I presented a Lecture at the Blue Ridge Community College, Flat Rock, NC on January 24, 2012. The purpose of the lecture was to review the new book by Thomas Friedman and Michael Mandelbaum, That Used To Be Us, which chronicles how America has mouse-trapped itself and what it can do to restore its greatness. I am including a transcript of the lecture.
THE ROOTS OF NATIONAL DECLINE
Thank you, Joan. It’s a pleasure to be back. First of all let’s talk process. As you know, most of what is coming is a review of Friedman and Mandelbaum’s book, That Used To Be Us, which was published last summer. But in addition to that I am also going to review an article, The Book Of Jobs, published in this month’s issue of Vanity Fair by economist, Joseph E. Stiglitz. And I’m going to also talk briefly about, CAPAU, the organization that Hendersonville Times-News columnist,
Some of you also know that I have previously talked to you about elections for the Presidency and Congress. I will be doing that again this coming November. However, since the Iowa Caucus and the New Hampshire and South Carolina
“I think we have to blow the place up” is what former Republican Senator George Voinovich of Ohio
In fact, I believe that America America
Most of you are probably familiar with Thomas Friedman. He is a three-time recipient of the Pulitzer Prize for his work with the New York Times, and the author of many books. His columns appear in the Hendersonville Times-News.
Michael Mandelbaum is the Christian Herter Professor of Foreign Policy at The Johns Hopkins University School of Advanced International Studies. For those of you who have forgotten your diplomatic history, Christian Herter was a Republican Congressman and Governor from Massachusetts who served as Secretary of State at the end of the Eisenhower Administration and was the man who subsequently founded the distinguished School of Advanced International Studies at Hopkins
Let’s start with a selection of some of the trends that disturb them:
25% of high school students drop out condemning them to a life of poverty and social failure. 69% of public school students are taught math by a teacher without a math degree. 75% of young Americans between the ages of 17-24 are rejected by the military because they didn’t graduate from high school, have a criminal record, or are physically unfit. College entrance exams show that only 25% of graduating seniors are ready for college.
In the 1950s and 60s the unemployment rate for men was 9%. In the recession of the early 80s it was 15%. Today it’s more than 18%.
In 2001 our national debt was $5.6 trillion. Now it’s $14 trillion, which is equal to our nation’s Gross Domestic Product.
In 1982 the average household saved 11% of its disposable income. Today it’s less than 1%.
In the 1950s spending for health care was 4% of GDP. Today it’s 17% and on a trajectory to hit 30% by 2030.
In 2009 the United States
The annual federal spending in research in mathematics, the physical sciences, and engineering is equal to the increase in our health costs every nine weeks.
Thirty years ago 10% of California
The top 1% of Americans now controls 25% of our total income and 40% of our national wealth. Twenty-five years ago the numbers were 12% and 33%.
We used to be a nation of savers and investors. We’ve become a nation of spenders and borrowers.
That’s something that I can attest to personally. I rode DC’s Metrorail for decades. Its escalators and elevators were out of service all the time. Metrorail’s managers and workers were simply incapable of fixing them before others would break down. When challenged, management would respond that it couldn’t get parts and that it did not have enough employees.
When I contrast this level of incompetence with Henry Ford’s B-24 Liberator bomber construction facility at Willow Run in Ypsilanti, Michigan during World War II that built B-24s at a rate of one an hour or the Liberty Ship facilities that added a new Liberty Ship to the Arsenal of Democracy every 42 days, I first want to cry and then I’m consumed by fury.
Friedman and Mandelbaum drive the point home this way. They say, “We are nearly complete in our evolution from Lewis and Clark into Elmer Fudd and Yosemite Sam”.
Many Americans believe that the 21st century will belong to the Chinese. And, thus, our job is to imitate them. Right? No, say Friedman and Mandelbaum. They believe what we must to do is recapture our ability to take large actions on a collective scale.
They believe that America’s slow-motion decline has four root causes: We have lost sight of how the world has changed and how we must adapt to that change, we have failed to address education, debt, and energy and climate change, we have stopped investing in our nation’s formula for greatness, and we now have a political system that is paralyzed.
When we won the Cold War twenty years ago we wrongly assumed that the clear and present danger to our supremacy was gone. We were wrong. We’ve missed how rapidly the world was about to change as billions of people began to practice capitalism. A worldwide explosion of pent up aspiration for prosperity replaced the demise of the communist threat. Missing that reality was a colossal American blunder.
Friedman and Mandelbaum believe that the new world in which we live poses four central challenges: globalization, the Information Technology revolution, our massive national debt, and the threat of our reliance on fossil fuels. The authors state that we have responded to these four challenges “with the vigor and determination of a lollipop”.
There is no way that we can respond to these challenges without collective sacrifice. For example, the debt can’t be reduced without our being willing to accept reduced benefits AND pay higher taxes. In addition, as unpleasant as it is to accept, we will also have to realize that higher fuel bills will be GOOD for America
Thus, national sacrifice is inevitable. The debate will be about how it is to be shared. The authors believe that to meet the challenges of globalization and the IT revolution and to achieve the steadily rising standard of living that Americans have come to expect, we will have to save more, consume less, study longer, and work harder. All of this amounts to national sacrifice. It won’t happen unless there is a call for that sacrifice from our elected leaders, especially the President of the United States
That debate, the authors believe, should focus upon America
Let’s look briefly at each of these five pillars.
In education Friedman and Mandelbaum argue that what matters is not how your public school ranks in its county or state, but how it ranks in the world. The crucial challenge we face in education is to educate our young people beyond the exploding new level of technology. We will need to require more education and better education. Most of us recognize that there is still much to accomplish here in America
The bottom line in education is that we need to lift the bottom faster and the top higher. And we must do both of these simultaneously.
Since the building of the Erie Canal and the transcontinental railroad in the 19th century, governments at every level have invested heavily in the infrastructure the nation required to flourish economically.
In the 20th century FDR’s New Deal built dams, levees, roads, parks, airports power stations, reservoirs, tunnels, auditoriums, schools, and public libraries. These investments in infrastructure and education gave a tremendous boost to the American economy in the midst of the Great Depression. And in the 1950s President Eisenhower literally transformed the American way of life by creating the economic lifeline that we call the Interstate Highway System.
But now all that has changed for the worse. Our roads are now clogged and deteriorating, our bridges are unsafe, our water systems leak and are increasingly unreliable, our airports and train stations have become dingy relics. The American Society of Civil Engineers estimated in 2009 that the price tag to repair America
Let’s talk immigration. No nation on earth has been able to match America
In March of 2010 there was a black tie, long dress dinner at the National Building Museum in Washington
No, this was not a dinner of the China-India Friendship Association. These young people were all American high school students and they were the finalists in the 2010 Intel Science Talent Search. They were the top math and science high school students in America
By the way, the winner of the Intel contest was Erika DeBenedictis who developed a software navigation system that would enable a spacecraft to travel through the solar system more efficiently.
But today, instead of importing people to fill critical shortages in science and engineering, we are shutting our doors. In fact we are creating our first national brain drain and we don’t even realize it. Today many immigrants are returning home because of our visa backlog. At the end of 2006 more than a million professionals and their families were in line for the yearly allotment of just 120,000 permanent resident visas. That’s a losing game that many of them are no longer willing to play.
Such a policy is terribly counterproductive to our long-term economic health. Immigrants represent about 12% of our population, yet they have started 52% of Silicon Valley’s tech companies and have contributed to more than 25% of U.S. America
Research and Development is the fourth pillar of our national prosperity. And the news there is not good. Nations thrive or languish not because of one bad big decision but because of thousands of bad small ones. Today our spending on R&D is actually declining. After Sputnik was launched in 1957, our spending on R&D, as a percentage of GDP was over 2%. Today it is less than 1%. A 2005 study conducted by the National Research Council has found that federal government funding of R&D as a fraction of GDP has declined by 60% over forty years.
Since 2005 the situation has grown markedly worse. In 2009 51% of U.S, patents were awarded to non-U.S. companies. Federal funding in research in the physical sciences and engineering as a fraction of the GDP has plummeted by more than 50%. Almost half of the adults in the United States
The fifth pillar of our prosperity is the necessary governmental regulation on private economic activity. This includes safeguards against financial collapse and environmental destruction, as well as regulations and incentives that encourage capital flow to America
The father of this system was our first Secretary of the Treasury, Alexander Hamilton. Hamilton America Lincoln
Teddy Roosevelt’s principal accomplishment grew out of his belief that for business to thrive it required consistent and transparent rules, as well as regulations to prevent abuses and hold business accountable. Roosevelt understood that government had a vital role to play in the regulation of markets as well as protecting public health and safety. Teddy Roosevelt did not believe in too big to fail. His response to the trusts that were too big was to break them up.
The trick, of course, is getting the proper balance between regulation by government and the workings of free markets that spur economic growth. While there are dozens of examples of such regulation, one that demonstrates its success is bankruptcy law. Unlike Europe where business failure was marked with long-lasting stigma, our bankruptcy laws gave American entrepreneurs a clean slate and a fresh start. It’s what enables entrepreneurs in Silicon Valley to try, fail, declare bankruptcy, try again, and then strike it rich.
Today this unique American partnership between the private sector and the Government is under assault from both those on the right who want to stop government in its tracks and those on the left who want to use government to assault the private markets.
In other words everything has changed. That’s why corporate profits and productivity have risen but so has unemployment. The old jobs that have been lost are forever lost. America
The new labor market is one that places a premium on workers with college and graduate level degrees. Forget blue-collar/white-collar, the authors argue. The new paradigm has become one of creators/servers. To succeed, we need to train a nation of creators. Summing it up, the authors give us Carlson’s Law, from Curtis Carlson, the CEO of SRI International: “Innovation that happens from the top down tends to be orderly but dumb. Innovation that happens from the bottom up tends to be chaotic but smart”. And that shines a bright light on the inadequacies of our educational system.
Because of globalization and the IT revolution, raising math, science, reading and creativity in ALL American schools is a must. Education, Friedman and Mandelbaum insist, has become a matter of economic survival. All of us need more education AND better education. They state, “We need to lift the bottom faster and the top higher.”
They give us a new definition of stress: It’s what you’ll feel when you can’t understand the Chinese accent of your first boss out of college. The point they are making is that we need to realize that we can no longer maintain our economic supremacy by simply attempting to maintain traditional blue and white collar jobs in today’s hyper-connected world. To grow and prosper in the new world order we have no choice but to educate our citizens to hold jobs that don’t exist yet. In addition, we have to equip our young people to invent those jobs. If we don’t, other nations will fill that vacuum.
And so they see a world divided between “high-imagination-enabling countries and low-imagination-enabling countries.” Only the former gets us to decent paying jobs going forward. Friedman and Mandelbaum have put a warning shot across America
They also tell us that the nation has blundered badly with respect to our ballooning deficit and our energy crisis.
Regarding deficits, they tell us that either we will cut spending, increase taxes, and start investing in our economic future all at the same time or we will lose our supremacy, transfer crushing debt to our children and grandchildren, and literally mortgage our future.
Seventy-seven million baby boomers have begun to retire. Without reform of both Social Security and Medicare, the costs of those two entitlement programs are on course to rise by 70% and 79% respectively by 2020. These growth rates will kill our economy. They will kill the American dream. They will kill hope.
But instead of facing the necessity of entitlement reform the nation has chosen to adopt a course of action that invites catastrophe—borrowing from countries like China America to over borrow and China
The authors tell us that America
They believe that clean energy will follow information technology as the next industry upon which economic growth will depend. And in this respect China is already far ahead of the United States
The authors believe that we have no choice but to put a price on carbon—that’s right, Cap and Trade. Did you know that President George H. W. Bush introduced Cap and Trade in 1989? That’s right, a Republican, introduced Cap and Trade!
But since then we’ve gone backwards. Pricing carbon has been held hostage to the politics of paralysis that dominate Washington
We need to price carbon, increase energy efficiency standards, and raise the tax on gasoline. Doing those things will create the conditions in the private marketplace that will enable the United States to lead in the creation of the world’s next major industry—clean energy. And that creates jobs—lots of jobs.
Instead, according to Friedman and Mandelbaum, “the Democrats have been cowardly, and the Republicans have been crazy”.
Now Cap and Trade is what I call a FOAM AT THE MOUTH political issue for my friends on the right. It’s analogous to what happens if you try to discuss the rights of the unborn with my friends on the left. Rational thought ceases and is supplanted with FOAM AT THE MOUTH.
So I’m going to take the time to go into this issue of energy policy and global warming in greater detail in the hope that it will increase light and decrease the heat that typically stymies rational thought and reasonable policy.
Let’s start with two just released NASA studies which warn that global warming could lead to a major transformation for Earth’s plants and animals. The first study, conducted by NASA’s Goddard Institute for Space Studies, warns that global warming would likely lead to widespread destruction of ecological habitats, mainly by the introduction of invasive species drawn to warmer or cooler habitats.
The second study by NASA’s Jet Propulsion Laboratory and the California Institute of Technology investigated how plant life is likely to react over the next three centuries as Earth’s climate changes in response to rising levels of greenhouse gasses. The study predicts that climate change will disrupt the ecological balance between plant and animal species, reduce biodiversity, and adversely affect Earth’s water, energy, carbon, and other element cycles, including a warning that increases in temperature could cause large areas of permafrost to melt, resulting in the release of large amounts of methane gas.
Now most of you will take this warning to heart. But the FOAM AT THE MOUTH TYPES will likely dismiss it as unproven and alarmist. So rather than look at what might happen in the future, let’s look at what did happen in the relatively recent past.
Let’s look at the Little Ice Age in the hope that even the FOAM AT THE MOUTH TYPES might learn something of value.
The Little Ice Age is not an event of the distant past. It began about 1300 and lasted until 1870. During that period the earth’s temperature dropped by about 1 degree Celsius. But the effects of that sustained drop were cataclysmic. And because they were cataclysmic they demonstrate how fragile the balance can be between climate change and life, as we know it.
Experts agree that a combination of three natural forces likely produced the Little Ice Age. These included major volcanic eruptions, changes in the Global Oceanic Conveyor Belt, otherwise known as ocean currents, and a very marked decrease in sunspot activity.
In each of the centuries of the Little Ice Age there were at least five major volcanic eruptions that spewed enormous amounts of sulphur gas into the atmosphere. These gasses, when mixed with water vapor, produced clouds of sulphuric acid that reflected sunlight, thus lowering temperature.
If you know your geography, you know that Europe is much farther north than is the United States Europe . It runs through the Mediterranean Sea and encounters land just north of Jerusalem Moscow , through Berlin , Paris , and London and it ends up in northern Canada —in James Bay . Thus, any disruption of warm waters of the Gulf Stream and its extension, the North Atlantic Drift, would likely have had disastrous consequences for the European climate.
The Little Ice Age was immediately preceded by an abnormally warm period called the Medieval Warm Period. This warm period likely produced an abnormally large amount of glacier melt. Glaciers are composed of fresh water. And an abundance of fresh water from the glaciers may have either disrupted or shut down the Global Oceanic Conveyor Belt, thus denying Europe of the flow of warm water that heats the air passing over it that then warms the European Continent.
And finally from 1645-1715 sunspot activity basically came to a halt. It’s a phenomenon know as the Maunder Minimum, named after the English astronomer, Edward Maunder, who studied it. The reduction in sunspot activity reduced solar output by about ½%, which may seem insignificant, but may well have added greatly to the gathering cold that gripped the earth.
There is not time to describe in detail all of the deleterious consequences of these three natural events. But what follows will give you the flavor of the devastation that occurred. And this is climatological devastation that really happened. It’s no theoretical prediction of the future.
The 4000 or so Vikings in Greenland were isolated and forced to cease their exploration of Greenland . The desolation that they suffered was made worse by the fact that they treated the native population of Inuit people as inferiors and adversaries. Had they been willing to learn from the Inuit people they would have been able to survive by being able to fish during the winter. The Inuits had developed an ivory harpoon that worked year round. The Vikings only had spears that didn’t work in winter.
In 1347 commercial ships from Asia unloaded their cargo in European ports. The cargo contained rats, and the rats bore fleas that carried the Bubonic Plague. As the frigid winter gripped all of Europe , people stayed in doors in cramped quarters and the rats moved in with them. By 1351 one third of Europe ’s population, 51 million people, had perished from the Black Death.
The life sustaining crops for all of Europe during this period consisted of cereal crops: rye, barley, and wheat. These are long stem crops that could not withstand the rain, snow, and wind. They fell to the ground and rotted. Millions starved to death. In parts of Europe this problem was alleviated with the introduction of the potato, which grew underground.
But its beneficial effect was significantly diminished because the Catholic Church under Pope Innocent VIII declared the potato a “Devil’s Plant”. It was a sin to eat it. In a Papal Bull in 1484 Innocent VIII declared that persons planting or eating potatoes to be witches and many were burned at the stake.
In 1816 there was no summer in New England . It snowed many days that summer. New York Harbor froze and it was possible to walk from Manhattan to Staten Island .
So what’s the point of all of this? After all these were naturally occurring forces over which man had little or no control. The point is that these kinds of changes can and without doubt have had devastating effects on humanity. From that there is a lesson that all of us should have learned by now. And that lesson is that one tampers with Mother Nature’s balance at their extreme peril. And the corollary to that lesson is that if the natural balance is upset, you can’t then decide to reverse it and live happily ever after. Mother Nature doesn’t work that way.
Those who perished from 1300 to 1870 did so through almost no fault of their own and without having a clue as to what was happening. But we know what’s happening and we may prove to be more stupid than our forbears. If so, we’ll deserve our fate.
Friedman and Mandelbaum are convinced that, as the Baby Boomer Generation supplanted the Greatest Generation, America
The authors believe that America
The United States
American Exceptionalism is under assault. Simply asserting our supremacy does not sustain it. The inadequacy of our ability to meet the four challenges that Friedman and Mandelbaum describe: globalization, the IT revolution, our debt and deficit, and our appetite for fossil fuels, paint a bleak portrait indeed. The authors argue that, “not enough Americans seem to understand the first two and too many want to deny the necessity of addressing the second two”.
All of this is made significantly worse by the fact that our political system has broken down. It’s paralyzed by partisan rancor. Our two political parties are both deeply and closely divided. Because of that reality we are caught in a cul-de-sac in which we bounce back and forth between the extreme positions of both the Democrats and the Republicans. It used to be the case that “wave” elections where one party annihilated the other were infrequent. Not so, any more. The Democrats pounded the Republicans in 2006 and 2008. The GOP returned the favor in 2010. And now it looks like both parties may be in for a shellacking in 2012.
But the only way to address the problems we face, reining in our exploding debt, creating an educational system that equips our young people with the tools that will enable them to compete and lead in the 21st century, drilling for more oil and gas while imposing a carbon tax, and reforming the tax code and raising additional revenue, can only be accomplished by combining the best of both the Left and the Right.
Friedman and Mandelbaum believe that one way or another America
But remember that they told us at the outset that they did not know if their book was fiction or nonfiction. They don’t know how this story is going to end, and we don’t either. Friedman and Mandelbaum call themselves frustrated optimists.
So let’s conclude by looking at how they leave us all holding the nation’s fate in our own hands.
They want America America
But most of all they believe that we need to put in place a different set of incentives for our political leadership—ones that will lessen the grip of extreme polarization and special interests on public policy. That, they believe will require shock therapy.
They tell us that business as usual in American politics is a prescription for national decline. That is why they quote former Senator Voinovich who said, “I think we have to blow the place up”.
Friedman and Mandelbaum speak the truth when they tell us that the Democrats act as if government is the solution to all of America
A generation ago the Democrats stood for progressive change. Now they defend virtually every federal program as if it were sacred. Thus, they have become the most conservative force in American politics. The Republicans used to be the conservatives in the original European sense, opposed to sudden, rapid shifts in public policy and prudent when it came to public finances. Now they are the party of fiscal radicalism and recklessness, cutting taxes, but not reducing spending in a meaningful way.
Friedman and Mandelbaum hope that this dangerous transformation of how politics works can be reversed by the emergence of a serious independent candidate for the presidency in 2012. I’m not willing to bet much of my ranch on that proposition either.
Obviously I believe that Friedman and Mandelbaum’s, That Us To Be Us, is a singularly valuable book. That said, I also believe that it leaves two loose ends. It inadequately describes the nature of our current economic plight, and it underplays the danger and the depth of the political paralysis that grips the government in Washington
So I want to close by addressing both of those matters. Concerning the peril posed by the continuing economic crisis, I want to rely on a brilliant piece in the January 2012 issue of Vanity Fair by economist Joseph Stiglitz. Stiglitz is a professor of economics at Columbia Gary , Indiana
He reminds us that it’s been five years since the housing bubble burst and four years since the recession began. The wages of American workers are falling and the income of an average household is now less than it was almost fifteen years ago.
Stiglitz correctly argues that the Bush and the Obama Administrations blew it when they concluded that, if bailed out by the taxpayers, banks would begin to lend again and that would be sufficient to put the economy on the road to recovery. They were wrong. About Obama’s bank plan Stiglitz has said, “the designers were either in the pocket of the banks or were incompetent”. It’s a classic case of the terrible price that is paid when one get the diagnosis wrong. When that occurs, the intervention almost always is irrelevant or makes the problem worse.
Stiglitz tells us that our underlying economic trouble goes way beyond the troubled banking system. He tells us that to understand it we must look back 80 years to the Great Depression. Both then and today the real economy came unstuck because of the jobs we have, the jobs we need, the jobs we’re losing, the workers we need going forward, and the ones we have who we can’t use any longer. Sound like a refrain from Friedman and Mandelbaum? You Betcha!
At the start of the Great Depression more than 20% of American workers were employed in agriculture. But agriculture’s success made its demise inevitable. Today only 2% of Americans produce food. And their bounty feeds all of us and millions more around the world.
As agricultural productivity soared in the 1920s, prices fell. We get that right? When there is lots of sweet corn in the grocery store in July the price plummets. Those falling prices forced farmers to borrow heavily in order to maintain their standard of living. When they had borrowed beyond the breaking point, the banking system collapsed around them and the nation too.
FDR’s New Deal attempted, but failed, to stem the tide of economic collapse. Its efforts were too small. By 1937 Washington politics forced an overly cautious Roosevelt to curtail his stimulus program.
Stiglitz argues that it took the massive injection of government spending as the nation prepared for World War II to turn the tide of the Great Depression. That spending not only built the Arsenal of Democracy that won the war, it also brought about the structural transformation that moved America
Today we face an analogous and no less daunting challenge. Today we are moving from a manufacturing economy to a service economy. Increased productivity and globalization are changing everything. Is that not another one of the major themes of Friedman and Mandelbaum? You Betcha!
Today’s unemployed factory workers are the descendants of the Great Depression’s unemployed farmers.
But Stiglitz tells us that today’s deficit hawks, just like their predecessors in the 1930s, only see the need for balanced budgets and cutbacks in government spending. That policy prescription did not get us out of the Depression, and Stiglitz believes it won’t work any better today. He believes that it’s foolhardy to expect that the economy will either recover on its own or by the FED simply turning on its printing presses. The persistence of our stagnant economy together with persistent high unemployment supports his argument.
Instead of continuing current policy, Stiglitz believes that we must embark on a massive investment program that will simultaneously increase both productivity and employment. In effect he is calling for something that I have been advocating in my writing for almost two years—A 21ST CENTURY AMERICAN MARSHALL PLAN. In a column published just after President Obama’s State of the Union speech in 2010 I said, “Sixty years ago Secretary of State, General George Marshall, was the architect of President Truman’s Marshall Plan that rebuilt the shattered European economies. Why hasn’t President Obama realized that today America
Such an effort today would necessarily focus on education, basic and applied research, our crumbling infrastructure, and much more. And it will entail spending an enormous amount of pubic money. For the expenditure of all that money to be effective, and we are talking about trillions of dollars, it is essential a mechanism other than business as usual in the Executive Branch be created.
And it’s necessary because the Federal bureaucracy is stupid, slow, under worked, overpaid, and utterly unimaginative. The Executive Branch and the bureaucrats in it are just like the slugs in the Washington Metrorail system who can’t fix broken escalators. And by the way, don’t tell me that this stinging indictment of the Federal workforce is too harsh, too unfair, and undeserved. I was there for 36 years. I know better.
The model that needs to be used can be found at the agency that I know best, the National Institutes of Health (NIH). NIH is the largest supporter of biomedical research in the world. It’s success is unchallenged and unparalleled. And its success is directly attributable to the way in which it determines which universities and which individual researchers receive NIH support. The system NIH uses is called Peer Review. That means for each substantive area of research the NIH forms panels of experts from all over the country, private citizens, not bureaucrats. These experts review the proposed projects in their area of expertise and give each project a priority score. When that is done all the NIH does is to write the checks based on the priorities. It’s simple, fast, nonpolitical, and avoids all of the nonsense that vesting the decision-making power within the bureaucracy would make inevitable, and, thus, doom the effort.
And Stiglitz concludes by telling us that we must also fix the financial system too. The heart of this is to make sure that banks get back to the business of lending and get out of the business of speculating. Although Stiglitz does not mention this, I believe that the single most effective thing that would get the banks on the right track is to require that the top executives of all the banks face PERSONAL bankruptcy if they put the bank at risk as a consequence of speculative decision-making. That one change would sober these folks up instantaneously. It would tell them that the party is over—that they could no longer get to choose between incredible personal profit if the speculation bore fruit or taxpayer bailouts if it didn’t.
But there’s a problem here right? Even if you agree with Stiglitz’s prescription to cure what ails the nation, you probably also believe that there is no chance to get there from here politically. And I suppose most would jump to that conclusion.
But before we jump to that hopeless conclusion, let’s be crystal clear about the stakes. Either we will summon the political will to make the national sacrifices necessary to right the economic ship of state or face an inevitable decline that will erode far more than our prosperity. What is at stake here is whether we can sustain our grand experiment in democracy, our liberty, and our individual freedom, not just maintain our standard of living. Viewed in that context maybe a Marshall Plan and its attendant costs would look not only inviting, but also essential.
However, if we believe that Washington Washington Washington
I’m old fashioned. I believe that ultimate power in shaping our political system rests with you and me, not with those we elect as our representatives. I believe that, if it becomes clear that they aren’t performing, that it’s our responsibility and our obligation to do something about it. In other words either we will fix this mess or we will be responsible for flushing the nation down the toilet.
The hard fact of the matter is that the members of Congress, all of them, violate their oath of office to uphold the Constitution. In fact, all of them uphold a different oath—working to assure their reelection. And the terrible truth is that doing that requires them to sell their votes to the highest bidders either from the K Street Corridor or from Wall Street. It has become the reflexive way of life for Democrats and Republicans on Capitol Hill. And they systematically use the cash they raise from the lobbyists to convince enough voters to keep them in power. It’s devious and deceitful. Democracy does not work when members of Congress and the President of the United States
We can change this game they play. We really can. All we have to do is to begin voting against every incumbent who seeks reelection. That’s right, every one of them. Makes no difference if they are Republicans or Democrats, smart or dumb, honest or not, long serving or newcomer, conservative or liberal. Vote against ALL of them.
Were the American people to begin to do that, increasing numbers of members of Congress will begin to lose their seats. And, given the 24-hour news cycle and the social media it will become clear to everyone that the name of the game is being profoundly transformed. All of a sudden members of Congress, regardless of their political party or ideological point of view, would understand that the only way they could keep their privileged position on Capitol Hill would be to dance to a different set of drummers—US. All of a sudden they would realize that a majority of us, and a very large majority of us, are insisting that they come together and work out solutions to the major issues the nation faces. All of a sudden they would figure out that it won’t work any more for them to keep kicking the can down the road as the nation edges closer to the abyss.
If we learn the lessons that Friedman, Mandelbaum, and Stiglitz have propounded so brilliantly and couple that knowledge with this new approach to how we cast our votes, we can put America
That is why Mike Tower , a distinguished op-ed columnist for the Hendersonville
Thank you.
LeRoy Goldman
January 24, 2012
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