America’s positive trade balance ended in the early 1970s because, after enjoying quarter of a century as the only developed modern economy in the world after the destruction of WW2, Japan and Europe (in particular Germany) were back in business, competing and beating home-grown industry.
America’s path to perpetuate growth shifted to an international finance multinational corporate model from 1971 onward, which came naturally to Wall Street because they’d been investing heavily in countries like Germany and Japan (with US govt backing – subsidy) to rebuild, revitalize and stabilize the historical threats, in part by commiting their prosperity to the US-dominated free market paradigm.
Increasingly, Wall Street profits no longer rely on US domestic output. Defending ‘uncompetitive’ American industry doesn’t pay the same way.
Reaganomics in the 1980s tried to use federal muscle to deficit spend out of the decline and, while it slightly reversed the downtrend, it didn’t change the fundamentals. Instead, the 1980s ended in a bubble, unsustainable.
To make matters worse the Cold War threat evaporated in 1989 and China (plus India, Russia) join the game in earnest. American deficit outlook is bleak.
Neoliberalism was the solution, Clinton realigning fiscal policy on an ‘if you cant beat em join em (buy em)’ axiom, telling Americans they cant compete with China, pushing the global prosperity message instead.
In real terms this meant American big capital doubling down on global finance, accelerating the hegemony of Wall Street and US dollar’s preeminent position as the world’s de facto currency by deregulating banks (see repeal of Glass Steagall).
America’s home grown industry is largely forgotten by the ruling elites as Wall Street and corporate oligarchy and top neoliberal politicians form a cabal, to ringfence their wealth acquisition, and – when bubbles burst – make sure the American population (and foreign governments) pay for the bailouts.
The cabal is powerful. It has been consolidating power since Obama’s election.
The American people aren’t part of this cabal. 300 million Americans are irrelevant (most of the time) or else victims (when interests of the public clash with dictates of wealth transfer; the latter must win).
And so here we are in 2021.

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