The Rent-seeking Economy

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America’s problem is the same problem that afflicted the 16th century Spain. When America established its hegemony and set up the world currency system, her leaders installed the U.S. dollar as the reserve currency for the world. America took advantage of this position to export dollars and import goods, rather than to manufacture goods herself. With demand for the dollar as reserve currency pushing up the price of the dollar, local manufacturers lost their ability to compete. Furthermore, China in the past decades has enacted an overt policy of keeping its currency undervalued to encourage exports. This is a violation of trade agreements and should enable the U.S. to take counter measures. But the political leadership has been asleep at the wheel.
Thus instead of Americans earning money via creating manufactured goods that people want, the American government prints money, gives the money to politically favored corporations, bureaucrats, and workers, who then export the dollars in return for cheap HDTV’s.