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Rustic
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Username: Rustic

Post Number: 2879
Registered: 10-2003
Posted on Sunday, October 29, 2006 - 10:23 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Interesting article about the fate of America's vast "middle class" and the state of its economy. Lest you think this isn't about Detroit, think again ... it happened in Detroit first ... you can pretty much take all of the dates in this article and subtract ~10-20 years and it directly applies to Detroit.

http://www.spiegel.de/internat ional/0,1518,439766,00.html

A SUPERPOWER IN DECLINE
America's Middle Class Has Become Globalization's Loser
...[F]or many blue- and white-collar workers, the [decline of the economy] is already absolute because they have less of everything than they used to. They possess less money, they are shown less respect in society and their chances for climbing up the social ladder have deteriorated dramatically. They're the losers in the world war for wealth. But while that may be their fate, they cannot be faulted for it. And it's certainly not a private affair. Every nation has to face uncomfortable questions when an ever-larger part of its citizenry is delinked from the nation's overall wealth. This is all the more true of a society that has made the pursuit of happiness a fundamental right.

...

Things were going swimmingly for the Americans until the end of the 1970s... Family incomes grew virtually at the same rate in all sections of the population during the first three decades after World War II, with those of the poor growing slightly faster. ... It was as if the American dream had manifested itself in statistics.

But then the trend reversed, .... Capitalists left their home turf and went looking for suitable locations to invest in. Direct investment abroad - which had been more or less in harmony with exports until then - rose dramatically.

...[F]actories themselves began to be relocated, mainly to cut manufacturing costs. Production for the world market became increasingly global itself, which led to a redistribution of capital and labor. Global production increased by a solid 100 percent between 1985 and 1995. But direct investment abroad increased by 400 percent during the same time period. Capital's new mobility began to make the other factor of production, labor, restless, too.

...[N]ew jobs were created elsewhere... Within the next two decades, the income of the lowest fifth sank by 1.4 percent. The second fifth still managed to gain by 6.2 percent, the third by 11.1 percent and the fourth by 19 percent. At the tip of the pyramid - where the promoters and planners of globalization reside, and those who profit most from it - income gains climbed by 42 percent.

The US national economy clearly bears the signs of this break with its golden age, when the country produced prosperity for almost everyone. Until the 1970s, the productive core of the country burned with such a fiery light that it illuminated the entire world. The United States provided dollars and products for everyone. The American empire's nuclear power helped in the reconstruction of war-torn Europe and Japan. The United States was the world's greatest net exporter and greatest creditor for four decades. Everything went just the way the economy textbooks said it should: The world's wealthiest nation pumped money and products into the poorer states. The United States used the energy from its own productive core to make other countries glow or at least glimmer. It was indisputably the world's center of power, a source of energy that radiated out in all directions.

US capital was at home everywhere in the world, even without military backing. ... At the peak of its economic power, the West's leading nation disposed of assets abroad whose net value amounted to 13 percent of its GNP. To put it differently: The country's productive core had expanded so dramatically that it opened up branches and subsidiaries all over the world.

...

This undoubtedly superior United States doesn't exist anymore. As a center of power, it is still more powerful than others, but for some years now that energy has been flowing in the opposite direction. ... The world's greatest exporter became its greatest importer. The most important creditor became the most important debtor. Today, foreigners dispose of assets in the United States with a net value of $2.5 trillion, or 21 percent of gross domestic product. Nine percent of shares, 17 percent of corporate bonds and 24 percent of government bonds are held by foreigners.

...

Neither laziness nor the obvious American penchant for consumerism can be blamed for this changed reality in America. US industry -- or at least what little is left of it -- is responsible. In the span of only a few decades, US industry has shrunken to half what it once was. It makes up only 17 percent of the country's GDP, compared to 26 percent in Europe.

Every important national economy in the world now exports products to the United States without purchasing an equivalent amount of US goods in return. ... Everyday, container-laden ships arrive in the United States - and after they unload their wares at American ports, many return home empty.

... The growing imbalance can't be attributed to natural resources or the import of parts for manufacturing firms. .... Instead, it's the top products of a developed national economy that the United States is importing from everywhere in the world - cars, computers, TV sets, game consoles - without being able to sell as many of its own products on the world market. ...
Sound familiar?

You know ... the national economy might just be catching up to where Detroit has been for the last couple of generations ... Yay Detroit, still the crucible of the American economy!
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Upinottawa
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Username: Upinottawa

Post Number: 592
Registered: 09-2005
Posted on Sunday, October 29, 2006 - 10:34 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

But, America's middle class can still get jobs at Wal-Mart!
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Rustic
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Username: Rustic

Post Number: 2880
Registered: 10-2003
Posted on Sunday, October 29, 2006 - 10:43 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Not in Detroit they can't ... not in Detroit ... see how far ahead of the curve Detroit is ...

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