Why America Is In Decline

Tyler Durden's picture

Submitted by Simon Black of Sovereign Man blog,

Along with history, travel is by far one of the best teachers. Formal education in classrooms can be stifling to the mind. It makes people believe that the world actually conforms to all the snazzy theories we read about.

But there’s no economic textbook on the planet that can come close to showing you how the world really works.

It’s not about stocks and flows, efficient markets, or official statistics. None of that stuff really matters.

The world runs on people. And even though our politicians go out of their way to highlight the differences among us, human beings all over the world are fundamentally the same.

We all love our children. We cheer for our favorite teams. We work hard to put food on the table for our families. We get frustrated with where we’re at in life. And we desire to achieve more.

This desire to achieve is fundamental to all humanity. Human beings aspire. We push ourselves to accomplish more and improve our stations in life. And this desire spans generations.

Parents always want their children to enjoy a better life than they had. And they work their butts off to ensure this happens.

This isn’t exclusively a western phenomenon. All over the world, the need to provide a better life for one’s children is practically a subtext to the social contract. And people in developing countries want exactly the same thing.

They’re succeeding.

A child born in China today will have a far richer life than his/her parents and grandparents.

And in my travels to over 100 countries over the last 10+ years, I’ve seen other frontier and developing markets that are bursting at the seams in a similar trend.

Myanmar. Colombia. Tanzania. Georgia. Sri Lanka. Botswana. Indonesia. Mongolia.

The growth rates in these places are staggering, and you can see first-hand the hundreds of millions of people being lifted out of poverty.

In these developing countries, they look across the water to the West and can see a rich and consumptive lifestyle. They want this lifestyle, especially for their children.

They’ve spent decades toiling in factories, saving money, and building for the future. It’s time to cash in.

Decades ago, the vast majority of wealth and production was in the West– specifically the United States.

Most people across Asia and Latin America were absolutely impoverished, and felt honored just to be able to work hard and export a product to the US.

Today, it is those same countries (particularly in Asia) that now hold the majority of the world’s wealth and production. And it is their growth that pulls the global economy along.

The West, on the other hand, is full of debt and consumption. America’s greatest exports are now infinite quantities of paper currency, drone attacks, and arrogant regulations like FATCA.

It doesn’t take a rocket scientist to see where this is going.

The West is running out of steam, and the Social Contract subtext is breaking down. Parents are no longer able to provide a better life for their children.

It’s not from lack of trying. But when you’re bogged down by tens of trillions in debt, rising taxes, increased regulation, and a government that rules by fear and intimidation, it’s like swimming upstream in the middle of a hurricane.

Wealth and power are shifting. Developing nations are rising quickly, and western nations are sinking. It’s happening. Ignoring this reality doesn’t make it go away.

Providing a better life for our children now means breaking away from a 20th century paradigm and embracing the new rules of the game.

The world isn’t coming to an end. But it’s changing, just as Hemingway wrote– gradually, then suddenly.

This is fundamentally a good news story… and it opens up a world of opportunity for those who are willing to see it.

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Vampyroteuthis infernalis's picture

This author fails to grasp that one large driver of the increased economic activity in devloping countries IS debt driven by the western countries. The west fails, so will the others.

Jumbotron's picture

DING DING DING !!   We HAAaaave a WINNAH !!!

And the fuel for that debt creation is ...well...fuel.  Cheap fuel.  Which we are out of.

"The Long Emergency"


inhibi's picture

And sometimes I think the world IS ending. 

Just wait until water becomes the next oil. Then what? You can't opt out of potable water like you can with oil.

BrosephStiglitz's picture

You can't opt out of oil either.  I mean.. you can personally not use oil, but what about the cheap supply of clothes you wear, or the food you eat?  Those require transportation, and that is where a cheap, non-volatile, and abundant energy store really has caused a massive burst in growth.

Anything imported will become extremely costly in terms of time and cost if an oil alternative cannot be found.

Government needs you to pay taxes's picture

It makes for some interesting scenarios, assuming the price of transporting goods rises 200%.  Back to making things closer to home, and more objectively separating 'Need' from 'Want'. 

Pickleton's picture

Hell half the clothes we wear are made out of oil products too.  And the food is fertilized from oil based fertilizers.

sylviasays's picture

The four fat lesbians herald the death knell of the middle class by predatory big gubernut socialists. 

SAT 800's picture

Sailing ships. all our tea used to arrive on sailing ships from China; and Australia exported its whole grain crop in sailing ships. they work.

Serenity Now's picture

You are right, but the world population and standard of living was slightly different back then.  Yikes.

the tower's picture

to waste oil as an energy source or to make cheap clothes or plastic is unforgivable

we need oil for many other things, like medicine.. many drugs cannot made without oil

without oil there is no fertilizer, and fertilizer is the main reason why we have such an abundance of food...

Bendromeda Strain's picture

We'll just exploit our abundance of bullshit...

Monty Burns's picture

What about solar powered desalination?  Driest countries have the most sun.

RafterManFMJ's picture

Doctor Flamond: You see, a year ago, I was close to perfecting the first magnetic desalinization process so revolutionary, it was capable of removing the salt from over 500 million gallons of seawater a day. Do you realize what that could mean to the starving nations of the earth?

Nick Rivers: Wow. They'd have enough salt to last forever.

TheReplacement's picture

After wawa, salt is the most important thing to human civilization.

Jack Burton's picture

In the end, nearly all growth of modern economies is built on energy, which is mostly oil and gas. China is developing now for 2 decades at a rapid rate, look at energy, that consumption goes up in lock step with GDP. It has to! Agriculture is oil based in all modern economies.

It is a fact that once cheap energy, oil and gas, becomes more expensive, then growth will suffer. And YES, nearly all world growth is debt based. In America consumption is debt based, in the EU it is debt based. Cheap oil and cheap debt, those drive it all.

garypaul's picture

Yes, and the latest I have heard about the "shale miracle" in the U.S.:

 - 96% of the so-called oil in California shales is not recoverable

- The Bakken is threatened by exponentially rising costs to extract (debt for the drillers)

- I'm sure there are more surprises out there

prains's picture

The Bakken Scam if even remotely recoverable couldn't sustain a modern economy for ONE generation so who fucking cares, eventually we have to suck on a low carbon future why all the glad handing to avoid mathematical inevitability

Flakmeister's picture

The Bakken is a real field, however in the grand scheme of things it is the parallel to a stoner scraping his hash pipe...

sylviasays's picture

96% of the so-called oil in California shales is not recoverable

Kalifornia shale is not allowed to be recoverable thanks to the state's hypcocritical Demoncat socialist leftist elite whose mega-mansions have carbon footprints bigger than most small towns. The wind and solar power cabal they support are unsustainable scams that produce little energy and are totally dependent on taxpayer subsidies. 


The Phu's picture

I don't know that the author fails to grasp that at all... he just politely ignores it.  He also ignores that, to your point, when the west fails (and then the developing world follows in lock step), the developing world will have plenty more people to rise up and blame the west for their inability to realize the "American Dream."  Then there will be riots, suicide bombers, and then there won't be enough bullets and missiles. 


Just look at Rome for the roadmap.  'nuff said.

what's that smell's picture

baby boomers? they squandered a great nation's wealth so they could go wind surfing on the credit card.

shed a tear for them? never.

Cloud9.5's picture

Before we go, you better learn from us how to plant a garden, run a milling machine, TIG weld, can food, reload ammunition, rebuild an engine and a host of other things.  All of us did not go to the beach and stay there.  As a casual note, most farmers are boomers.

UrbanMiner's picture

As a generalization, the boomer generation begat the concept of the self over the whole, there are exceptions of course, but the rule holds. In my business (I deal with people of all ages) I find boomers to be the most self smug of all generations, again not everyone, but as a general observation, their sense of entitlement and arrogance is unparalleled. The so called 'greatest generation' of WWII fame, humble and hard working, thinking of their progeny more than themselves. Perhaps the boomers just had it too easy, and it infected their sense of how the world should treat them, they've known nothing but 'perpetual growth'. Interestingly, despite having been left vast sums of wealth by their parents, the mantra of the boomer seems to be 'I'm leaving nothing to my kids'. I deal with estates and the boomers want it all and wish to leave little to nothing for their kids, it's fascinating and sad at the same time. Greed has always been around, but it is the boomer management class that has institutionalized it.



zerocash's picture

The mantra of many boomers is "I'm leaving my debts to my kids".

TheReplacement's picture

Lift a shovel to give them a proper burial?  Nope, too many of them laying around.  Let 'em rot.

Stuck on Zero's picture

"The west fails, so will the others."

Vamp.  That's a myth.  When the system falls the places that have the factories, expertise, and people will rebuild quickly and advance.  The West has lost the will, the factories, and the skills and will not recover so quickly.

Vampyroteuthis infernalis's picture

SZ, have you ever read the book "Why Nations Fail"? It outlines that a societies' success or failure is based upon whether a ruling class is open and inclusive or closed and extractive. These developing countries were poor before due to a closed and extractive system. After the west fails, they will return to their old impoverished ways. Plain and simple.

Serenity Now's picture

+1.  The so-called Chinese miracle has been nothing more than our Walmart dollars going to China for cheap plastic junk, cheap DVD players that break in six months, cheap clothes, cheap everything.  If they have made one single thing of quality in the past 15 years, then I certainly haven't seen it.  

Take a look at your local Walmart (or any mart).   Shorter shelves, wider aisles, way less merchandise, 1/3 of the store is groceries.  The credit bubble is over, our fake economy is over, and yes, China is over.  Like night follows day.

Kayman's picture

   Excluding the zero/negative productivity of our talented money changers, there is plenty of other talent left in the west in general and America in particular.

   But I see a lot of people, myself included, that face endless penalties to produce (more). So I (we) do not.


garypaul's picture

It's true that the system penalizes you for producing more, but that's by design. The best example I can give is why Cambodia's government used to execute anyone who wore glasses - because it meant the person looked like they were educated and might be a threat to the rulers. You can extrapolate my meaning from there.

CH1's picture

The West has lost the will, the factories, and the skills.

I'm nitpicking, perhaps, but I disagree:

The West has LOTS of capable, motivated people. Will and skills are still here. It's just that the current neo-fascist system doesn't allow us to function as we wish.

I could manufacture things, but I won't, because the system makes me a slave if I do. Fuck them.

COSMOS's picture

The new generation has lost those skills you have.  They used to pick them up from the older folks but now with all the distractions etc nobody takes the time to pick up some real life skills

Bendromeda Strain's picture

My HVAC guy finally picked up a competent assistant to eventually sell the business to, but the locksmith and the plumber are both getting long in the tooth. Neither are cheap, but they are certainly reasonable. I should ask them if they have sons who declined the family business in favor of a never ending video game apprenticeship.

malek's picture

The west still has SOME capable, motivated people, but for sure not lots of them anymore.

And that's by design, as it's so much easier to shear the unskilled, apathetic sheeple...

TheAnswerIs42's picture

Yes, they will rebuild and advance, except the global infrastructure will then be missing.

Maybe that's a good thing? I doubt it.


Sonic the porcupine's picture

Debt doesn't drive an economy, capital investment (via deferred consumption) and increased productivity do. The developing countries make things. Even when they realize the AAA paper they have foolishly bought from the west/US is in fact worthless, they still have the factories and the goods they produce. They will simply stop exchanging them for said worthless paper.

Serenity Now's picture

Well, they don't make things out of thin air.  It requires money.  Our money.  For every exporter, there has to be an importer.  Do you see more goods or fewer goods in your local Walmart?  

Factories are worthless without money to pay for raw materials, labor, or without buyers.  It doesn't matter where the factories are.

malek's picture

The absoluteness of this statement is hilarious.

The world cannot function without debt-based fiat money, i.e. unbacked IOUs or in more general terms imaginary pipe dreams? I don't think so.

Is it guaranteed the Asian countries will smoothly switch from interdependence with the west to trading between each others? No, but they have all the necessary requirements in place, so your thinking seems arrogant to me.

AMGdesignnl's picture

Denial is the best way to go on ... no need to worry <);o)

unplugged's picture

Add in a moderate helping of apathy to achieve nirvana.  But, I really don't care.

Serenity Now's picture

Ha, good one.

"I don't understand the question, and I will not respond."  --Lucille Bluth

Tsar Pointless's picture

We all love our children.

Indeed. That's why we're fervently poisoning their water and air, running up trillions in debt, pissing off the rest of the world with our narcissistic foreign policy, drugging them in their youth, and generally fucking up everything we put our grubby, ignorant little hands upon.

That's love, baby!

Jack Burton's picture

Bravo Tsar!  Your point is well taken.

awakeRewe's picture

We all love our children.

Really? There are 50,000,000 + children that can't disagree.