More specifically, corporations have no national loyalty. 

Many of the uber-wealthy and the people who run large corporations in particular want to have all the benefits of having a country with a legal system that protects their property rights and provides a court system that will do that, that provides physical protection (not a given; see oil companies in Nigeria), that has stock markets that are regulated and not regulated in the ways important to them, that permits them to fire workers trying to organize unions with slap-on-the-wrist penalties for doing so at worst, that in some sectors enables them to privatize profits and socialize their losses, that looks the other way while they use Cayman Islands bank accounts to avoid paying taxes, etc.

The great thing about the current situation for transnational corporations is that they get to use relocation (or use the threat or fear of same to increase profits at the expense of living wage compensation for some of their workers) to pay the vast majority of their employees a far lower wage than they would have to pay otherwise, shop for the weakest environmental laws and the dictator who will most obligingly use the police powers of his state to provide physical security and make sure they get lenient regulatory and tax treatment if not outright subsidies for locating there, etc.  They are remarkably, and increasingly, adept at avoiding paying taxes but of course love the vast benefits that the US and state and local governments, and the taxpayers who pay for them, make available to them.

Some deal.

You're absolutely right--the social contract, such as it was for a time, is weak and increasingly under duress in this country. 

I don't see that social contract as inherently something our society can offer--it is all contingent on how much wealth we can collectively generate (better education and training system, better infrastructure, R&D), and whether we have a culture that insists on sharing it more than we do, among other factors (let me know when you figure out how we make that happen).  And it isn't as though the contract was formed as the result of some consensual social process (which you weren't saying in any case). 

Two critical factors were essential to its modern-era formation. First, nothing was given to the masses or ordinary people.  Ordinary people had to organize unions, consumer advocacy and other organizations, and form social movements in order to advocate effectively against intense and entrenched opposition to bring about more widespread sharing of prosperity's benefits, and society's potential benefits more broadly.  

And second, the heyday of what we might call the US social contract was in the post-WWII era, when much of the world was flat on its back, rebuilding after the war, and the US had unquestioned economic supremacy.  That obviously just is not this world.  All that is up in the air going forward, depending on how good of a job we do organizing ourselves as a society to meet the current economic challenges.

The era of what passes for a US social contract might more appropriately be seen as something of an aberration rather than the norm.  The social fabric in this country, the sense of an "us" being "in this together" is really extraordinarily weak and has very limited scope (a few days or weeks following 9/11 or Columbine or Oklahoma City or Tucson, short-term relief efforts following natural disasters).  Many individuals function on a day to day level as though they are one with Margaret Thatcher when she said there is no such thing as community (beyond friends, family members, and possibly their neighborhoods or towns at times)--only individuals.

The question is whether that situation will/can change for the better, whether we can to at least a degree come together with inventive and effective social responses, not just inherently limited individual efforts--as was to a significant extent the case during the New Deal era under the exceptionally gifted and skilled leadership of Roosevelt (that should also probably be seen as an aberration, not the usual case or something we can ever think is likely, let alone be able to count on when the need is there). 

Or whether it's going to be an increasingly dog-eat-dog situation going forward in this country, as it has been for several decades now, where more and more citizens give up on the social project of trying to make the society work decently well for as many people as possible, where that is part of how ordinary people think about political life and decisions they make.  

The forces that want the latter, or see it as inevitable in the human condition, or at any rate have no problem with it, are numerous and powerful.  The forces that want the former are presently not well organized, fragmented, and largely ineffective.  And they (we, as I count myself among them) have a huge uphill climb against the current zeitgeist still largely deferring to laissez-faire wild west US-style "capitalism", notwithstanding Katrina, the Gulf oil spill, the financial meltdown, etc.    

Some equilibration of wages is inevitable, sure.  But neither the extent nor the pace of it are.  Nor is the relative degree of sharing of benefits, burdens and risks of the economic transition.  The top 10% or so are doing better while everyone else is treading water, hanging on by a thread, or has fallen off the cliff.  The current dynamics are intensely destabilizing politically, as we observe every day.  They have greatly weakened the quality of our republic and will continue to do so unless and until there is an effective response that reinstills the faith of most Americans in their political system and in the basic premises of American life. 

The gross power imbalance and warped public agenda we see today, including the almost complete lack of any sort of countering response during this monumental transition period, is a measure of the degree of domination of the political agenda by corporate America.  It avows, and grossly violates whenever it suits its purposes (socialism for the privileged few, capitalism or a weak safety net for everyone else), right-wing premises that have blown up in our faces again and again in recent years--Katrina, Gulf oil spill, financial meltdown most obviously.  So far the manifest failure of those premises has not led to the needed correctives and adjustments.

All of the above is why we need a government committed to the well-being of ordinary Americans.  Ordinary people--people who are not independently wealthy or wealthy enough to survive intense economic shocks to their lives--can adjust to negative changes that are gradual.  Today's GOP is committed to fast-forwarding the current economic dynamics, while at the same time also destroying both public and private economic security cushions.  The response of Democrats on economic policy, among elected officials, has been one of timidity, surrender, or me-tooism (many elected official Democrats being relucant to confront or stand up to powerful corporations, others apparently intellectually persuaded by the conservative Republican worldview on economic policy or unable to formulate better alternatives they are willing to fight for) from some, and heroic underdog efforts in other cases, coming from many of the party's progressive elected officials in Congress. 

David Brooks had a column the other day where he said the 2012 election is about who has the best response to American decline.  I do not want my party to accept, or show through its body language, a narrative of national decline.  I think that is politically lethal.  But beyond that it is premature, still.  Had this country made some good policy decisions since circa 1980--made investments in all of our people, modernized our infrastructure, intensified R&D, at least slowed down otherwise irreversible negative trade dynamics so as to ease the transitions, avoided the ruinous Iraq war--we'd be in better shape.  Still challenged and under intense pressure, but in better shape.  You're right that all empires or dynasties or dominant powers eventually decline.  But those that make good decisions hold up better, for longer, and are less likely to suffer complete collapse, but rather transition to a different, undominant, but still decent place in the global order. 

One thing I give Obama credit for is that, however inadequate the substance backing it up is, his WTF SOTU motif is a needed message.  Ordinary Americans fear and sense decline even when they are not personally experiencing it.  But they are going to be reluctant to vote for candidates, especially presidents, they think are resigned to that and generally prefer the candidate best able to project optimism, nonverbally as well as verbally.  We do need to organize and fight, in the sense of making long-term, sustained, prosperity-enhancing commitments, for a good future for our country--or at least the best possible one. 

Right now we as a society are figuratively trying to fend off a herd of rampaging rhinos with popgun policies, shackling ourselves far more effectively than any of our competitors ever could.  From an economic security standpoint, this is hurting the overwhelming majority of Americans, who make up most of the society, who are not benefiting from long-term economic dynamics, who are unable to secure special privileges for themselves through political influence, and who are increasingly vulnerable if they have not already had their lives collapse around them.  But right now they have no power in the political system.  Nor do they have anyone with a major megaphone speaking for them.