The Economy of the USA

This oligarchic situation built by such businessmen as Andrew Carnegie or John Rockefeller pushed US congressmen to pass anti-trust laws in the early years of the 20th century. 

Andrew Carnegie 

     Andrew Carnegie built an industrial empire of steel centered around the Carnegie Steel Company in Pittsburgh.

     Carnegie who was the largest steel producer in the world merged his company with several smallest steel companies to create in 1901 the U.S. steel Corporation.

     This integrated structure is often considered as one of the first and most important trusts in US history. It was shaped by Carnegie and the American banker John Pierpont Morgan to reduce costs and improve rentability. 

John Rockefeller 

     John Rockefeller founded the Standard Oil Company, an oil cartel which made him the richest man of his time.

     Standard Oil gradually gained almost complete control of oil refining and marketing in the United States through horizontal integration.

     At that time, many legislatures had made it difficult to incorporate in one state and operate in another. As a result, Rockefeller and his associates owned separate corporations across dozens of states, making their management of the whole enterprise rather unwieldy.

     In 1882, Rockefeller's lawyers created an innovative form of corporation to centralize their holdings, giving birth to the Standard Oil Trust. The "trust" was a corporation of corporations, and the entity's size and wealth drew much attention.

     Standard Oil business practices improved the quality and availability of kerosene products while greatly reducing their cost to the public (the price of kerosene dropped by nearly 80% over the life of the company), but it created intense controversy and gave the momentum to US antitrust laws. 
 
 
 
 

Antitrust Laws 

     As a consequence of Carnegie, Rockefeller and other robber baron’s business practices, US congress passed late 19's and early 20's century anti-trust laws to limit oligarchic business practices in the United States.

     In 1890, US congress passed the Sherman Antitrust Act. It was the first legislation passed in order to limit business monopolies, cartels and trusts. 

American Dream 

     The American Dream is a national ethos of the United States of America in which democratic ideals are perceived as a promise of prosperity for its people. In the American Dream, first expressed by James Truslow Adams in 1931, citizens of every rank feel that they can achieve a "better, richer, and happier life." The idea of the American Dream is rooted in the second sentence of the Declaration of Independence which states that "all men are created equal" and that they are "endowed by their Creator with certain inalienable Rights" including "Life, Liberty and the pursuit of Happiness."

     The "American Dream" has been credited with helping to build a cohesive American experience but has also been blamed for overinflated expectations. The presence of the American Dream has not historically helped the majority of minority race and lower class American citizens to gain a greater degree of social equality and influence. Instead, the American wealth structure has often been observed to sustain class differences in which well-positioned groups continue to be advantaged.

     In common parlance, the term American Dream is often used as a synonym for home ownership since homes have historically been seen as status symbols separating the middle classes and the poor. This usage, though, while common, is generally considered a very specific use of a more general term.

     Since the early 19th century, the United States has regarded and promoted itself as a beacon of liberty and prosperity achieved through a combination of the philosophical and ethical principles propounded by its founders and implemented in their most perfect form. In tandem with this is its natural wealth and bounty within the New World.

     The meaning of the 'American Dream' has evolved over the course of American history. While historically traced to the New World mystique —  the availability of land and the continuing American expansion—the ethos today simply indicates the ability, through participation in the resonant society and culture of the United States, to bring prosperity to oneself.

     According to the dream, this includes the opportunity for one's children to grow up and receive an American education and its consequent career opportunities. It is the opportunity to make individual choices without the restrictions of class, caste, religion, race, or ethnic group.

     According to researcher Tommi Uschanov, "american dream" actually characterizes better European societies in which people who born to lower social classes are - according to statistical data - more likely to reach upper social classes during their lives than in the United States.

     Historian and writer James Truslow Adams coined the phrase "American Dream" in his 1931 book Epic of America: The American Dream is that dream of a land in which life should be better and richer and fuller for every man, with opportunity for each according to ability or achievement. It is a difficult dream for the European upper classes to interpret adequately, and too many of us ourselves have grown weary and mistrustful of it. It is not a dream of motor cars and high wages merely, but a dream of social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable, and be recognized by others for what they are, regardless of the fortuitous circumstances of birth or position.                                                   

     He also wrote: The American Dream that has lured tens of millions of all nations to our shores in the past century has not been a dream of material plenty, though that has doubtlessly counted heavily. It has been a dream of being able to grow to fullest development as a man and woman, unhampered by the barriers which had slowly been erected in the older civilizations, unrepressed by social orders which had developed for the benefit of classes rather than for the simple human being of any and every class. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Conclusion 

     It seems to me, that it was really interesting to investigate development and problems in economy of the United States. The United States has the largest national economy in the world. The USA remains the world’s leading producer of goods and services, although its margin of superiority is diminishing as other countries become more competitive in the world’s market.

     Industrial and technological position of the states is very high. The USA is the leading producer of electrical energy, aluminum, copper, sylph and paper, and one of the top producers of natural gas and automobiles. No other nation exports as much high technology as the USA. There is a considerable quantity of articles and books devoted economy in whole and a present situation in the United States. Throughout all development of economy, there were some difficulties, now America and many countries of the world try to endure serious crisis. The economic situation of the United States today is widely understood to be the most serious since the Great Depression of the 1930s, and not only for this country. The situation changes from day to day, and week to week there is a new focus, a new problem. If we track from the origin of economy in the USA up today, I think it is possible to allocate both weak and strong sides of it. While investigating this theme, I have come to the following conclusions: first, the strengths are:

Housing markets: Strong price rises – averaging about 7% per annum lately – plus low interest rates allow families to refinance their mortgages and cash out some of the gains on their homes. Access to credit cards and auto loans are also ample. Those additional financial resources support strong consumption spending. Car sales: With liquidity quite ample, consumers are able to take advantage of price discounts and low-cost financing incentives to buy motor vehicles at a prodigious rate. But auto companies are not able to make much profit in this highly competitive environment where there is virtually no pricing power. Imports: A lot of consumption spending is showing up as elevated levels of imports, swelling the trade and current-account deficits and raising questions about how sustainable this pattern can be.                                                                                                                                     

     Defense spending: The build-up of military hardware, especially airplanes and aviation parts, is adding almost ½% to GDP growth this year.                                                                   

     Inflation: There are two areas of price problems: housing and oil. Otherwise, inflation is tame.  

And the weaknesses are:

     Job market: Job growth has been minimal, even as fresh layoffs have diminished. The unemployment rate is stuck at about 6% and could edge a little higher in the months to come. Business fixed investment: There is still tremendous excess capacity in several parts of high tech industry, especially telecommunications equipment. Senior management is tightening capital budgets further. Construction: The plunge in non-residential real estate development has been almost as bad as after the banking and thrift crisis of the late 1980s, early 1990s. State and local government infrastructure projects have to be scaled back because of budget problems. Bank lending: Standards are still being tightened, costs are raised, especially for less credit worthy borrowers, and demand for loans has shrunk. Profits: Many industries are still operating at a loss, despite the recovery that has taken place so far.

     And I would like to add, that if America wants to save itself, and in doing so save the world, then we should embrace a direction that has no finish line, that has no limitations and that offers constant growth and opportunity. 
 
 
 
 

                                                   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

       Literature 

1. Anthony T. Kronman, "Wealth Maximization as a Normative Principle", the Journal of Legal Studies, vol. 9 (March 1980)
2. Barbara Ehrenreich (1989). Fear of Falling, The Inner Life of the Middle Class. New York, NY: Harper Collins.
3. D. Bradley, E. Huber, S. Moller, F. Nielson & J. D. Stephens (2003). Determinants of relative poverty in advanced capitalist democracies. American Sociological Review, 68(3), 22-51.
4. David Bailey and Soyoung Kim (June 26, 2009).GE's Immelt says U.S. economy needs industrial renewal.UK Guardian.. Retrieved on June 28, 2009.
5. David McCullough, John Adams, Simon & Schuster, 2001, p. 648
6. Dennis Cauchon and John Waggoner (October 3, 2004).The Looming National Benefit Crisis. USA Today
7. Dennis Gilbert, (1998). The American Class Structure. New York: Wadsworth Publishing.
8. Douglas Eichar (1989). Occupation and Class Consciousness in America. Westport, Connecticut: Greenwood Press.
9. Geranda Notten, Chris de Neubourg (2007): Poverty in Europe and the USA: Exchanging official measurement methods. Table 3, pg.38
10. J. Cohen Benjamin The Future of Money, Princeton University Press, 2006; cf. "the dollar is the de facto currency in Cambodia", Charles Agar, Frommer's Vietnam, 2006, p. 17
11. L. Josh Bivens (December 14, 2004). Debt and the dollar Economic Policy Institute. Retrieved on July 8, 2007.
12. Laurence J. Kotlikoff, 1987, “social security," The New Palgrave: a Dictionary of Economics, v. 4, pp. 413-18. Stockton Press.
13. Lloyd Warner, Marchia Meeker, Kenneth Eells (1949). What is Social Class in America, Lloyd Warner New York, NY: Irvington Publishers.
14. Milton Friedman; Rose Friedman (1980). Free to choose. Harcourt. 
15. Min Zeng (October 6, 2008). "Bailout Funding Promises to Pressure Treasury Prices".
16. Mortimer B. Zuckerman (December 15-22, 2008). Editorial: Heading Off a Depression. US News and World Report. 
17. Nancy D. Ruggles (1987). "Social accounting," The New Palgrave: A Dictionary of Economics, v. 3, pp. 377-82, esp. p. 380.
18. Rhonda Levine (1998). Social Class and Stratification. Lanham, MD: Rowman & Littlefield.
19. Richard H. Ropers Richard H, Ph.D. Persistent Poverty: The American Dream Turned Nightmare. New York: Insight Books, 1991.
20. Sarah Young Fisher; Susan Shelly: The Complete Idiot's Guide to Personal Finance in Your 20s & 30s, Penguin Group, 2009, pg. 264
21. Scott A. Hodge, Curtis S. Dubay (2008-03-27). "America Celebrates Tax Freedom Day". Tax Foundation.
22. Scott Bittle & Jean. Johnson, «Where Does Money Go?" Collins; New York: 2008.
23. Scott Burns (2007-02-21). "Your real tax rate: 40%". MSN Money.
24. William Greider, the Nation, May 6, 2009. The Future of the American Dream.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

(1) United States wealth compared to the rest of the world in the year 2000

 
 
 

(2) Year-on-year change in total net worth of US households and nonprofit organizations 1946-2007, unadjusted for inflation or population change. 
 

 
 
 
 
 
 

 
 
 
 

(3) The percentage of households and individuals in each income bracket. 

(4) Social classes

 
 

(5)