Dawning on America

There is a coming Awakening or Dawning on America that its 100-150 year reign as the premier economic and politic power is coming to an end. With technology and economic trends ripping like torrents throughout the World, what is to prevent the USA from becoming the next Blockbuster or Lehman Brothers – rapidly going out of the top-dog business to its utter surprise? Asia’s China, India, and Korea are seen as the emerging economic powers with 2.7 billion population, triple the US economic growth, workers with superior educational training and 1/3rd to 1/4 lower than US wage scales in the case of China and India. At the recent G20 economic summit, the fast growth economies of Germany, Brazil, China, and South Korea dictated to the USA what was going to happen on trade and currency decisions.

The huge annual US budget deficits at over $1Trillion now raises the real possibility of the US being pushed into a debt crisis – and given that Wall Street has almost exclusively been made whole by the government’s TARP funding plus nearly unlimited capital from the zero interest Fed Window, watered down Financial Regulation, and no prosecutions for Housing Bubble Financial Malfeasance, the Street may just Bubble-Bull-market stampede into another risky financial disaster. A financial disaster for which the USA cannot respond given its total indebtedness [Federal, State, Local governments plus personal debt]. Suddenly, the USA could become a debtor nation whose collapse would bring not just a second Economic Depression but also political turmoil of the highest order since almost all other countries have ceded the cost in lives and defense spending to the USA; but the USA could no longer afford to be the topcop.

The 3 Dawnings in the USA

I – Slowly but surely the US Public has realized that it cannot have a consumer lead economy if its middle-class manufacturing and service jobs have been exported to China, India and other countries throughout the World. Suddenly out-sourcing jobs is not just a dirty word; but downright nasty. US Multi-national corporations like Wall Mart and broad swaths of the retail sector; Apple and most of the electronics sector; and Black-Decker and many in the US appliance industry among the hundreds of companies which have lead the charge overseas – each one claiming they have to rob the Commons of Jobs in the USA or they will lose out in their respective marketplaces. The article here spells out the reasonings on reversing US job losses.

II – The just concluded midterm elections emphasizies  what NYTimes Frank Rich calls the Insane Asylum of US Politics. The litany of political dysfunction in the USA is both alarming and harrowing.:
1)the SupremeCourt calls corporations and special interest groups equivalent to people and therefore grants unlimited campaign funding and lobbying contributions to them;2)As result of the above legal license to kill politically from the Supreme Court the public was subjected to a Shock and Awe Cannonade of Negative Smear Ads during the midterm elections. The already polarized political climate became further poisoned; the very opposite of what the electorate wants as moderate candidates in the middle for the House and Senate bore the brunt of losses.
3)Republicans in the Senate use the filibuster cloture rule with no limitations whatsoever making a 60 vote majority in the Senate required for effectively all legislation;
4)Key Conservative Republican thinkers continue to embrace the idea that destruction of government processes and leaders is in the best interest of their party and country;
5)Hence, nonsense political positions advocated by radical groups calling on drastic deficit reduction by tax cuts, widespread spending cuts, but no touching of special political programs and entitlements- these are mot just tolerated but defended in the most venial, self-serving manner;
6)The Politics of Fear is cultivated by fostering wedge issues like anti-immigrants, gay bashing, Christian prayers-only in public places, repealing of abortion options, etc for their knee-jerk vote-getting appeal rather than handling the problems with careful but open debate and reconciliation of interests. Example, the urban areas need much better concealed+automatic weapon gun sale and controls while rural areas want to protect a hunting way of life- this gets lost in the NRA and other campaigns against any gun controls whatsoever.
In sum while the US desperately needs political savvy and far-thinking fiscal policy as the economic and technology race accelerates around the world
it is instead getting debilitating and costly political gridlock. This is making the US the laughing stock and easy prey of both economic competitors and tyrants worldwide. Robert Mugabe of Zambia, Mahamoud Ahmadinejad of Iran, and Hugo Chavez of Venezuela mock any calls for election and political reforms by calling on the US to clean-up its own politics. China, Brazil, India, and other countries move their economies ahead with advanced support and trading stategies while the US flounders.

III – Realization that the USA has become a Bautocracy – a “bought” government where campaign and lobby funds are in billions of dollars each year. Both Democrats and Republicans have sold out in nearly equal measure. This means that $1.5 triilion in TARP and Emergency Funding has gone to make the top banks whole again while manufacturing jobs suffer export and decline. This meansthe big Wall Street bankers have special access to the Fed’s 0% interest rate window meaning sky high profits[and bonuses] are guaranteed by the government. This means the recent $650Billion expenditure starting November 2010 is not for more jobs and direct economic stimulus but to buy Treasury bonds to the disproportionate advantage of the Financial Community. This means that despite the great malfeasance committed by countless banks and boards of directors almost everybody involved in the Financial Bubble has gotten off Scott Free – the worst is a slap on the wrist for CountryWide CEO Anthony Mozilo[no admission of guilt, most of the $60M fine paid by other parties] – in general the white collar criminals on Wall Street pinched the US for trillions with no consequences whatsoever.

And now for the topper, there is the case of the “temporary” Bush taxcuts. Rescinding them for those earning $250,000 or more per year would bring in $50-70 billion a year for a country demanding a balanced budget. But currently, the SuperRich are flexing their lobbying and campaign financing muscles and demanding that the Bush Tax cuts be made permanent. This is a huge tax break for those who already own more than 25% of all US wealth and often pay effective tax rates well below most middle class families. If the Bush Tax Cuts are extended this will be the demonstration that Robert Mugabe, Hugo Chavez, Mahmoud are right – the US has become a Banana Republic – owned and operated by the SuperRich. Its just Dawning on America that as Walt Kelly’s Pogo used to say – “We have met the enemy and they is US” – we have been foreclosed and sold out in large measure by ourselves.

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