Al Qaeda Lost. But Neither Did the U.S. Win

Just ask your self that old political campaign question, “Are you better off today than you were in 2001?”

Some, for sure, can answer in the positive. Here are a few of them:

2010/11 Earnings
Tiger Woods $62,294,116
Phil Mickelson $61,185,933
LeBron James $44,500,000
Peyton Manning $38,070,000
Alex Rodriguez $36,000,000
Kobe Bryant $34,806,250

(http://sportsillustrated.cnn.com/specials/fortunate50-2011/index.html.

Interestingly, there are no women in the top fifty big money athletes, but that’s for a different story.)

Yes, there are a few who are better off than they were in 2001, but even the very rich have by and large seen the value of their assets diminish.

But money is only the beginning. In almost every way, the U.S., as a country, is worse off than it was in 2001.

The number of dead in the ongoing wars in Iraq and Afghanistan – more than 6,200. The number of wounded in those wars is a matter of debate. The Department of Defense gives the number at around 45,000. But a veterans’ group, from VA documents obtained through the Freedom of Information Act shows that more than 500,000 Iraq and Afghanistan veterans have been treated at VA hospitals. The numbers measure different issues. But the gap is surprisingly wide.

In July of 2001, just before the 9/11 attacks, unemployment was 4.6 percent. Today, 9.1 percent. That is the national average. But the numbers for African Americans are far worse, as they are for Hispanics.

Civilian Unemployment Rate, by Race

Race 2000 2010
White 3.5% 8.7%
African American 7.6 16.0
Hispanic 5.7 12.5

These data are reinforced by poverty statistics that not only show a vastly higher percentage of Blacks than Whites in poverty. But the data also show an increase in poverty rates since 2000.

People Below the Poverty Level by Race (Percentage)

Year White Black
2000 9.8% 22.5%
2009 12.3 25.8

And those who are working, earn very little more, in real terms, than did their counterparts in 2000. (But they do receive more benefits.)

Average Weekly Earnings in Private, Non-Agricultural Industry (1982-1984 dollars)

Year 2000 2010
Weekly Earnings $284.79 $297.31

One of the reasons for the glacial pace of wage increases has to do with the glacial pace of industrial production.

Industrial Production Index (2007=100)

Year 2000 2010
Total Industrial Production 92.0 92.8

While wages are nearly paralyzed, the prices that wage earners must pay have been accelerating sharply.

Consumer Price Indexes (All urban consumers, 1982-1984 dollars =100)

2000 2010
All Items 172.2 218.1
Food 167.8 219.6
Housing 169.6 216.3
Medical Care 260.8 388.4

Americans seem to have lost their love affairs with cars over the decade. Average speed in autos declined from 2007 to 2010 by 6.7% and Americans reduced the amount of time they spent on the highways. Of course, that just might have to do with the price of gasoline. In January of 2000, the average price for all grades of gas in the U.S. was $1.30. In January 20111, it was $3.18

Number of Person Miles Traveled on Highways (Trillions)

Year Person Miles Traveled
2001 3.52
2009 3.30

The massive increase in household debt has been a major drag on the economy. From 2001 to 2007, household debt doubled from $7 trillion to $14 trillion. In the process, it boosted home ownership and household consumption above 71 percent of the GDP. At its peak, the debt hit 130 percent of the GDP. With the “great contraction,” Americans began working off some of that debt – down in 2011 to 116 percent of GDP, where it was last in the Fall of 2007. But the burden of debt is still huge. For example, the 50.3 million American households with credit card debt owe an average of  $15,799.

Government finances in 2010 are even worse compared with 2000 than are those of households. Of course, the government is not like a household because it can create money out of nothing and it should be the source of demand of last resort. But the tax cuts and the increased expenditures doubled government debt during the Bush presidency from roughly $5 trillion to $10 trillion.

Government Finance-Federal Receipts, Outlays, Surplus or Deficit and Debt as Percentage of GDP

(Billions of dollars, fiscal years)

There is bad news and good news on international trade. The bad: the U.S. balance of trade on merchandise has increased substantially since 2000. The good: global trade as a whole has undergone a massive expansion and the U.S. balance of trade on services has increased markedly.

Exports and Imports of Goods and Balance of Trade on Goods (Billions of current dollars)

Year Trade Balance Exports Imports
2000 -$436.1 $781.9 $1,218.0
2010 -$645.9 $1,288.7 $1,934.6

Exports and Imports of Services and Balance of Trade on Services (Billions of chained (2005) dollars)

Year Trade Balance Exports Imports
2000 +$71.8 $343.5 $271.7
2010 +$587.5 $1,997.2 $1,409.7

(Military equipment purchased and sold abroad by the U.S. Government is counted as service exports.)

International trade has increased dramatically, but our nearest neighbors are not sending us more trucks.

Number of Trucks Entering the U.S. from Canada and Mexico

Year Number of Trucks
2000 11,573,707
2010 10,187,330

Nor are their citizens entering the U.S. in private cars as they used to do.

Number of Passengers Entering the U.S. from Canada and Mexico in Private Vehicles

Year Number of Passengers
2000 329,841,500
2010 182,518,947

From fiscal year 2000 to fiscal year 2010, the defense budget increased by 75 percent. But the number of ships and aircraft has actually diminished over the period. The Navy reports a record percentage of ships are on inactive status desperately in need of repair and maintenance. (Do you remember Ronald Reagan talking of the 600 ship Navy?)

U.S. Navy Active Ships

Year Number
2000 318
2011 285

U.S. Air Force Inventory by Aircraft Category

Type FY2000 FY2009
Total Aircraft
Active 4,944 4,460
Reserve 442 375
Air National Guard 1,355 1,153
Total 6,741 5,988
Fighter/Attack
Active 1,595 1,493
Reserve 114 108
Air National Guard 771 664
Total 2,480 2,265

The future of the United States depends to a major extent on its ability to transform its economy and society through research and development. The number of dollars spent in the U.S. on R&D has increased substantially. But the percentage of U.S. GDP so spent has been frozen. In 2000, the U.S. devoted 2.7% of the GDP to research and development. The percentage in 2011 remained at 2.7 percent. That percentage is lower than the percentages of GDP spent on R&D in Japan, South Korea, Sweden, Israel, and Finland.

This stream of data, comparing the U.S. in 2010 or 2011 with 2000 could be continued, seemingly, indefinitely. What they indicate is the hollowing out of the United States in the 2000s. The narrowing of the options; the vastly diminished capability to believe in ‘American Exceptionalism;’ and the darkening of the ‘American Dream.’

The U.S. chose a particular way to respond to 9/11 – with the invasion of Afghanistan and the overthrow of the Taliban. Then the U.S. turned its attention to Iraq and the overthrow of Saddam. It has yet to bring about a functioning government or political stability in either country. The result has been the slow bleeding of the United States, the deterioration of its economy at home and its standing abroad.

We have devastated al Qaeda and killed Bin Laden. But we haven’t “won.”

Data Sources: 2011 Economic Report of the President; U.S. Government, Bureau of Transportation Statistics; U.S. Government National Transportation Agency; U.S. Naval Association; U.S. Air Force Association, National Association of Manufacturers; U.S. Travel Association; Wikipedia; U.S. Energy Information Agency; U.S. Highway Agency; Federal Reserve; Credit Card Industry Facts.