Ideology of free trade spawns ... outbreak of nativism

Spiegel, Is the American Dream Over? A Superpower in Decline

America has long been a country of limitless possibility. But the dream has now become a nightmare for many. The US is now realizing just how fragile its success has become -- and how bitter its reality. Should the superpower not find a way out of crisis, it could spell trouble ahead for the global economy...

The United States is a confused and fearful country in 2010. American companies are still world-class, but today Apple and Coca-Cola, Google and Microsoft are investing in Asia, where labor is cheap and markets are growing, and hardly at all in the United States. Some 47 percent of Americans don't believe that the America Dream is still realistic...

The Desperate States of America are loud and distressed. The country has always been a little paranoid, but now it's also despondent, hopeless and pessimistic. Americans have always believed in the country's capacity for regeneration, that a new awakening is possible at any time. Now, 63 percent of Americans don't believe that they will be able to maintain their current standard of living...

The country is reacting strangely irrationally to the loss of its importance -- it is a reaction characterized primarily by rage. Significant portions of America simply want to return to a supposedly idyllic past. They devote almost no effort to reflection, and they condemn cleverness and intellect as elitist and un-American, as if people who hunt bears could seriously be expected to lead a world power. Demagogues stir up hatred and rage on television stations like Fox News. These parts of America, majorities in many states, ignorant of globalization and the international labor market, can do nothing but shout. They hate everything that is new and foreign to them...

The unemployment rate is at 12 percent in Florida. Many people are leaving, running away and leaving everything behind, not just their dreams, but also their furniture, their keys and, most of all, their debt. Others are taking everything with them, from toilets to copper cable...

The beginning of the 1980s offered conservatives the opportunity to reshape the country as they saw fit... When air traffic controllers went on strike for higher pay, Reagan fired them and banned them from federal service for life. He also deregulated the telecommunications industry, the shipping industry, banks and commercial aviation, and he lowered the maximum tax rate from 70 to 28 percent...

The United States became a different country, a radical, free, forward-looking and bold country -- a triumphant country, or so it appeared.

Exporters from other countries surged into the American market, first from Japan and later from China and India...

But was it healthy and sustainable? ...

All of this is making radicals more vocal. "I think what we're seeing now in America is an outbreak of isolationism, nativism and xenophobia," Reich says, pointing toward animosity toward immigrants, accusations against China and growing skepticism of foreign trade...

"The US economy has been losing momentum for the last decade," says Edmund Phelps, winner of the 2006 Nobel Prize for economics. According to Phelps, it has been increasingly clear, since the beginning of the millennium, that no new jobs are being created on balance, because the US economy has undergone structural change. Companies are dominated by investors interested only in the kinds of quick and large profits that can be achieved by reducing the workforce. Almost 6 million jobs have been eliminated since 2000. Today only 9 percent of Americans work in the manufacturing industry -- half as many as in 1985.

"America has to change," says Obama's economic advisor Paul Volcker in New York. "I wish we had fewer financial engineers and more real engineers instead, like mechanical engineers." America, according to Volcker, must "rebuild its industrial sector." Since World War II, job growth has kept up with population growth, ranging from 10 to 20 percent per decade. The country was firmly convinced that it could continue to do so. In the last decade, the population grew by 25 million, but there were no new jobs, or at least no net job creation...

Can he find a different job? "There are no jobs," he says. The Petersons haven't been able to make their mortgage payments for the last 16 months.

"It's all so frustrating," says Marc. He is referring to their imminent move, his sons' anxiety, their debt, of course, and, most of all, the realization of not having made any progress after working for 20 years. "Salaries did not rise, but the cost of living did," says Amie. "We scaled back, even our dreams. The things we hoped for will not come true."

The naked fear of the undertow is palpable throughout the entire country, where people who once considered themselves part of the middle class, the solid center of the country, now feel threatened. These are the people who, now that the smoke has cleared, are suddenly realizing that 30 years of economic growth, all the boom years, have virtually passed them by. In 1978, the average income for men in the United States was $45,879. In 2007, it was $45,113, adjusted for inflation...

The unemployment rate in the United States is at about 10 percent. But when the people who have stopped looking for work and are not registered anywhere are included, the real number is likely to be closer to 20 percent. For the first time since the Great Depression, Americans have a problem with long-term unemployment...

Almost 45 million Americans are considered poor, with 4 million falling below the poverty line in 2009 alone. The Department of Agriculture warns of growing "food insecurity." One fourth of all children in the United States depend on government food stamps...

Uh oh, I just thought of a way for Obama to become very popular: to indulge the protectionist instinct, raise tariffs and rebuild America's manufacturing sector. He has hinted at such policies before. Maybe the newly elected Republicans would support him. I support a return to protectionism, but I don't like Obama regaining popularity...