Monday, August 09, 2010

Why our country is going down the tubes, and what you can do about it

America is caught in a spiral of decline and stagnation.

Why? The most immediate cause is that we refuse to spend money on public goods:
The lights are going out all over America — literally. Colorado Springs has made headlines with its desperate attempt to save money by turning off a third of its streetlights, but similar things are either happening or being contemplated across the nation...

Meanwhile, a country that once amazed the world with its visionary investments in transportation, from the Erie Canal to the Interstate Highway System, is now in the process of unpaving itself: in a number of states, local governments are breaking up roads they can no longer afford to maintain, and returning them to gravel.

And a nation that once prized education — that was among the first to provide basic schooling to all its children — is now cutting back. Teachers are being laid off; programs are being canceled; in Hawaii, the school year itself is being drastically shortened. And all signs point to even more cuts ahead...

In effect, a large part of our political class is showing its priorities: given the choice between asking the richest 2 percent or so of Americans to go back to paying the tax rates they paid during the Clinton-era boom, or allowing the nation’s foundations to crumble — literally in the case of roads, figuratively in the case of education — they’re choosing the latter.

It’s a disastrous choice in both the short run and the long run...

[E]verything we know about economic growth says that a well-educated population and high-quality infrastructure are crucial. Emerging nations are making huge efforts to upgrade their roads, their ports and their schools. Yet in America we’re going backward.

How did we get to this point? It’s the logical consequence of three decades of antigovernment rhetoric, rhetoric that has convinced many voters that a dollar collected in taxes is always a dollar wasted, that the public sector can’t do anything right...

Krugman knows, of course - and has said in other columns - that antigovernment rhetoric never really convinced many Americans to give up public goods and public services. What really happened was that the conservative movement told white people that all the cost of public goods would be borne by them, while all the benefits would go to blacks and Hispanics. This is the argument that was successful. This is the argument that destroyed our government's ability to provide the economic foundations of a successful nation-state.

Surely, now that our economy is going down the tubes, white conservative Americans are going to wake up and realize that they need public goods too...right?

Except that people's minds don't quite work that way. Instead of convincing people of the need for public goods, economic downturns often lead people to switch to an "every tribe for itself" crisis mode. This is what Matt Yglesias is talking about when he says that economic insecurity breeds mass scapegoating, prejudice, racial tribalism, and paranoia:
Last year we had town halls gone wild, fueled by the threat of death panels pulling the plug on Grandma. This year, us-vs.-them controversies are proliferating, linked by a surge in xenophobia. This is our summer of fear.

So far, the summer of fear has featured a charge, led by Newt Gingrich, Sarah Palin and former New York congressman Rick Lazio, to block the construction of the Cordoba House Islamic cultural center (which is to include a mosque) a few blocks from the site of the World Trade Center. Meanwhile, with frightening speed, we've gone from discussing the prospects for comprehensive immigration reform to watching congressional Republicans call for hearings to reconsider the 14th Amendment's guarantee of citizenship to anyone born in the United States...

Fear, in essence, begets fear. The loss of a job, or the worry that one might be lost, raises anxiety. This often plays out as increased suspicion of people who look different or come from different places. While times of robust growth and shared prosperity inspire feelings of interconnectedness and mutual gain, in times of worry, the picture quickly reverses. Views of the world turn zero-sum: If he wins, what do I lose? Any kind of change looks like decline -- the end of a "way of life."...

Benjamin Friedman, an economist at Harvard whose 2005 book "The Moral Consequences of Economic Growth" argued that growth tends to foster liberal sentiments and open societies, whereas slowdowns undermine them, says this summer's events "are predictable consequences of this kind of sustained economic downturn."

"Manifestations like these have appeared in the U.S. at such times before," he told me, "most obviously in the 1880s and early 1890s," when a sustained period of economic stagnation coincided with the abandonment of the Reconstruction-era commitment to civil rights, the widespread adoption of anti-Chinese legislation and a nationwide wave of lynchings directed not only at blacks, but also Catholics and immigrants...

The lesson is simple: The current controversies are ultimately byproducts of our economic morass. To really dispel the atmosphere of suspicion, what's needed are ideas about how to boost the economy to bring unemployment down and earnings up. Finding policies that do all this will not be easy, but it is the only way to turn the national mood around.
This is a very common idea, and it is supported by a number of lab experiments.

So, America is trapped in a vicious circle: Underinvestment in public goods causes economic decline, which causes prejudice and tribalism, which causes underinvestment in public goods.

How can this cycle be broken? I believe that the only people who can break it are conservatives. If Republican voters realize that government is not the enemy, and that investment in public goods is crucial to their own children's futures, we can arrest the cycle of decline, and set ourselves back on the upward path of economic growth and greater social integration. If you vote Republican, the power to save the country is in your hands.

But for us liberals, there is just not much that we can do, other than to try persuade our conservative friends that roads and bridges and public education are not just a scheme to steal their money and give it to the brown people. If we fail to make that case, America has a hard, dark road ahead.

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