That’s how I feel these days when I watch cable news and focus not on the anchorpeople but on the hyperactive Dow Jones ticker at the bottom of the screen. Up 100 points, down 200, rallying, retreating, meandering, “looking for a bottom,” falling off a cliff. Another day, another triple-digit decline.
So here’s a question I’d like to ask Barack Obama and John McCain: Is the United States destined to look and feel increasingly like a “developing country”? Is this the way it’s going to be?
I know that our mammoth economy bears little resemblance to Argentina’s, or Brazil’s, or any of the other economies I covered in South America. I know that we’re dealing with a mortgage meltdown and a credit crisis, not runaway inflation. But one thing is the same: The feeling of free-fall into some sort of abyss.
It’s not just the United States that is experiencing a Third World-style economic disaster. Iceland—tidy, rich, Nordic, postcard-perfect Iceland—is scrambling to avert national bankruptcy. Throughout what we used to call the Western world, governments are nationalizing banks, guaranteeing deposits, cutting interest rates and taking other heroic measures to stave off collapse.
I’d like to know how the presidential candidates view this economic crisis, and I don’t want any boilerplate about how American workers are the best in the world. Is this a temporary setback or a fundamental shift? When the volatile markets settle down, as they eventually will, is the United States going to be a poorer nation than it was? Will the next generation of Americans lead lives of less affluence and comfort, rather than more?
I want to know if this is some kind of final reckoning for the way we’ve been living so far beyond our means. Is the bartender finally presenting us the bill for our tab?
I’d like Obama and McCain to really try to get their minds around what’s happening and explain what they think we ought to do about it. They both know that we’ve borrowed trillions of dollars, a good deal of it from China, to pay for our expensive habits. They know that the United States, Europe and Japan have transferred massive amounts of capital to the oil-producing countries. McCain and Obama know that the tallest building in the world is in Dubai. They know that high prices for oil and natural gas have given Russia back its status as a great power.
The candidates also know that whoever takes office in January will be constrained by economic and fiscal reality. Debt service and entitlements already impose limits on discretionary spending for new initiatives. By Inauguration Day, how many “bad” mortgage-related investments will the U.S. government own? How much more money will the Treasury have poured into the insurance giant AIG? We already own nearly 80 percent of the company, for which we paid $85 billion; company executives celebrated by treating themselves to a $440,000 retreat at a luxury resort. On Wednesday, taxpayers ponied up another $38 billion for AIG. Will the tone-deaf executives rent the Taj Mahal for their next party?
When I was covering South America, it was said that Brazil could be thought of as “Bel-India”: There was a small, powerful, rich elite that lived so comfortably they might as well be in Belgium; and there was a huge, poor majority whose living conditions at times resembled those in India. Since I left the region, Brazil has become wealthier and income distribution has improved. In the United States, income distribution has gotten worse.
I’m worried that this economic crisis may be more than just an episode. I’m worried that what’s at stake is not just a few years of lost economic growth, but our traditional notion of the American dream.
Sen. Obama? Sen. McCain? Reassure me. Don’t give me empty words about American exceptionalism. Tell me in plain language what our new place is in the world and how we’re going to give our children the good life that we’ve enjoyed.
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Comments: 20 ( 5 removed by Jack E. )
America has developed more resources than anywhere else in the world in terms of a lot of good people with scientific and ingenious problem solving skills, so if those resources are empowered and focused on resolving the world's social and geophysical issues, you can bet that great wealth will peacefully accumulate with egalitarian righteousness.
America will never recover until we have a job market again. people do not exist on slave wages and right now you have to make $17.50 just to reach the poverty level.
When I was a first year college student in America, there was some sort of minimum wage that I think was $1.65
Anyways, I would actually disagree with allowing industry to dictate the direction of academia. R&D of course should work hand-in-hand with industry, but as we've seen recently on Wall Street, it is not a good idea to let the fox control the hen house.
When I was an an undergraduate in a science, I did practicals with various industry, but the challenge was always to help industry understand that short term profits based on bad science or willful ignorance would later on have serious impacts. Most who are CEO's have had an education much like an MBA. And unfortunately, most who then go on the be leaders of industry chose not to broaden their education early on, to scientifically understand the full impacts of every footprint we make on this planet.
Had America done as President Carter had suggested back around 1978, with fine-tuning industry so it behaved more environmentally friendly, America would now be in a command position in just about every field of human enterprise. Almost every industry in the world now that uses energy of any form, is placing a demand in the marketplace for such technology. America now would be in a position to supply even an entirely new energy infrastructure. I know. I worked personally on some projects when I was a student... but back then, there was no demand for it, at least from industry.
So that was an incredibly stupid and missed opportunity, and here we are now, with trying to put band-aids on an economy that is experiencing death by a thousand cuts, and with many still attempting to debunk the science of climatology.
But it's not too late. All those social and geophysical challenges in front of us can become the industry of tomorrow, and here America is truly in a position to capitalize on that in a good way. I know of many small enterprises that have over the decades been developing the means to tackle all those issues, from pandemics in poverty-stricken regions (often from people who first served with Medecins Sans Frontieres or the Peace Corp) to ingenious public transportation systems, the auto industry, and horizons most of us could only dream about. Go to Ted.com, and you'll see what I mean.
It will take thinking out of the box, and will only really happen if we support such endeavors at the highest level and as quickly as possible. It would be a fatal mistake at this late point to allow industry to set the pace on this. Most who are its CEOs are only trying to fix a broken dam in their corporate economies.
We could see it in the same way we accepted the challenge to go to space in 1961, and we got to the moon in less than a decade on just a dream, but empowered by an intelligent and passionate president through a tax-supported administration. Incredible aerospace and allied industry evolved from NASA's touchdown on the moon, and the technology derived from that R&D lurched the world into the 21st century with satellite technology allowing the GPS for this internet, as one example.
If we would do this, I can only imagine the sort of economic vitality this would generate. People would flock to get on the ground floor of such industry, once America's leadership engages the creative spirit of America. There are some 7,000 universities in the world. Almost half of them are in the USA. That's not bad when you consider that the US population accounts for only 4.5% of the world population. They need to be free for anyone who can pass an entrance exam, for it is our young whom we must invest our future with. They then will be prepared to contribute greatly to society, and the wealth from that is incalculable.
Lately, everything coming from America's political leadership has only resulted in alienation, divisiveness, war, economic chaos, suffering and a lot of dead people. The other thing Kennedy did in the early 60's was the Peace Corp. Obama, in the last debate, stated he'd renew that spirit of service, now to tackle the problems of today.
Once one begins to tackle life by working for something greater than one self, the spirit of that evolves to great success at whatever one does. It's simple psychology.
And it fits in with the Socratic understanding of wealth generation.
Bent, when I started working minimum wage was $1.00 but what you could buy with that dollar was fantastic. The MW now in my state is $8.25 which is still below the starvation wage and the federal MW is something like $5.50, companies have to pay state MW when it is higher than federal but its still a scam to the working people that make all the money for these corporate cons.
Its very true we have to invest in our young worldwide but in America all they want to invest in is corporate welfare.
While the business community may see government rules and regulations as restrictive and unnecessary, corporations (though viewed by the law as a person) have no obligation to act morally. When the arbiter of the rules governing corporate conduct does not act, we are all hurt. The scope of the economic crisis that brought us the Wall Street bailout by could have been diminished by government oversight and regulation on the financial industry.
When companies like Haliburton (Kellogg Brown & Root) off-shore jobs so that they do not have to pay employees social security or medicare, yet take government contracts, it insults all American citizens who pay taxes. When multi-billion corporations like Wal-Mart intentionally scam the system by pushing the health care of its workers onto the government – the average 200 person Wal-Mart costs the federal taxpayers $420,750 per year -- citizens need to know what is costs them. Sadly, one person cannot change the behavior of a multi-billion dollar corporation. There is no incentive for Wal-Mart or KBR to change, which is why we need government oversight and a comprehensive Healthcare policy for all citizens, not corporations.
If people do not have health care, the lack of financial protection drives the uninsured deeper into poverty. As more manufacturing jobs have been replaced by service sector ones, employer sponsored health care for workers is being eliminated – whether because of part time employment or contract work. Many small businesses are not able to provide health care for their workers. About 47 million people have no health insurance. The US spends around $125 billion on health services to the uninsured. Helping the uninsured to get access to health insurance while allowing those people with employer insurance to keep their plans, would reduce the likelihood of financial ruin for a family in the event of an illness. Improved health insurance would increase productivity through better health, and help small businesses remain competitive. Health care costs could be driven down by allowing the government to negotiate drug prices to lower costs. Costs can further be reduced by cutting the fat from medical care, not by eliminating the people providing the care, but by reducing the overhead built into the system -- administrators, attorneys, consultants, and accountants.
The US economy runs on cheap energy. To keep the engine running at time when energy prices are increasing we need to look ahead. Clean sustainable energy will benefit the entire country. However the economies of scale and infrastructure is not in place for these alternative energy sources. A government policy to reward business to invest and develop this technology would have long-term national security benefits, provide power for our nation, as well as produce jobs that will stay in this country. Both presidential candidates recognize that this is an issue that cannot be ignored.
Too bad we didn't begin that infrastructure back when carter proposed it... But it's not too late yet.
There is also the site www.nopom.info which has lots of articles about points you all have mentioned above. (The book can also be read online free at that site ane here on gather at Invisible Hand.
This really is a solution for today's problems that is quick, simple, and permanant because it removed the underlying cause / means / motivation for such economic problems. It is a solution which benefits everyone and costs nothing. (It also gets government out of the mix.)
Jack, I don't like to bet on a dead horse. I honestly believe that Obama has the right stuff... potentially. The right stuff to draw the right people into his advisory staff, to listen to all sides, but most of all, to perhaps inspire the best in people, because it won't be the president who will transform the way we do business, it will be the people... E pluribus unum.
I agree. If we had taken the steps outlined by Carter, we would be way further ahead in getting this country energy independent. Carter's energy policy wasn't helped by the country's economy, high unemployment or inflation. I think that by framing energy prices around their "true cost", he made his policy very unpopular and a tough sell to the public. Better to find a market mechanism that provides incentives to encourage energy conservation and alternative fuels.
Walter Heller called what led to the recession of 1981 the Reagan-Volcker-Carter recession, but in those years of instability during Carter's administration, there was very little incentive to walk any of the sage talk from Carter. People wanted to zoom down the highways with turbo-charged V-8s eating 5 MPG at way beyond 55 MPH. Remember all the jokes about the little Renault Le Car?
So if we get our heads a bit out of the sand of all that's distracting our attentions from some real issues - and that's now being forced on us though this global economic collapse - then we might decide to kill two birds with one stone, which would include restructuring our marketplace so that it reflects true and transparent equity without exploitative agendas that always comes back to haunt the marketplace from the shadows. From such a place, there would be a thriving industry that would be bigger than the CEOs driving it, and where globalization includes an integration of all those forces that comprise human existence - from the social sciences to the geophysical - and here the marketplace would return to those models of economics that have to do with the good of the community, which then would be good for each individual, in exactly those pursuits one is personally interested in. But one almost has to be born in such a society to appreciate it.
We are almost too conditioned by a sort of up-close ethnocentricity (like the forest for the trees), which is so comfortable, despite the pain, to be able to make that quantum leap, and would prefer to make that transformation very slowly, like taking hesitant back and forth steps on a beach into a cold ocean. But now the economy may be forcing us to take the plunge. It's hurt for an instant, but then it becomes thrilling.
Walter Heller called what led to the recession of 1981 the Reagan-Volcker-Carter recession, but in those years of instability during Carter's administration, there was very little incentive to walk any of the sage talk from Carter. People wanted to zoom down the highways with turbo-charged V-8s eating 5 MPG at way beyond 55 MPH. Remember all the jokes about the little Renault Le Car?
So if we get our heads a bit out of the sand of all that's distracting our attentions from some real issues - and that's now being forced on us though this global economic collapse - then we might decide to kill two birds with one stone, which would include restructuring our marketplace so that it reflects true and transparent equity without those exploitative agendas that always comes back to haunt the marketplace from the shadows. From such a place, there would be a thriving industry which would be bigger than the CEOs driving it, and where globalization includes an integration of all those forces that comprise human existence - from the social sciences to the geophysical - and here the marketplace would return to those models of economics that have to do with the good of the community, which then would be good for each individual, in exactly those pursuits one is personally interested in. But one almost has to be born in such a society to appreciate it.
We are almost too conditioned by a sort of up-close ethnocentricity (like the forest for the trees), which is so comfortable, despite the pain, to be able to make that quantum leap, and would prefer to make that transformation very slowly, like taking hesitant back and forth steps on a beach into a cold ocean. But now the economy may be forcing us to take the plunge. It'll hurt for an instant, but then it becomes thrilling.
It may take a crisis to give people an incentive to change. People like easy answers and when the are given the choice of Carter's message of conservation and changing America's way of life or Reagan's message of blaming the problem on government regulations they will choose not to change.
I think it is ironic that Reagan got credit for decontrol of oil prices when it was initiated by Carter and was to be completely phased in by 1981. The Reagan presidency, at Detroit's prompting, went to work dismantling the fuel efficiency standards from the Carter years -- look how they have fared with this short sighted strategy. Now with oil prices falling to $77.70 a barrel (the drop from a high of $147.27 per barrel shows that effect of speculation) consumers benefit, but will the candidates set aside their energy policies?
While those who wallowed in the pig trough continued to make obscene profits, there is talk about letting them keep the tax cuts they were granted under the Bush presidency.
Some of these same swine were partying as the government granted bailouts for their corporations:
http://www.nowpublic.com/tech-biz/aig-after-bailout-scandal-executives-party-california
When is corporate welfare going to stop?
The public can change the course of events anytime it wants to just by saying enough and stop electing the same criminals back in office time after time.