

Macro Perspective: Is This America's Great Decline?  - bootload
http://www.bubblegeneration.com/2010/11/macro-perspective-is-america-in-great.html

======
davidmathers
It's refreshing to see some left-wing economic nonsense on HN instead of the
right-wing economic nonsense that usually makes the front page (where's the
hyper-inflation you promised me? oh, you meant _next_ year. of course. of
course.)

Anyway, arguments aside (I'm not convinced he truly understands comparative
advantage), isn't the relative decline of America something we want? I can't
be the only one who wants to live in a world where wealth is distributed more
equally among nations.

55 million people in China make less than $125 a year (the official "low
income" line). How about we let them get to $125 a month before we start
worrying about the rise of China and the decline of America?

I'm assuming he means relative decline and not absolute decline. To posit
absolute decline would be just bonkers.

~~~
arethuza
Out of interest, why do you interpret it as "left-wing" - is anything that is
critical of the current state of the US economy automatically "left-wing"?

~~~
davidmathers
As a rule of thumb I'd say that pretty much any essay that contains the word
"structure" is written by a leftist, no matter what the subject.
Macroeconomics as a concept is basically leftist, as is focus on/awareness of
society, social issues, systems based thinking, promotion of rationality or
rational order, and suspicion of trade and natural order.

Most of the right-wing crank economics that gets written (and sadly shows up
on the HN front page) consists of direct attacks on macro policy and/or fiat
currency (i.e. social money, not "hard" money). Rule of thumb: if you're
reading a sky-is-falling essay and it contains the words "fed", "federal
reserve", "gold", or "inflation" the author is a right-wing nutjob.
Macro/social thinking and policy is either dangerous or immoral. Or useless
and ineffective. Because, you know, "there's no such thing as society."

~~~
arethuza
"there's no such thing as society."

I'd forgotten that Thatcher quote. However, when you see it in context it
really doesn't look _that_ bad:

<http://briandeer.com/social/thatcher-society.htm>

------
csomar
I'm living in an era where the US dominance is at its highest. May be I'm
alone.

Let's look around. My computer, my phone, websites and services I use, the
cars (we used to buy French ones, now as Ford and other alternatives are
available, we and the whole Tunisian population are somehow diversifying)....

Everything you can think of, from food to Energy or wars, if you make a deeper
look and analysis, you'll notice a dependency to Europe, but more increasingly
to the USA in that last decade.

China? They produce huge amounts of goods. Think of the $99 Android Tablet
quality. They are quite popular, yes, but I don't think they match the
Americans in term of profitability.

I really wonder how is this America big decline? They have better education,
stronger army, more resources and lot of smart people.

~~~
makeramen
>> I really wonder how is this America big decline? They have better
education, stronger army, more resources and lot of smart people.

Your argument along with your evidence is the state of things as they are
today; decline is the trend (the derivative if you may). Just because we're at
our peak, doesn't mean we're still growing.

~~~
m-photonic
>Just because we're at our peak, doesn't mean we're still growing.

In fact it would mean we're NOT still growing. The "peak," strictly speaking,
would be the point where a function ceases increasing and begins to decrease.

------
achompas
This is all topical economics. Example:

 _The result is a heavy dose of heavily concentrated industries--and while
that's good for beancounters, it's terrible for innovation, basic quality
standards, customer service, and, of course, investors._

Wait. So large companies like Apple, GE, GM, Google, and Boeing aren't
developing new and exciting technology? Also, if something is good for
"beancounters" (like, say, an increase in the company's book value or cash
flow), well, isn't that good for investors too?

More: he reads the NY Times, sees that Chinese IPOs > US IPOs, and concludes
America is broken? China's GDP is growing 3-4 times as fast as ours, so 3-4
times as many IPOs seems about right. He also misunderstands how savings flow
through our economy. We don't need to "shift savings into investments." The
moment banks receive consumer savings, they're lent out to small businesses so
they can purchase equipment. That's investment.

He also trots out the "oh woe is our net trade situation" without mentioning
that any trade rebalancing will decrease China's GDP by billions. So there's
that.

He's complicating our economic problems. The bottom line: we were
overleveraged as a country. Now our economy is (drastically) adjusting. We'll
be fine.

------
Bertrood
It didn't take too long before it was time to stop reading this article. After
two paragraphs of this kind of stuff its easy to fill in the blanks.

America will do fine in the future. It is easy to lose site of this when
looking at things on the surface such as imports vs. exports in the US and
emerging markets vs the stale US economy.

America has the best univerities in the world, and the largest amount of
highly educated workforce and entrepreneurs. This IS earning power for the
21st century. With declining traditional labor forces, markets in the future
will be based more around innovation and knowledge management. The US will be
well positioned for this in the future even with all it's current troubles.

With the recent saving of our financial systems with the bailouts, the US
government done the nation great service by ensuring the low cost of capital
in the future. This is another reason America's future looks very bright.

We are also very well positioned geographically to optimize trade by sea and
land to the US.

~~~
gregfjohnson
The people I worry about in the U.S. are the ones who will not be equipped to
be entrepreneurs, innovators, or knowledge management types. Only about 30% of
Americans earn a college degree. We university types tend to forget they
exist, just as most of us forget that the Earth is 70% ocean. They are just
off our cognitive rader screens, not part of our universe.

I'm wondering if those of us who dream about creating companies and changing
the world can start to envision a future that provides opportunities for a
broad swath of working class Americans.

~~~
tomjen3
Why should we? Honestly they live better than the bottom 70% has ever done,
they have access to fresh fruit and healthy meat even in the middle of winter,
they have heated houses, indoor bathrooms with flushing toilets, roofs that
doesn't leak and better medical-care than in any other period in history.

There may be bigger differences between the classes than there were 40 year
ago, but thats a strawman - progress is measured in whether or not you
advance, and doesn't depend on whether or not your neighbor advances more.

~~~
mr_luc
I agree with the truth that this comment expresses, but I hope for different
things.

I really mean to blog on this subject, in fact, as it's one that inspires me.

Due to a curious combination of circumstances, I work 3 months each year in a
factory (likely representing the bottom 10% of the labor pool), and the system
that we have works way worse than it could for all parties involved. I'm very
interested in thinking about where it could go with the proper application of
technology.

------
narrator
The funny thing is China isn't an imperialist country. They're primarily
concerned with their internal affairs and with the rest of the world insofar
as they need their raw materials and advanced technology. They're not very
interested in leading and controlling the world like the west seems to be so
obssessed with.

~~~
iskander
First of all, you seem to be ignoring China's wars with India and Vietnam, the
Chinese attempt to overthrow the government of Malaysia, territorial claims to
Taiwan (and a dozen smaller chunks of land), their continuing support of North
Korea, as well as their explicit program of population dilution going on in
Tibet and Xinjiang.

Anyhow, imperial ambitions grow with capacity. For now, China asserts itself
in its "backyard" (and Africa -- check out the Forum on China–Africa
Cooperation). Chinese reach will almost certainly extend if their military
competition dwindles.

~~~
davidmathers
_As an aside on Mugabe, he makes one of those observations that are so
precisely to the point that you wonder why so few other commentators ever get
round to coming to it. "Darfur, Zimbabwe, Burma, North Korea, anywhere that
the concept of human rights doesn't exist, it's always the Chinese at
backstop. And always for reasons that you could write down in three words:
blood for oil."_

\-- [http://www.guardian.co.uk/books/2010/nov/14/christopher-
hitc...](http://www.guardian.co.uk/books/2010/nov/14/christopher-hitchens-
cancer-interview)

It would be tragic if China were to actually become the dominant power in the
world. But that's a long long way from where we are now. And I personally
can't see any path from here to there.

------
dmitri1981
> The MegaJobs are more like lottery tickets, than prizes in a meritocracy
> (think landing a spot at a top law firm, or investment bank--it's more about
> who you know and where you studied, than what you can do).

I could not disagree more. All people I know with what the author calls
MegaJobs have them because they considerably smarter and are prepared to work
harder than most. These are the guys that worked 16 hours a day at university
and are now doing the same the at their jobs. To suggest that it was due to
connections is frankly naive. Connections can definitely help you get in, but
they are never a substitute for above qualities.

------
makeramen
Someone needs to write an article that says "America will be okay." There are
a lot of things we're doing wrong, but at the same time, a lot of things we're
doing right. We want to make sure we stop the bad things from getting too bad,
and the good things from turning bad. And sometimes (oftentimes), we're
completely wrong about what was good or bad for us in the first place but
things have been working out for hundreds of years anyway. So as long as we
keep trying our hardest to do what's right, things will probably be okay.

But then of course everyone would just nod their heads and we wouldn't have
all this interesting discussion.

------
chailatte
Yes, just like England lost the power to America, and Spain lost the power to
England, so will US lose the power to China. Precisely because of the reasons
author listed.

~~~
j_baker
I don't think that's a given. China is _big_ , but that doesnt necessarily
equate to power. Besides that, who says America's decline has to come right
now? It's easy to be all doom and gloom in economic times like these, but the
grass isn't greener on the other side. Other countries are in this as deep if
not deeper than we are.

~~~
chailatte
An aging US population, massive growing debt, shrinking dollar and shrinking
manufacturing says America's decline is now.

~~~
j_baker
China's population is aging much faster than ours due to their one child
policy. Our debt isn't really a whole lot worse than it was after World War
II, and that preceded pretty good growth for us. Lastly, the effect of the
value of the dollar going down and manufacturing jobs going elsewhere is of
debatable importance.

~~~
positr0n
Yes but after World War II we had thousands of working age men return home to
start careers and family. Also the pre-WWII centers of finance, industry, and
everything important had been bombed to smithereens, so a lot of that moved to
America. None of these affects are applicable today.

~~~
j_baker
You're right. All of those things are already here. We're even better off than
we were then.

