Thursday, November 13, 2008

Solving America's Financial, Health Care, & Foreign Policy Crises

The U.S. has been living beyond its means for some time, and now the chickens have come home to roost. Washington’s reaction is to urge everyone to return to the party – taxpayers should bail out the rich (Wall Street investors who gambled with your money and lost, bankers and mortgage loan companies who encouraged you to live beyond yours means, corporations like GM that produce lousy products), consumers should spend more (even if that means buying Chinese goods), everyone should keep on burning up the world’s last drops of oil as fast as possible.

That approach is understandable. First, the high-consumption society is what supports the power structure from which the rich and powerful benefit. Second, if politicians laid it out honestly to the American people, the American people would be very shocked and very upset. They might even question why those politicians should be kept in office!

But while the politicians’ calls on Americans to “have another stiff one” and get on with a party that no longer seems to be much fun are understandable, they are not logical.

  • As Pentagon officials keep reminding us, we don’t have enough troops for all our foreign adventures, much less for a new one in the mountains of Pakistan or the vastness of Iran.
  • The $800 billion dollar Wall Street bailout might be chickenfeed in comparison to the real cost of America’s war machine (estimated at $1.5 trillion for 2009 including debts on past wars and defense costs hidden in non-Pentagon budgets such as the Departments of Homeland Security and Energy), but it is still a huge amount of money for an increasingly impoverished citizenry to give to the rich—especially seeing that it is just the down payment on a far larger bailout.
  • The health care crisis – limitless care, regardless of cost, for the lucky and no health insurance at all for the rest – is both failing to provide adequate care and bankrupting the Federal budget.

The simple truth is that we have drunk too much and danced too long. The national hangover is going to be long and hard…and drinking more will only make it hurt that much more.

So, what can we do? Downsize with a bias toward justice.

If we have bitten off a bit more than we can chew overseas, then a good first step would be to talk to everyone: we may be able to persuade so-called enemies and so-called friends that compromise is to their benefit. Offering to negotiate with Iran a slow, careful pullout of American offensive forces from the region might buy us a lot of Iranian cooperation. Trying a bit of evenhanded discussions with Hamas and Tel Aviv with the immediate purpose of providing Gaza with effective government and freeing it from Israeli control with balanced controls to prevent military provocations from either side could not only cure one of the real cancers of international affairs but also fundamentally change the tone of Western-Islamic relations, undercutting at a stroke both Sunni and Shi’ite radicalism.

If we have been living a bit too high on the hog at home, then a good first step would be to admit it. Follow-up steps would be small and numerous:

  • Any aid to car companies should be in return for complete cessation of the production of gas-guzzlers and real corporate support for stiff minimum mileage rules. America does not need GM – it needs a responsible transportation industry producing high-efficiency personal and mass-transit vehicles. We have bailed out Detroit before. It failed to lead to the production of the type of vehicles society needs – indeed, the plague of SUVs came after the bailout of Chrysler. We already know handing cash to Detroit does not work; let’s try something else…say, a competition to construct a new automobile factory.
  • Taxes should be restructured to encourage the construction of modest suburban housing rather than McMansions as well as to reward those who live in small houses close to where they work, commute by mass transit, and cut energy costs.
  • Instead of bailing out greedy corporations, the focus of government should be the generation of new jobs in better industries (urban renewal, small town renewal, infrastructure renewal, and the creation of a world-leading green industry). Just imagine how cheap energy would be today if the Federally-funded research that lies underneath the U.S. aviation and computer industries had been devoted to solar power!
  • Taxes should be restructured to help the poor and encourage making a living from working rather than from playing the market with leveraged money.
  • If funds for health care are limited, then focus first on providing minimal coverage for all rather than unlimited coverage for the fortunate.

Perhaps most importantly, instead of encouraging consumers to spend more and go into debt more while politicians put the nation further into debt by borrowing from China to fund foreign adventures, our “leaders” should lead – by presenting to the public a vision of a less spendthrift but cleaner, more stable, more just, and—perhaps—happier society.

Is all this to say that Americans must learn to be satisfied with less? Certainly for a while, but not necessarily forever. The U.S. does have many sound fundamentals. Americans are quite well educated in technical terms. They are also familiar with democratic norms, if far too complacent about the durability of their freedoms. The population remains, despite the political discord of recent years, unified. Natural resources, despite decades of waste that remarkably continues apace in the face of the economic crisis, remain abundant. Americans’ understanding of the world may be abysmal, but at least they are mostly literate, have easy access to the Internet so they can escape from the mind-numbing superficiality and bias of the media, and could choose to educate themselves about the needs and goals and perceptions of other cultures. The land remains expansive in comparison to population. And by the standards of Europe before WWII or China facing an expansionist Japan in the 1930s, or the Cold War, America faces little foreign threat except that which it is by its own misbehavior provoking.

There is thus good reason to hope that one measured step back to create a more just society, restore America’s good name internationally, teach society to live more responsibly, and rebuild both industry and infrastructure could lay the groundwork for two steps forward in the near future.

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