I continue my new series of quoting from and linking to various Internet sites that I consider thoughtful and worth reading. As with TMV, these sites honestly attempt to be informative, moderate, and overall non-ideological. Dave Cohen of Pittsburgh, PA posted today on his blog “The Decline of the Empire” (www.declineoftheempire.com) the following analysis:
Politics Is Irrelevant To America’s Fate
Like a rat leaving a sinking ship, Barack Obama’s economic adviser Austan Goolsbee has bailed. He will go back to the University of Chicago, where there’s some hope of actually accomplishing something.
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[Mr. Cohen then cites a few paragraphs from “The Huffington Post” coverage of the event.]
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More than ever, the atmosphere in Washington seems so laced with toxicity that policymakers have largely given up merely debating how to spur the economy, cognizant that any approach will be deemed politically impossible.
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But there is a larger question here few are willing to consider. How relevant is politics to our fate?
To answer that question, I have divided our problems into two categories: 1) those that are “Baked into the Cake;” and 2) those that are Amenable to Political Solutions. I’ll present both lists, and then make some additional comments. Let’s set the time frame to be the next decade.
Problems Which Are Baked Into the Cake:
1. A moribund housing market
2. an eroding Middle Class (measured by household wealth & discretionary income)
3. persistent high unemployment
4. falling wages for American workers
5. household de-leveraging
6. higher health care costs
7. higher (though volatile) commodity prices, including oil and food
8. higher interest rates
9. high poverty rates among the bottom 20% (sorted by income)
10. lower spending (consumption) by the bottom 80% (sorted by income)
11. Rampant political corruption (no campaign finance reform, term limits, etc.)Problems Which Are Amenable To Political Solutions:
1. the growing debt to GDP ratio (trillion dollar plus annual deficits)
2. crushing entitlement obligations in health care (Medicare & Medicaid)
3. future shortfalls in social security funding
4. too-big-to-fail banks
5. growing income & wealth inequality
6. out-of-control defense spending
7. crumbling infrastructureI’ll leave it at that, knowing that such lists are bound to be incomplete, or could be reorganized along different lines using different criteria.
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…Consider persistent high unemployment, which might be defined as a joblessness rate above 7%. Most observers (including me) understand that it will take many years of steady, robust job growth to get back to the employment level (the number of working Americans) we enjoyed in 2007. The problem appears to be baked into the cake.
But those on the left would suggest we increase Federal stimulus spending à la Roosevelt (the WPA, the CCC, etc.) to create jobs to fix our crumbling infrastructure or clean Paul Krugman’s bathroom. (What would such jobs pay?)
This might eventually reduce unemployment to some level below 7%. But this is where the rubber meets the road. Do you have any faith that our dysfunctional 2-party political system could implement make-work programs to repair America’s water supply, its bridges and the rest? Of course you don’t. The chance of this occurring is effectively zero. That’s why Austan Goolsbee quit.
If we look again at those problems Amenable to Political Solutions, we keep running into the same obstacles over and over again. Take growing income & wealth inequality. The president and the Congress could enact measures to tax the wealthy and redistribute the income through social programs over time, which is why I didn’t include it in the first list. But rampant political corruption prevents the implementation of any such program. The same is true of fixing our too-big-to-fail banks problem.
Or consider crushing entitlements obligations in health care. If we fix this problem, somebody is going to get hurt. Will it be the thriving health care industry, which creates more jobs than any other sector of our economy? Or will it be the elderly, who will no longer have access to the health care services they enjoy today? The latter outcome seems more likely, due in no small part to rampant political corruption. The bottom line is that fixing this one problem will create a host of new problems. This is a “lose-lose” situation, like all the rest.
Similar remarks apply to reining in out-of-control defense spending, which has been little more a defense industry jobs program for as long as I remember. Now you can add in Homeland Security, which is a jobs program for the paranoid.
If we look at the problems that are still Amenable to Political Solutions, we see that politicians have the opportunity to do nothing, which will make the problem worse, or they have the opportunity to do something, which will make life miserable for somebody, and that somebody is likely to be ordinary Americans. So far, they have demonstrated their overwhelming proclivity to bicker among themselves, doing nothing all the while.
It is in the sense above that I say that politics is irrelevant to America’s fate. America’s fate was determined through policies enacted over the last 30 years.
The problems that really affect your standard & quality of living are already “Baked into the Cake.” In solving those problems which are still Amenable to Political Solutions, all that can happen now is that your day-to-day problems will mount, or get worse.
If American citizens want to waste their lives engaged in political wrangling, that’s their business. But they shouldn’t pretend there’s an upside if one side or the other “wins” some political battle. For most Americans, there is no upside.
I don’t agree with all the statements in this post or with all his prior posts, but he is an insightful and independent writer who forces his readers to think about “The Big Picture.” Mr. Cohen is interested in energy and environmental matters, including a weekly reports most Saturdays on the oil market.
Mr. Cohen and I might agree that the answer to the nation’s huge domestic and international problems is not a return to a small, powerless, 18th Century central government and the complete unleashing of the private sector to do even more damage on a global scale that got us in this massive economic mess. Many of our nation’s large private sector corporations, financial institutions, and various global business cartels simply own the central government that now works solely on their behalf. Real representational democracy no longer exists in the U.S. and in many other nations around the globe.
Too many large U.S. companies are corrupt, inefficient monopolies that have suffocated real free enterprise by various market manipulations and governmental favoritism bought with large campaign contributions to both political parties. They are part of the problem – along with corrupt big government. Our greedy oligarchy and crony capitalists are quickly moving our nation towards a feudalistic, fascist system.
“The Decline of the Empire” (DOTE) is not designed to be some “happy talk” Internet site. It may be too fatalistic or depressing for some TMV readers but it is filled with facts, statistics, charts and citations to a large number of reputable sources. Mr. Cohen is highly critical of both political parties for the same (and additional reasons) I have criticized them in the past.
Overall, DOTE is excellent daily reading. I also recommend that TMV readers look over many of his prior posts.
Submitted on 6/9/11 by Marc Pascal – ranting happily as always from Phoenix, Arizona where it has stayed below 100 degrees for several days now. Hell, Chicago recorded higher temperatures twice this week!!