The last stages of American world dominance have arrived

If you want to understand what has happened to America, go read the short but very interesting article American Parallels. In it Ian Welsh compares the pattern of the decline of American world dominance to the declines of the Empires of Great Britain, Spain, Rome, and Athens. This is where we are:

American world dominance, as with British, was based on a military dominance that came out of economic dominance. From about 1890 on America had the world’s most powerful economy, out producing Britain industrially, and backed moreover by a continental resource base. At the end of world war II the US was producing about half the world’s goods.

Since then there has been a gradual decline, and the rise of larger powers – China and India, whose population are significantly larger than that of the US. As in the decline of Britain, capital is fleeing the old empire, heading for the rising powers.

• As in the decline of Britain, the new powers flout intellectual property laws, refusing to pay rent to the old power.
• As in the 1890’s – the rising power has now, on a pricing parity scale, an economy equal to the old empire.
• As in the case of Britain military overstretch is straining the dominant power.
• Financialization, the curse of late stage empires, has hit the US as it hit Britain, with rent-seeking the predominant method of making money, and actual production of goods ignored. American capital flows to other countries seeking returns, and builds factories there. American ex-pats teach other nations how to compete, even as Scottish engineers did during the decline of the UK. As with Britain, America, breathless with greed, is teaching others how to defeat it.

[Highlighting and bullet points mine - Ed. WTF-o]

If you have read my earlier posts you may notice that I have repeatedly pointed out the futility of trying to use tax cuts to stimulate the American economy. Tax cuts won't work, because the investors will try to seek the highest return, and like the British investing in mines and railways South American and India in the late 19th century, those returns are much more available in the rest of the world. The utter stupidity of a government policy based on a refusal of the government to interfere in - or even plan for - the American economy has made the American decline inevitable.

Mr. Welsh makes a final statement with which I heartily agree:

America will follow its own unique path. All Republics end, and so do all Empires. There is, in human history, a series of cycles of renewal, decay and renewal. Each one ends in a crisis period, and each crisis must be overcome. It is never inevitable that you’ll fail – but it’s never guaranteed you’ll succeed either. It is this generation’s task to renew the tree of liberty and keep the American experiment going – to remain true to the ideals that made America and have driven it since 1776. It is my profoundest wish, as we come up on the New Year and look both back and forward, that you are successful in doing so, and that America once again becomes the beacon of liberty and hope that its founders wanted it to be.

Go read the rest of Ian Welsh' article.

Our task as Americans is clear. We need to renew the ideals from 1776 that have made America great. The most urgent task at the moment is to destroy the power of the conservative movement who have betrayed those ideals.

Happy New Year.