In a recent article, It’s Not that I’m Negative, America Really is Screwed, economic commentator Umair Haque argues that America’s decline is irreversible.
The US economic collapse is vastly under-estimated, he says, with 40 million people unemployed, 100,000 thousand dead from Covid-19 and cities across the country now on fire.
Photo: AFP
Decades of underinvestment in public goods has left the country, he describes as a "failed state" incapable of recovering from the pandemic, and ill-prepared for any future shocks.
"I keep getting this question from Americans: How did we get here, and can we do anything about it? And I don't think that we can now I think it's too late."
Public health, public education and a paid retirement, which are taken for granted in many countries, are now beyond America's reach, Haque says.
"America never invested in those things. The rest of the rich world began to invest in those things from the '50s through to the '70s and now pretty much everyone enjoys that. America was the only one that didn't invest in those things.
"Can America write a social contract in which the average American enjoys those things? When you look at the economics the hard truth is that 80 percent of Americans now live pay check-to-pay check. Right on the edge of perpetual financial catastrophe.
"So, we come along and say 'sure you can have what the rest of the world takes for granted, all you have to do is pay an extra 10 to 20 percent in taxes'. The problem is they can't afford it."
The US is facing what he calls a "trifecta of doom".
"Those three things are income, savings and the third one can be something like happiness, or trust or it can be something like life expectancy.
"And when we look at indicators like that, we expect those things to be steadily creeping upwards in almost any society in the world.
"Maybe with small periods of stagnation, but that's how progress happens, that's what progress is.
"When we look at America, it's one of two countries in the world where all of those statistics are trending downwards at pretty catastrophic rates."
Unemployment and the prevalence of low quality jobs in the US is only set to worsen, he says.
"Long before coronavirus hit, in the last 10-20 years in America something really grim has been going on, which is the old base of "good" industrial jobs has disappeared.
"So, the story was if you worked in a small town in America you worked in a factory that was churning out some kind of consumer goods, you'd have a pension, you'd have health care you'd have all kinds of benefits and a job for life."
On the back of that kind of employment the American Dream was underwritten, he says.
"Now the fastest growing sector is low-income service jobs this is a glorified word that we should more simply call servants."
About half of Americans are now in these low-income service jobs performing a service for the 1 to 10 percent who are rich, he says. Coronavirus has accelerated that process and the jobs lost to because of it will not return.
"The truth is out of those 40 million jobs that are being lost, America's going to be very lucky to see 20 million come back. I would say 10 million is probably more reasonable."
America's bosses will see opportunity in a post-Covid world, he says.
"A lot of American CEOs will be saying 'I can get by with a lot less employees, I can get by with a lot less stores, I can cut costs to the bone'.
"People around the world often don't understand how ruthless American capitalism is, and in this case you can be sure that Wall Street and boardrooms are sitting around and learning exactly the wrong lessons from coronavirus."
America is a failed state with many problems layered upon others, racism being just one, Haque says.
"One of things that has happened in America is that because the white American majority is so racist, they didn't understand that the consequences of their racism was going to be their own impoverishment a few decades later."
The Reaganite "counter-revolution" of the 1980s was underpinned by racism, he says.
"It said we don't have to build any public goods - healthcare, retirement education - all of these things.
"And a lot of that was driven by white people thinking I won't invest in them, I'm not going to pay for those kids' schools, those peoples' retirement.
"Those 'people' of course being black, brown, Asian, Mexican whatever - other people.
"As a result of that kind of thinking, a few decades from then, they themselves wouldn't have things like public healthcare, education, retirement, public transport because those things, either all the society has them, or nobody does."
This has left Americans paying "insane, extortionate rates for basic things."
"Having a child in America costs $US50,000, sending a kid off to university costs more than buying a house.
"If you had to have an operation, God forbid, it would cost you your life savings. That's because Americans don't have public healthcare.
"And they don't have public healthcare because racism cheated them of a chance to develop things that could have been for the whole society."
Umair Haque Photo: Umair Haque
The riots in America now are about more than the George Floyd killing by police in Minneapolis.
"I think on a deeper level are also about a sense of rage, and a sense of disappointment and a sense of failure - how did our country end up here? How did things get so bad?
"And a rebellion against the Trump administration - how is this mad man in charge of our country?"
As the superpowers such as America decline, other nations emerge as global leaders, he says, and New Zealand is among them.
"All the old super powers are dying: America has gone, Russia is a shadow of what it used to be."
New Zealand is emerging as a global leader "whether you like it or not."
"None of this is about my feelings, it's not my opinion that America is collapsing, the cities are on fire and the average person doesn't know what the hell to do.
"Just like it's not my opinion that New Zealand is a global leader."
The Social Progress Index produced by Harvard is the most authoritative guide to how well a country is doing, he says.
"You guys are number 7 - all the other countries above you are Scandinavian countries.
"In the midst of all that chaos that's being left behind by the fall of the old superpowers a new set of leaders are rising around the globe."
Nations such as Canada and South Korea are other examples, he says, and they will be the countries that show the way forward for others.
"The future economically for any global leader is not so much about imports or exports of yesterday's products and services anymore.
"The future for a global leader is to show the rest of the world how to build a functioning society and how to keep one."
For the US, however, it is too late unless the Federal Reserve steps in and boosts incomes, he says.
"Businesses can rebuild for sure, and America can go on being optimistic, but that doesn't stop the fatal trends of people growing poorer, of social disintegration, of people not trusting each other.
"Is there a way out? The only way out is the average American needs to have that extra 10 to 20 percent of income."
That won't happen under American capitalism, Haque says.
"Well the corporations that employ him are never going to give it to him because Wall Street will fire their CEOs if they do.
"The only way for this to happen if for the Federal Reserve to print what is known as helicopter money."
That could underwrite incomes or be part of a new social contract.
"Otherwise, I think the writing is on the wall. If you are too poor to afford the very things you need you don't have a choice, these are the stark economics of a collapsing society."
UK-based Umair Haque is the author of several books, including The New Capitalist Manifesto: Building a Disruptively Better Business.
