I just finished reading Wealth and Democracy by Kevin Phillips. A little dry but I liked it a lot. I’d say it has two main points:
1. In U.S. history when there is a large amount of wealth inequality it usaully has come from goverment backing and is helped by goverment corruption. These days are no different, and much the wealthies ability to get so much money comes from goverment largess. Look at the telecom giveaway in the 90’s.
What surprised me is how this is not always the way it was. Presidents from Washington to lincoln, (”Labor is prior to, and independent of, capital.”) to even eisenhower.
I’m convinced that much of he current economy is mere speculative bubble that mostly supports the super rich while the rest of the U.S. steadily loses ground. Which brings us to the second point…
2. Comparing the U.S. to other historically dominant powers such as Holland in the 1700’s and Britian in th 1800’s, the U.S. is in the decline stage of it’s cycle. The precious world leaders (Holland and Britian) rises were charecterised by industrialisation increased trade and increased prosperity for all of the people. Their decline stages had economies that were losing jobs in basic manufacturing and being more and more tilted toward finace, as well as having the middle class lose prosperity while the rich got richer.
Here in the U.S. the real wages for middle classes havn’t risen since the 70’s, manufacturing jobs are leaving the country in droves and Finace is becoming the most important sector of the economy.
The only difference is that Unlike the logical chain from Holland to Britian to the U.S. there is no clear succesor to the U.S. once it starts to really decline. China comes to mind, but it has a long way to go to be able to pick up were the U.S. left off, plus it relys on waistful U.S. consumer spending to power it’s economy, so if the U.S. declines it will be hurt as well.
Nevertheless, China is going to keep getting stronger and the U.S. is going to continue to weaken. This makes my decison to go to China look rather brilliant. When (or should I say if…) I get good at chinese, I should be able to live comforably off teaching American Businessmen Chinese as they try to jump on the next bandwagon.