STOCK MARKET WATCH -- Thursday, 25 October 2012

[Demeter]

41. THE REST OF IT: Why Our Nation Is Failing PAUL BUCHHEIT

http://www.truth-out.org/buzzflash/commentary/item/17585-ozymandias-ii-why-our-nation-is-failing

Progressives, unlike many of those on the far right, are not willing to let America fail, but instead fight for changes while promoting awareness of the unpleasant truth. Three remarkable books help us to understand what we need to do:

1. The Measure of a Nation, by Howard Steven Friedman

American "exceptionalism" is the sense that we're better than other countries, and that we don't need to rely on them to solve problems like education and health care. Such isolation breeds delusion. Friedman notes that over 30% of American students rated their math ability at a high level, compared to 10% of Korean students and 6% of Japanese students. But the U.S. ranks significantly below each of them in math.

We ignore the success of public education systems in Finland and Japan, and instead try to turn our schools into profit-making centers. A few well-positioned people will benefit instead of millions of young Americans whose public schools will have lost their funding.

Health care doesn't measure up, either. 25 years ago we ranked 7th in life expectancy. Now we're 38th. We're falling behind other countries in the rate of infant mortality, partly because we have a higher child poverty rate than any OECD country other than Romania. We spend over twice as much as other developed countries on health care, yet we reject their successes as "socialist."

But we lead the world in billionaires.

2. Collapse, by Jared Diamond

The author notes that collapses of societies throughout history "tended to follow somewhat similar courses...unsustainable practices led to environmental damage..." He traces this path through past societies such as the Mayans in Mexico and the Norse in Greenland, then returns us to our modern-day problems with a discussion of Montana, which has been heavily damaged by the mining of copper and coal and clear-cutting of timber, while many of the profits have gone to out-of-state investors.

There are deniers, of course, who accuse Diamond of being an environmental alarmist. But Montana has 20,000 abandoned mines covering more acreage than in any other state. It experienced the second slowest per capita growth rate (behind Alaska) between 1950 and 1999, in good part because of the decline in mining and logging and oil extraction. Today, with some of the largest coal reserves in the nation, the state's so-called "Coal Cowboy" governor Brian Schweitzer is lobbying for the strip-mining of 10,000 acres of public land for new development. As if to weigh one bad decision against another, members of Congress are recommending that Montana land simply be sold off.

It's not fair to pick on any one state, but Montana may be the best example of an American treasure at risk. The only certainty is that all states are victims of our disregard for the environment. All reputable members of the scientific community agree with this.

As Bernie Sanders reminds us, clean alternatives are gaining rapidly in output, efficiency, and cost. In four years we've tripled solar output while cutting the cost in half, with similar productivity gains for wind power. The industry waits for a national commitment to unleash the creativity of small business innovators. It's beginning to happen at the local level.

3. Why Nations Fail, by Daron Acemoglu and James A. Robinson

The authors define "extractive" and "inclusive" societies - the former controlled by a wealthy ruling elite that undermines economic growth for the masses; the latter like America in its infancy, which Thomas Jefferson and Alexis de Tocqueville praised as egalitarian and democratic.

Much further back, in the 14th century, the prosperous city of Venice promoted inclusiveness by allowing any risk-taker to invest in trade expeditions, but then succumbed to the demands of the upper class to exclude commoners. The Venetian economy experienced rising inequality and a hurried collapse.

According to the authors, modern-day China faces the same fate, despite its dramatic recent growth, because of an extractive ruling class and a fast-rising inequality level.

How about our own modern-day America? Shockingly, we have the 5th-highest wealth disparity among 150 countries. In a transfer of wealth suggestive of an extractive society, the richest 10 Americans increased their estates by an average of over $5 billion each last year. Each one of them gained enough from largely passive investments in one year to pay the salaries of 100,000 teachers.

At the other extreme, in numbing contrast, the median wealth of a single black or Hispanic woman is a little over $100.

It gets even worse. There's no way for the great majority of low-income Americans to advance to a more prosperous level. Economic mobility has been falling, to the point that our citizens are provided less opportunity for advancement than almost all other OECD countries. According to a Pew study, only 4% of U.S. children born to families in the bottom quintile make it to the top quintile as adults. 80% of them remain below the median income level all their lives.

Inequality is the scourge of nations in collapse. Plutarch knew it, in ancient times: "An imbalance between rich and poor," he said, "is the oldest and most fatal ailment of all republics." Shelley depicted it in Ozymandias. America is stricken with it now. But we haven't yet collapsed. We still have a chance to be the land of opportunity, if we listen to the past, and to the people outside our borders.