America's decline is quite evident

America is in decline. America is seventh in literacy, 27th in math, 22nd in science, 49th in life expectancy, fourth in labor force, fourth in exports, third in median household income and 34th in infant mortality. Ironically, we lead the world in the number of incarcerated individuals per capita.

Add to that the fact that not only are millions of Americans unemployed or underemployed, but good jobs, jobs that have dignity and upon which a person can support his or her family, are vanishing.

Moreover, there is no reason to believe that our elected leaders in Washington can lead us out of the growing darkness. And trading in a cast of Tweedledees for a cast of Tweedledums on Nov. 6 will make no difference.

The transformation of America from an agrarian to an industrial society was made possible largely by oil and steel. Together they were the fundamental building blocks of the 20th century American colossus.

For oil, it all began in 1859 in Titusville, Pa. That is when the first commercially successful well was dug. By 1870, John D. Rockefeller had founded Standard Oil Co. of Ohio. His firm quickly became one of the largest shippers and refiners in the nation. Rockefeller bought out, absorbed or undercut his competitors to the point that by 1880, Standard was refining more than 90 percent of the oil in America. Rockefeller’s dream, a dream never realized, was to control all of the world’s refineries.

For more than the next half-century, America led the world in oil production and refining. American oil fueled the explosive growth of the American automobile industry, and it fueled the Arsenal of Democracy in World War II.

The rise of the American steel industry is just as remarkable. And the “Rockefeller” of steel was Andrew Carnegie. Carnegie rose swiftly through the ranks of the burgeoning Pennsylvania Railroad. But he left the railroad after the Civil War and founded the Keystone Bridge Works and Union Ironworks in Pittsburgh. He could see the enormous market for rails as the Transcontinental Railroad neared completion.

But the problem was that the iron horses of that day rode on iron rails. And iron rails were not reliable. They could not support the weight of increasingly heavy trains. They became brittle and cracked. Carnegie knew the answer was steel. But the cost of mass-producing steel was prohibitively high.

But British engineer Henry Bessemer solved the problem. He invented a way of injecting molten pig iron with compressed air. The air burned off the high carbon content of the pig iron in a controlled and rapid manner. The result was steel, and it could be mass-produced cheaply.

By 1892, Carnegie Steel Co. had been created, and America was manufacturing more steel than the United Kingdom. In 1901, as Carnegie neared retirement, he sold his steel empire to J.P. Morgan, and United States Steel Corp. was born.

The name of the new company said it all — UNITED STATES STEEL (USS). And for more than the next half century, the American steel industry, led by its flagship, USS, transformed the nation and made it the envy of the world.

But by the 1960s, it all began to go terribly wrong. Enormous reserves of oil and gas had been discovered all over the world. Many of those fields were larger and more easily developed than those in the United States. In addition, most of the nations controlling those petroleum resources were nations that were not allies of the United States. Suddenly a cartel, OPEC, was calling the shots.

And guess who’s their biggest customer? We are. Our appetite for oil is insatiable and growing. We are 4 percent of the world’s population, yet we consume 18 percent of the world’s oil. In 1970, oil cost $3 a barrel. Today it costs $88 a barrel. OPEC has figured out how to play this game. They get to say, “Pay.” And we get to ask, “How much?”

Every president since Jimmy Carter has said American energy independence is essential. Three Democratic and three Republican presidents later, America remains hostage to OPEC.

The steel story is just as depressing. In July 1959, the United Steelworkers went out on strike. The paralyzing strike lasted 116 days. In the interim, American consumers of steel found out what the American steel industry and the United Steelworkers had chosen to ignore at their own peril: Foreign manufacturers of steel were able to produce higher quality steel and sell it at a lower price in America than we could.

The strike devastated the American steel industry. And for decades thereafter, the Middle-Earth thinking of American steel companies and their union kept them in denial. It was nothing short of corporate suicide. When the Trans-Alaska pipeline was built in the mid-1970s, no American steel manufacturer could make the pipe in the correct size and grade. It was supplied by three Japanese steel firms.

In 2011, the world’s top 10 steel producers were all foreign. United States Steel was No. 12.

All of this reminds me of the famous line that Oliver Hardy oft repeated to Stan Laurel, “Well, here’s another fine mess you’ve gotten me into.”

The question is, can we get out of it? The answer is “yes” and will appear in next Sunday’s column.

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