America Falling
"The decline of the American empire can wait," judged the majority of observers in 2008. A few, for whom economic recovery seemed back on track, even dared to proclaim that "America is back." For all of them, American power was unwavering — an astonishing error of judgment when one cares to think beyond the clichés. Love of America cannot be blind. This summer's downgrade was predictable.
The confrontation between Congress and the White House on the budget issue showed that the United States was cornered. Political imbroglio, financial imbroglio, but above all economic impasse seems to be the best summary of the situation across the Atlantic.
When trying to assess the health of an economic operator, it is imperative to get the parameters right. Undoubtedly, the amount of public debt, which is now higher than that of the GDP, betrays the fragility of the empire. But other categories of indicators show a profound degradation of the American system by their evolution over the past four years.
First, employment figures confirm a real change of regime. The working population is now 6 million units below that of the end of 2007. This slump is affecting the activity rate: 63 percent of Americans were active before the big recession; now only 59 percent are. Another lesser-known indicator says it all: The number of Americans who change jobs voluntarily has halved. The much-touted mobility of the American workforce is coming up against the acute difficulty of finding available and attractive jobs. The Americans, in their turn, are suffering the anguish of structural unemployment. The two sides of the Atlantic have become closer.
In the second place, revenue sharing between employers and employees has become even more unbalanced during the recession. This is the taboo element of the country's economic equation.
The share of wages in the national income has fallen to less than 50 percent, according to the National Bureau for Economic Research. If we add Social Security contributions, which are growing steadily, we reach a figure of almost 62 percent, which is still the lowest figure recorded since 1965. At the same time, corporate profits have hoisted themselves up to a historic high (14 percent of national income), surpassing the figure recorded during World War II, when companies reaped the full benefits of the war effort and wage controls. Yet, it is here, in the increase in employment and labor income, that lies the key to the much-needed reduction in household debt.
Finally, the Americans have never paid so little tax. Their tax rate, which has fluctuated between 11 percent and 19 percent of disposable income since 1959, has fallen to 10 percent. But this is still too much for the majority of Republicans, who don't give a damn that their country will soon have the infrastructures of a third-world country and a third-class educational system. Is a democracy that refuses public contribution still a true democracy? This is the most serious question posed by the brawl that broke out in Congress. Quo vadis, America?
The confrontation between Congress and the White House on the budget issue showed that the United States was cornered. Political imbroglio, financial imbroglio, but above all economic impasse seems to be the best summary of the situation across the Atlantic.
When trying to assess the health of an economic operator, it is imperative to get the parameters right. Undoubtedly, the amount of public debt, which is now higher than that of the GDP, betrays the fragility of the empire. But other categories of indicators show a profound degradation of the American system by their evolution over the past four years.
First, employment figures confirm a real change of regime. The working population is now 6 million units below that of the end of 2007. This slump is affecting the activity rate: 63 percent of Americans were active before the big recession; now only 59 percent are. Another lesser-known indicator says it all: The number of Americans who change jobs voluntarily has halved. The much-touted mobility of the American workforce is coming up against the acute difficulty of finding available and attractive jobs. The Americans, in their turn, are suffering the anguish of structural unemployment. The two sides of the Atlantic have become closer.
In the second place, revenue sharing between employers and employees has become even more unbalanced during the recession. This is the taboo element of the country's economic equation.
The share of wages in the national income has fallen to less than 50 percent, according to the National Bureau for Economic Research. If we add Social Security contributions, which are growing steadily, we reach a figure of almost 62 percent, which is still the lowest figure recorded since 1965. At the same time, corporate profits have hoisted themselves up to a historic high (14 percent of national income), surpassing the figure recorded during World War II, when companies reaped the full benefits of the war effort and wage controls. Yet, it is here, in the increase in employment and labor income, that lies the key to the much-needed reduction in household debt.
Finally, the Americans have never paid so little tax. Their tax rate, which has fluctuated between 11 percent and 19 percent of disposable income since 1959, has fallen to 10 percent. But this is still too much for the majority of Republicans, who don't give a damn that their country will soon have the infrastructures of a third-world country and a third-class educational system. Is a democracy that refuses public contribution still a true democracy? This is the most serious question posed by the brawl that broke out in Congress. Quo vadis, America?