Excellent analysis of America’s deep economic trouble and the political act of mass economic suicide.
A comment to this article also magnifies the reality that America’s political division will not allow a joined effort needed to turn things around. America is an huge ship destined for disaster … exactly 100 years after the unsinkable Titanic sank to the ocean bottom.
- The question is not when the U.S. recovers economically, but if they recover. As mentioned in the article they have a toxic political system that barely works, therefore getting the really tough decisions passed is extremely difficult, if not impossible.
Add to that the overwhelming amount of money spent on the military, which is a sacred cow, and there is not a lot left over for education (and that is assuming that 50 different States can agree to revamp and improve their education systems).
The U.S. Is in big trouble and it is doubtful whether they will ever get back to their “glory” years of the past decades, let alone get their financial house in order.
Is America the sick man of the globe?
(Reuters) – The U.S. government may have bailed out General Motors, the country’s largest automaker, but it hasn’t begun to tackle the broader problems that led to the city’s implosion. Doing so, experts say, would require the kind of political will that has not been in great evidence in the country recently.
To the few remaining auto workers left in a city half the size it was in 1960, the America they knew growing up is long gone and things can only get worse.
“We have made concession after concession on wages and benefits and there is no end in sight,” said Dean Parm, a worker and union committeeman at Nexteer Automotive, whose hourly wages have been cut to around US$17 an hour from US$28. “It feels like we’re dinosaurs. And we’re on the verge of extinction.”
This is the point of the story where many Americans typically glaze over because they see Michigan as a long-standing financial basket case of a state thanks to the shrinking U.S. auto industry. But the problem is that the broad decline of the manufacturing sector that has been underway in this country for decades now may threaten not just the long-term health of the economy but also the living standards of all but the wealthiest Americans.
“The whole country is now seeing the story that Michigan has been living with for a long time,” said Diane Swonk, chief economist at Mesirow Financial. “We have kicked the can so far down the road that now all we have is a cliff to fall off.”
“The recession merely revealed a reality that has been with us for a long time. We faced a growing gap in education and skills that we tried to fill with debt and credit, which gave us the illusion of growth.”
Germany’s manufacturing and exports have rebounded after tough reforms
Some point to the example of how Germany’s manufacturing has rebounded a decade after the country was derided as the “sick man of Europe,” though they add the German experience shows reform is a long, hard road.
America is now the “sick man of the globe,” says John Silvia, chief economist at Wells Fargo. “The good news is the illness is not terminal.”
But fixing America’s education system for jobs of the future plus retraining unskilled workers would require bipartisan consensus, a long-term commitment by America’s political class and funding to make it happen. In today’s bitterly divided Washington, that is a tough sell.
In the recent midterm elections Democrats were pummeled less than two years after President Barack Obama’s triumphal arrival in Washington and American voters remain in a volatile mood. Steven Schier, a politics professor at Carleton College in Minnesota, said unless the job mess is repaired more wild swings lie ahead.
“It’s entirely possible we’re going to see voters flip the switch every two years until both Republicans and Democrats get the message,” he said.
"But I will not let myself be reduced to silence."