As recently as the 1990s, the USA had the highest standard of living in the world.

Since then, America has stagnated and thrown its creativity into foreign wars, over-leveraged mansions, and corporate welfare. Barriers to innovation and competition have proliferated in our last leading industries with RIAA, MPAA, and software patents. The effects of building oil-dependent infrastructure have come home to roost with peak oil arriving in 2005.

The result is that America now offers about the fifteenth highest standard of living in the world. We still have a much nicer place to live than China or Brazil or Russia, of course; there are over 200 countries in the world so fifteenth is in the top 10%. For the first time, though, America has been definitively passed by France, Japan, Germany, Switzerland, Norway, and other top quality of life nations.

The New York Times this week reported that Mexican illegals are now finding they have a better quality of life returning home to Mexico. [1] That doesn't mean our quality of life has dropped below Mexico's; it means the premium for being illegal is now greater than America's advantage at the margin. There are even some classes, such as college educated middle income professionals, where quality of life in wealthier parts of Mexico is already objectively higher than in many parts of the USA. (Mexico is probably about 35th in worldwide material quality of life)

Oil prices are still rising, congress is intent on more and more protectionism and supporting nationalized companies like GM, housing prices are still not rational, the banking sector is a more deeply entrenched oligopoly, old line monopolies that want to leach on the creative industries of coastal California by blocking broadband expansion and running patent shakedowns are in charge of the courts, it's still illegal to build the kind of low-oil walkable sustainable neighborhoods that would reduce oil import dependence as we aim for $10 or $20 a gallon gas, affordable local and high speed rail is still prohibited by federal (FRA) regulations that prohibit European and Japanese innovations here, congress and the president are playing chicken with national finances instead of trying to fix them, occupational licensing is on the rise, and I haven't even mentioned health care.

I'm not saying you should look into getting that Mexican work visa now and beat the rush. America has many advantages still. The state universities are the best in the world, the business climate is generally supportive more than parasitic or bureaucratic (a surprisingly rare thing in other nations), the labor market is still relatively flexible, the nation is a uniquely large market united by a common language and currency, the dollar is stable (for now), we have the best natural open land preserves in the world, and the people are entrepreneurial.

We're not going back to undisputed number one but America can do fine among equals. If you want to go somewhere else though, you don't have to give up your income and luxuries anymore; just don't expect to lord your superior citizenship over the locals who are -- on average -- richer than you are.

[1] http://www.nytimes.com/interactive/2011/07/06/world/americas...