Friday, September 3, 2010

Seeing The American Forest

He couldn't see the forest through all the trees.

- Anonymous

One of most famous and insightful early observers of the American experiment was not himself an American, but a French Norman aristocrat, Alexis de Tocqueville. As an outside observer, he was able to identify much that was different and unique about America that many Americans could not themselves see. Perhaps we are seeing another Tocqueville today in the person of Thomas Straubhaar, a professor of economics at the University of Hamburg. He sees the liberal economic policies of Obama as misguided and complains in an insightful essay in Der Spiegal that America is becoming "too European." This from Prof. Straubhaar:

There's no question about it: The 20th century was America's era. The United States rose rapidly from virtually nothing to become the most politically powerful and economically strongest country in the world. But the financial crisis and subsequent recession have now raised doubts about its future. Are we currently witnessing the beginning of the end of the American era?

A firm belief in the individual's ability, ideas, courage, will and a reliance on one's own resources brought the US to the top. The American dream promised everyone the chance of upward mobility -- literally from rags to riches, from minimum wage to millionaire. The individual's pursuit of happiness was seen as the crucial foundation for the well-being of society, rather than the benevolent state which cares for its subjects -- and certainly not the welfare state, which provides a social safety net for its citizens.

In the American system, every man was responsible for himself -- in good times and bad. No one could count on government assistance, not even the wannabe millionaire who did not make it and ended up homeless.

For many US citizens, the financial crisis has turned the American dream into a nightmare. . . .

Both the behavior of the American government and the Federal Reserve makes one thing clear: They do not see the solution to the US's economic woes in a return to traditional American virtues. Obama is not calling for the unleashing of market forces, as Ronald Reagan once did during an equally critical period in the early 1980s. On the contrary: Obama, driven by his own convictions and advised by economists who believe in government intervention, has taken a path that leads far away from those things that catapulted America to the top of the world in the past century.

The Obama administration's current policies rely on more government rather than personal responsibility and self-determination. They are administering to the patient more, not less, of exactly those things that led to the crisis.

The highest commandment of the American worldview was always to maximize individual freedoms and minimize government influence. It was an approach that was highly successful. According to that rule, self-directed action would remain the rule and government intervention the unpopular exception. But that is no longer the case.

This raises a crucial question: Is the US economy perhaps suffering less from an economic downturn and more from a serious structural problem? It seems plausible that the American economy has lost its belief in American principles. People no longer have confidence in the self-healing forces of the private sector, and the reliance on self-help and self-regulation to solve problems no longer exists.

The opposite strategy, one that seeks to treat the American patient with more government, is risky -- because it does not fit in with America's image of itself. . . .

But what is good for Europe and Germany does not automatically work for the US. The settlers of the New World rejected everything, which included throwing out anything with a semblance of state authority. They fled Europe to find freedom. The sole shared goal of the settlers was to obtain individual freedom and live independently, which included the freedom to say what they wanted, believe what they wanted and write what they wanted. The state was seen as a way to facilitate this goal. The state should not interfere in people's lives, aside from securing freedom, peace and security. Economic prosperity was seen as the responsibility of the individual.

If you take this belief away from Americans, you are destroying the binds which interlink America's heterogeneous society. Removing this belief could lead to conflicts between different sections of society, clashes which have long bubbled beneath the surface.

What could help would be a return to the American Way, the approach which made the US so historically powerful. The success of this model is illustrated by history. In 1820, twice as many people lived in the United Kingdom as the US, and its economic performance (measured by gross domestic product) was three times as strong and the average standard of living (measured by GDP per person) was a quarter higher. Today, there are about five times more people living in the US than the UK, America's economic performance is about seven times better than Britain's and the average American is about 50 percent better off than the average Briton.

What should be done? It would be more intelligent to repair the elevator which helped the US rise from the bottom of the heap to the top, instead of trying to transplant a European style of operating onto American soil. Either the US follows the American Way -- an approach characterized by a shared history, economic success and constant progress -- or the US will have to adjust itself to the "European" way, sparking economic and social tensions in the process.

If the US manages to revert to its former ways, there is potential for hope. If not, the American age will have really come to an end.

1 comment:

dave in boca said...

David Brooks writes obliquely about this problem with the "genteeling of America" which whines a bit that Americans don't relish infrastructure and production jobs, but yearn for high-revenue prestige jobs like the law, investment banking, real estate brokering, and other service industry jobs with high income potential.

Another recent approach was Michael Lewis's hilarious article on Greece and its humongous $12 trillion deficit, which the feckless Hellenes have decided is the fault of a few monks on Mount Athos, a virtually inaccessible peninsula where men live 9th c. lives without any females, even chickens, allowed in the monastery precincts. As Lewis explains, 3 out of 4 jobs in Greece are somehow related to the government and not paying taxes is the national pastime---NOBODY pays taxes and if you are chased for tax money, you take it to court and the adjudication usually lasts a decade. NOBODY is accountable and the Greek deficit became possible when they fudged the numbers to enter the EU and the ever-gullible Germans kept feeding the dragon.

Now the unions are threatening the socialist PM, who is actually more of a capitalist than his Conservative Ponzi Scheme predecessor, with all sorts of retribution, but the conservatives will not go back to rule because they are more responsible than the Papandreou socialists for the Ponzi debacle. I had dinner with George P's brother when he was at Princeton and their daddy was PASOK PM. Nikos explained that Greece and its economy is simply a gigantic RICO scam.

The joke on the libturds in the USA is that they seem to want to emulate the worst parts of the European economic experience [high guaranteed employment thru govt jobs, shitty govt healthcare with death panels] without imitating the best---cheap nuclear and hydroelectric power in France, Germany, Italy.

If the US lets the SEIU thugs and other unions [Greeks spend 4X what America does on their schools and the students require tutors because the Greek teachers unions won't allow monitoring] to take over education and service industries, we will look like Greece in two score years.