In the Midst of Plenty: The End of the Beginning of the End
September 9, 2012
This is part 1 of a 4 part series.
For the fifth time in as many decades, declinist literature has become increasingly prevalent. Spurred on by the economic crisis and slow recovery, many authors have taken up their pens in an attempt to forewarn the world of America’s seemingly inevitable collapse, oversimplifying complex domestic and international issues in the process. Most works indulge in fat-tail phenomena, base predictions of the country’s future success on past performances, and define the state as having a predictable lifespan; all reasons as to why these analyses fail to garner more than a cursory glance from academics, national leaders, and the population, in general.
Concerns over America’s stability mount during periods of transition, no matter how innocuous the circumstances, and the changes made have yet to bring about disaster – such as “1,000 years of darkness” – many fear. Economic shifts create the initial panic that eventually forces the country to rethink its competitiveness on the world stage. Consequences suffered from the economic collapse have made the nation, more so than in the past, examine its faults.
Much of what is undermining current progress is not as mysterious and cryptic as many national leaders and media personalities have led the population to believe.
“The question…is whether we can arrive at a set of normative rules which seek to protect liberty, reward achievement, and enhance social good, within the constraints of economics”
– Dr. Daniel Bell, The Cultural Contradictions of Capitalism
Dr. Daniel Bell – a noted sociologist who published a series of books on America’s socio-economic transition in the 1960s and 1970s – attempted to define the impact of America’s evolution into a consumer culture. In The Coming Post-Industrial Society, Bell ascertained that as America progressed towards a service economy – focused on developing professional/administrative positions – the market’s demand for more knowledgeable workers would diminish the opportunities available for individuals reliant on middle- and working-class jobs.
Many have blamed the globalizing marketplace for enveloping American politics in a shroud of class warfare for the past few decades; however, it was the West’s progression from managerial to entrepreneurial capitalism that initially created the animosity driving the political debate in the United States. Responding to the counter-culture movements, American Conservatives empowered themselves by organizing movements funded by business leaders opposed to the pluralist mindset that defined the nation for decades. Initially, the intention was to foment a countervailing perception of America’s future, but, as time passed, the Conservative movement focused its attention on, as President Ronald Reagan said, “revers[ing] the Great Society”.
The recession in the 1970s reinforced the Conservative’s message about the limitations of government and afforded them the platform necessary to begin striking down populist policies outright, rather than incrementally reshaping the programs for the betterment of the nation.
As American society modernized, the workforce became internationally-focused, post-industrialized, individualistic, and dislocated.
It was this market transition that pushed many toward the mindset that the nation’s social programs need to be erased and not reinforced, because they “alter the ‘natural’ market-based distribution of wealth” and “create a beggar mentality”.
The Conservative movement believed that its actions would reinforce American progress over the medium- and long-term, but with hindsight it is apparent that the primary goal was to increase profitability in the short-term, which became a detriment over time. By the end of the Carter administration and the beginning of the Reagan administration, business lobbyists began defeating reform proposals and pressing Washington for tax cuts and deregulation, setting the stage for the Savings and Loan scandals in the 1980s, the corporate collapses in the early 2000s, and culminated in the 2008 global market collapse (as noted here, here, and here).
As the United States’ economy expanded, Dr. Bell ruminated on the yet to be achieved principles that were being developed to make the nation equitable and meritocratic, leading to his The Cultural Contradictions of Capitalism. With its central theme focusing on overabundance in production and the nation’s desire for excess, Dr. Bell questioned whether or not this new breed of capitalism and consumerism would deteriorate and ultimately destroy the virtues that contributed to the system’s prior successes. The new model being developed has stepped away from the Puritanical model that defined capitalism for decades and transformed it into a consumer culture focusing primarily on status and self-image.
What concerned Dr. Bell the most was that society’s interest in self-gratification will do nothing more than encourage a nation to borrow more than it could repay.
“Public sentiment is everything. With public sentiment, nothing can fail. Without it, nothing can succeed”
– Abraham Lincoln, The Lincoln-Douglas Debates
Political choices also played a role in the increasing inequality occurring throughout the United States in the last half of the 20th century. For decades, America was focused on developing a pluralist society that reinforced the principles of security and prosperity for all. Cultural clashes and socio-political discontent revamped the way in which the population perceived what the nation’s future ought to be. It was during the 1960s and 1970s that pluralist philosophies began to be criticized; their limitations led many to become focused on individual achievement over collective progression.
In only a few generations, the American people’s belief in democracy’s potential to achieve has waned as many have become increasingly distrustful of public institutions. Underestimating public sentiment has diminished support for central leadership; a situation more deleterious today than in previous decades. In the past, dissatisfaction impacted all income groups, but over the decades Washington has become increasingly supportive of the private sector and business leaders, and implemented policies negatively affecting middle- and working-class Americans.
Diminished support from the people has only been exacerbated by the perception that the United States’ power and influence has, in some way, been ebbing since 2008, perpetuating fear mongering prevalent in declinist rhetoric. Its prevalence illustrates that many individuals hold firm to the belief in the counterintuitive and ahistorical concept that America will have the lion’s share of power resources forever. This replaces the concepts defining American idealism as it becomes increasingly apparent that the majority of the population has an exaggerated concept of the country’s relative power.
With economic successes funding an expansive military, the U.S. has been able to achieve many objectives, yet, historically, limitations have always remained: China, North Korea, and Vietnam at one point or another had Communist leanings, some of Eastern Europe has yet to truly move beyond its autocratic past, and Cuba is still controlled by the Castro family.
Expanding declinism and blind nationalism pose a threat to the United States’ future as individuals are unwilling to see the country for what it is and thus demand quick-fix solutions to complex problems.
Devising and implementing policies based upon polled opinions and national outrage will continue to undermine the country’s strategic objectives and national progress.
Washington needs to perceive current trends through the lens of relative decline – the country’s self-defeating belief that it will always be in control needs to shift towards an understanding that other nations will begin to take control of power resources and utilize them more efficiently and effectively, thus affording them faster growth and greater influence on the world stage.
“What you see too often in Washington and elsewhere around the country is a system of government that seems incapable of action. You see a Congress twisted and pulled in every direction by hundreds of well-financed and powerful special interests.”
– President Jimmy Carter, Crisis of Confidence Speech, 1979
In quoting the philosophies of John C. Calhoun, Pat Buchanan recently lamented that “government” is “divid[ing] us into ‘tax-payers and tax-consumers’” in what is perceived to be a means “to obtain control of the government”. Though Buchanan agrees that “we are there”, the culprit vilified in his diatribe is not the one that carried the nation to this point.
What had transpired during the last three decades was the deconstruction of the America way by the Conservative movement; an intentional, strategic breakdown of the country’s Byzantine, pluralist system through broad deregulation and an open assault on the Great Society. The country became divided along tax-payer/tax-consumer lines when the notion of pluralism – which defined the nation for decades – became demonized as anti-American, replaced with an individualistic identity that exposed the population to unnecessary socio-political contention and socio-economic risks. Upheaval in the way in which the country viewed itself – through failures from political and economic leaders to the vilification of the concept of community – had created a crisis of confidence that the nation stills struggles with today.
As the winner-take-all economy was beginning to take shape, shortsighted policies repeatedly failed to defend the public against rapidly changing circumstances.
Economic progress replaced the importance of societal development leading many, including national leaders like President Reagan, to believe “that threats to liberty [came] in vicious forms, like communism and socialism”, as well as “bureaucracy and over-regulation”.
This perception, coupled with lobbyist money, transformed the domestic system both quickly, such as the repeal of Glass-Steagall, and, imperceptibly, over time. Both factors are responsible for creating the very unstable financial institutions the private sector believed would be better off regulating themselves, which inevitably stymied the nation’s ability to achieve its’ intended goals.
“The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary.”
– H. L. Mencken, In Defense of Women
The loss of faith stems from the desire of some of the nation’s dominant ideologies to perpetuate conflict – real or imagined – in the guise of legitimate topics that concern the citizenry. It seems unavoidable in America’s current political landscape; even the democratic system designed to govern the nation, with its vetoes and filibusters, is being utilized to protect the nation’s leadership from future electoral issues.
Though the country struggles to correct itself, the nation must be careful not to replace individuals with ideologies; it must begin to acknowledge that words and ideas matter and terrible ones can have dire consequences for the nation.
Since 2008, America has had nowhere to turn to restore its confidence and the people continue to argue over how Americans see their nation, its leaders, and its role in the world. With the developed world facing larger deficits and concerns mount over national security, demands have become louder for more public sector deleveraging, even though deleveraging in the private sector has yet to be completed.
Economist Bob Baur recently stated on CNBC “it’s the government that needs to deleverage” because “households…and companies have improved…drastically”. An improvement means the private sector is moving in the right direction, but it does not mean it has necessarily achieved everything it needs to protect itself from future problems.
The mistake in demanding public sector deleveraging is that the fears underlying the costs and risks of public debt are exaggerated. While households are cutting back and the private sector is functioning below potential, it is the job of the government to focus on stabilizing programs through federal funding and not pushing the country toward austerity.
During the economic crisis, it was the country’s ability to move the private sector’s burden on to the public sector that saved the nation’s markets. If this option were not available, it would have hampered the private sector’s ability to save money and depress its ability to invest, which would have further hindered national economic stability. Furthermore, if the private sector would have been incapable of correcting itself, it would have caused household incomes to collapse, undermining their ability to save as well as pay off debt.
In analyzing contemporary fiscal concerns through the lens of basic economics, the current national deficit is the symptom and not the source of economic distress in the United States.