Thursday, January 15, 2009

What it's all about

Photo AmyPalko

David Seaton's News Links
Sometimes it is possible to explain up an entire situation , no matter how complex, with only a few words. This is how Dimitri Orlov has masterfully summed up the present dilemma of the United States:
No matter what your political persuasion might be, there is simply no way that an economically insecure, badly educated, badly treated population can be made to thrive, and this sets the stage for some very bad economic performance. Dimitri Orlov
I think that those words should be hung up on the Washington Monument, in flashing neon lights, in time for Barack Obama's inauguration ceremony.

That is what it is all about really, developing people's potential: ignorant, unhealthy, stunted people cannot be either happy or productive. When people are just left hung out to dry they wither. This from BBC News:
The rapid mass privatisation which followed the break up of the Soviet Union fuelled an increase in death rates among men, research suggests.The UK study blames rapidly rising unemployment resulting from the break-neck speed of reform. The researchers said their findings should act as a warning to other nations that are beginning to embrace widespread market reform. The study features online in The Lancet medical journal. The researchers examined death rates among men of working age in the post-communist countries of eastern Europe and the former Soviet Union between 1989 and 2002. They conclude that as many as one million working-age men died due to the economic shock of mass privatisation policies. Following the break up of the old Soviet regime in the early 1990s at least a quarter of large state-owned enterprises were transferred to the private sector in just two years. This programme of mass privatisation was associated with a 12.8% increase in deaths. The latest analysis links this surge in deaths to a 56% increase in unemployment over the same period. However, it found some countries with good social support networks withstood the turmoil better than others.
The suffering that the American people are about to endure, or are already enduring, shouldn't be such a surprise, some people had identified many of the problems we have today several years ago. I was emptying some drawers yesterday when I came across an old article from the March 2003 Guardian, which shows that alarm bells were already going off even then.
The alternative interpretation looks at the effects of 20 years or so of financial deregulation on the demand for consumer and business credit, the size of the US trade deficit, the changing balance between investment in real assets as opposed to speculation, and the quality of corporate earnings. From this perspective, the US economy is in far worse shape now than it was in 1991, sustained only because a bubble in housing has taken the place of the bubble in stocks.While incomes were rising by a modest 2% last year, borrowing was going up by 9%, mainly because consumers were able to borrow on the back of house price increases. As one analyst puts it, you have to ask how sustainable an economy is when consumers are using their homes as cashpoint machines.(...) Like US consumers, companies appear to be in denial about the extent of these structural problems. Sooner or later, they will have to be rectified. Expansionary macro-economic policies help, but only in the way that pain-killers help a struggling athlete; by temporarily deadening the pain.
Larry Elliot- The Guardian, March 10, 2003
What could long term remedies be, beyond the "stimulus", now planned which will probably have the same effect that Larry Elliot describes above, the "pain-killers that momentarily deaden an athlete's pain."? David Walker, until just the other day and for ten years, America's chief accountant and another analyst who has been warning that the sky was falling for a long time, has this to say:
The US is at a critical crossroads. Our future will depend on actions taken within the next few years. We must turn the economy round and address the long-standing challenges associated with our entitlement programmes, spending policies, regulatory approaches and tax systems.(...) The president and Congress must put a process in place that will enable elected officials to reimpose tough statutory budget controls and reform our nation’s Social Security, Medicare, healthcare and tax systems. All these require significant reforms that Washington has delayed for too long. David Walker - Financial Times (the writer was head of the US Government Accountability Office from 1998 to 2008)
We must "address the long-standing challenges associated with our entitlement programs" and "reform our nation’s Social Security, Medicare and health care". When a bookkeeper talks about "reform" he usually means "cutting costs". How does cutting costs in pensions, and health care effect a population that is already "economically insecure, badly educated (and) badly treated".

Did you hear anybody talking about cutting defense spending?

Neither did I.

That millions of their fellow citizens are suffering inadequate health care and poor education seems to leave many Americans completely unfazed.

In Joshua Landis's
blog today, I read a quote from Britain's great World War One poet, Wilfred Owen titled "Insensibility".
Wretched are they, and mean
With paucity that never was simplicity.
By choice they made themselves immune
To pity and whatever mourns in man
Before the last sea and the hapless stars
Because, finally, America, like every other country in the world is about people, isn't it?.. Because this, life itself, is all about people isn't it? ... Or isn't it? DS

No comments: