COLUMN: In face of challenges, complacency could be dangerous

Thursday, February 11, 2010 | 12:01 a.m. CST

In the current (January/February 2010) Atlantic Monthly, James Fallows writes a thought-provoking essay, “How America Can Rise Again.” Upon returning to the U.S. after three years in China, Fallows reports that he is surprised with the widely held belief that America is in long-term decline. Yes, we have been here before, but it may be different this time.

Certainly, confidence in government is not high — it seldom is. We like to criticize our government even when we believe it is the best system in the world. In national surveys conducted just last month, about 35 percent indicated the U.S. is on the “right track,” with 58 percent replying it is on the “wrong track.” Only 22 percent approve of Congress, 70 percent disapprove.

The economic era most similar to the present is the recession of the early 1980s. There are some similarities with high unemployment and financial disarray. (For background, see David Leonhardt's Jan. 21, 2009, report "The Economy Is Bad, but In 1982 It Was Worse,” which appeared in The New York Times.)

Back then it was the savings and loan industry. Now it is a more widespread credit crisis. Back then a loan to Chrysler, today a takeover of General Motors. Despite these similarities, the macroeconomic situations are much different. Then the prime rate was 20.5 percent and inflation was 14.8 percent. Today they are 3.25 percent and 2.7 percent, respectively.

Think of Billy Joel’s "Allentown." The decline of the steel industry was the beginning of the permanent loss of well-paying blue collar jobs that never came back to Allentown, Pa., or Youngstown, Ohio. The loss of family farms in Missouri can be traced to high interest rates of that era as well.

Then, too, we were concerned about the permanent decline of the U.S.,  Japanese and European competition, the decline of American education (“A National At Risk” was published in 1983) and Social Security funding stability were all born then. Although America recovered, with two wars, finance mumbo-jumbo and more deficits we find ourselves back where we were 30 years ago.

Having recovered from those problems, Americans may have a false confidence that we can overcome our current problems. But our problems today are much more dangerous.

The easiest problem to see should be the federal deficit. For fiscal year 2009 federal revenue was 15 percent of gross domestic product and federal expenditures 24.5 percent of GDP. That puts the deficit over 9 percent of GDP; we are borrowing about two-thirds as much as we are taxing.

Part of our failure to comprehend is because, compared with the “good ole days” the negative impacts are less visible. Less Medicaid spending in Missouri is not seen by most of us. The loss of Parents as Teachers will not be clear until these under-cared-for children are in K-12 and they cannot learn to read. Loss in mental health programs do not affect the many citizens who have jobs.

During World War II, American homes had blackouts and food rationing, in the 1970s we had “alternate gas days” and reduced speed limits, and in the 1980s was had “buy America” campaigns. Irrespective of their economic impact, these actions were reminders that the nation was facing real problems. It’s hard to grasp the consequences of deferred maintenance on bridges and schools and the debt load of unfunded pensions.

Our political system might not be up to the task of crisis problem-solving. Politicians know how to win elections, but cannot devise and adopt solutions, issue campaigns can swamp good judgment with slogans and the trend toward Senate supermajorities may institutionalize gridlock. Few people seem to notice because of our innate convection that we have the best political system on earth.

Fallows is not naive about our political challenges, but the impossibility of political reform causes him to reason there are only two alternatives: muddle through or starve the beast. Few Americans want to be a doomsayer, so the only feasible path is to muddle through.

Meanwhile, we hear that the really bad year for state and federal budgets will be next year — fiscal year 2012. We will still be muddling; we will probably make it through.

David Webber is an associate professor of political science at MU. This article is presented courtesy of The Missouri Record, which carries Webber’s column each Tuesday.

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