A Broken Country - How To Begin Fixing It

A Broken Country

Many people I know are utterly fed up with the state of things in our country, and they always seem to ask “how did we get here?” Everyone has their opinions on this of course, and most are at least somewhat close to the mark in my estimation. The issue I take with most people I know is simply that they still choose to see the problems and potential solutions in a two dimensional manner, at least in the political sense.

More and more I've come to conclude that our two party system is largely broken. And not necessarily because two parties aren't enough either. Rather it is that these two parties represent a nearly unbroken history of political machinations that have distorted the entire political process. Republicans and Democrats still tow their individual party lines when it comes to the sort of standard arguments we expect from them, so little has changed on the surface. What has changed are the underlying processes that drive the system itself.

The Tea Party Movement is one of several recent “answers” to the overall frustration the public feels with the process, but one I feel strongly has misplaced priorities often owing to a naive interpretation of the facts behind our current socio/economic situation. The other significant movements geared towards overall transparency, such as #OccupyWallStreet and #Anonymous seem to get little if any press, and what little they do get is often quite distorted. Both being significantly driven by the revelations of #Wikileaks does make a difference though in how these movements should be interpreted. Why you ask? Because at the end of the day this approach differs significantly from the simplistic finger pointing sort of solutions offered by all other sides.

We live in a complex society, one where individual liberty and freedom are tantamount to most people, even if much of our liberty and freedom in practice today is an illusion. Anyone with a brain can realize that we have huge problems in this country, and even I believe there are significant and distinct root causes for the situation we find ourselves in. What I assiduously avoid however is conspiracy theory. I avoid it, not because some of those theories may not be true, but rather because the real problem is the existence of the machinery of conspiracy itself. I ran across a great article here that really digs into the larger issues at stake, which also paints a much broader understanding of what #Wikileaks is really about. The gist of this thinking however, is that limiting the capability of conspiracy in itself will help us at least begin to gain the transparency we all seek. Only with transparency can we really get a handle on the root problems of our society at a level of detail worth solving.

One other thing is vital to understanding the nature of our situation, and that is having at least a cursory understanding of modern American history. Laying bare a few facts about a couple of specific presidencies has for me codified my thinking in regards to our current situation. And surprisingly, one of those presidencies is not the one most haters of our current government jump on, Franklin Roosevelt. Granted, there has been some rather obvious fallout from the FDR administrations establishment of our current social welfare systems. But this fallout is largely a result of the tampering by later presidencies. How do I mean? Let's take a look at one particularly egregious presidency.

Whenever you mention Richard Nixon, it always seems to bring back the image of the Watergate debacle (or Futurama, depending on the generation you come from, but I digress). However Nixon's administration, as well as the congress serving around him before and after his election, really have quite a lot to answer for. I would bet that few people realize that it was Nixon who was behind the WIC program (Women/Infants/Children), behind the expansion of the Welfare and Medicare programs, or our current system of heavily subsidized agriculture.

Sounds more like a liberal platform than a republican one doesn't it? To understand one must remember what the social landscape was like at the end of the sixties. Inner city poverty was a real and growing problem, and the middle class were being equally hammered by cyclical food pricing issues. What better way to get elected and stay elected than enact programs that REMOVE THESE ISSUES AS POLITICAL ISSUES. We can also thank Nixon for the first real reform of health care in the 20^th century through the deregulation of the insurance industry, a reform that has basically destroyed our healthcare system. While we're at it, one must recall the key shifts that took place in our Federal Court system under his administration, which were responsible for the beginnings of the reinterpretation of the 14^th Amendment which now gives citizen-like rights to corporate entities.

The other president worth mentioning here is Ronald Reagan. His administration was able to convince much of the political establishment, including many democrats, that trickle down economics was a viable economic strategy. It was during his administration that we saw the vast deregulation of financial institutions, which has led to our current series of debacles. Prior to these two administrations our finance sector largely worked towards building real capital, and making real investments in real things such as manufacturing and infrastructure. Since the Reagan era, our finance sector has transformed our entire economy into one driven by “financialization”, or one that works by making money from money itself. Not only would things like “Collateral Debt Obligations”, “Naked Short Selling”, “Credit Default Swaps”, and Hedge Funds not even exist now had Reagan not done what he had done, they would be illegal today. More importantly the whole process of financialization has made absolutely sure that the only people that can gain anything in our society are the ones who have the money to play.

To be entirely fair here, the three Democratic presidents we've had in this timespan have been as guilty of buying in to the above mentioned situations. Most aggregiously so of Bill Clinton and our current President Barack Obama.

Economists tend to focus on the big picture entirely too much, and this bears out rather obviously when one looks back over the last thirty years. The American economy has largely grown (despite three significant economic downturns) well ahead of inflation during the last thirty years. But when one only looks at a single metric, one often misses important details.

Though our economy has grown much over the last thirty years, that growth has had significant and measurable costs. The relative wealth of the top 20% of earners in America has grown by a factor of four, to represent nearly 86% of all wealth in America. Four hundred of the wealthiest American's have the equivalent incomes of the lowest earning 100 million Americans. Meanwhile those at the poverty level have not only seen their ranks grow, but have seen their effective incomes (when factored against inflation) actually contract. The American middle class, once coined thus because it represented the largest group of citizens, now earns barely 6% of the overall wealth in our country.

In my estimation both sides of the political landscape have got it all wrong, and for all the wrong reasons. Republicans and Tea Partiers want to limit government largely because they think that free enterprise and capitalism can fix everything. I tend to agree that this would be true myself. The problem though is that our finance systems are not geared towards a proper and competitive capitalist market at all. So until our government (the one Republicans and Tea Partiers hate and mistrust) reestablishes the sort of controls and oversight we had prior to the 1970's this sort of thinking will get us nothing but what we've already experienced.

The Democrats hang on assiduously to their social programs, largely because they strongly believe that the government must be in the business of being our societies safety net. I also agree with this assessment, but in the end it is a naïve solution to placate our citizenry that solves nothing. The government simply cannot shore up growing wage inequities through masterful use of the tax code. Such types of redistribution of wealth only strengthen the desire to make our tax code all the messier, and prohibit people on both sides from even remotely considering building a proper tax code from scratch designed for the 21^st century. As important, growing reliance on entitlement programs erodes our society emotionally and culturally in countless obvious ways. The government can also not play a huge direct role in fostering innovation or shoring up our countries aging infrastructure, mainly because we have the lessons of history to show us how poorly our government does such things efficiently. The reason why the corporate and financial interests in this country are not investing in these areas is primarily because more money is to be made from all those other financial boondoggles I mentioned above that would otherwise be illegal ones.

Our federal government exists for the sole purpose of drafting laws, enforcing laws, and regulating interstate commerce. Until our government gets back to it's roots here, very little is going to be solved.

*AND* until we enact campaign finance reform to get the money influence out of Washington, absolutely nothing will be done.

So what needs to happen? Regulate our finance sector so that it cannot continue to treat Wall Street like it's Las Vegas East. Restrict and regulate our insurance industries so that they function as actual insurance companies like the did prior to the 1970's. Break up the "too big to fail" banking system because something too big to fail should be too big to exist. Work with the Justice Department to try to reverse the recent 2010 ruling “Citizens United v. Federal Election Commission” which basically gives corporate America carte-blanche to run our political process entirely. And stop getting involved in wars that serve no purpose. Our colonial era-esque military presence in 135 countries has got to go away, not to mention our involvement in Iraq and Afghanistan. The largest single drain on our federal budget, relative to collected income tax, is the Military and not social welfare as most would have you believe. People forget that one of the largest programs, Social Security,  is fed by an entirely different tax, known as the FICA tax. Social Security will have to be reformed, this is true enough, as it is an unsustainable program as it is currently administered. But lets stop with the lie that it is one of our biggest expenditures fed by income tax, because it is not. Incidentally we can also thank Nixon for the reason why the General Accounting Office plays this stupid game with our budget, because it was in the governments interest then during Vietnam, as it is now, to hide the true cost of war.

Most of our societal problems could easily begin to be addressed if our government simply got back to doing what it is supposed to. Easier said than done I know, but it is where we have to start.