My friends, this conversation happened several decades ago

The USA has been in decline for several decades. In 1945 the US economy amounted to 50% of the world economy, now the figure is closer to 20%.

Conversations like this are odd.

Is America in decline?

Can anything reverse growing inequality of wealth?

What is odd is that people act as if this is the first time we are having this conversation. Possibly I’m sensitive to the issue since I’ve been a big believer in America’s decline since I was a child back in the 1970s. I’ve been reading books on this subject all my life.

During the early 1990s, with the US stuck in a long recession and Japan still being envied around the world, there were a large number of books published such as Rethinking America. The book argues that America should imitate some of the better practices of Germany and Japan.

Consider a book like The European Revenge, published in 1975. The authors make the argument that soon Europe will surpass the US as the world’s largest economy. And of course, that was true: the EU now has an economy larger than the US. Books about the decline of the USA were popular throughout the 1970s.

Serious problems began to emerge in the US after the recession of 1958. Agriculture was automated and the textile industry shut down and moved overseas. This lead to a permanent decline in the male participation rate in the work force:

The USA has been in decline for several decades. In 1945 the US economy amounted to 50% of the world economy, now the figure is closer to 20%.

Here is the pattern of these conversations:

1.) during every recession, most people worry that the US might be in decline

2.) during every boom, most people convince themselves that everything is fine. A thick wall of denial grows up, so that it becomes impossible to motivate people to undertake necessary actions.

I think #2 is the real problem here. The decline of the US won’t stop until people worry about that decline all of the time, both during recessions and during booms. Sadly, I do not see that happening. People’s attention drifts away once the immediate crisis is past. Eventually we will live in a world where the US economy is equal to 10% of the world economy, or maybe 5%. I wonder how low it can go?

I suppose I shouldn’t worry, since I’m going to do fine no matter what happens to the US. But I do feel badly for all the people who are going to experience a life of reduced expectations.