Obama and McCain: the necessity of rebuilding the nation

As Barack Obama and John McCain haggle over immigration and reasons for the energy mess, they are sticking their heads in the sand about the real problem.
That problem is the growing loss of faith among Americans in their ability to face the future as they struggle with consumer debt that has risen to $14 trillion from $8 trillion during George Bush’s sojourn in the White House.

The need now is not for slogans about hope or “Change we can believe in”. It is to rebuild the people’s ability to cope with changes and come out on top if possible.
This is not a Cassandra comment. The US may remain a global economic and military super power for a long time. But continuing to be rich and strong does not prevent foreign rivals from narrowing the gap or ensure that people will still have an “American dream” worth believing in.

The candidates have not yet given focused attention to the core problems of the vulnerability felt by ordinary citizens confronted by repeated domestic shocks and challenges to their way of life from rising foreign powers. This is compounded by the nation’s dilapidated physical infrastructure and malfunctioning financial, health and education systems.

These insecurities cannot be resolved without instilling new confidence in the people. Even if self-confidence improves, the gap may continue to narrow and that would of itself trigger massive shifts in the way that ordinary Americans live.

Such issues should be treated as top-drawer political questions instead of being placed on the back burner as longer term challenges compared with others seen as immediate concerns. Higher priority is necessary because the loss of confidence derives from the ordinary American’s fear of changes over which they and their government seem to have little or no control.

The causes of concern go far beyond such immediate issues as how to handle the Iraq war, slow down the flow of illegal immigrants, or soften the housing market’s gloom. In fact, the intensity of the immediate concerns indicates how far control of the country’s prosperity has slipped out of the hands of Americans and their government.

The immediate issues are surmountable. For instance, if the situation in Iraq becomes less hostile to the US, the media and politicians will put it on the back burner. If it worsens, whoever takes the White House in January 2009 will try to get out as soon as feasible.

If illegal immigration slows down, people will no longer harp on it. If the pace quickens, everyone will adjust to it because of the recognition that pushing immigrants out does not prevent them from returning so long as the economy needs their labor.

When home prices become low enough, buyers will seep into the market and banks will become less skittish because homes will once again have market value equal to or above the loan.

In each of these and other immediate issues, the cycles of fear sparked by 9/11 play significant roles that have amplified since. The oil crisis combined with the specters of simultaneous recession and inflation are the latest blows signifying to the persons-in-the-street how defenseless they are as they struggle to live the “American dream”.

This is a time when the Euro is threatening the dollar’s primacy and Europeans are trying to go their separate ways from Washington on critical economic and military matters. The BRIC countries – Brazil, Russia, India and China – have increased their reserves ten-fold to over $3 trillion sending a clear signal that economic power is shifting towards them for the moment.

That moment might lengthen as the Middle East looks eastward for clients for its oil and financial investments instead of westward to the US, which treats them with suspicion bordering on resentment.

The fact is that American dominance of the world economy is no longer impregnable. That directly affects the livelihoods of almost all Americans. So far the candidates are looking away from this serious challenge.

The vulnerability is underlined by the mistakes made in Iraq and Afghanistan, perplexity regarding Iran and the increased danger for Israel. It is fed by the recent history of venality of respected companies starting with Enron and MCIWorldCom to the much admired financial giants currently hustling to cover losses.

Goldman Sachs said recently that another $65 billion may be needed in write-downs caused by incompetent risk-taking by financial institutions, in addition to the nearly $100 billion lost by them in the US and Europe during the past 12 months.

At the same time, the continuing impoverishment of many Katrina victims demonstrates not only White House confusion over a purely domestic tragedy but also the incompetence of US officials and the quarrels of local politicians. Those will continue after Bush is long gone.

Faced with such shattered icons, the feelings of incapacity are understandable. To dispel them requires much more serious thought rather than rousing catchphrases.