[jyl]

The rest of the world caught up. US manufacturing was no longer dominant, business became harder and tougher, competing against countries with people just as smart and hard-working but poorer and hungrier. Profits got harder to make, businesses had to manage the margins and costs and assets as hard as the engineering and production. Newer, more advanced industries where the US was still dominant, generally high technology and high complexity and heavy science, were better places to be so US companies, people, and investment shifted to there. The companies, people, and investment that didn’t shift became poorer and some died out, and along the way they cut corners trying to hang on. This cycle keeps repeating, with other countries catching up in more and more advanced industries and the US shifting to even newer and even more advanced ones, and those who don’t or can’t shift gradually shrinking away.

Not just the US - similar in Germany, UK, France, Italy, all of the West. After decades of being the catching-up country, Japan became the getting-caught-up-to country. Eventually it will be China’s turn to see others eating away at their less advanced industries and seeing millions of Chinese companies and people failing to shift and getting poor. In fact, it is already starting to happen there.

What’s the saving grace, if there is one? First, this pressures countries and people to develop more advanced industries - so progress happens. Second, along the way countries get rich. The US is a very rich country, so is Western Europe, so is Japan. “Rich” means per capita (or average) wealth and income. There can be lots of poor people in a rich country if wealth is not distributed or used well, but that’s up to the country and its people and politicians.

Demographics come into this too. As countries get more advanced, birth rates slow and the population gets older, which slows growth. Eventually the country is very old - meaning the population’s average age - but hopefully has gotten rich. Japan got there, so did Western Europe. China is in trouble, it is getting old very fast and is still far from rich. The US is totally unique along major countries - it is a very rich country that is not old and not aging that fast.