America in Trouble

"America is in trouble."  So opened Hedrick Smith at the Union League Club luncheon in Chicago that I attended last month promoting his new book, Who Stole the American Dream?  "We're not facing decline.  We're already in it," proclaims Mark Steyn in his book After America.  Although these writers come to the same conclusion--America is rapidly sliding toward collapse, the similarity ends abruptly.  They ascribe very different causes to America's malaise and suggest starkly opposing paths to attempt to arrest our decline.

Hedrick Smith (who's literary achievements include The Russians and The Power Game) claims that we have become two Americas (echo John Edwards?). "We are today a sharply divided country-divided by power, money and ideology," he claims.  Smith dates the beginning of this schism to the Powell Memorandum, written in 1971 by Lewis Powell before he became a Supreme Court justice.  In it, Powell warned the business community that it was under attack by consumer advocates, taxes, government regulation and trade unions, and that it had better wake up and smell the coffee.  Hence began corporate lobbying in a big way.

Smith asserts that this lobbying effort ushered in a series of legislative changes that enabled a well-heeled plutocracy to tilt the tables, disempower the middle class and enrich itself at the expense of the vast majority of Americans, who struggled while their standard of living eroded (Smith could be thought of as an intellectual supporter of the Occupy movement, if such supporters exist).  He spins the narrative that expounds on the familiar villains of the Left: rich people that have too much legislative influence and thereby get themselves unwarranted "tax breaks" (notwithstanding that we have the most progressive tax code in the developed world), the bankers as the sole cause for the housing crisis, the high cost of imperial overstretch, rapacious CEO's plundering companies and shifting jobs overseas, and the rise of the Radical Right.  He dismisses global competition as overblown and does not consider the wage effect of hundreds of millions of Chinese and Indians on world labor markets.  There is no mention of government's role in the housing crisis.  Nor does he even mention the effect that teacher's unions have had on our abysmal education system.   Smith is a good writer, but I found his lack of balance astonishing.  It seemed to me primarily a tome of Obama talking points.  He concludes with a set of recommendations for the future that few could disagree with:  renew manufacturing, buy American, create a more efficient military, push innovation and science.  But he is silent about the corrosive effect of a growing government.

Not surprisingly, Mark Steyn also concludes that America is in trouble, but fingers an entirely different cause.  While Smith's posits that America's slide is caused by class warfare--the "rich cabal" grabbed the handle of government and drained wealth from the middle class, Steyn indicts the growth of the federal government.   The insatiable taxing and regulating nanny state have drained wealth and ambition from our nation. "America has been thoroughly unbalanced: thanks largely to distortions
driven by government, we have too much college, too much 'professional servicing'--accounting, lawyering, and other activities necessary to keep the fine print in compliance with the regulatory state.  All of these are huge obstacles to making productive use of even our non-borrowed money and to keeping America competitive with the rest of the world."  In Steyn's view, it is the bloat of government that is grinding America down--- the explosion of "entitlements," taxes, and the regulatory burden of the feds.  America's drive to innovate has been replaced by the higher value of multiculturalism.  He cites the downgrading of NASA as a prime example, as it recently killed manned space flight and substituted as part of its mission to recognize Muslim contributions to science. Huh?
"To boldly go where no diversity outreach consultant has gone before!," he intones, "What's 'foremost' for NASA is to make Muslims 'feel good' about their contributions to science.  Why, as recently as the early ninth century Muhammed al-Khwarizimi invented the first hoary quadrant!"

In  a previous generation, government did some good big things--putting a man on the moon, defeat Nazis, construct and interstate highway system.  Now, not so much.  "The bigger government gets, the less it actually does.  You think a guy like Obama is going to put up a new Hoover Dam (built during the Depression and two years ahead of schedule?).  No chance.  Today's Big Government crowd is more likely to put up a new regulatory agency to tell the Hoover Dam it's non-wheelchair accessible and has to close."

For Steyn, the demons aren't the rich, but the government class-- the faceless bureaucrats that regulate us, tax us, and force us to comply, often with rules and regulations that nobody actually voted on, but were promulgated by some 20 something lawyer in the bowels of the Department of Labor.

"Edwards was right about the "two Americas," but not about the division: in one America, those who subscribe to the ruling ideology can access a world of tenured security lubricated by government and without creating a dime of wealth for the overall economy; in the other America, millions of people go to work every day to try to support their families and build up businesses and improve themselves, and the harder they work, the more they're penalized to support the government class in all its privileges."

America is in trouble, I believe.  While Smith makes some valid points--China has become an economic threat due to its currency manipulation, its intellectual property piracy, and its product dumping--he completely misses many factors in our slide.  Globalization, our failed education system, and the ever intruding government.  Steyn is closer to reality. Each day, government makes hard work and risk taking less and less enjoyable and less and less rewarding, choking the vibrancy that made this nation great.

Pity the poor entrepreneur, slugging it out while a legion of regulators and taxing authorities torment him or her.  Pity the poor working stiff, hustling in a tough, boring job, making $45,000 a year, while his neighbor gets to stay home and enjoy a total benefits package worth almost as much.

It a few days, we will have an opportunity to choose whose thesis is correct.  If we vote for Obama, it will be Smith's and we will continue to policies of taking more from "the rich," downsizing our military, empowering unions and regulators, and growing government.  If we choose Romney, the results are less clear, but we will at least put a brake on hurling headlong into an ossified Euro-nanny state, drowning in its own debt and stuck in perpetual stagnation.