The Midwesterner: Blogging the Global Midwest

Pop Goes the Bubble

Yogi Berra has reminded us that "it's tough to make predictions, especially about the future." With all respect for the Sage of St. Louis, I'm going to make a prediction that is sure to pan out. Here it is:

There is a big and growing bubble in farm land prices across the Midwest, and this bubble will pop, sooner or later. The result will be a rash of failed farms and rural misery.

We know this will happen because it's happened before, most recently thirty years ago. In the 1970s, a variety of factors -- mostly high grain prices -- sent farm land prices to record heights as farmers borrowed heavily to buy as much land as they could. Then, in the early 1980s, other factors -- mostly falling grain prices -- left many indebted farmers unable to pay their debts.

The result: thousands of Midwestern farms failed. Banks foreclosed. Many small rural banks, holding too many bad loans, also failed. Newspapers reported farmer suicides, even the murder of bankers by distraught farmers. Farm foreclosure sales became common social events. Most big farmers weathered the storm, but medium-sized farmers, whose debt soared by 250 percent in the 1970s, collapsed. Usually, they were bought by bigger farmers next door, accelerating the consolidation of Midwestern farming and the decline in rural population.

Managing Decline

(This is the last in a series of posts on globalization and social/economic decline in America.)

Great nations decline badly.

Through history, empires and mighty nations have declined messily from their peaks, often destroying themselves and their neighbors as they fall. China, once the world's most powerful nation, endured 300 years of poverty, war and humiliation, culminating in the madness of the Great Cultural Revolution, before entering its recent revival. The Arab world, which invented mathematics and much of medicine, remains sunk in centuries of ignorance and superstition. The European empires disappeared in two ruinous 20th century wars. Most recently, the Soviet empire has withered into a bitter, corrupt and still dangerous kernel.

Now it's America's turn.

Previous posts in this series have reported the decline in this nation's capacity to support its people economically and in its ability to project power abroad: this decline has been the subject of articles and books by other writers and is increasingly accepted as fact. But we went further in stating that this decline is irreversible, mostly because the global economy has enabled the great corporations and their leaders -- traditionally the drivers of America's economy -- to escape not only American law and regulations but any responsibility for the nation, its people and its future. Operating globally, they have stopped being American. The nation will carry on without them but it will be weakened, in decline.

The Cost of Decline

(This is the third in a series of posts on globalization and American decline.)

American decline, increasingly obvious across the nation's landscape, remains controversial. Is the United States declining absolutely, as the Roman Empire did? Is it only declining relatively -- that is, it's strong but other countries are catching up? Is this decline only temporary, something that will disappear when the recession ends and we get our mojo back?

These are important questions. The recession certainly will end. No country can remain the sole superpower forever. So will everything be OK, so long as we keep America strong and vital?

The truth is that American decline is neither temporary nor relative. It doesn't have anything to do with the recession and not much to do with China. Yes, the recession will end and China could collapse, as some pundits predict. Neither will affect the reality of American decline.

This decline can be measured in two basic ways. Both are happening now. There is no sign that either will be reversed.

The Face of Decline

(This is the second in a series of posts on American decline.)

American decline is the topic du jour, the subject of hundreds of op-eds and a shelf of books, as the evidence piles up of stagnant incomes, third-world inequalities, fleeing jobs and slipping standards in everything from education to pensions. 

Some pundits dispute the very notion of decline: after all, how shabby can a nation be that still has Silicon Valley and Wall Street, that remains the global powerhouse in arms and finance, that still draws foreign students to its universities and entrepreneurs to its cities? And besides, if we're lagging a bit right now, well hey folks, this is America. We can recoup. We can beat this challenge, just as we beat other challenges in the past. The sub-title of Thomas L. Friedman's latest book perfectly sums up this can-do spirit: "How America Fell Behind in the World It Invented and How We Can Come Back."  

Maybe not. Not this time. This time is different. Our previous post explained why -- that the corporations and corporate leaders who must lead this comeback have gone global, and have abandoned any real interest in the condition of American society.

The Roots of Decline

(This is the first of several posts on the link between globalization and social and economic decline in the United States.)

The presidential election, now a month away, may or may not produce solutions to the immediate problems, such as the deficit, that ail us. But no matter which candidate wins, he won't be able to deal with the deeper problems -- the collapse of the American middle class, the vast inequalities between the rich and the rest, and the decline in this nation's ability to support its people.

The reason is globalization. The American economy, once mostly national, used to respond not only to national laws and regulations but to American ideas of economic decency -- the belief that the one true purpose of an economy is the well-being of the people who live within it. Now it has gone global. Neither old American regulations nor old American beliefs still apply.