Thursday, January 21, 2010

Obama, the Crisis and the American Dream

Most of us were too thrilled by Obama's victory to worry about how he would perform. From the outset, as his choice of key cabinet members clearly demonstrated, he showed a lack of conviction about what he wanted to achieve: Clinton at State, Geithner at the Treasury, and Gates at Defense. Gates, of course, was CIA Director under Bush, Geithner comes straight out of Wall Street, while dear Hilary is nothing if not "old Washington". At a moment when Obama had a chance to blow some fresh air over the Potomac, he inhaled the stale DC air instead.

His dithering over Afghanistan and backtracking on key elements of health care reform once again show an absence of decisive leadership and maybe even of genuine political conviction. There is an old saying that it's better to die on your feet than live on your knees; but on health care in particular, Obama appears to have dropped to the floor as soon as the GOP shook a fist at him.

But where Obama - and indeed the US - are truly in a hole is with the economy. The flaw in the American version of capitalism lies buried in the heart of the American mythology about itself: that everyone can "make it", that individuals are responsible for their own success or failure, and that government should keeps its hands out of people's pockets and its nose out of their affairs. The US system is the best because - well - it's the best.

Unfortunately, international comparative statistics tell a different story. Social mobility in the US is among the lowest in the developed world (the UK's record is, if anything, even worse); and the US is at the bottom of the developed country list for life expectancy and infant mortality. Most people, in other words, don't "make it". Nor are they great at looking after themselves. Low educational standards is another US "achievement".

Meanwhile, and perhaps in the long term even more important, the neo-liberal, laissez-faire economic model has not only hollowed out industry in the US by fostering the flight of production facilities to low-cost areas of the world, but it is proving defenceless against the state-guided, protectionist capitalism of China and some smaller eastern countries. Much of the West's decline has, until recently, been masked by the availability of cheap imports (thereby disguising the relative reduction in quality of employment and in average remuneration) and the massive financial profits generated by Wall Street and the City. But the current recession, the gargantuan greed of western bankers, and the West's huge indebtedness have torn away the mask to reveal a sickly visage.

The US is very far from moribund, but she is unquestionably in trouble and her citizens are palpably angry about it - hence the voter volatility in the Massachussetts senate race. Ironically, voters want Obama to get the country back on its feet even though many of them don't believe government should be involved. They want health care fixed only if it comes tax free, and while they are wedded to laissez-faire, they want the bankers reined in and maybe even punished (unless punishment means more government in which case - maybe not). In a nutshell the problem isn't government involvement but the American weltanchauung.

What the country needs, one suspects, is a reevaluation of its sclerotic economic model, a searching re-examination of its collective myths, and a far more courageous administration in the White House.

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