The US Moves Towards the Future Unprepared
and Unseeing
By Roberto
Savio (*)
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ROME, Sep (IPS)
The Tea Party's giant rally in Washington drew
300,000 Americans protesting taxation, a
government that is suffocating its citizens, and
a marxist, Kenyan-born, Muslim Obama. These
people are calling on the United States to be a
world leader again and dispense with debate and
vacillation.
All of the above might seem like fiction if it
weren't for the elections coming up in November,
when the Republicans will likely win back
control of the legislature.
Since early August Obama's approval ratings have
been negative (56 percent disapprove of his
conduct in office). This is largely due to
Americans' idiosyncratic expectation that the
government will solve all their problems while
they excoriate its intrusion into their lives.
The real problem is that the United States has
entered a profound crisis of growth and
unemployment. The economy must grow by 2.5
percent per year to maintain the present level
of employment. The current growth rate of about
1.2 percent is not enough to compensate for
increases in unemployment, now officially at 9.6
percent. There are 15 million jobless, but there
is also an additional million who have stopped
looking for work and are not counted in the
unemployment figure. Then there are 5 million
working part-time. The moral: New York
University calculates that one out of every
seven Americans has
been hit by the financial crisis. It is not
surprising that 62 percent of Americans are
worried about the future and stores are
deserted.
The situation for businesses is altogether
different. The Wall Street Journal calculates
that corporate cash holdings are up 38 percent
over last year -and yet they have no plans to
hire more workers. Rather, the plan is to
continue shedding employees to cut costs and
increase profits. During the crisis, from
December 2007 to December 2009, the Gross
Domestic Product dropped by 2.5 percent while
the job dismissal rate was 6 percent.
The financial sector is in even better shape.
The injection of about 750 billion dollars
revived it, along with extremely low interest
rates, which allowed it to borrow funds from the
Federal Reserve and lend them for a healthy
return. It is no accident that financial firms
handed out 20 billion dollars in bonuses at the
end of 2009.
Washington's latest political neologism is "the
new morality". The implication is that the
country will have to get used to the idea that
the economy can be doing well without full
employment. For optimistic economists (there are
few) the end of the tunnel is 2014. For the
pessimists (the majority) it is 2018.
All of this has a political impact that is, if
we can say so, very American. Obama has
accomplished far more than his predecessor:
health care reform, which was the ruin of
presidents before him; reform of the financial
sector (albeit insufficient); an economic
stimulus package of more the 700 billion
dollars, without which economists agree
unemployment would be worse; and the rescue of
the automobile industry. In the international
arena he has restored American credibility as a
partner in global governance. Yet only 37
percent of whites and 47 percent of Hispanics
say that he is doing better than Bush, while the
most progressive sector of the country complains
that Obama cheated them by not delivering the
big changes that they wanted.
True, Obama was not as audacious as some had
hoped. He has consistently sought to bring
Republicans along with him, despite the fact
that their philosophy is simply to give him
nothing, ever, no matter what he does. Not
surprisingly they have succeeded in blocking
many of his initiatives.
It is hard to understand why Obama continues to
pursue bipartisan politics when his opponents,
in a country clearly in crisis, continue to
propose policies that would set off popular
uprisings in any other country. For example,
they are now calling for a ten-year extension of
the tax cuts for the rich passed by Bush.
No doubt, Obama has had his share of bad luck.
He has paid a high personal price for the oil
disaster in the Gulf of Mexico, however
implausible the logic may be. But the real
problem is another altogether. Americans are
characterised by their idiosyncratic belief in
the country's exceptionalism. The majority of
Americans did not like health care reform, or
the stimulus package, or the car industry
rescue.
A large part of the population never took to the
election of a young intellectual black man as
president. The primary accusation is that he is
betraying the identity of the US by gradually
introducing a European political model in which
the government is the primary actor. Almost
every state in the US is in crisis, police
forces are being cut back, public services -like
street lights- trimmed or eliminated, and yet at
the mass rallies of the Tea Party, which calls
for the purging of moderate Republican
candidates in upcoming elections, are demanding
an end to taxation while saying they want to
restore (as they see it) the US to its former
greatness and omnipotence.
The upshot is that the US will not be able to
take any significant position on climate change,
which effects us all. Meanwhile the world is
undergoing a significant realignment. China has
overtaken Japan as the planet's second largest
economy and has set its sights on the US. Rarely
has a country been so poorly prepared to
understand the new realities of the world and
face them in a rational manner. It should be
hoped that the path forward does not include
military adventures, which figures like Sarah
Palin would not hesitate to initiate.
(END/COPYRIGHT IPS)
*Roberto
Savio is founder and
president emeritus of the Inter Press Service
(IPS) news agency and publisher of Other News.
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