home; hence in some countries it is 30 – 40 % of the GNP.
Thank you so much for your opinion. I will file it where it belongs
Very Aptly Put!
They say in business that if you find a need and meet that need, then you can become a success. However, over the years this principle has been morphed into a much more sinister version. Today, you must find a need, meet the need and then EXPLOIT that need. In doing so, the people must be exploited as well. Now we pay humongous salaries to people to find new and creative ways to exploit in any increment possible. Now, company reps may say in beautiful rhetoric that they are helping the people, but in truth, they are only self serving. Does this seem similar to what the Obama administration is doing? Over time this exploitation has become the essential of our economic well being much in the same sense as the exploitation of Madoff’s Ponzi scheme.
Mr dprince; living in the 3rd World I can testify to the kind of exploitation that is practiced. For example, when the US had to pay $1 an hour to workers in a sweat shop in Korea, they closed the factory and came to Jamaica to operate a free zone where they paid virtually $1 U.S. a day.
This sent back those name brand things to the US…(free zone just stitched pre cut stuff)…and Americans paid a lot of money for stuff that was really really cheap….
With all these huge profits amassing to these entreprenuers it is no wonder they had so much to throw away on Ponzi schemes.
Because the ‘human’ touch is gone from so many places, the Banks who held the sub prime mortgages had no prob. selling them to other interests who didn’t care about anything but the bottom line.
There is no doubt that sending factories and jobs overseas has been a bad choice by the US as the workers in 3rd world nations are exploited, the gov, if it receives any money uses it for whatever, and the American public is sold cheap junk at high prices