THE POWER OF MYTH. The myth that American Capitalism is the best economic system in the world is so entrenched that it is virtually impossible to convince any American that the reality is otherwise—and that the U.S. is in rapid and serious economic decline. Somehow, the necessary cognitive capabilities needed to assess the abundant evidence that we are in trouble seem to elude the American character. It seems to be regarded as somehow un-American to assess the facts dispassionately. As a consequence, the quality of American life—as far as most Americans are concerned—continues to decline.
Yet what are most Americans doing about it. Absolutely nothing. It is truly remarkable. Optimism—something of an American characteristic—is a fine thing, but it is not a substitute for clarity of mind, followed by the requisite action.
PROBLEMS NOT CONFINED TO ECONOMY. The situation is actually much worse than that because the U.S.’s problems are not confined to the economy. They are widespread and fundamental, and extend to the lack of a moral core to guide us—and we are doing very little to resolve them. Instead we are proceeding as if everything will return to normal.
It won’t. Ever.
NORMAL HAS GONE FOREVER. Normal—in the sense of an equitable economic system and near full employment combined with a prosperous middle class began to be deliberately and systematically undermined by the ultra rich in the early Seventies—and they have largely succeeded. The class war is nearly over, and the ultra rich have won.
- CONSTITUTION. The constitution is woefully and blatantly out of date.
- PLUTOCRACY. The U.S. is no longer a representative democracy, but is now a plutocracy—a government dominated by the ultra rich for their own benefit.
- EXCESSIVE CORPORATE POWER. Corporations, primarily owned by the ultra rich, now have excessive power—and are virtually unchecked. Virtually everything has been monetized down to, and including, our values.
- FINANCIALIZATION. A financial system is supposed to serve the real economy. In the U.S. it is the other way round.
- LEGAL SYSTEM. Our legal system from the Supreme Court to our prisons is biased, unjust, unfair, racist—and both expensive and destructive. It also blatantly favors the rich and the financial sector in particular.
- HEALTHCARE. Our healthcare system is both a disgrace a serious drain on the U.S. economy. It costs nearly twice as much as the systems of other developed nations—and delivers inferior results. Beyond that, Americans are sicker and die several years sooner than the citizens of other developed countries. In fact the projected life span of some Americans is actually declining.
- FOOD CHAIN. By now most Americans should be aware of the dangers of fast food—though don’t seem to be doing much about it. However, the fact that our food chain is seriously deficient does not seem to be either known or accepted. The problems with our food system are widespread and span the use of antibiotics in meat to excessive fat, salt and sugar in processed food, to excessive use of herbicides and pesticides, to declining nutritional value.
- EDUCATIONAL SYSTEM. Our educational system is demonstrably inferior.
- ECUCATIONAL DEBT. Third level education, while inferior in many cases, is saddling a whole generation of college students with excessive debt. As of this date, it is $1.2 trillion and rising.
- TRAINING. Most of our competitors invest vastly more in worker training than we do. As a consequence, they have more and better skilled workers—who have been better educated in the first place. No wonder the Germans, for instance, can out-export us—while being paid more and working shorter hours.
- SAVINGS RATE MINIMAL. Our savings rate is woefully inadequate.
- IGNORANT AND DELUDED. Neither our educational system nor our media are keeping us adequately informed—especially in relation to our standing in relation to other developed nations (which delivers the stand we need to reach or exceed). However, when combined with an unceasing barrage of commercial and political propaganda, they do a fine job of keeping us both ignorant and deluded—and, above all, either incapable of, or unwilling to, fight back.
Robert Reich is one of the few people who has spoken out about what has been happening. His blog is well worth reading. The following appeared on May 21 2014.
Robert Reich: American Capitalism is Broken
For years Americans have assumed that our hard-charging capitalism is better than the soft-hearted version found in Canada and Europe. American capitalism might be a bit crueler but it generates faster growth and higher living standards overall. Canada’s and Europe’s “welfare-state socialism” is doomed.
It was a questionable assumption to begin with, relying to some extent on our collective amnesia about the first three decades after World War II, when tax rates on top incomes in the U.S. never fell below 70 percent, a larger portion of our economy was invested in education than before or since, over a third of our private-sector workers were unionized, we came up with Medicare for the elderly and Medicaid for the poor, and built the biggest infrastructure project in history, known as the interstate highway system.
But then came America’s big U-turn, when we deregulated, de-unionized, lowered taxes on the top, ended welfare, and stopped investing as much of the economy in education and infrastructure.
Meanwhile, Canada and Europe continued on as before. Soviet communism went bust, and many of us assumed European and Canadian “socialism” would as well.
That’s why recent data from the Luxembourg Income Study Database is so shocking.
The fact is, we’re falling behind. While median per capita income in the United States has stagnated since 2000, it’s up significantly in Canada and Northern Europe. Their typical worker’s income is now higher than ours, and their disposable income – after taxes – higher still.
It’s difficult to make exact comparisons of income across national borders because real purchasing power is hard to measure. But even if we assume Canadians and the citizens of several European nations have simply drawn even with the American middle class, they’re doing better in many other ways.
Most of them get free health care and subsidized child care. And if they lose their jobs, they get far more generous unemployment benefits than we do. (In fact, right now 75 percent of jobless Americans lack any unemployment benefits.)
If you think we make up for it by working less and getting paid more on an hourly basis, think again. There, at least three weeks paid vacation as the norm, along with paid sick leave, and paid parental leave.
We’re working an average of 4.6 percent more hours more than the typical Canadian worker, 21 percent more than the typical French worker, and a whopping 28 percent more than your typical German worker, according to data compiled by New York Times columnist Nicholas Kristof.
But at least Americans are more satisfied, aren’t we? Not really. According to opinion surveys and interviews, Canadians and Northern Europeans are.
But at least we’re the land of more equal opportunity, right? Wrong. Their poor kids have a better chance of getting ahead. While 42 percent of American kids born into poor families remain poor through their adult lives, only 30 percent of Britain’s poor kids remain impoverished – and even smaller percentages in other rich countries.
Yes, the American economy continues to grow faster than the economies of Canada and Europe. But faster growth hasn’t translated into higher living standards for most Americans.
Almost all our economic gains have been going to the top – into corporate profits and the stock market (more than a third of whose value is owned by the richest 1 percent). And into executive pay (European CEOs take home far less than their American counterparts).
America’s rich also pay much lower taxes than do the rich in Canada and Europe.
But surely Europe can’t go on like this. You hear it all the time: They can no longer afford their welfare state.
That depends on what’s meant by “welfare state.” If high-quality education is included, we’d do well to emulate them. Americans between the ages of 16 and 24 rank near the bottom among rich countries in literacy and numeracy. That spells trouble for the U.S. economy in the future.
They’re also doing more workforce training, and doing it better, than we are. The result is more skilled workers.
Universal health care is another part of their “welfare state” that saves them money because healthier workers are more productive.
So let’s put ideology aside. The practical choice isn’t between capitalism and “welfare-state socialism.” It’s between a system that’s working for a few at the top, or one that’s working for just about everyone. Which would you prefer?