What Are We Celebrating on July 4th?

July 4th ... Independence Day ... is fraught with symbolism.  It's the beginning of American exceptionalism, the beginning of America taking its place on the world’s stage, the beginning of freedom and prosperity for Americans.  

There is no question that 1776 marked the beginning of America's feeling that it was exceptional and that its moral voice coupled with its growing economic strength gave it a place on the world’s stage.  But what of freedom and prosperity?

We all know the famous lines from the Declaration of Independence, crafted primarily by Thomas Jefferson ... “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain inalienable rights, that among these are the right to life, liberty, and the pursuit of happiness.  That to secure these rights, governments are instituted among men.”  

These were truly revolutionary words.  They have given America’s elite something to crow about.  And they have given the mass of Americans, especially the disadvantaged, something to hang their hopes on for more than two centuries.  This was the basis of the American dream.  But what were and are the facts on the ground?

Those that benefitted from our independence were primarily those with business interests, who were now free of the yoke of English taxes and control.   Then as now, business interests were the main “client” of government ... indeed, back then you could only vote if you owned land or had enough wealth to be taxed, so those were the constituents ... and they prospered then as they do now.

As of the first census in 1790, 18% of the US population (700,000 out of 4,000,000) were slaves.  Their status certainly did not change with American independence.  That would have to wait another 85 years for the Civil War and the Emancipation Proclamation.  Of the Founding Fathers who were slave holders, only George Washington freed his slaves, upon his death.  Jefferson did not even do that.

The status of women ... the wives of the founders and the mothers of their children ... did not change at all with independence.  They remained chattel with no rights for a century, slowly achieving some rights in the later 1800s, and only won the right to vote in 1920 with the ratification of the 19th Amendment to the Constitution.

Over the last century, there can be no question that both women and, to a lesser extent, blacks have improved their status in all areas of American business and life  But there can also be no question that even today neither have reached anything approaching equality with white males and that broad discrimination persists. 

And then there are the Native Americans.  They had a status lower than slaves because they were of no use to anyone.  They were just a heathen barrier to be gotten rid of when their presence interfered with American interests.   Our genocide of the Native American (and what else can it honestly be called) is breathtakingly chilling.   Manifest Destiny had no room for equality.  

And as for general prosperity, while it is true that we all have more now than we did … more education, more modern conveniences, creature comforts … it is also true that there is greater inequality between the richest Americans (top 5%) and the rest then at any time.  If you look at broader groups ... top 20%, middle 40, and bottom 40 ... the income distribution has remained pretty static since independence.  So we really haven’t achieved much of anything on that point.

So what are we celebrating?  Some moving, aspirational words which we have still not managed ... or if truth be told, even tried very hard ... to implement.  As President Obama said, “We can do better.”

We are celebrating the birth of a nation whose unbridled capitalism was able to take full advantage of the opportunities presented by the natural resources of this vast country and a bottomless pool of cheap immigrant labor to make this the richest nation in the world.  We are celebrating a rapacious America which, while being the leader of the free world, despoiled the environment and took advantage of the mass of its powerless citizens, leaving a damaged people and landscape in the wake of “progress.”

Instead of celebrating so hard and patting ourselves on the back for how great America is, we should use this opportunity to rededicate ourselves and our institutions of government to implementing those words of the Declaration of Independence: “that all men are created equal,” “that they have the right to life, liberty, and the pursuit of happiness,” and that the role of government is to “secure” those rights.  We should never forget that in reality most of our citizens have little cause to celebrate if they stopped to think about it.

Understanding Why America Is No Longer, and Perhaps Can Never Be, As Great As It Was

People either go on about how great America is, or they lament that America is not as great as it used to be.  In the first case, people typically ignore reality.  In the second case, they often ignore fundamental factors. 

When people say that America is great, they are either referring to the strength of our military (which is a fact), the size of our economy (which is a fact), or the things America stands for (which is also a fact, at least in theory).  

However, while we unquestionably have a strong military it does not serve its purpose of protecting American interests because our enemies are not cowed by our might nor do we have the political willingness or financial ability to send our military everywhere it is needed to protect our interests.  Thus we are not really as strong as our size and might would make it appear.  American strength is somewhat of a facade.

Our economy is also the largest in the world, even though the Chinese have been rapidly catching up with us.   We also have the most stable and strongest domestic economy in the world.  But our corporations, and as a result our financial well-being, have become so interconnected with the stability of the rest of the world economy that our economy is not as strong/stable as it was.  

Further, because of stagnant wages and loss of middle-class jobs, financial inequality in America has soared and become damaging and our middle class, which was the bedrock of our consumer economy, has been eviscerated.  The American people are hurting even as its corporations are prospering.  Then there’s the fact that the rest of the world, in particular China, holds most of the debt that we have incurred spending more than we take in, especially as a result of the disastrous Bush II tax cuts and the Iraq war.

As to American exceptionalism being a function of our ideals, as I’ve noted in prior posts, this exceptionalism is mostly a myth (see “American Exceptionalism - A Myth Exposed”).  America has never lived up to the ideals expressed in the Declaration of Independence or the 14th Amendment.

On the other hand, when people speak of America not being as great as it was, they often speak of America not being respected because our military needs to be stronger.  But the lack of respect has little to do with the strength of our military.  It is more because America has not for many years had the moral authority that it once had, even if it was based on an illusion.  Also, as noted above, our guerrilla enemies are not scared of our military prowess.

When they speak of our economy being weaker, they do focus on the issues I raised above, but the underlying context is not addressed.  The economy is not as great as it was because the world has changed and America has changed.  

The world has changed because 3rd world countries are no longer just producers of raw material (with the glaring exception of most of Africa).  And so they produce products that would pose competitive problems for U.S. production even without the free market trade agreements that have proliferated at the behest of both economists and corporations.  Unless the U.S. would enact high protective trade barriers to keep many foreign products out of the U.S.  But that would create a different problem … the combination of not having inexpensive foreign-produced items to purchase and a reasonable growth in U.S. workers’ wages would lead to high inflation rates that would damage our economy.  (Also, the inevitable trade war fight that would ensue would harm our exports.)

But America has changed in significant ways as well.  During the first stage of explosive growth in our economy, much of the country was still unsettled frontier leaving room for  a huge expansion of economic activity accompanied by huge increases in population through immigration from all parts of the world.  During the second stage, from the turn of the 20th century into the initial post-WWII period, America was unequaled because the rest of the world’s developed economies were minuscule by comparison and China and most of the non-European world were undeveloped, not even developing.

None of that is true today.  And so, because of all of these factors, the way often cited for the American economy to regain its strength is through American creativity or innovation.  And many think we’ve done just that.  

But while we have seen lots of American technological innovation in the last few decades, it has only fueled American corporate profits, not worker wealth, since the products are all produced overseas, and so the economy has not really been strengthened.  Only if those jobs were brought back would it make a real difference.  

As for creativity, since the creation of the computer chip, there really hasn’t been much creativity, just innovation.  Even nanotechnology is innovation, not creativity.  But regardless, unless creativity resulted in good, middle-class jobs for U.S. workers, it would not help strengthen our economy.

But this discussion begs the question, “Does America have to be great?”  Economically, given the size of our population and the standard of living that we were used to 40 years ago and would like to reacquire, that answer is unfortunately, yes.

Thus, bottom line, figuring out how to bring American jobs back or create new ones without creating other major economic disruptions such as high inflation is a task that corporations and workers/unions need to sit down at the table to discuss, probably at the behest of government.  One point seems clear.  To significantly increase the number of American middle-class jobs, wages will have to be lower than they once were, but that would still result in a benefit for both workers and the economy.

The only other way that America will either be or viewed as the great nation it once was economically is if much of the rest of the world implodes and the U.S. finds a way of disconnecting itself from that calamity.  I think recent history shows that it would be prudent to prepare for that eventuality.

Militarily, America certainly needs to be strong.  But what that means in the context of current or projected international conflicts has been a subject of some debate.  Many argue that we need a leaner and more flexible military rather than an updated version of the current dinosaur.

As for being great from a moral authority perspective, while there is no need to be great, it certainly would be very beneficial from many perspectives for the U.S. to regain its moral authority.  President Obama certainly tried to move in that direction in the beginning of his first term.    But to regain that authority, much would have to change both within this country as well as how it engages the rest of the world. 

If the advice I have given in many of my posts on this site were followed, it would go a long way to regaining our moral authority.  But that, unfortunately, is highly unlikely because to bring about that change means changing who holds power in Washington … ending the control that corporate America and the wealthy have over our policies.  Although Bernie Sanders talks of such a revolution, achieving it is another matter … and he is the only candidate talking about it.

As has been the case in many of my posts, the final analysis is that we survive in an outdated, broken system and cannot be what we need to be in the future without major changes in our political, social, and economic structure.

American Exceptionalism - The Myth Exploded, Part II

In a previous post, I discussed why American exceptionalism is a myth ... that the data show clearly that Americans are not better off than those of other developed countries in the areas of health, education, income equality, social mobility, and equal opportunity.  The promise of the Declaration of Independence has not been realized by large segments of America’s citizenry.

Another way in which American exceptionalism presents itself is in our undying belief that our system of government, democracy, is the best system of governance in the world and that all people should live in a democracy and experience its benefits.  Connected to this is our belief that from a geopolitical perspective, a government will more likely be our ally if it is a democracy than if it is not.

In the cases of Russia and Iraq we see the absolute fallacy of this reasoning.  Russia was a Communist dictatorship.  It was the evil empire, our blood enemy for half a decade.  But for all the failures of the Soviet Union’s Communist system regarding the lack of freedom of its citizens and the weakness of its economy, as well as of course the horrors of Stalinism, it provided important benefits to its citizens ... order, security, jobs, normalcy, a sense of place.  

After the fall of Communism and the overnight transformation of Russia into a democracy, everything fell apart.  There was no more authority and Russia became a gangster state, overrun by criminals, thieving oligarchs, and politicians whose only concept of governance was personal enrichment and absolute control.  Far from becoming an ally of ours, Russia has remained a thorn in our side, although a less powerful one.

Iraq was without question under the dictatorship of Saddam Hussein a terrible place ... at least if you happened to be viewed as an enemy of his.  But even more so than in Russia, Iraqis benefitted from order, security, jobs, and a sense of place.  There was no freedom, but people were able to live their lives for the most part in an atmosphere of normalcy.  

After the American invasion and the introduction of democracy, Iraq fell apart as a country.  It became instead a place of warring factions, continual violent conflict, with no security, no order, no normalcy, and not many jobs.  America’s experiment in exporting democracy to Iraq has been a dismal failure.

Freedom is a wonderful thing, and every person on earth should be able to live in an atmosphere of free speech, religion, politics, etc.  But if you talk to people on the street, what is more important than freedom is order, security, normalcy, jobs, and a sense of place.   In some cases, notably in most of the former Eastern bloc Communist countries, the introduction of democracy has been beneficial to its citizens.  But in many others, we have seen the introduction of democracy in a country fail miserably to benefit the people.

The United States government must learn, as it apparently hasn’t, that for a democracy to function as intended and deliver its promised benefits requires a combination of societal background elements.  For example, if, as in Iraq and many other countries, you have a population divided by religion, ethnicity, or tribe with a history of violence in dealing with conflict, the implementation of democracy will be almost impossible.  If you have a country, such as Russia, in which the populace has gotten used to and wants a strong authoritarian government, democracy will produce the same.  If you have a country, such as the Gaza Strip and Egypt, in which Islamic fundamentalist forces have a strong presence, democracy will produce a government of that nature.  Note:  Recently Secretary of State John Kerry said that the military coup in Egypt deposing the lawfully elected president was restoring democracy; is there something I’m missing here?

In many cases, democracy is not the form of government which will best meet the needs of the people for order, security, jobs, normalcy, and a sense of place.  I remember the point made in a Political Science class in college that often countries need a transition government, such as a benevolent authoritarian government, to allow the necessary elements for a functioning democracy to develop.  In other cases, the democracy it championed may turn out to bite the U.S., but that makes it no less legitimate.

So both from a humanitarian standpoint and a geopolitical perspective, the exporting of democracy is of questionable value except in carefully considered circumstances.  The United States should both have other options that it is open to and when democracy produces an undesirable result from a geopolitical perspective, as in Egypt and as in Chile in the 1970s, it needs to respect the legitimate expression of the wishes of the citizens of that country.

What Are We Celebrating on July 4th?

July 4th ... Independence Day ... is fraught with symbolism.  It is the beginning of American exceptionalism, the beginning of America taking its place on the world’s stage, the beginning of freedom and prosperity for Americans.  

There is no question that 1776 marked the beginning of America's feeling that it was exceptional and that it’s moral voice coupled with an unleashed mercantilist strength gave it a place on the world’s stage.  But what of freedom and prosperity?

We all know the famous lines from the Declaration of Independence, crafted primarily by Thomas Jefferson ... “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain inalienable rights, that among these are the right the life, liberty, and the pursuit of happiness.  That to secure these rights, governments are instituted among men.”  These were truly revolutionary words.  They have given America’s elite something to crow about.  And they have given America’s disadvantaged something to hang their hopes on for more than two centuries.  But what were and are the facts on the ground?

Those that benefitted from our independence were primarily those with business interests, who were now free of the yoke of English taxes and control.   Then as now, business interests were the main “client” of government ... indeed, back then you could only vote if you owned land or had enough wealth to be taxed, so those were the constituents ... and they prospered then as they do now.

As of the first census in 1790, 18% of the US population (700,000 out of 4,000,000) were slaves.  Their status certainly did not change with American independence.  That would have to wait another 85 years for the Civil War and the Emancipation Proclamation.  Of the Founding Fathers who were slave holders, George Washington did free his slaves upon his death.  Jefferson did not even do that.

The status of women ... the wives of the founders and the mothers of their children ... did not change at all with independence.  They remained chattel with no rights for a century, slowly achieving some rights in the later 1800s, and only won the right to vote in 1920 with the ratification of the 19th Amendment to the Constitution.

Over the last century, there can be no question that both women and blacks have improved their status in all areas of American business and life  But there can also be no question that even today neither have reached anything approaching equality with white males and that discrimination persists. 

And then there are the Native Americans.  They had a status even lower than slaves because they were of no use to anyone.  They were just a heathen barrier to be gotten rid of when their presence interfered with American interests.   Our genocide of Native Americans (and what else can it honestly be called) is breathtakingly chilling.   It's justification is closely related to Hitler's "Lebensraum" ... Germany's need for more room to grow.  Manifest destiny has no room for equality.  

And as for general prosperity, while it is true that we all have more now than we did, it is also true that there is greater inequality between the richest Americans (top 5%) and the rest then at any time.  If you look at broader groups ... top 20%, middle 40, and bottom 40 ... the income distribution has remained pretty static since independence.  So we really haven’t achieved much of anything on that point.

So what are we celebrating?  Some very wonderful-sounding words which we have still not managed ... or if truth be told, even tried very hard ... to implement.  We are celebrating the birth of a nation with unbridled mercantilism/captitalism that was able to take full advantage of the opportunities presented by the natural resources of this vast country.  We are celebrating American progress, which has left many damaged lives and souls in its wake.

Is this really cause to celebrate?  Can't we do better in fulfilling America's promise to its people?

American Exceptionalism - A Myth Exposed

American political leaders and average Americans too take great pride in trumpeting the United States as the greatest country in the world.  We are the strongest, the richest; we have the best medical system; we have the best educational system; and the list goes on and on.

But are we the greatest country?  While it is incontrovertible that we are the strongest country in the world militarily, and that we are the richest country in the world in terms of the size of our economy, when it comes to the health and welfare of the American people we are far from the greatest, as the data below will show.  And I believe it is in the ability of all Americans to pursue the American promise of “equality” and “life, liberty, and the pursuit of happiness” that our greatness is best measured.

You might ask, “Why bother exposing this myth?”  Because we have many problems in this country which seem to be intractable, largely because people ... both most leaders and the average American ... refuse to acknowledge the facts, let alone view them as presenting a serious problem that must be addressed.  Most people are so caught up in how great we are and how good life in this country is that we have come to believe the illusion and cannot see the gritty reality which is quite different.  

Only when our leaders and the public are able to see and admit these significant problems that limit our greatness will the political will exist to do what is necessary to fix them.  And they can be fixed.  We have the riches and the knowledge to do all that needs to be done.

In the data below, the United States is compared with the rest of the developed world, and at times the entire world.  The areas I will examine ... health, education, income inequality, violence/security, social mobility, and equal opportunity ... are essential to the ability of our country to live up to the promises made in the Declaration of Independence and truly be the great nation we aspire to.

Health:  Despite having by far the most costly health system in the world, the United States consistently underperforms on most measures of the quality of health care.  Looking at quality of care, access to care, efficiency, equity, and living healthy lives, the US ranks last or next-to-last when compared with Australia, Canada, Germany, the Netherlands, New Zealand, and the United Kingdom.  Most troubling is the failure of the US in the area of health outcomes ... people leading healthy lives.

The summary table below says it all:

                                       AUS     CAN      GER     NETH       NZ    UK       US
Overall Ranking (2010)         3          6             4             1            5       2          7
Quality of Care                     4           7            5             2             1      3           6
Access                                 6.5        5            3             1             4      2         6.5
Efficiency                             2           6            5             3             4      1           7
Equity                                  4           5            3             1             6      2           7
Long, Healthy Lives               1           2            3             4             5      6           7
Health Exp/Capita (2007)   $3357   $3895   $3588  $3837   $2454  $2992  $7290

This data, which comes from a report by The Commonwealth Fund, is consistent with the findings of other reports and surveys.  For example, a recent report sponsored by the National Research Council and the Institute of Medicine compared the US with 17 other developed countries, and the US came in last.  The report shows a “strikingly consistent and pervasive” pattern of poorer health at all stages of life, from infancy to old age.  Further, the report shows that even white, well-off Americans live sicker and die sooner than similarly situated people elsewhere. 

Education: The US fares somewhat better in education comparisons, in that it was not dead last.  This is the one area regarding which the media will occasionally ring the alarm bell that “we are falling behind.”  In data comparing the G-8 countries, American 15-years old come in 3rd in Reading, 6th in Math, and 5th in Science.  In looking at high school graduation rates, the US and Canada tie for the lowest rate, 76%.  The other 6 G-8 countries range from 85% (Italy) to 97% (Germany).   This is a huge failure of our system.

Income Inequality: In a report on income inequality in 17 developed countries based on various studies, the United States had the greatest income inequality.  The top 1% of income earners accounted for 17.4% of US income while at the other end, in the Netherlands, the top 1% accounted for only 5.4% of income.  In looking at World Bank figures for the entire world, with the exception of China and Hong Kong, only undeveloped or developing countries, mostly in Africa and Central and South America, had greater income inequality than the US.

And income inequality is been increasing steadily in the US over the past 50 years.  For example, in 1949, the top 1% accounted for 11% of income, similar to or less than many developed countries at that time.  But for 10 of the 17 countries, income inequality has actually decreased in the past 50 years while those that have increased have experienced a much lower percentage increase than the US.

In looking at total net worth, the top 1% in the US accounted for 34% of net worth, the top 10% accounted for 70%, while the bottom 80% accounted for only 15%.  According to a UN report on the distribution of household wealth worldwide, only 4 countries in the world had greater inequality in household wealth than the US!

Violence/Security: In 2003, there were 30,000 fire-arm related deaths in the US  (homicides and suicides).  According to an American Bar Association report, the rate of death from firearms in the US is eight times higher than in other industrialized countries.  According to the U.S. Centers for Disease Control,  the fire-arm related death rate among US children younger than 15 is nearly 12 times higher than among children in 25 other industrialized countries combined.  The US has the highest rate of youth homicides and suicides among the 26 wealthiest nations.  

In a UN report comparing the intentional homicide rate (i.e. excluding suicide) worldwide, the US at 4.8 per 100,000 people was the highest for a developed country.  The next highest was 2.2 for Finland.  Germany, Italy, and France were 0.8, 0.9, and 1.1 respectively.  The United Kingdom was 1.2.

It would seem that our vaunted right to purchase firearms of all sorts has helped to create a more violent, less secure environment for Americans, rather than a less violent, more secure one as argued by gun proponents.  Interestingly, in a recent article regarding the Texas District Attorney and his wife who were murdered in their home, it was reported that he had 60-72 guns of all types planted all over the house and that both he and his wife were expert at using them.  But apparently all those guns were to no avail.

Social Mobility:  America has always prided itself as being the land of opportunity.  Over the years, especially the late 1800s and early 1900s, tens of millions of immigrants came to the US because of the American dream.  And indeed, while data for that period is not available, certainly anecdotal stories of the upward mobility of immigrants abound.  Surveys show that Americans still think of their country as being a meritocracy; that is, if you have what it takes and you are hardworking, you will succeed.

But the data from two recent studies show that the image is far from true.  Yes, there is still social mobility, but the US is hardly the leader in this area.  In a study by the PEW Economic Mobility Project of 10 developed countries, the US had a lower generational income mobility than that of the other countries.  That means that a child’s income (as an adult) was more a function of his father’s income.  Likewise, in a study that compared 6 developed countries regarding the likelihood of children remaining in the same income quintile as their their father, 42% of American children in the poorest quintile remained in that quintile, a rate of poverty persistence far greater than the 30% in the United Kingdom and the 25-28% range found in the Scandinavian countries.  Likewise in looking at the percentage who moved from the lowest quintile to the highest quintile, the US rate was 7.9%, while the rate in the other 5 countries was 11 - 14%.

Equal Opportunity:  The United States has many laws guaranteeing equal opportunity, meaning freedom from discrimination.  But even if those laws worked perfectly and there was no more discrimination in this country, which of course is far from the case, there would still be a significant lack of equal opportunity because your parents’ income usually determines where you live and the quality of education that you receive, which in turn determines the range of your opportunity.  Given the high income inequality in the US, that means that true equal opportunity is really a phantom in our country.  

While this lack of equal opportunity is not just a function of unequal funding, legal and legislative efforts to alter this dynamic by changing the way in which schools are financed ... equally by the state rather than unequally by school districts ... have not gained traction anywhere because of the opposition of those who fare better under the current system.  While there is no comparative data on this specific issue with other countries, the data on social mobility reflect this reality.

In summary, the data show that the United States has the worst health system in the developed world, even if it is by far the most expensive.  It has a mediocre educational system compared with other developed countries.  It has the highest income inequality in the developed world and almost the highest wealth inequality in the entire world.  It has the highest rate by far of people dying from firearms in the developed world.  The social upward mobility of Americans from generation to generation is now significantly lower than that in other developed countries.  And equal opportunity is not available because lower income Americans receive an inferior education.

This data is cause for our political leaders and the public to stop and consider what has caused these problems to develop and what needs to be done to return America to the path of greatness.  It is not just a matter of throwing more money at a problem.  Each of these problems reflects structural defects in our system that must be corrected.  The American people are hurting.  Further, the combined impact of these problems will lead, if not addressed, to a steadily weaker America on the world stage.