Alan Lupo

Whatever the Federal Reserve does or doesn't do, the problems facing America are beyond serious and go far deeper than consumer confidence, the credit crunch and the subprime housing crisis.

We are not in an economic depression, or even, as of now, a recession; but we are depressed about the economy. Wages have not kept pace with inflation, and there is an immoral gap between the pay of working stiffs and that of the top dogs who are their bosses.

Companies, including profitable ones, continue to close down and move their operations overseas. A construction industry Web site notes that about 100 new plant closings are reported monthly. Meanwhile, unemployment inches upward, and consumer confidence is down.

The nation obviously has been through rougher times before, but perhaps none as complex. Years back, if a mill closed in Lawrence, Haverhill or Peabody, it likely moved south for lower wages. Today? Corporations shift jobs to Mexico, Costa Rica, Russia, India, China, Israel, you name it.

In a 2005 study of job losses in Massachusetts, two labor specialists concluded that though the outsourcing debate has concentrated "on the need to be closer to global markets or meet the needs of supply chains that have become stretched thin," and despite predictions that globalization would create great jobs, their research showed the key corporate motive is "to shift production from high cost to low cost countries both near shore and off shore." Multinational companies, they argue, "are engaged in an international race to the bottom ..."

But that's just one aspect of the new, complicated world facing the U.S., a nation whose citizens are not known for their understanding of or caring about what goes on on the other continents.

Friends from New York City talk of how Europeans, taking advantage of the weak dollar, are buying up residential properties in Manhattan. That's close to home. A bit more distant, but more potent, are the purchases of American corporations, in part or in whole, by foreign nations and companies.

As Newsweek has reported, last November Citigroup sold almost 5 percent of itself to the Abu Dhabi Investment Authority; earlier, the China Investment Corp., controlled by the Chinese government, bought 10 percent of the Blackstone Group, a financial services management outfit.

In its annual trends report, The Economist magazine predicted, "China will continue to overtake America in all sorts of fields. In 2008, Chinese demand will for the first time become the main driver of world economic growth, with the increase in its domestic spending in current dollar terms contributing more to global growth than American domestic demand."

As for the U.S., that same report warned, "The housing downturn will deepen in 2008. The pace at which new houses are being built is down by more than 40 percent from its peak in January 2006. That collapse has dragged down the economy's growth rate by almost 1 percentage point over the past year." The magazine predicted what most of us now know - higher loan payments for many Americans, more home foreclosures and tighter credit.

Some economists caution us not to panic and contend that the middle class is in good shape. Why, look at all the stuff - all the toys, if you will - that we buy, from plasma TVs to iPods.

But, of course, there's also the fact that too many Americans buy on credit. Some folks use credit cards because they are in a financial bind and short of cash. Others use them because they are spoiled.

Gimme, gimme, gimme. They want it all, want it now, absolutely must have it, and cannot live a meaningful life without it.

We can't do much to stop plants closing in North Andover, Everett, Wilmington or Claremont, N.H. We may be overwhelmed by sovereign nations and overseas corporations buying up American companies. But as one small gesture, maybe we could exercise some self-discipline in what we buy on credit and try to save a few bucks. It might lower consumer confidence a bit more, but it seems like a healthy economic move for the average American.

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Alan Lupo, a veteran Boston columnist who appears regularly on these pages, can be reached at alupo@comcast.net