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It's the economy, stupid!

Most Norwegian media these days should have had job ads with the heading "US expert sought". 




(THIS ARTICLE IS MACHINE TRANSLATED by Google from Norwegian)

Not just because the media is wrong – it is human to be wrong. But they were all wrong, in the same way. And as usual, almost all comments were about surface phenomena and ideology. But what's really interesting about the political crisis the US is in now is what's going on beneath the surface – and not least in the economy. The United States is a superpower at sunset, and now it's really starting to wear off.

In a major analysis from Harvard Business School with the title Problems Unsolved and a Nation Divided (September 2016)
it is documented that the United States economy is stagnating and declining, while neither the economic nor the political system is able to address the problems.

US competitiveness began to crumble quite a while before the Great Recession. US economic challenges are structural, not cyclical. The United States is unable to take the necessary steps to address the growing weakening of the country's economy. This inability is due to an unrealistic and ineffective national conversation and discussion about reality and the challenges facing the United States. The election campaign shows how crippled and corrupt this conversation – or lack of conversation – is. Hillary Clinton went on to call the United States "A Shining City on a Hill" while parts of her country now resemble a slum in the Third World.

Divisions. Harvard's analysis states that US economic performance peaked in the late 1990s, and then began to crumble on key indicators such as growth, job growth and investment. Growth is declining markedly. While it used to be from 4 per cent to 3 per cent, it has been around 2000 per cent since 2. The upturn in 2015 was replaced by a new stagnation in 2016, with growth rates slightly above the percentage.

The employment rate reached its peak in 1997. With fewer people in the workforce, per capita income has been reduced. Median income per household has fallen since 1999, and income stagnates in almost all income groups. This particularly affects those in the lower and middle income groups.

A similar split has occurred between large and small companies, says the Harvard study. The big companies are getting richer, while the small companies are struggling, and they are unable to function as engines for job creation.

The typical male worker with 100 percent work earned an average of $ 50 in 383. With the same dollar value, a similar male worker earned $ 2014 in 53. It is the mighty Brookings Institution who writes this. This has happened despite the fact that productivity has increased almost 2,5 times in the same period. But the richest of the rich have never been richer than now, Brookings writes – "they are in a class of their own". The richest 0,01 percent (one hundred percent, or 1 percent of 1 percent) now own 11,1 percent of all wealth in the United States. The richest 16 families have over $ 000 trillion, or as much as the two thirds that are at the bottom of the ladder.

And then one wonders why there are many angry people at the betrayed grassroots in the United States?

China takes over. The country is also gaining ground at the same time as the financial banks can use the Treasury as an overdraft facility. Most of the United States' infrastructure was built right after World War II. This contributed to tremendous growth, and to making the United States the world's leading superpower. Today, the United States spends only 0,6 percent of its public budgets on infrastructure investment. The decay takes place in all areas: roads, bridges, tunnels, power grids, telephone networks, public transport…

In his State of the Union speech in 2013, Obama strongly advocated the immediate repair of nearly 70 dilapidated bridges across the country in a plan he called "Fix it First.». It would have cost $ 50 billion for the entire transportation sector. Instead, Congress passed a $ 1,9 billion cut.

The American Society of Civil Engineers says that if the current decline continues until 2020, it will lead to the following backlog: $ 3100. trillion in GDP losses, or a loss the size of all of Germany's GDP. $ 1100 trillion in trade losses, equivalent to Mexico's GDP. 3,5 million jobs. $ 2400 trillion in consumer revenue, in line with Brazil's GDP. $ 3100 in personal income loss for every American.

If the United States falls on the home front, the defeats are even more significant internationally. The United States was once the world's factory and the world's innovator. As is well known, China has taken over as the world's factory, and is rapidly also taking over as the world's innovator. Two typical headlines from the US at the end of November: CNN: "China is crushing the US in 'economic warfare'". Bloomberg: «Who Wins a Trade War? China. "

In August 2009, the Pentagon conducted its first economic war game. War games are a common method of simulating military conflicts. The new thing this time was that it was not generals and military strategists who carried out the war game. It was economists, fund managers and bankers. After two intense days, the summary was ready: China won, without so much as pulling a weapon!

The car has been the very symbol of the American economy, and the United States has been the world's number one car factory. That time is over. China now produces 26,7 percent of the world's vehicles, compared to the United States' 13,3 percent. China is the world's largest trading nation and the world's largest export nation. Of the world's twelve largest ports, eight are located in China. The largest port in the United States is in thirteenth place.

The United States was once the world's leading space nation. Now Americans are relying on Russian missiles to send people to the International Space Station. And China has a lunar landing program, the United States does not.

The United States of today resembles the Roman Empire in its last days.

While the United States is waging seven wars and has hundreds of military bases abroad, China is waging zero wars, offering primarily economic cooperation and investment. Typically, the US plan to create an economic counterpart to China, the so-called TPP agreement, has stalled, while China develops the Asian investment bank and continues with its giant investment program called "the new Silk Road and the new economic belt".

Although the US economy is still nominally larger than China's, it is already less measured in purchasing power. There are many indications that the dollar hegemony is now also about to fall.

Give up the role. What does all this mean? That means the empire is falling apart. Any attempt to maintain the power of the United States will lead to even more and even more dangerous wars. The only viable path for a capitalist United States is to take the fall inward and relinquish the role of indispensable nation. But Americans have invested far too much in this role. The billionaires depend on it to keep the flow of money up, and around the world there are vassals – also in Europe – who are terrified of what will happen if the United States were to remove the protection they have lived under. They literally fear that then it will be "the time of the high forks".

The United States of today resembles the Roman Empire in its last days. A sugar-rich and decadent upper class, an incapacitated and powerless proletariat, an infrastructure and an energy system that is on the verge of collapse. The currency is worthless, and the country is heavily indebted – and the only thing preventing bankruptcy is issuing more and more worthless securities and preparing for war. And along the borders of the empire, the barbarians do as they please.

The real rulers of the United States – and now I'm talking about the oligarchs, not the talking machines called politicians – are aware of this. The majority in this upper class believes that the United States must solve these problems by going to war, constantly new wars, ultimately also against Russia and China. But a minority in this upper class has realized where the country lies, and believes that the only way to save US imperialism is to scale down and give up the role of world police, and come to terms with being a nation among nations.

But this discussion does not force the country to lead, and this lack of self-awareness and sober analysis is, as the study from Harvard also says, one of the major weaknesses in today's United States.

Pål Steigan
Pål Steigan
Steigan has its own blog on steigan.no.

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