The country with the greatest economic inequality. Who do you think has the greatest economic inequality (where the rich are extremely rich and the poor are very poor)? If you said the United States of America, you would be wrong, the U.S. is number two. Number one is China. If you think about it – it is the most ironic fact of the century, a country that overthrew their government in 1949 and put in a system where everyone is equal – Communism – is the country that has the greatest economic inequality. Maybe the United States can learn something from China.
The long awaited fourth part of “How Did We Get to Here” (about the downfall of the U.S. economy) is now completed. The last edition was published in 2013 (for the years 1980- 2013), but there has been a lot of time that has passed since then. First, we will take a brief look from the strong economic times of 1950 to the the downfall of the U.S. economy after 1980, with 2010 (as the midpoint) up to the present year, 2034. And then we will look at a couple of the factors that have caused this downfall.
The United States was once the most powerful country in the world in many ways, but that was 50-80 years ago. Multiple changes have occurred since then. We will cover some of the more important causes of what happened in a little bit.
U.S. Manufacturing Overview
First, we will do a quick look at U.S. manufacturing in categories such as their position in their world, the number of manufacturing jobs, the percentage of jobs to the rest of the workplace and how it met our domestic needs in respect to the years: 1952, 1980, 2010 and 2034. Obviously, overall manufacturing has greatly diminished. Manufacturing of clothing was 2% in 2012, now it is only a novelty or a hobby (percentage-wise, probably, 0.0001%).
Year 1952 1980 2010 2034
# in economy/world 1 1 1 3
# in manufact/world 1 1 1(tie) 13
# manufact jobs in U.S. 16.5M 19.5M 11.5M 3.2M
% US manufacturing of
total needs 95% 60% 5% <0.1%
% US manufacturing as part
of total U.S.economy 53% 20% 11.5% 2.5%
The Decline of U.S. Manufacturing (Causes)
Manufacturing and exporting has been the backbone of strong economies for many centuries. However, starting in 1980, a new economic movement started in the United States, Europe and Japan, but not in China. The theory that was followed has been called “Supply-Side Theory”, a form of extreme Free-Trade policy, which insinuated that any regulation was bad. And any tax was also bad. Therefore, the United States ultimately abolished all import taxes. This caused a major problem that wasn’t discovered until much later – that American workers had to directly compete with 4 billion other global workers – it is a “flat world” after all. This caused a major disappearance (outsourcing) of American manufacturing jobs to the point that almost nothing is made in America today except some military weapons. But, the loss of manufacturing also created not only chronically high unemployment and an unstable economy but it created a high dependency on imports. This caused massively high Trade Deficits (no exports, high amount of imports, lots of borrowed money) . After ignoring the ever increasing massive Trade Deficits for many years, the U.S., in 2025, under President Tad Romney, declared that debts caused by Trade Deficits were not legally recoverable (part of the Balanced Budget Act), which eventually escalated into major financial depressions all over the world. Then, the austerity cuts made things much worse and government was constantly kept out of any recovery plan. This was exactly the Herbert Hoover plan, only this occurred in the 21st Century. But, did attention to Trade Deficits bring back manufacturing by increasing exports? No. The Depression further decreased manufacturing jobs and even as the U.S. economy has slightly improved over the past two years, there was never any push to increase American manufacturing. Present situation as of June 15, 2034: terrible economy, manufacturing sector dead.
Below is a list of the top countries as far as their economies (GDP). We will look at the countries with the top three economies: China, India and the USA.
Top Economies of 2034
- United Kingdom
China has been the leading manufacturer in the world since 2012, and has been the number one economy since 2019. The Chinese economy continues to grow with rare setbacks due to shrewd governmental interventions with industry. Growth rate from 2030-2034 is stable at 6-7%, down from the double digit growth of the 2010’s and down from 8-9% of the 2020’s. But still impressive in this age of oversupply (less world-wide demand of products, [however, supply-side advocates still do not acknowledge this fact of worldwide overproduction]). Shanghai is the leading financial center for the past ten years. Other countries follow the news from China closely as they are, pardon the old fashioned term, “the movers and the shakers”. China carries the most political clout in the United Nations with an ever increasing number of allies (aligning with the #1 economy of the world is pretty easy actually). Allies include India, Russia, Southeast Asia, the Middle East, most African Nations, about a half of the South American nations and about a third of the European nations since the dissolution of the European Union in 2021.
After many miscues in the 2010’s, India came into its own in the 2020’s with government becoming more involved and totalitarian in regards to industrial policy. Growth had been in the double digits for several years, but has slowed to 6-7% for the past eight years. India has surpassed China as being the most populated country just two years ago, 2032. Pollution and income inequality continue to be major problems.
The United States has slipped to number 3 in regards to national economies. Automation continues unabated. Drones check forest fires, there are very few human forest rangers. Automation is now the standard at fast-food and regular sit-down restaurants. The “Mega- Merger” movement continues to expand. There are four major banks. There are five major insurance carriers. There are three major airline carriers.There are three companies that control multi-media communications. Free Internet is as dead as the horse drawn carriage. Income inequality continues to grow unabated. Geographic differences continue to expand, for example, minimum wage in Washington, D.C. is $20.35, Austin, Texas is $7.25, and in some states, minimum wage has been repealed. Chinese-made automobiles flood the market, since 2026. 3-D printing is extremely big, but most of the raw materials come from China. Miami has had to make major renovations for its ever rising water level. Gay marriage is legal in 40 states. Here is one interesting story: the New Balance factory in Massachusetts was put out of business by its own subsidiary. In a major power play, Yue Yuen, in the fall of 2022, had been over-producing New Balance shoes secretly for six months, when it suddenly announced that they were going to be the sole maker of New Balance shoes, enforcing contracts with all the major shoe chains to buy only from them and then selling the shoes at a reduced rate, so that the U.S. shoe manufacturer could not survive. There were threats to sue, but these were quietly dissuaded by prominent members of Congress. Mandarin is taught in most schools, and many Americans travel to China to get jobs. The economy forecast of 2035 and beyond, (like my prediction back in 2013) is bleak, only worse.
The United States once the most powerful nation has continued to slip, still clinging to Free Market Thinking, even after 50 years of results that show it doesn’t work, but reason and facts never get processed when it’s political. The U.S. has no economic plan, it has entirely abandoned manufacturing, and is awash in a mountain of debt. It is impossible to find anything made in the USA anymore. This blog which once was a portal to find “Made in USA” clothing in stores and on the internet and an avid backer of American manufacturing has become a blog on how to find American made clothing at Vintage shows and how much these clothing gems are worth. (They are worth a lot). So, hold on to those old “Made in America” garments, see my blog entry on “How to Preserve Your Made in America clothing.”
Long live the American Dream.
Salon magazine reported that controversial founder and CEO of American Apparel, Dov Charney, was ousted as CEO by the Board of Directors due to sexual misconduct. Mr Charney has withstood previous sexual harassment charges over the past decade, however, new information has moved the Board to act, and on Wednesday, June 18, 2014, made it official that Dov Charney was no longer to be the CEO of American Apparel. American Apparel is a company which makes all of their clothing in Los Angeles with numerous stores across the United States and in several other countries. their claim to fame is all of their clothing is Made in the United States and their secondary claim to fame is their controversial internet advertising which often included topless women and occasional bare derrieres. Dov Charney was definitely a capitalist, really didn’t believe in Made in America, and was hardly an icon that people could follow. So, we shall see what will happen with a Dov Charney-less American Apparel. We do hope they survive, as they do supply many types of clothing made in the United States that no one makes any more.
Flint and Tinder – Proudly Made in America | Goods + Wares – Men’s Shop – Shop. Here are some great ideas for Father’s Day from Flint and Tinder. The selection is not just underwear, for which Flint and Tinder are famous for, but there are many other fine and interesting accessories, all made in the USA. Click the above link for other fun accessories. Have a Happy Fathers Day!
Here is a fantastic article by A Continuous Lean about one of the oldest American shoe brands, Alden. Written by Jake Gallagher.
At 130 years old, Alden might just be America’s coolest centenarian. As they cross into their 13th decade this year, Alden’s shoes has never been more in demand, with the reported wait list for a pair of custom shoes from their Middleborough, Massachusetts’ factory stretching back well over a year. When the heritage movement hit with full force in the early aughts, Alden found themselves
Alden was a marque name of the early aughts heritage revival, and even as the spotlight on Americana has begun to fade once again, Alden’s renaissance is as strong as ever. While the shoemaker continues to crank out a wide assortment of stock designs for their diehard customers, it’s the considerable crop of “special makeups” that Alden has produced in partnership with stores across the world that present some of the venerable shoemakers most interesting creations.
Trunk Clothiers Officer Chukka – A beefed up desert boot that would make General MacArthur proud.
J. Crew “Milkshake” Suede Plain Toe Boot – The other kind of “desert boot” built on an ultra-lightweight wedge sole.
Unionmade Sutter Tassel Loafer – Blue suede shoes, minus the Elvis, plus a mocc-toed and tasseled silhouette.
Bureau Belfast Color 8 Cordovan Plain Toe Blucher – The investment dress shoe, because nothing ages quite like color 8 cordovan. You’ll be passing these on to your grandson.
Frans Boone Grain Dover Oxford – With a water resistant grain leather upper and a waterlock sole, these grainy lace-ups are a true rainy day special.
Winn Perry Red Brick Buck – The no-nonsense dirty buck done right for this summer.
Context Roy Boot – A sleeker take on the iconic Indy boot, cut in a casual snuff suede.
One of the most difficult questions to answer is how American is an automobile. The Kogod School of Business did a great job last year classifying each model of automobiles was American by using several categories like country of ownership, country where research is done, where the auto is assembled, and where the transmission, engine and others parts are made. It is great that the Kogod updated the list for 2014. Some of the noted changes are the Ford F-15 series trucks that used to be made in Mexico are now made in Michigan and this makes them the most American made car, tied with the Chevrolet Corvette. Another addition this year is the inclusion of Tesla.
For Bangladeshi Women, Factory Work Is Worth the Risks – Businessweek. The following article is a Pro-Free Trade Article, which is trying to defend why its okay for Americans to buy from Bangladesh. I will not interfere with the article but I will put in my [ editor's brackets] where it is appropriate.
From Businessweek May 21, 2014
For Bangladeshi Women, Factory Work is Worth the Risks
To give her daughter opportunities neither she nor her mother had, Nazma Akhter made the only choices possible for a poor, illiterate woman in Bangladesh [the only choice? She had children]. She fled her village, bolting the door behind her so her mother couldn’t chase her down. She moved to Dhaka, the capital, and began living in a shed the size of a parking space. She worked 12-hour days making jeans, T-shirts, and dresses, earning no more than $98 a month.
The income was just enough to allow Akhter to bring her family to Dhaka and put her daughter, Riza, in school. Then, on Nov. 24, 2012, a fire broke out in the Tazreen Fashions factory where Akhter worked. The blaze killed 112 of her co-workers. A worse disaster followed. On April 24 last year, 1,129 perished when the Rana Plaza factory complex collapsed.
For Akhter, who guesses she’s in her early thirties, the fallout from Tazreen has been severe. She unravels her sari to show the scar on her back from hours of surgery after she jumped out of the building, falling two stories, to escape the fire. She still can’t work. But she says she’d do it all again if it meant that Riza, now 10 and an excellent student, could get a good education and a shot at an office job—the girl’s dream. Nothing could be further from the life lived by Akhter’s mother, who still pulls stalks of rice in paddy fields. “God, she worked so hard,” says Akhter, whispering in the shed as her three children sleep in the afternoon heat. “My mother couldn’t stand straight anymore. I couldn’t live like that. I couldn’t make my daughter live like that.”
The paradox of Bangladesh’s $20 billion garment industry, where substandard practices have resulted in the deaths of at least 2,000 people since 2005, is that it’s virtually the only way for the nation’s women and girls to claw their way out of poverty and illiteracy. For some 3.5 million Bangladeshis, mostly women, the 10-hour shifts [it usually more like 12 to 15 hour shifts] spent hunched over a sewing machine offer a once-in-a-generation chance to better their lives.
“My mother couldn’t stand straight anymore. I couldn’t live like that. I couldn’t make my daughter live like that.” —Nazma Akhter
In 2011 about 12 percent of Bangladeshi women ages 15 to 30 [did you note the ages of what they call women? I wouldn't call age 15 a woman] worked in the garment industry, according to a study by Rachel Heath of the University of Washington and Ahmed Mushfiq Mobarak of Yale University’s School of Management. Pay was 13 percent greater than in other industries that rely on manual labor. Perhaps most important, the researchers found, 27 percent more young girls were attending school than before the garment industry existed. [Are you saying that there is an increase of just young girls (not boys) because the factory workers can pay for schooling out of their own pockets now or are you saying it is because there are many more city-dwellers than in agriculture due to this massive shift in population due to the influx of factories?]
Young as she is, Riza, a poetry-obsessed math whiz, understands that her mother’s job was an essential step in her family’s quest for security and prosperity. “Tell me something,” she asks. “Do offices catch fire like factories do? Because I want to work in an office someday.” [Yes, offices can just as easily catch fire in Bangladesh due to substandard building codes and enforcement, too.]
For Bangladesh, a nation dismissed by Henry Kissinger as a “basket case” after its violent birth in 1971, and which has since endured several political coups and uprisings, garment making has been a godsend. It now accounts for 6 percent of gross domestic product and last year made up almost 80 percent of exports. “Don’t forget that this industry has allowed Bangladesh to cut poverty by a third. Don’t forget that it has created milions of jobs. [That used to be American jobs]. Don’t forget that it has helped put more young girls in school than ever before,” says Gilbert Houngbo, deputy director general of the International Labour Organization, which has funneled millions of dollars in the past year into inspections of Bangladeshi factories. [I find the word "funneled" to be a strange choice of words to do inspections] “On the other hand, you can’t do that at the expense of women’s basic rights—the right to feel safe, to be safe, to have decent work environments.”
On a steamy afternoon, Akhter relives the day she almost died. She waves with her hands as she describes the smoke filling the air on her floor of the factory. She feigns a limp to demonstrate how her leg was stuck in a pile of bodies. Suddenly she starts howling, the memories still sharp. The cries awaken Riza as neighbors crowd into the shed to hear the story. The girl slips off of a thin sheet on the floor and starts putting things in her school bag, even though classes are over for the day. Three notebooks, a small box with a pencil, a sharpener and half an eraser, a book of Bengali grammar, and an empty lunchbox barely fit into her used Hannah Montana backpack.
Conclusion from the Editor
Yes, it is certainly a feel-good story that should warm the heart of any major industrialist. But before we start patting ourselves on the back for improving poverty in Bangladesh, just remember that the original reason why American jobs were moved to Bangladesh had nothing to do with improving the poverty level of Bangladesh, it was about making money. If the corporations had the welfare of the people in mind, they would have funded all their schools and radically improved their infrastructure – none of this has been done.
So, in reality, we are left with a 30 year old previously healthy woman, who is now permanently and totally physically disabled and with a bad case of Post Traumatic Stress Disorder to boot. Plus, she has three children that depend on her support. The problem is obvious, Akhter is without a job, and gets no disability pay and probably has some enormous hospital bills (unless she sues, which is highly unlikely). She has no visible means of support, and is unlikely to find work or a man that will support her, ever. Yes, happy endings. This story makes me so happy that we shipped our American jobs to Bangladesh. Long live “Free Trade” and the World Trade Organization.