Archive for July 16th, 2009

Carter the Prophet

“In a nation that was proud of hard work, strong families, close-knit communities and our faith in God, too many of us now tend to worship self-indulgence and consumption.  Human identity is no longer defined by what one does but by what one owns.  But we’ve discovered that owning things and consuming things does not satisfy our longing for meaning.

It has been called a speech that should have changed history.   Thirty years ago President Jimmy Carter gave what at the time seemed a successful speech.   He noted that the problems the country was facing — an energy crisis, an economic recession, and a question of confidence after a failed foreign policy venture in Vietnam and the Watergate scandal that brought down President Nixon — required a national renewal of purpose.  The speech was inspirational, but later pilloried for as the “malaise” speech, contrasting Carter’s supposed pessimism with Ronald Reagan’s optimism.

Carter had the fate of any prophet of doom — he was quickly pushed aside by the optimists who said nothing is wrong, we can keep moving onward and upward!  And within years, as oil prices dropped (ending the concern about dependence on foreign oil — at least for awhile) and the economy rebounded (albeit through increased debt and foreign goods from abroad), Carter’s warning was forgotten.  President Reagan took the solar panels off the White House and dismissed Carter’s call for a national renewal, including Carter’s claim that we had become overly materialistic and risked severe consequences if we didn’t change our ways.

Carter was prophetic.   Even though he wasn’t able to follow through and bring the change needed, in part due to actions of his administration, in part because of the nature of American capitalism, his speech rings true today.

In that speech, Carter offered a course of action the country should now reconsider:

First of all, we must face the truth, and then we can change our course. We simply must have faith in each other, faith in our ability to govern ourselves, and faith in the future of this Nation. Restoring that faith and that confidence to America is now the most important task we face. It is a true challenge of this generation of Americans.

….

We are at a turning point in our history. There are two paths to choose. One is a path I’ve warned about tonight, the path that leads to fragmentation and self-interest. Down that road lies a mistaken idea of freedom, the right to grasp for ourselves some advantage over others. That path would be one of constant conflict between narrow interests ending in chaos and immobility. It is a certain route to failure.

All the traditions of our past, all the lessons of our heritage, all the promises of our future point to another path, the path of common purpose and the restoration of American values. That path leads to true freedom for our Nation and ourselves. We can take the first steps down that path as we begin to solve our energy problem.

(Read the whole speech)

Carter left office in 1981 with very low approval ratings.  The country had fallen into recession after the oil spike in 1979, Americans had been held as hostages in Iran at the US embassy for over 400 days, as our former ally had become a foe with the overthrow of the Shah.

1979 stands as a pivotal year, with the Iranian revolution in January, and the Soviet invasion of Afghanistan in December.   The decline in the ability of the US to use military power to shape events had been shown in Vietnam, and it appeared that the hegemony of the post-war era was over, America was in decline.  Carter offered a way out.   He called for a massive effort to develop alternative sources of energy and move towards energy independence.  He called for a “rebirth” of the national spirit.  Instead, the country embraced the superficial but seductive optimism of Ronald Reagan.

The journalist Walter Lippmann once talked about what came to be known as the “Lippmann gap,” the gap between national commitments and the ability to follow through on them.   Carter was essentially saying that we were suffering from that kind of gap, and would have to pull together and work as a community to set things right.   Ronald Reagan effectively dismissed the idea of there being a gap, and we embraced the “you can have it all” mentality.

In 1979 our total debt was 30% of GDP, about $640 billion.  Our budget deficit that year was $28 billion.   Now we have total debt of $12 trillion, and a deficit of over a trillion dollars.   In 1979 we had the capacity to change course, we were in relatively good economic shape fundamentally, but needed to react to growing economic imbalances caused by a new trend of increased global interdependence — what would later be called globalization.   Oil prices fell dramatically in the early eighties, and that gave us the chance to balance economic health with a concerted effort to keep our economy productive (e.g., save the steel industry, invest in infrastructure) and achieve energy independence.   It would not have been easy, we’d have had to deal with some lean years in terms of economic growth and spending, but we’d arguably have been able to create a sustainable and environmentally friendly long term economic future.

Instead, we partied!   Run up the debt!   Consume, consume, consume!   Bigger cars, more stuff, and stay close to the Saudi royal family so they supply the cheap oil.    Yup, those were a fun thirty years.   We enjoyed a bubble economy where it seemed easy to get rich, stock market increases promised everyone an early and wealthy retirement, and cheap credit with low (observable) inflation that made it seem like there were no dark clouds on the horizon.   We therefore didn’t save for a rainy day (US saving rates reached zero in 2006), and entered a series of wars to boot (Grenada, Panama, Iraq, Bosnia, Kosovo, Afghanistan, and Iraq again).

So here we stand, the problems of 1979 didn’t go away, we just hid them by consuming and borrowing, making wars and losing clout, responding to crisis much like the old Roman Empire did — refusing to confront the need for real change until too late.  In 1979 the decline could have been turned around.  President Obama claims we still can — but he has to claim that, doesn’t he?   Perhaps we can, but the price will be higher, and the pain (real pain of people out of work, earning less, losing homes, not being able to pay for college, having stresses that tear apart families — not just metaphorical pain) more intense than if only we had listened 30 years ago.

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