For those of you who think I must be a socialist because I advocate some reduction in consumption--think again. I have far too much confidence in American ingenuity to ever place my faith in Maxist solutions. I grew up in a small-town/small-city America, where industrial innovation was a big part of our economy, along with manufacturing. The de-industrialization of many American small towns has resulted in most young people leaving them as soon as they finish high school. A higher proportion than ever of our population now resides in major metropolitan areas, many swelling from heavy traffic and rapidly spreading sprawl.
Mindless Consumption Undermines our Independence:A certain ethic of mindless consumption now threatens our way of life. Americans once produced appliances, so it made sense for us to consume them. Now others produce them, and we consume them beyond our means of payment. The result is personal debt bondage. Our national obsession with bigger and bigger houses, and the absurd idea that real estate can increase in "value" indefinitely, has resulted in the collapse of our economic system. And beccause so much of the world depended on the American economy, the global economy is suffering, too.
America as a Creative Force:
The United States is still one of the most inventive societies in the world. Many of the inventions that define modern life---automobiles, telegraphs, telephones, television, jet travel, motion pictures and music industries, the Internet, etc.---were invented in the U.S. or developed here in a big way. We think of the U.S. as a young nation, but our government is actually one of the oldest in existence. Most of the kingdoms that existed in 1776, when the U.S. was born, no longer exist. Our constitution has never been overthrown or re-written, as have many others.**
Oddly enough, though the U.S. sets the example for government stability, most emerging democracies choose parliamentary systems. Very few other nations (Canada and Mexico being exceptions) trust the de-centralized federal system we employ in the United States. Personally, I believe that our de-centralized federal system allows for more creativity and innovation than the unitary systems in place in much of the world, including Europe. In France, the local equivalent of a school superintendent is appointed from the capital, Paris. If the brain trust in a Paris makes a bad choice, the whole country suffers. But our president can not even appoint the school board in Virginia, just across the Potomac from D.C., much less in more distant states. This, I believe, is a good thing.
Overcentralization:
The political right is quick to blame the left for increasing the power of the federal government at the expense of the states. Not to debate this, but the right wing conveniently forgets that
capitalism has caused equally dangerous centralization of the U.S. economy. This centralization of the U.S. economy has been increasing for decades. Why is such a huge portion of the U.S. food supply grown in California, on land irrigated by federally-subsidized aqueducts when family farmers in the rain-watered east fail because of a lack of government support? (Is the U.S. even food self-sufficient anymore?) Why did New York State (or the United States as a whole), which once had a thriving manufacturing base, come to depend totally on Wall Street for its economy?
The collapse of our centralized financial system has resulted in even more centralization via bank mergers. With government bailouts in late 2008, the Republicans presided over the greatest centralization and nationalization of the U.S. economy in history. Right-wing approval of reckless banking has brought us closer than ever to socialism, and now the Right accuses the current president of advocating a socialist agenda, when it was the Right who handed him a socialist economy in the first place.
Possible alternatives:
During my childhood, my parents purchased two homes. Both of those mortgages were held by local banks until they sold the homes. In other words, the lending banks did not "bundle" up their mortgages and sell them to distant corporations. This was all in my hometown in the Southern Tier of New York State. Because the banks were local, and intended to keep the mortgages of local properties, they were more careful and ethical about how and to whom them lent money. The local banks did not want their properties devalued by reckless or predatory lending. The result: one of the lowest local home foreclosure rates in the nation.
Home prices remained reasonable because real estate was based on actual residential needs as opposed to rampant speculation. This small-town economic common sense protected my home town from the ravages of speculation-driven finance that is killing real estate markets in Nevada and California.
Reality Bites Back:
Our banking system is based on a "fractional" banking, which allows banks to "make up" money based on a percentage of actual cash on deposit. The Federal Reserve (the Fed) controls the actual percentage. Former Fed chirman Allen Greenspan apologized before congress for encouraging the reckless mortgage bundling and sub-prime lending that has caused this current economic mess. Greenspan was a personal friend and follower of the late Ayn Rand,
whose philosophy of Objectivism scorned religious faith and instead placed all its faith in the power of the individualized capitalism to give meaning to human life. Greenspan's faith in imaginary money (which he created), has proven a failed ideology, and I was personally surprised that he made a public apology. He mas more personal integrity than I would have imagined.
Where to look for Answers:
I don't have the
one answer to all of our problems. If I did, then you would be right in suspecting me of trying to create a religion around me. I don't believe any one ideology can pull us out of this economic mess. I have more faith in decentralized human ingenuity than in centralized decision making, which worked so badly for the old Soviet Union. Nonetheless,
Some government action must originate from Washington, because the federal government is now the part-owner of several large banks, due to bailouts. Somewhere out there some small town is solving its own problems based on pragmatism as opposed to ideology, and those examples should be looked at as possible models.
Some examples:
1. The local food movement: the emphasis is on produce grown within a region. Buying from local growers keeps money within one's community, keeps local food producers in business and helps a region attain more food-self-sufficiency. This also reduces the need for fuel to ship food long distances. Oddly enough, this idea is thriving in New York City, where weekly green markets offer food grown in the region.
2. Reduce the bundling and selling mortgages to distant banks and encourage local banks to hold the mortgages on properties in their region. The banks will be more careful about their lending practices, and will maintain a vested interest in keeping local foreclosures at a minumum.
3. Preserve farmland. Ensure that property taxes on farmers do not force them to sell out to real estate developers. This is crucial for farmers sitting on the edge of expanding suburbia.
4. Farmer-sportsmen-conservation partnerships. Many farmers have already converted some of their property into hunting preserves. This keeps land out of speculative development, preserves watersheds, and generates state revenues from hunting and fishing licenses, and tourism.
5. Allow more circulation of precious metals: the federal government has held over the American people the threat of confiscating personal holdings of gold and silver. This should stop, because it penalized the poor more than the rich (who shipped boatloads of gold coins overseas when FDR confiscated gold in the 1930s.) More gold and silver should be circulating, and the U.S. should issue a separate track of currency notes with backing of precious metals, and in small denominations for easy access to the middle and lower classes. People could then choose to conduct business in dollars or the new gold and silver notes, whichever both parties agreed upon.
6. Offer government bonds in smaller denominations: This would allow middle and lower class savers, and not just the rich, to invest in their country. Considering how much cash Candidate Obama raised from small donors, this may be a viable new course of saving (for individuals) and revenue (for governments). State, county and local governments should also be more aggressive offering smaller bonds with quick maturities to encourage people to invest locally. Short terms of maturity would also force governments to be honest and pay back quickly.
7. Landfills as energy producers: A small town in Geogia is already supplying all of its natural gas needs from its landfill, and selling the surplus to surrounding industries. Because all landfills produce gas, there is no reason this resource should go untapped.
Those are just some ideas, and I dare anyone to say that list is entirely an idea of the right or left. Many could be tested on the state or local level, before Washington tried to impose them on the whole country.
**I also suspect that the federal system that governs the U.S. has also allowed this country to absorb more dissent without having constant coups and also wild political swings in any direction. Unlike a unitary system, where one political ideology can easily rise to the top and try to change everything, our de-centralized power structure puts the brakes on such steamrollers. Our political stability and peaceful transition of presidents is part of what (until recently) has made the U.S. such an attractive place to invest.
***I defended Sarah Palin as a small-town candidate when I detected an urban- media prejudice against rural folk. (See my article "Sarah Palin on Indigenous Issues," 11/17/08) This does not mean I supported most of her policies, but I understood her way of life and was annoyed by the media attacking her origins.
