The general thrust of comment about the economy, whether by the media or by internet bloggers, seem to be oriented towards a restoration of the economic status quo. It might be summed up this way: If we have growth, and the Stock Market picks up, all will be well. Frankly that is disappointing because one might have thought that all of this combined brainpower would have realized that the American Business Model contains fundamental defects which need to be fixed before the U.S. (as a whole) will prosper adequately.
Let me list some of these defects. The overarching one, which I have not listed separately, because it is so pervasive, is that American Culture, while retaining much good, has become corrupt. The American Way of Life does not stand up to close examination. We have allowed ourselves to become manipulated, greedy, money obsessed, lazy, thoughtless and ignorant to the point where we are not even aware of how much our values have declined; and how poorly we are doing in relation to much of the rest of the world.
- THE HEADLESS CHICKEN FACTOR. We are so ideologically obsessed with the doctrine of unfettered Free Enterprise including Free Trade (which, by the way, is not the way we operated for most of our history) that we seem to be ignoring the lesson that virtually every single country that is growing at a satisfactory rate has an industrial policy and a clear idea of where it is going. We haven’t; and we don’t.
- A HOUSE DIVIDED. Despite the fact that we are at war, and in serious economic trouble, our political system is so polarized that the country is spending most of its energies on an ideological civil war, based upon emotional button-pushing rather than facts, instead of focusing on the very real issues that require attention.
- A FLAWED BUSINESS CULTURE. Our business culture is authoritarian, secretive and so obsessed with the short-term bottom line that the very legitimate interests of employees, and other stakeholders, receive scant attention. Our competitors seem to handle such issues better and their superior approaches are resulting in both market success and superior profitability. In effect, despite a belief that U.S. management is the best in the world, we have serious problems with both our business culture and our management skills.
- A NEGLECTED INFRASTRUCTURE. For decades we have failed to re-invest in our infrastructure and have inadequately invested in that required for the future in order to satisfy the short-term interests of the bottom line.
- A DISFUNCTIONAL TAXATION SYSTEM. Our tax system is flawed at just about every level and, in many cases, is counter-productive. It’s unfair, promotes the export of jobs, has helped to destroy our manufacturing base and is de-motivating.
- AN EXCESSIVELY FINANCIALIZED ECONOMY. Prior to the great Recession, the Financial Sector, earned no less than 40 percent of corporate profits. These profits made a relatively small number very wealthy but, fundamentally turned out to be illusory and resulted in the greatest assault on the economic wellbeing of the American public since the great Depression. Having an economy which is so distorted in favor of the Financial Sector is unsound.
- A NEGLECTED MANUFACTURING BASE. Manufacturing jobs underpin an economy in ways which are seriously under-appreciated. They pay better, have a greater employment multiplier effect, and help balance our payments in ways that services just don’t match. The U.S. workforce is supposed to be too expensive to employ. That begs the question of how the German workforce, which is even more expensive, is so successful internationally.
- A FLAWED EDUCATIONAL SYSTEM RESULTING IN AN UNDER-EDUCATED WORKFORCE. We have known about this problem for years and still be progress in baby steps.
- AN EXCESSIVE BIAS IN FAVOR OF BIG BUSINESS. The U.S. economic system is heavily skewed in favor of Big Business despite clear evidence that Small Business creates more jobs and that Big Business often does not operate in the National Interest.
- AN INEFFECTIVE GOVERNMENT. The ideological debate is over how much government we should have but very little attention is given to the effectiveness of our government. There is currently considerable evidence that it is ineffective, especially when compared to the governments of our international competitors.
- INADEQUATE INVESTMENT. A sound economy requires massive ongoing investment. We have under-saved, under-invested, invested in the wrong things, and invested in the wrong locations. Worse, for nearly two thirds of a century we have invested in a Military Industrial Congressional Complex that is inefficient, corrupt and a drain on society as a whole. Beyond that, it is provocative, substantially counter-productive, and not too good at winning the kind of wars our politicians chose to wage – despite the undoubted courage of our armed services.
- SERIOUSLY DEFICIENT SOCIAL STRUCTURES. There are certain social structures which are absolutely fundamental to life, to the wellbeing of one’s citizens, and to resultant economic success. These include: Healthcare; Education; Housing; and Pensions. The U.S. is seriously deficient across the board. Our argument is that we cannot afford satisfactory solutions to these issues. One has to ask how so many of our competitors can - and still compete with us so successfully in the marketplace.
- A CRIPPLING NATIONAL DEBT AND BUDGET DEFICIT. Serious though these issues are, they are more a symptom than a cause of our current malaise. However, we are unlikely to resolve them without much misery unless we address more fundamental problems.
- A DIVERGENCE OF INTERESTS BETWEEN THE LEADERS AND THE LEAD. Globalization, as currently practiced, now means that the interests of major corporations can, and do, now diverge significantly from those of this country. That would be serious enough in itself, but since those same corporations have now effectively bought Congress, the interests of the American people are no longer represented to best advantage.
- THE NEED FOR CONSTITUTIONAL REFORM. Corporate interests, and the politicians they finance, have now learned to game the Constitution with the electoral process serving more as a distraction than as a genuine process of change. The solution is to amend the Constitution – as was expected by the Founders – starting off with a resolution which would remove the legal fiction that corporations should have the same rights and protections as people.
Well, my friend, there you have it. My underlying point is that, once again, with the Mid-Terms fast approaching, we are allowing ourselves to be distracted by the race instead of focusing on the issues that are fast draining the very life-blood from this country.