Holiday readings about America’s future to power-start your New Year

Summary: The media overflows with useful analysis. Here are suggestions for your holiday reading. These deserve your attention, and might help you better prepare for what lies ahead for us in 2016. We can make a better 2016 — if we work the machinery the Founders bequeathed us.

“There was a dream that was Rome. It shall be realized. These are the wishes of Marcus Aurelius.”
— Maximus Decimus Meridius, in the movie “Gladiator”. America will change when we say such words.

Nothing is Written in Stone

Contents

  1. The Melting Away of North Atlantic Social Democracy.
  2. Are Americans losing faith in democracy?
  3. Important: The New Deal era was an intermission in the long Gilded Age.

(1)  The Melting Away of North Atlantic Social Democracy

A brilliant summary of current knowledge about growing inequality, one of the greatest threats to the Republic: “The Melting Away of North Atlantic Social Democracy” by J. Bradford DeLong (Prof Economics, Berkeley). Here is the opening and closing sections…

Hotshot French economist Thomas Piketty, of the Paris School of Economics, looked at the major democracies with North Atlantic coastlines over the past couple of centuries. He saw five striking facts:

  1. ownership of private wealth … was always highly concentrated.
  2. 150 years — 6 generations — ago, the ratio of a country’s total private wealth to its total annual income was about six.
  3. 50 years — 2 generations—ago, that capital-income ratio was about three.
  4. over the past two generations that capital-income ratio has been rising rapidly.
  5. the flow of income to the owner of the dollar capital did not rise when capital was relatively scarce, but plodded along at a typical net rate of profit of about 5% per year generation after generation.

He wondered what these facts predicted for the shape of the major North Atlantic economies in the 21st century. And so he wrote a big book, Capital in the Twenty-First Century, that was published last year.

… We as a civilization could decide that we are not willing to let money talk so loudly in politics. We could keep our politics from being one of establishing monopoly after monopoly and rent-extraction chokepoint after rent-extraction chokepoint. If we manage that, then the forecasts of Keynes (1936) and Rognlie (2015) will come true, and a rise in wealth accumulation will carry with it a fall in the rate of profit, and a highly-productive not-too-unequal society.

But right now money talks very loudly indeed. And I leave the Piketty debate more depressed about our ability to keep it from talking so loudly.

Young People Losing Faith in the Republic

(2) Five graphs show the biggest threat to the Republic

Are Americans losing faith in democracy?” by Roberto Foa and Yascha Mounk at VOX. See more about this here by Larry Sanger. I’ve written about this growing danger for a decade, yet the media continue to focus instead on largely imaginary enemies. You can fight back. For ideas see Reforming America: steps to new politics.

Inequality

(3)  The New Deal era was an intermission in the long Gilded Age

For years I and others have said that the post-WWII period was an anomaly in US history, not its fulfillment. Our vision of America — the 1950-1970 nation of improving civil rights, a growing economy, low inequality, and good social mobility — was a historical anomaly in US history caused by the three shocks of the Great Depression, WWII, and the Cold War. These shook the confidence of the 1%, creating fears of domestic instability and foreign conquest so that they shared more of the nation’s income and funded a broad range of infrastructure improvements (e.g., schools, highways).

As the fear of communism and domestic revolt faded, the 1% has recovered its political power, again sucked to itself most of America’s productivity gains, and defunded the government’s regulatory and constructive functions (leaving untouched the Left’s rights revolution; they don’t care who and how the proles screw). Most of the accomplishments we take pride in will disappear unless we fight desperately to retain them.  This is the essential insight for those seeking political reform.

Here is a scholarly explanation of this view: “The Long Exception: Rethinking the Place of the New Deal in American History” by Jefferson Cowie and Nick Salvadore (Professors of History, Cornell), International Labor and Working-Class History, Fall 2008. Abstract…

“The Long Exception” examines the period from Franklin Roosevelt to the end of the twentieth century and argues that the New Deal was more of an historical aberration—a byproduct of the massive crisis of the Great Depression — than the linear triumph of the welfare state. The depth of the Depression undoubtedly forced the realignment of American politics and class relations for decades, but, it is argued, there is more continuity in American politics between the periods before the New Deal order and those after its decline than there is between the postwar era and the rest of American history.

Indeed, by the early seventies the arc of American history had fallen back upon itself. While liberals of the seventies and eighties waited for a return to what they regarded as the normality of the New Deal order, they were actually living in the final days of what Paul Krugman later called the “interregnum between Gilded Ages.” The article examines four central themes in building this argument: race, religion, class, and individualism.

Too learn more about these things see these posts about inequality.

For ideas how to fight for America see these posts about Reforming America: steps to new politics.

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Don't Blame. Grow

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2 thoughts on “Holiday readings about America’s future to power-start your New Year

  1. You know, one looks at the Engagement Graph and you go….OH MY GOD.
    But hold on here.
    This Country is not the same place as back when. Nor are the people the same type of souls as way back then.
    If you really can be of an age to recall what it was like, say back in the 50-60’s, if your memory is a bit flawed as all of them are, well look up,
    And consider, any society that can’t build much of anything anymore but another Deal, another new Financial program…..well, it just is not long for this world anyway.
    And you wonder where all the dissolution in things social all around you comes from?
    It isn’t just Engagement.

    It’s the interregnum for sure.

    Breton

    Like

    1. Breton,

      “And consider, any society that can’t build much of anything anymore”

      Some zombie economic lies to end the year on! Not only have I shown this graph, and others like it, many times during the past decade — I suspect I’ve shown it to you. But one thing that I’ve learned from the 42 thousand comments is that some people just prefer the lies.

      To repeat, exports has been a growth sector of the US economy for several generations (increasing 250% as a fraction of GDP). That is, people want what we make so that exports are growing faster than the overall US economy. The only thing preventing exports from growing even faster is the overvalued US dollar, an inevitable side effect of its role as the world’s major reserve currency.

      US exports of goods and services as a fraction of GDP

      Like

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