When I was a child I remember pondering the mystery of my good fortune at having been born in the United States. I would see news programs showing third world countries and displaying life in mud huts, children either playing in the filth of the slums of Sao Paulo or sitting in dirt with swollen bellies being swarmed with flies in Ethiopia or the Congo. The question naturally arose as to why the United States was different. Grade school textbooks and teachers supplied us with the answers: we were blessed with a large country filled with natural resources (usually avoiding the issue of the theft and genocide that had secured this blessing). We had abundant fresh water and large rivers that afforded transportation and hydroelectric power. We had oil in Pennsylvania and Texas and California. We had coal mines and copper mines. We had a healthy and youthful population to man the factories of General Motors and US Steel. We had enormous forests that provided timber and paper products. We had great Universities, funded initially by wealthy philanthropists and then eventually State Universities funded by tax dollars, all of which turned out scientists and engineers who developed more and greater technologies upon which the rest of the world relied, and which we used to further exploit the natural resources we were blessed with.
I remember that our collective world view growing up and even extending into college years in the early ‘70’s consisted of the United States being at the pinnacle of the world, with Europe occupying an intermediate place between ourselves and third world countries, partially because Europe had been blown to bits in two World Wars, but also, as it was subliminally implied, of the natural superiority of the United States and its people. I remember being told that in Europe, individual hotel rooms did not have bathrooms, but there was a shared bathroom everyone used at the end of the hall, and which was not supplied with toilet paper. Hardly anyone owned automobiles because gasoline was $5.00/gallon over there. Europeans were unable to get blue jeans and the conventional wisdom suggested that if you traveled to Europe, you should take a couple extra pairs of blue jeans because people would come up to you on the street and offer to buy the pair you were wearing for $100. I didn’t make it to Europe until I was 37 years old and it is funny how these beliefs, imparted in grade school, stick with you and do not allow for changes with time. I was somewhat surprised that my hotel room had a bathroom and that everyone who wanted jeans seemed to be wearing them and no one seemed particularly interested in my pair. While some cultural differences could be appreciated, they were minor compared to the gap that I had been led to believe existed. Apparently over a decade or two Europeans had managed to build hotels with individual bathrooms, and acquire toilet paper and blue jeans. Parking places seemed to be a much larger problem than lack of automobiles, at least in Amsterdam. So much for the time stability of cognitive constructs and assumptions about the world.
Events of the past year and a half caused me to ask the question once again, in a slightly different way: What is it that keeps the United States from being a third world country? The simple explanations offered in my childhood seem to no longer pertain. While the United States can still claim to have natural resources, the descriptor “abundant” has to be dropped. Abundance of course, only has meaning in relation to demand. Demand has expanded in response to parallel factors of technology and more importantly, population. Fresh water is a problem, especially in the Southwest where the population has exploded and the Colorado River can no longer supply the thirty mouths of households and agriculture. Most importantly, we have been unable to supply our own needs for petroleum since we became dependent on imports in the ‘70’s. As infrastructure was erected in Asia, the cheap labor force was exploited and manufacturing jobs left the United States with the transparent result that the US is simply unable to compete with countries whose labor force is willing to work for far less than the ever increasing federally mandated minimum wage. The factory jobs in the United States have devolved into service jobs, retail jobs, and jobs that relate to imaginary things, like financial instruments.
For the last 2 decades employment in housing construction and related businesses provided the illusion that the US lifestyle could be maintained in spite of the inability to compete on an international scale with countries producing things the world needed. The US government and its people have been living on borrowed cash and borrowed time. There are only two ways that the inability of the US to compete in the world marketplace can be reversed: either all of the workers in Asia refuse to work for less than the minimum wage set in the US (which won’t happen), or the US worker will have to accept wages similar to what are being paid in Asia for similar work. Suggestion of the latter solution triggers such indignation and anger that it can scarcely be mentioned in public without endangering one’s physical safety. The cognitive dissonance aroused by such a suggestion is so extreme that it can hardly be imagined. The belief remains that Americans are necessarily entitled to a superior lifestyle as if by divine right or simply by the nature of things. There is no way bounds into one’s consciousness when one hears that Nike is paying workers in Malaysia from Vietnam, Bangladesh and Myanmar $1.51/hour (or rather, $262/month, with knowledge of just how many hours they work for that not being reported) . One might surmise, however, that these workers do not expect to have cable service, two cars, a stereo and an iPod, all the pizza and beer they feel like consuming, nor for that matter, the ability to purchase a pair of the Nike shoes they produce.
What kept the United States from being a third world country in the past was wealth flowing into it as a result of providing things the world needed. For the last thirty years, all that has been flowing into the US was debt, and consumer items that were being purchased from elsewhere with borrowed money. Resource depletion and population growth fueling ever faster resource depletion, as well as the establishment of a manufacturing infrastructure in Asia have erased the advantages the US had over the rest of the world in times past. In short, I cannot see anything that is now keeping the United States from being a third world country. When the debt spigot is turned off, as it will be, and when the mad printing of money leads to the devaluation of the dollar to the point of being nearly worthless, widespread poverty will ensue. The only thing the US will have at that point to cling to its perceived righteous position at the top of the world will be its military strength. One can anticipate with near certainty I believe, that the leaders will resort to use of that final resource to avoid their own embarrassment and fall from power. The world can expect that, if the United States goes down, it is going to bring others with it. What else is a failing and panicking empire to do?
Copyright 2009, MRM
