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Several significant events occurring recently in the U.S. should force us as Americans to scrutinize closely what has been happening in our country. In particular, our country, having been the richest and most powerful country in the world in essentially the second half of the 20th century, doesn’t seem from several perspectives to be doing that well in the 21st century. Actually, signs of many of these shortcomings were already there in previous years, even 20-30 years ago, we just haven’t been paying close attention to them while basking in the glory of being the richest and most powerful country in the world.

It took several recent ominous events to finally wake us up and face reality:

• The gigantic financial industry meltdown makes us ask how did it happen, how greed can damage the whole industry and country, who were on deck watching the ship, and weren’t the government’s regulatory bodies supposed to foresee and keep such problems from snowballing? How can Exxon Mobil make a record net income of $14.8 billion in just the third quarter of 2008 when everyone else was suffering from the high gasoline prices and the American economy was in a recession? Note that the 3Q08 net income was an increase of $5.4 B from 3Q07, which was already a record profit year.
• The near-bankruptcy and the need for a huge government bailout by the big three American auto companies make us ask why the Japanese, German, and Korean car companies can continue to make money when our American car companies keep losing money and market share? When the big three were asking the federal government (i.e., the American citizens) via Congress for a huge handout to keep them from bankruptcy and at the same time their auto worker unions refused to agree to more union concessions make us ask do they have the interest of anyone else in mind besides their own and is that a wise decision even for their own long-term good?
• The failure from both the battlefield and world opinion with respect to the Iraq war makes us ask does America really represent a symbol of justice and peace, and how can the President’s office fabricate things in order to justify their pre-determined policy?
• The corruptions and moral failures of high government officials (such as Illinois Governor Blagojevich, New York Governor Spitzer, Presidential candidate Senator Edwards of North Carolina, Alaska Senator Stevens, and many other political leaders, including many, many officials in New Jersey) make us ask what happened to their oaths of office to uphold and defend the Constitution of the United States, and what happened to their moral and ethical standards when almost all American political leaders are supposed to be Christians? Is it surprising then that so many of our young people also do not meet the moral and ethical standards that a good society is supposed to have?

As stated earlier, these problems are not necessarily new. There were already signs of similar problems in earlier years, even 20, 30, or more years ago. For example:

• The Savings & Loan Crisis of the late 1980s and early 1990s was to a large extent due to introduction of highly speculative and risky investment schemes and the lack of adequate government regulatory oversights. We didn’t learn from this disaster from 20 years earlier. The record profit of Exxon Mobil in 3Q08 is nothing new. In each of the previous three years (2005-2007) when ordinary citizens were suffering from repeated gasoline price increases, Exxon Mobil had recorded the highest profit ever by a public U.S. company.
• Gasoline shortage first appeared in 1973 and the emergence of the Middle East oil cartel occurred around the same time. Japanese cars started to gain market share from American cars in the 1970s and together with German cars had been consistently rated among the top automobiles from the 1980s. Yet the big three Detroit companies continue to make big, fuel inefficient cars, such as SUVs and Hummer, and continue to make cars that on the average have poorer performance and maintenance records. The decline of the American auto industry has been occurring for more than 30 years, and yet no drastic actions were taken. We have also witnessed when airlines were going or almost going bankrupt, yet their unions had refused to grant more union concessions. Besides being selfish, is that to their benefit in the long run?
• We had the Vietnam War in the 1960s and 1970s. For over half a century, we had been staunch supporters of Israel at the expense of ignoring the rights and needs of the Arab countries. Is it so surprising that other countries do not necessarily always respect us at the political table?
• Public lies were made by President Nixon resulting in impeachment and subsequent resignation by President Nixon in 1974. Public lies were made by President Clinton with respect to the Monica Lewinsky sex scandal in the 1990s. Here are two examples of moral/ethical failures by the highest office holder in the U.S. Is it surprising then that other government leaders do not always tell the truths about their personal behavior?

There are at least three other phenomena that have significant relevance with respect to the decline of American power. The first is that most of the electronic manufacturing industry (with the possible exception of PC manufacturing) has been dominated by companies from Germany, Japan, and more recently Korea. This is most obvious for products such as cameras, camcorders, televisions, VCR players, CD players, and DVD players. Although the U.S. may be the most innovative country in the world, it seems that American companies cannot compete successfully in large scale manufacturing of consumer and business electronic equipment, as well as many other products. This is not just due to the cost of labor, because the actual manufacturing plants can be located in other countries, such as China. It is more due to design, quality control, and management of the manufacturing process.

The second phenomenon is that the quality of education in the U.S. is not ranked near the top relative to other developed countries. The most comprehensive comparative study is probably the Trends in International Mathematics and Science Study (TIMSS) that is conducted every four years and started in 1995. Mathematics and science are two subjects that are more or less universal across countries, whereas other subjects, such as history, geography, and languages, usually do not have the same centents across countries. That is why the comparative study is done for mathematics and science. TIMSS is developed by the International Association for the Evaluation of Educational Achievement (IEA). Comprised of national research institutions and government research agencies from around the world, IEA designs TIMSS assessments for fourth and eight graders. In the U.S., the National Center for Education Statistics (NCES), in the Institute of Education Sciences at the Department of Education oversees TIMSS assessments.

The most recent TIMSS study was done in 2007 and results have just been released (see, e.g., http://www.aip.org/fyi/2008/121.html and http://nces.ed.gov/timss/results07.asp). The results showed that in mathematics, the U.S. is ranked 11 out of 36 for fourth graders and 9 out of 48 for eighth graders. In science, the U.S. is ranked 8 out of 36 for fourth graders and 11 out of 48 for eighth graders. In all four cases, the score of the U.S. is significantly below the top 4-5 rankings. In absolute terms, such ranking may not be bad, but if we want to continue to be the richest and most powerful country in the world, we have to improve significantly and move up closer to the top. Although the U.S.’s scores in mathematics rose between 1995 and 2007, its scores in science have been stagnant between 1995 and 2007.

In another educational comparison study by UNICEF published in 2002 (see, e.g., http://www.cbsnews.com/stories/2002/11/26/world/printable530872.shtml), which was based on five different tests of 14 and 15 year olds to determine their abilities in reading, math and science.  The results showed that South Korea has the most effective education system in the world’s richest countries, with Japan in second place, and the U.S. and Germany near the bottom, at 18 and 19 out of 24 countries.  Commenting on the results, Dewayne Matthews, vice president of the Denver-based Education Commission of the States, said that the U.S. showing in the UNICEF ratings was expected by people who follow international rankings in education and emphasized the need for reform.  He said “A lot of that has been driven by this perception that our schools are simply not good enough and they don’t compare well with systems in other countries.”  The study showed that there may be a number of factors affecting the effectiveness of a country’s educational system, but the rankings do not necessarily depend on the amount of funding provided or the student-to-teacher ratios.

The third phenomenon is the huge and rapidly growing national debt, which is now over $10.5 trillions.  Eight months ago in April 2008 when I wrote the article “Government Spending and America’s Future” (http://www.dontow.com/AOT10-Government Spending.html), the national debt was $9.3 trillions.  This means that our national debt has increased by almost 13% in eight months!  In terms of each U.S. person’s share, it has increased from $30.6K to almost $34.6K!  If we don’t take drastic steps to reduce significantly this huge national debt, essentially we will be bankrupting our grandchildren.  Because of the current financial crisis we are facing, we may have to swallow the bitter pill and increase our national debt even more in the near term before we can turn it around.

We point out these shortcomings not because we want to trounce on the U.S. We understand that there are a lot of positives about the U.S., and we understand that every country has its shortcomings. We focus on our shortcomings because we are concerned that if we let these shortcomings continue in the years to come, the quality of life for our children and especially for our grandchildren will suffer greatly. It is time that we be courageous and scrutinize carefully what we have been doing and then take drastic corrective actions, including actions that we weren’t willing to take in the past. The solution is of course extremely complex and involves many things. I believe that the solution at a high level must include at least the following three components.

Mental Fortitude

• We must admit that our country is facing serious problems. The first step in solving a problem is to admit that there is a problem.
• To solve these problems, we cannot conduct business as usual. We must be willing to do things which in the past we were not willing to do.
• Each of us must be willing to contribute and may have to sacrifice something in order to make the country better and therefore in the long run also make it better for ourselves. We must emphasize more on “we-ism,” instead of “me-ism.”.
• We must set higher moral and ethical standards for everyone, including ourselves, our children, and our political and corporate leaders.

High Level Comprehensive Strategic Plan:

• Our government must formulate a comprehensive, strategic plan that focuses on the long-term returns, and not always on the short-term returns.
• We must recognize that the current situation is drastically different from the situation during the first 200+ years of our nation. In the first 100+ years, we had vast territories across the North American continent for our country to expand and vast natural resources for our people to utilize. In the second 100+ years, our country’s natural geographical isolation helped to provide barriers to keep other countries from attacking us and our stronger economy helped us to dominate the weaker countries in the world. In the 21st century of global connectedness and global economy and the rise of more economic powers, we must find a way to compete successfully with many more worthy competitors. Furthermore, when the world is so connected, terrorists can now easily create havoc across national boundaries.
• We must stress the importance of a balanced budget and the need to reduce our national debt. If we keep living beyond our means, our children and grandchildren will pay for it.
• We must provide proper government oversights to protect the public from excessive greed and risky investment schemes.
• We must focus on developing alternative energy resources, not only to reduce our dependence on foreign oil, but also as significant long-term revenue sources via exporting these alternative energy resources.
• We must develop smaller, more fuel-efficient, and higher quality cars so that we can gain back market share. Our corporate leaders must address the fundamental problems facing their companies, and our labor unions must be more willing to compromise when the circumstances require it.
• We must revitalize our high end manufacturing industry to take advantage of the great creativity and entrepreneurship of Americans, so that we can benefit more from the products we invent.
• We must take care of our environment. This not only can make our lives healthier, but it also provides long-term revenue sources via exporting future environmental friendly technologies.
• We must put more focus on improving and expanding our infrastructure so that we rely more on public transportations and less on personal transportations, thus reducing our energy consumption and contributing to a cleaner environment.
• We must treat other countries, nationalities, and cultures with respect and as partners in solving the global problems. We should not ride into a foreign land as a lone cowboy to solve that foreign land’s problems. We should not give preferential treatment to one country at the expense of other countries.
• To combat terrorism, on the one hand we need to get rid of any unnecessary political motivations from our political positions and actions in order to make it more difficult for the terrorists to attract new recruits, and on the other hand for those countries that are fertile grounds for new terrorist recruits we must find ways to work with those countries to try to improve their economy.
• We should continue to reduce the gaps between different races, different sexes, the rich and the poor, and the have’s and the have not’s. At the same time, we should reduce the feeling of entitlements, and we all must contribute our part.

Raising Our Educational Standard: (we separate this out as a separate item from Comprehensive Strategic Plan because of its fundamental importance)

• The quality of the graduates at every level of our educational system will probably be the most important factor in determining whether our country can compete successfully with other countries.
• The world is now flat and we are in a global economy. In many aspects of our economy, we have to compete with the rest of the world. Since our standard of living is higher than almost any other country, we must compete at the high end of the food chain, and cannot compete at the manual labor end of the foot chain. So we need to continue to create new and better inventions, products, ways of doing things, ways of managing the manufacturing process, ways of distributions and marketing of our products, and ways of providing customer service. All these require high quality graduates at every level.
• In the second half of the 20th century, our country was fortunate to be a magnet for the best and brightest of the world’s students to come to the U.S. for college or graduate school. Because of better opportunities in the U.S., most of these best and brightest stay in the U.S. to work and became major contributors to the U.S. economy. Although the number of foreign students coming to the U.S. to study might not have changed significantly, many more of them are returning to their own country after they graduate or after a few years of working in the U.S. Furthermore, with opportunities opening in other developed countries, many more Americans are now going abroad to study or to work. This results in a reduced brain inflow to the U.S. and perhaps eventually to a brain outflow from the U.S. As discussed in the previous bullet item, this could be devastating to our ability to compete at the high end of the food chain.
• We previously discussed that the American educational system is not ranked near the top. There could be many reasons contributing to this status. In my opinion, one of the reasons is that our teachers in the elementary and secondary levels are not evaluated and rewarded based on a merit system. Instead, they are evaluated and rewarded based on a tenure system and years of service. It is ironic that the U.S. prides itself in being an advocate of a free enterprise economic system based on competition, yet the fundamental system that trains our workforce is not based on a merit system. When insightful and courageous school administrators try to establish a merit-based system, as in the Washington D.C. school system, our teacher unions are usually at the forefront of battling against it. It makes one wonder what is the primary target of the teachers: the welfare of their students or their own welfare?

Summary: The U.S. is on an unprecedented crossroad. We are facing tremendous challenges which if we don’t properly solve, our country will no longer be the richest and most powerful country in the world, and the quality of life for our children and grandchildren will suffer greatly. Solving these challenges will not be easy. We will not solve these problems if we continue to do business as usual. The solutions are complex and will require all of us (citizens, corporations, schools, unions, and government) to look within ourselves and take courageous actions that are beneficial in the long term to the society as a whole, and not just beneficial to ourselves in the short term. We need to recognize that if we do this, then it will also be to our benefit in the long term.