Sun Setting on American Century - Part 1

Editor's note: This article originally ran August 17, 2008. The following work is the first part in a series contributed by attorney, economist and author Perry L. Weed. Weed's article raises distinct observations about America's troubled economy.

Americans perceive that their world is changing rapidly. Four out of five believe that this country is in trouble and on the wrong track. The nation’s current troubles are far more complex than the recent economic downturn. They are structural and fundamental. They comprise the new world of globalization and global scarcity of natural resources, flat and declining wages, spiraling energy and food prices and unsustainable public and private debt. Compounding all this is a dysfunctional Washington government paralyzed in partisanship and special and entrenched interests. The urgent, basic business of the nation will remain unexamined and unresolved unless the downward economic spiral is addressed.

The November elections offer this opportunity, so far the leading candidates show little willingness to tackle the hard decisions requiring major changes and sacrifices. Increasingly independent, Americans are giving up on the two major parties and their elected officials in Washington, ranking them at their lowest approval levels ever – the U.S. Congress recently at nine percent. They fail to see their best interests represented in Washington. Likewise, they have lost confidence in Wall Street, capital markets and corporate leaders.

Americans and American businesses are disproportionately extracting, not producing, value and wealth. Families invade home equity, retirement programs and their credit worthiness by increasing credit card use. Companies downsize and strip out value in the name of efficiency. Corporations maintain stock prices by using profits, not for expansion and new products, but for buybacks and unprecedented executive compensation. Washington pays for wars, earmarks and new benefits with borrowed money thereby depreciating our children’s economic prospects.

American economic hegemony is weakening, not strengthening. The U.S. share of world economic growth is in decline. Our global competitive advantage slides downward. The nation has become dependent on foreign sources for suppliers, capital, strategic products, natural resources, skilled workers and illegal immigrant workers. Energy dependence worsens despite promises of independence made 30 years ago. We are more dependent and vulnerable than at any time since World War II.

The housing market and credit crises grind on with no end in sight. The housing inflation is the worst in the nation’s history. Our public and private indebtedness are all but unmanageable, driving down the value of the dollar. The price tag to maintain our failing infrastructure is projected at $1.6 trillion over the next five years. In short, the nation is in grave danger of decline unless we act decisively to reverse the current trajectory.

Since the 1970s, the cavernous gap between wealthy Americans and those further down the economic ladder has continued to widen and shows no sign of slowing. This divide is greater than in any other advanced country. Over the last 35 years, real wages for most Americans have been flat or falling. New service jobs replace production jobs but they pay less and offer fewer benefits. The shift to service jobs has doubled in the last 25 years. Pension protection and employee health insurance are steadily eroding.

The U.S. economy confronts basic structural problems at home and abroad that threaten the nation’s high standard of living and economic security. International finances are without effective regulation. The economic landscape is rife with financial and currency manipulation, corporate consolidation and concentration, trade wars, expanding black markets, excessive credit creation, unprecedented stock buybacks, scandalous executive compensation, failing industries and the offshoring of jobs, technology and supply lines. The U.S. is witnessing the hollowing out of its production capacity, the sale of its assets to foreign interests and dependence on Asia and Europe for the necessities of national life.

In the public policy arena, transnational corporations and the financial services sectors dominate and have all but eliminated such mediating and countervailing forces as government and organized labor that have historically provided checks and balances and social supports. Moreover, the nation is weighed down by the burdens of empire and excessive global outreach, including three wars undertaken since 1999. The cost projections for these ventures are in the trillions of dollars.

These forces and trends are intertwined and reinforcing. They are not short-term cyclical phenomena. We find our nation enmeshed in an interlocking convergence of powerful and unforgiving historical, institutional and demographic forces – some external, many cumulative and internal – which, taken together, have set the trajectory of economic decline.

The proceeding work is the first in a four part series contributed by attorney, economist and author Perry L. Weed. Weed's article raises distinct observations about America's troubled economy. To follow the whole article, select from the links below.

Sun Setting on American Century Part 2
Sun Setting on American Century Part 3

Click Here For Solutions To America's Economic Problems

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