It has always been considered common knowledge that the state of the economy is often the driving force behind American elections. In political campaigns this often becomes a matter of each side blaming the other for what is bad in the economy, and each side trying to take the credit for what is good in the economy. Neither side can offer a solution if it does not realistically face the condition of the current economy, and nobody can realistically face the condition of the current economy without looking at what I believe are the important views about America’s current economic plight.
There are many businesspeople and economists who try to hold on to the traditional view of economics that has carried the day since the 1930’s and the Great Depression. This point of view generally looks upon economic failures as a failure of the human spirit and mistakes in judgment by the government and the money interests. This view holds that eventually things will get fixed, that out of the current pain and suffering a new alliance between government and business will emerge that will cure the mistakes of the past and put the country back on course. The main criticisms of this view is that it has too little interests in the amount of damage these economic downturns inflict upon average Americans, and how after each disaster it seems that the government always claims to have fixed the problem only to have another crises occur later on.
The traditional argument is the one presented by the Obama administration to the American people. When President Obama says the economic recovery is “painfully slow” he is sticking to the idea that a recovery is coming. The American public likes this point of view because it contains a lot of good old American optimism, which can at times do wonders for the America economy. One does not, however, know how realistic these claims are in the midst of a recession or depression.
There are, of course, voices in opposition to this. These are the voices which should be discussed in some detail since it seems to me as though these particular voices are gaining more and more power. Their main contention is that America is not in a recession or depression, that America is instead in a state of re-structuring. America, they say, has been re-structured in much the same way the corporations of the world have been re-structured. What is interesting about this view is that I find it is shared by the hard left and the hard right. In order to illustrate what I mean, I will use an example of each.
From the right, I will use Paul Craig Roberts. He was the Assistant Secretary of the Treasury in the Reagan Administration and is considered one of the creators of Reaganomics. The following is a example of what he writes about America in its current state. It is from an article called Americans: Serfs Ruled by Oligarchs:
The great American superpower and its 300 million people are being driven straight into the ground by the narrow interest of the big banks and the munitions industry. People, and not only Americans, are losing their sons, husbands, brothers, and fathers for no other reason than the profits of US armaments corporations, and the gullible American people seem proud of it. Those ribbon decals on their cars, SUVs and monster trucks proclaim their naïve loyalty to the armaments industries and to the whores in Washington who promote wars.
This is vicious rhetoric, but it reveals something very important. This point of view discounts the idea that all of our woes are caused by tragic miscalculations and simple human greed. Instead, it actually sees the current situation in the form of a project that is working to the benefit of a few and to the detriment of the many. And, like many other hardline conservatives and Ron Paul types, he believes many of the fundamental rights of Americans are being taken away by the federal government in order to keep America’s citizens in line while they are being robbed.
As an example of the left side of this point of view, I will use David Harvey, a Professor at CUNY (City University of New York). Harvey is a classical Marxist, and presents an idea in his works that speaks to the same issues Paul Craig Roberts discusses, even if it is done from a different angle. In Marxism there is the concept of “primitive accumulation,” which describes the early process of wealth accumulation. Very often these accumulations involve a criminal activity of some sort, including running people off the land they occupy. Marx considered primitive accumulation a one-time crime, and then a more normal period of capitalism began.
Mr. Harvey respectfully disagrees and sees what he calls an ongoing process of “accumulation by dispossession.” What, after all, is a foreclosure except a modern form of dispossession? What is important here is that Mr. Harvey does not look upon the current crises as some kind of accident. To Mr. Harvey, the problems are structural, involving criminal class war, and it will do no good to try to save the current system as it exists, which is what the Obama administration wants to do. The Obama administration has not, for example, done anything to seriously threaten the power of the Federal Reserve.
The two points of view I have discussed bring us to the crux of the issue. Is the current state of the economy permanent? Has America been transformed into a country that will face chronic unemployment, massive government debt, higher taxes, a greater gap between rich and poor and more and more threats to its freedom as a way of life? In fact, they argue, there is no normalcy in America left to return to. The abnormal state we are in will become the norm.
The most dangerous aspect of this outlook is that both fringes on the hard left and the hard right too often wish the whole economy will come crashing down into a pile of rubble. The left figures this will allow the government to take over everything once and for all, and the right figures this will make people abandon the mentality of “government as the answer” since it was the government caused the problems in the first place.
The danger lies in believing a massive collapse will be good for anyone. Those who are the most vulnerable, including the sick and the elderly, will get hurt the worst. More importantly, there is no way to know what will happen if such a collapse were to occur. Those who argue in favor of the collapse have the opinion that America will simply refuse to take the proper steps to fix the debt and corruption in the government until the whole system goes under.
This is a brutal point of view, and gives the public very little credit. To avoid a collapse and its aftermath the public must begin, I believe, with victories for stability and sense in the coming November elections. We must believe that a graded, intelligent economic response is possible, or we will find ourselves wishing for our own destruction while holding onto the belief that what rises from the ashes will be the new America.
America needs to become competitive again. The left will argue that our nation can get that way by reforming education and building a new workforce from the ground up (in the left’s own image, of course), while the right argues that the best way to foster growth is to make America more appealing for business than anywhere else in the world.
Facing this coming election, the economy is once again at center stage. Republicans are calling for a tax rate freeze and a common sense freeze on spending; Democrats are looking to pour more money into failed policies, arguing that “they’ll work this time, honest” and appealing to those who honestly believe that government is the answer. And yet, on the fringes, there are those who think that there’s either a lesson to be learned or a needed focus on the State which would come from a total economic breakdown.
That is a form of utopian thought I want to avoid. We need good sense, not idealistic revolutionary rhetoric. If America begins to fall into an abyss, how do we know how far we have to go to reach bottom, and how long it will take to get back to the top, if ever?