Are Americans Spoiled Brats?

Eugene Robinson, one of the best newspaper editorialists on the planet, calls the American electorate "spoiled brats" having a "temper tantrum".  In today's Washington Post, he writes

The nation demands the impossible: quick, painless solutions to long-term, structural problems. While they're running for office, politicians of both parties encourage this kind of magical thinking. When they get into office, they're forced to try to explain that things aren't quite so simple -- that restructuring our economy, renewing the nation's increasingly rickety infrastructure, reforming an unsustainable system of entitlements, redefining America's position in the world and all the other massive challenges that face the country are going to require years of effort. But the American people don't want to hear any of this. They want somebody to make it all better. Now.

...And one thing (President Obama) really hasn't done is frame the hard work that lies ahead as a national crusade that will require a degree of sacrifice from every one of us. It's obvious, for example, that the solution to our economic woes is not just to reinflate the housing bubble. New foundations have to be laid for a 21st-century economy, starting with weaning the nation off of its dependence on fossil fuels, which means there will have to be an increase in the price of oil. I don't want to pay more to fill my gas tank, but I know that it would be good for the nation if I did.

The richest Americans need to pay higher taxes -- not because they're bad people who deserve to be punished but because they earn a much bigger share of the nation's income and hold a bigger share of its overall wealth. If they don't pay more, there won't be enough revenue to maintain, much less improve, the kind of infrastructure that fosters economic growth. Think of what the interstate highway system has meant to this country. Now imagine trying to build it today.

Barack Obama was elected to an impossibly hard presidency.  He knew it going in.  He ran on a platform of "Change", which ties in nicely to Mr. Robinson's argument. 

President Obama can point to any number of occasions on which he has told Americans that getting our nation back on track is a long-range project. But his campaign stump speech ended with the exhortation, "Let's go change the world" -- not, "Let's go change the world slowly and incrementally, waiting years before we see the fruits of our labor."

But the paramount issues for Americans kept shifting.  First it was the war, then the economy, then jobs, etc.  My guess is the majority of us did not agree with TARP or the auto industry bailout.  Many economists said they were necessary.  But I doubt if 98% of us, including those economists, politicians, etc, understood any of the ramifications, let alone the criteria for receipt of the monies.  In retrospect, my personal opinion is all companies should have had to adhere to the good old capitalistic
values they espouse and "let the market decide". 

I don't like being in a recession of this magnitude.  But if it teaches us restraint in spending, if it teaches us to begin saving again, I understand the American people have a 6% savings rate at present, then it will be worth it.  We've been  spending like drunken sailors for the past twenty five years.  I am hoping the discipline we learn during this very difficult time will stick.  If it doesn't, the recession will look like a picnic in the park.

Anger and Angst in America

Freedom of Speech by Norman Rockwell

The ongoing debates and angry sound bytes from town hall meetings has me thinking about where this over the top anger is coming from. The left likes to blame big corporations and conservative opposition; the right currently blames the Obama administration and big government. But hasn't this pent up hostility been building since Richard Nixon left the White House iin 1974?

For Baby Boomers, Watergate was the beginning of a lifelong distrust of politicians and power. Nixon's paranoia, and misuse of power left us wondering if we could ever trust our government again.

The examples I site are the result of failed policies in which one or both parties are liable.

The first auto bailout took place in 1979 when President Carter approved $1.2 billion dollars in loan guarantees for Chrysler. At the time, there was much disagreement about this policy. The Heritage Foundation, a conservative think tank, made a compelling case in a 1983 article about the fallacies of this loan program. Given the fact that all three automakers required a government bailout in 2008, it makes me wonder if we sustained a failed model for another thirty years or if we kept people in their jobs? Had the government implemented stringent requirements for more fuel efficient models thirty years ago, would the environment and the auto industry be in better shape today?

De-regulation of the broadcast industry began in 1981 under President Reagan. The Telecommunications Act of 1996, passed under President Clinton, promoted further deregulation of the entire telecommunications industry including cable, long distance telephone service, local telephone service, and broadband. According to the Museum of Broadcast Communications,

The act incorporates numerous changes to the rules dealing with radio and television ownership under the Communications Act of 1934 (New Deal legislation). Notably broadcasters have substantial regulatory relief from old and sometimes outmoded federal restrictions on station ownership requirements. Broadcast ownership limits on television stations have been lifted. Group owners can now purchase television stations with a maximum service area cap of 35% of the U. S. population, up from the previous limit of 25% established in 1985. Limits on the number of the radio stations that may be commonly owned have been completely lifted, though the bill does provide limits on the number of licenses that may be owned within specific markets or geographical areas.

Designed to create a competitive communications market and deliver better services and prices to consumers, the broadcast industry, instead, became consolidated. Competition eventually narrowed to five major companies who jammed a "one size fits all" mentality into their programming. Today, the majority of these companies are on the verge of bankruptcy thanks to over leveraging, mismanagement and a lack of government oversight.

President Reagan deregulated the airline industry, eventually dismantling the Civil Aeronautics Board. The idea was to increase competition among the airlines, to lower prices making it better for consumers. The short and long term results? Consolidation among airlines, miserable flying conditions, increased air traffic resulting in increased airline disasters. Former airline giants like TWA, Northwest have disappeared and other giants are in serious financial difficulty. Consumers are left with unreliable flight schedules, little or no accountability from their carriers, lost baggage, etc.

Bill Clinton promoted NAFTA, an agreement designed, according to the USDA Fact Sheet, to "increase agricultural trade and investment between the United States, Canada and Mexico" and benefit "farmers, ranchers and consumers throughout North America."

Not surprisingly, according to a 2001 article in Public Citizen, Ralph Nader's consumer advocacy group, just the opposite occurred:

"During the 1993 Congressional battle about the fate of NAFTA’s approval, U.S. farmers were promised that NAFTA would provide a path to lasting economic success through rising exports. Consumers were promised lower food prices. These promised benefits never materialized during seven years of NAFTA: farm income has declined and consumer prices have risen while some agribusinesses — which lobbied hard for NAFTA and now are avidly promoting Fast Track — have seen record profits."

Independent farmers and growers were convinced NAFTA would lead to decreased competition in their industry. 13 years later, prices to consumers are sky high and the farming industry is fighting for its existence. For example, dairy farmers are going under at an alarming rate. They can no longer afford to produce a product they cannot sell at a profit or even break even prices. NAFTA will probably be repealed in the next few years. Ironically, one of the repeal proponents is Secy of State, Hillary Clinton.

Another contributor to the current financial downfall was the repeal the Glass Steagall Act in 1999. Investopedia, a Forbes digital company explains:

In 1933, in the wake of the 1929 stock market crash and during a nationwide commercial bank failure and the Great Depression, two members of Congress put their names on what is known today as the Glass-Steagall Act (GSA). This act separated investment and commercial banking activities. At the time, "improper banking activity", or what was considered overzealous commercial bank involvement in stock market investment, was deemed the main culprit of the financial crash. According to that reasoning, commercial banks took on too much risk with depositors' money.

By the end of Bill Clinton's second term, the budget surplus was $127 billion. The 2003 invasion of Iraq began the decimation of this surplus. To add insult to injury, the Bush administration directed an invasion based on "faulty intelligence" etc etc. Under their watch, Halliburton enjoyed "no contest" bids for jobs in the Middle East, costing American taxpayers billions. TARP was pushed through Congress without national public approval. The average American tax payer is confused and feels helpless.

Right now, the Obama administration is the recipient of the anger. They did not create the Iraqi war; they did not design and implement the original TARP plan. They have inherited a 35 year old mess in the making and it is everyone's doing.

As citizens, we need to be knowledgeable. We cannot vote our emotions. We have to understand both sides of the issues and pick the side that makes sense.



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