Humans Seem Hell Bent on Committing Mass Suicide -- But There's Still Hope

By Fred Branfman, AlterNet. Posted May 15, 2009.

Not really. America has clearly begun its decline and fall as a global power, and for the same reasons as the Roman, French and British empires before it. Civilizations rise by working hard, saving, investing at home while exploiting weaker economies abroad, producing surpluses that finance a rising standard of living. At some point, however, they find themselves consuming more than they produce and choose to maintain consumption by borrowing, which eventually becomes unsustainable.

The final stage is marked by economic collapse due to debts that cannot be repaid, accompanied by military overextension abroad, a focus on entertainment and spectacles at home, a selfish "What’s in it for me?" attitude among its elites and a decline in basic indicators of societal health. Despite America being the world’s richest and most militarily powerful nation, for example, it in 2006 ranked 25th in life expectancy and 34th in infant mortality. And a 2003 story rated the United States 24th educationally out of 29 nations.

Just how serious is America’s current economic condition?

America’s household-debt-to-disposable-income ratio rose from less than 40 percent in 1952 to 133 percent in 2007, and bank indebtedness rose from the equivalent of 21 percent of GDP in 1980 to 116 percent in 2007. The Federal Reserve reports that total outstanding credit-card debt reached a record $951 billion in 2008, is rising dramatically, and the personal savings rate has dropped from 9 percent in the 1990s to 0.6 percent in 2007—though it has recently begun to rise somewhat. Its deficit is 12.3 percent of gross domestic product, the highest level since 1945, and will likely grow as more money is needed to stave off financial collapse and politicians whittle back tax increases or spending cuts. By late 2008, 37 percent of all manufactured goods sold in America were imported, nearly four times the level in 1978. Manufacturing employment has hit a 60-year low.

I take it these problems have affected the rest of the world?

The World Bank has predicted that the global economy will shrink in 2009 for the first time in more than half a century and that the decline in global trade would be the biggest since the 1930s. Private money invested in so-called emerging countries is likely to fall from $928 billion in 2007 to $165 billion this year. In Europe, manufacturing has already suffered its biggest decline since the Second World War.

Earth’s TV news mentioned a stimulus package. Will this work?

No one knows. After allowing its manufacturing base to deteriorate in the 1980s, America grew through an "Internet bubble" in the 1990s and "housing bubble" in the 2000s, i.e., growth produced by borrowing for, and foreign investment in, unsustainable economic activity. The stimulus package amounts to a "deficit bubble," i.e., borrowing trillions from future generations in an attempt to jump-start the economy.

It is hard to believe this stimulus won’t produce some sort of a short-term growth "bump." But the question is what will come afterwards.

What do you mean?

Nobody has yet explained how this borrowed capital will be used to build new high-growth, high-income and job-creating economic sectors capable of restoring U.S. economic strength from the bottom up. American manufacturing workers earning upwards of $25,000 a year cannot compete against Chinese workers earning $2,750 and Vietnamese workers earning $1,680 a year in today’s globalized economy. Were America to have hopes of reviving its economy beyond the stimulus it would need now to be urgently convening joint industry-government-academic panels to develop industries of the future—in renewable energy, robotics, telecommunication, health care and so forth—in which it could have a competitive advantage.

As a nation, the United States should, for example, be mobilizing to compete with China, which has recently announced plans to lead the world in producing electric cars.

It is not doing so?

No. If American leaders continue to borrow trillions from the future and yet cannot create strong U.S. job-creating economic sectors at home, especially ones that address the biospheric crisis, these gigantic debts will impoverish Americans for decades to come.

But this means America’s present economic leaders are conducting the greatest economic gamble in world history, with little evidence that it will succeed!

Precisely. Humans, understandably, make decisions about the future based on their previous experience of life. Paul Volcker, perhaps America’s most respected financial expert, said on February 20, 2009, that "I don’t remember any time, maybe even the Great Depression, when things went down quite so fast. It’s broken down in the face of almost all expectation and prediction."

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Fred Branfman is a writer, public policy activist, spiritual seeker and student of psychology. While directing Rebuild America in Washington, D.C., from 1987 to 1991, Branfman wrote “An Investment Economics for the Year 2000” and “Industry-led Strategy.” He wrote the “strategic investment initiative” for U.S. Sen. Gary Hart’s mid-1980s run for president. As a Cabinet-level aide for California’s then-Gov. Jerry Brown, he wrote the “Investment in High Technology” and “Investment in People” state-of-the-state initiatives. He also promoted renewable energy while directing Protecting Future Generations in the mid-1990s, and authored the state of California’s SolarCal strategy and “Jobs From the Sun” in 1979 while with the Campaign for Economic Democracy.

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