Archive for February 1st, 2010

The Stakes are High

President Obama’s had a good week, going from a well received State of the Union address, to a widely disseminated talk with the House GOP caucus (which by most accounts made Obama look very good), and an appearance at an NCAA game.    With economic growth increasing last quarter, and the White House becoming more assertive, one gets the sense that the political winds are shifting again, this time back towards Obama.   It’ll depend on whether or not jobs follow economic growth, but Democrats are feeling a bit more optimistic this week for the first time in quite awhile.

Yet there is something unnerving in the shifting political winds, the inside the beltway games, and the emphasis on a few speeches or issues.   President Obama was elected because the public sensed that the country was going the wrong way and they wanted a change.   Within a year, the public still overwhelming thinks that the country is going the wrong way, and are generally disappointed by the lack of change brought forth.  The left is angry about the lack of a health care bill, and the compromises made to even get close to passing something.   The right is angry about budget increases, and has launched an all out assault on Obama’s leadership.    The two sides are fiddling while the Republic burns.

The United States is in the midst of a series crisis, one which will determine the kind of world we leave our children and grandchildren.   I’ve noted many times how thirty years of economic mismanagement and growing public and private debt have left our economy extremely vulnerable to even slight jolts.   It could be China deciding to shift currency holdings away from dollars and US bonds, a spike in oil prices, renewed war in the Mideast, a natural disaster, or more likely a series of small things, and we could spiral back into recession and not be able to spend our way out of it without a real risk of currency collapse.

The rest of the world knows this.   The US is neither respected nor feared on the global stage any more.   The fiascos in Iraq and Afghanistan have greatly reduced the fear of US military action.  The world has seen how difficult it is for even the best trained and equipped military to project power and shape political outcomes, and it’s clear the US public has no stomach (or money) for future military engagement.    With our economy vulnerable and in deep debt, countries are looking for alternatives to the dollar, and shifting focus away from the US.   Nowhere is this more true than in China; the Chinese don’t want to be dependent on American markets, and are making pretty dramatic moves to diversify and actually bring some consumption home.

The Chinese also have passed the US as the top producer of clean energy.   In fact, as the US dithers over whether or not global warming is happening, the rest of the world has taken the attitude “happening or not, we’re going to prepare the energy sources of the future.”   The EU, China and other states are investing large amounts on new energy technologies, making the US a follower where we used to be a leader.    It’s conceivable that US export capacity could be hurt if other countries signed treaties limiting the trade of goods produced with a large carbon footprint.   As the rest of the world moves into a 21st century economy, we’re trying to keep alive the old fossil fuel based production system, covering our ears and going “nanananana” to people who talk about the decline of oil supplies or climate change.

Simply, we are in serious decline as a world power.   The rest of the world now believes it’s OK to ignore us or go against our interests — there is little we can do in response, especially when we need the world to buy our bonds and finance our rising debt.   Rather than trying to figure out how to profit from American consumers, states and companies are looking for safe alternatives to relying on US consumption.   To many, it appears our best days are behind us.   We’re going the route of the old USSR, though more slowly.   Rather than collapse, we have internal gridlock, with no real capacity to act to break out of this rut.  The left blocks the right, and the right blocks the left.   People tune in to political theater on FOX, MSNBC, or their favorite talk radio shock jock.    Obama is hoped to be a savior or condemned as a socialist.  The idea that he’s just a pragmatic President looking to solve problems is boring, it doesn’t provide political drama.

When the President called on Republicans to take responsibility for governing as well, promising to listen to them and work with him, I hope he was being sincere.   So far, the Republicans have resisted this.   Compromise means giving up things you really like so that the other side gives something up.   When you’re in opposition, there are more votes and better rhetoric if you don’t give anything up and avoid compromise.   You won’t be accused of softness by the true believers in your own party, and the other side looks feeble, unable to bring effective change.   Yet what’s good for the Republican party alone, or the Democratic party alone, isn’t good for America.

It really is time for the two parties to put ideology aside and work together to solve huge problems.   The problems are obvious: a large budget deficit and debt, lack of regulation over banks and financial speculation (especially things like derivatives), the coming retirement of the baby boomers, a gap between our commitments abroad and our capacity to fulfill them, and a public used to ‘something for nothing:’ the consumption generation who wants it now, wants it all, and wants it fast.   We have a health system likely to implode in coming years if nothing is done, and an economy that needs to produce more goods and retool the infrastructure if it is to compete in the 21st century.

There is little debate about the nature of these problems, just how to handle them.   OK, that’s an obstacle, and perhaps on some issues that’s an insurmountable obstacle.  But at this point, many on each side aren’t even trying.   In fact, those who do try to do what is responsible, like Senator Snowe, get targeted as a “RINO” by the hard right.   In their eyes loyalty to the party and party line is required, otherwise you’re a traitor.   Many Democrats want to just dump trying to work with the GOP and ram through whatever they can, annoyed that Obama is unwilling to support that.

Well, the country faces a pivotal point in our history.  The two sides can continue this “politics as bloodsport” approach, and the country will continue to spiral downward, inevitably experiencing a crisis that will force change, probably painful.   Or the politicians can wake up and see that the stakes are high, and the quality of life of our children and grandchildren depend on solving the problems we face today.    These are very interesting times.