A Must Read - Why America Is Not in Decline, Except at Home.

America hasn't really declined.  America simply went global and, in the process, turned its back on working-class Americans, blue and white collar.  A globalized America is an America of the 1%.  The rest who still believe are suckers.

That's the premise of a fine essay in Politico by Sean Starrs, a PhD student at York University.

The author argues that Americans see decline when they're in fact witnessing the impacts engineered into globalism.  America, or at least one segment of it, is actually doing very well indeed.  He contends we're getting deceived by now obsolete metrics.

The traditional way of conceptualizing national power is to look at so-called national accounts — most of all gross domestic product, but also balance of trade, national debt, world share of manufacturing, etc. — relative to other nations or the world. So when Japanese GDP was rising rapidly from the 1960s to the 1980s, people equated this with the rise of Japanese economic power. This made sense in the era before globalization, when production was largely contained within national borders and firms would export their goods and services to compete abroad. So when made-in-Japan radios began flooding the American market in the 1960s, this was reflected not only in increasing Japanese GDP and exports but also in the increasing capacity of Japanese firms like Sony to outcompete American firms like RCA.
 But in the age of globalization, as the world’s largest transnational corporations now have vast operations across the globe, this equation between national accounts and national power begins to break down. China, for example, has been the world’s largest electronics exporter since 2004, and yet this does not at all mean that Chinese firms are world leaders in electronics. Even though China has a virtual monopoly on the export of iPhones, for instance, it is Apple that reaps the majority of profits from iPhone sales. More broadly, more than three-quarters of the top 200 exporting firms from China are actually foreign, not Chinese. This is totally different from the prior rise of Japan, propelled by Japanese firms producing in Japan and exporting abroad.
 
In the age of globalization, then, the rise of Chinese national accounts could actually reflect the power of foreign transnational corporations, and we cannot know simply by looking at national accounts. Another example is the Chinese auto market, which has exploded to become the largest national auto market in the world since 2009. But again, in the age of globalization, this does not at all mean that Chinese firms are world leaders in automobiles. In fact, Chinese firms can’t even compete within China, let alone abroad. There are more than 100 Chinese auto firms, and despite decades of state subsidies and protection, their combined market share in China is less than 30 percent. Foreign firms, dominated by General Motors and Volkswagen, make up the rest. 
 
So we can no longer rely on national accounts to determine national power. Rather, we have to investigate these corporations themselves to encompass their transnational operations — for which national accounts (conceived in the 1920s) are wholly inadequate. Once we analyze the world’s top transnationals, a startling picture of economic power emerges. For one thing, national accounts seriously underestimate American power, and seriously overestimate Chinese power.
 
So this is what I do in my research, some of which is published in International Studies Quarterly. I analyze the world’s top 2,000 corporations as ranked by the Forbes Global 2000, organize them into 25 broad sectors and then calculate the combined profit shares of each nationality represented. The extent of American dominance is stunning. Of the 25 sectors, American firms have the leading profit share in 18, and dominate (with a profit share of 38 percent or more) in an astounding 13 of these sectors — more than half. No other country even begins to approach this American dominance across such a vast swath of global capitalism. Only one other country, Japan, dominates a single other sector (trading companies), which happens to be one of the smallest of the 25. By contrast, American firms particularly dominate the technological frontier, including a whopping 84 percent of the profit share in computer hardware and software (despite China becoming the largest PC market in the world in 2011), 89 percent of the health care equipment and services sector and 53 percent of pharmaceuticals and biotechnology. Perhaps most surprisingly, American dominance of financial services has actually increased since the 2008 Wall Street crash, from 47 percent in 2007 to an incredible 66 percent profit share in 2013. In short, despite almost seven decades of increasing global competition and the rise of vast regions of the world (most of all East Asia), American transnational corporations continue to dominate the pinnacle of global capitalism, a phenomenon that national accounts miss.
 
But if we now live in the age of globalization and these companies operate all over, then can we really count them as American power? Yes, because they are still ultimately owned by American citizens — of the top 100 U.S. transnational companies, on average more than 85 percent of their shares are owned by Americans. Thus, an incredible 42 percent of the world’s millionaires are American (as opposed to 4 percent Chinese), and more than 40 percent of the world’s household net worth is based in America. That the global share of U.S. GDP has declined to less than a quarter since the 2008 crash simply reveals how global American corporate power has become.

But this also drives increasing inequality in the United States, one of the defining issues of our age, from Occupy Wall Street to “The Hunger Games” to President Barack Obama’s 2014 State of the Union address. This is because the top 1 percent own 42 percent of Big Business, and as the latter increases its global power, so too does the wealth of American asset-owners — and thus inequality. But we cannot understand this fact without rethinking national power in the age of globalization, and understanding that U.S. power hasn’t declined — it has globalized.

At reader Richard's suggestion, here is a link to a complimentary post, "The Deep State", an essay that explores how power in America has transitioned to a new order, a merger of corporate and political power that circumvents most of Pennsylvania Avenue and Capitol Hill to direct the affairs of the United States.

Another Victim of Globalization - Britain's Trees.

British Columbians were, and remain, incensed that trade agreements prevented our government from blocking the export of raw logs.  We wanted the log processing jobs from the sawmills to wood fibre and pulp processing opportunities.   We can't, we were told by Victoria, our hands are tied.

Britons are now being told their country will suffer because of trade deals that left their government's hands tied.   This time the loss won't be jobs but Britain's Ash trees.

The British government claims it was powerless to prevent the importation of diseased Ash trees that spread their infection to the country's native Ash groves.

The government claimed it was powerless to ban imports of infected trees because its "hands were tied" by EU and world trade rules when it was warned in September 2009 that ash dieback disease could have a huge impact on the British countryside, the Guardian has learned.
 ...Burgess wrote that it had become apparent "fairly recently" that the disease – which the commission understood to be caused by Chalara fraxinea – had a form caused by a different fungus called Hymenoscyphus albidus. This, he said, "was widespread across Europe, including here in Britain.

"This fact alone precludes us from initiating an emergency response under the European Union plant health directive and we would also fall foul of our international obligations under the World Trade Organisation," he wrote.

When will we come to our senses and realize that globalization and world trade agreements were shaped to the needs of the world in the late 70's, a world that has sadly been replaced by the much more challenging and dangerous world of the 21st century.   Those agreements have lost much of their utility and purpose.   If you have a chance I strongly urge you to read Stiglitz' discussion of the flaws in globalization in his new book, "The Price of Inequality."  It is a compelling eye-opener and reveals we are heading much too fast down a dead end road.