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Producing all over the world
The new jobs were created elsewhere, which had to have an effect on family income in the United States. Within the next two decades, the income of the lowest fifth sank by 1.4 percent. The second fifth still managed to gain by 6.2 percent, the third by 11.1 percent and the fourth by 19 percent. At the tip of the pyramid - where the promoters and planners of globalization reside, and those who profit most from it - income gains climbed by 42 percent.
The US national economy clearly bears the signs of this break with its golden age, when the country produced prosperity for almost everyone. Until the 1970s, the productive core of the country burned with such a fiery light that it illuminated the entire world. The United States provided dollars and products for everyone. The American empire's nuclear power helped in the reconstruction of war-torn Europe and Japan. The United States was the world's greatest net exporter and greatest creditor for four decades. Everything went just the way the economy textbooks said it should: The world's wealthiest nation pumped money and products into the poorer states. The United States used the energy from its own productive core to make other countries glow or at least glimmer. It was indisputably the world's center of power, a source of energy that radiated out in all directions.
US capital was at home everywhere in the world, even without military backing. Many experienced this state of affairs as a blessing, some as a curse. Either way, it was good business for the United States: At the peak of its economic power, the West's leading nation disposed of assets abroad whose net value amounted to 13 percent of its GNP. To put it differently: The country's productive core had expanded so dramatically that it opened up branches and subsidiaries all over the world.
What remains
This undoubtedly superior United States doesn't exist anymore. As a center of power, it is still more powerful than others, but for some years now that energy has been flowing in the opposite direction. Today, Asian, Latin American and European nations are also playing a role in the United States's productive core. The world's greatest exporter became its greatest importer. The most important creditor became the most important debtor. Today, foreigners dispose of assets in the United States with a net value of $2.5 trillion, or 21 percent of gross domestic product. Nine percent of shares, 17 percent of corporate bonds and 24 percent of government bonds are held by foreigners.
Neither laziness nor the obvious American penchant for consumerism can be blamed for this changed reality in America. US industry -- or at least what little is left of it -- is responsible. In the span of only a few decades, US industry has shrunken to half what it once was. It makes up only 17 percent of the country's GDP, compared to 26 percent in Europe.
Every important national economy in the world now exports products to the United States without purchasing an equivalent amount of US goods in return. The US trade deficit with China was about $200 billion dollars in 2005; it was a solid $80 billion with Japan; and more than $120 billion with Europe. The United States can't even achieve a surplus in its trade with less developed national economies like those of Ukraine and Russia. Everyday, container-laden ships arrive in the United States - and after they unload their wares at American ports, many return home empty.
Those looking for something good to say about the superpower won't find it in the trade balance. The growing imbalance can't be attributed to natural resources or the import of parts for manufacturing firms. Oil imports, for example, don't make as significant a difference to the trade balance as is often assumed: They account for only $160 billion dollars, a comparably small sum. Instead, it's the top products of a developed national economy that the United States is importing from everywhere in the world - cars, computers, TV sets, game consoles - without being able to sell as many of its own products on the world market.
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