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Politics : American Presidential Politics and foreign affairs -- Ignore unavailable to you. Want to Upgrade?


To: calgal who wrote (45338)9/1/2010 9:35:46 AM
From: Peter Dierks  Read Replies (1) | Respond to of 71588
 
Decline, but Not Inevitable Decline
The U.S. is in deep but not irreversible trouble.
August 26, 2010 4:00 A.M.
Conrad Black

For decades, I have been a militant anti-declinist in terms of America’s place in the world. The United States is a proud, determined, hard-working, talented, patriotic nation and people, and it is not over-extended in the manner of empires of the past that took over the lands of others and eventually collapsed under the weight of the over-ambitious hegemon. Thus came the twilight of all previous empires, from the Persian to the Russian, including several versions of the Chinese, and even the astounding nautical and commercial empire of Holland, built on the acumen and enterprise in the 17th century of scarcely a million avaricious and seafaring Dutch.

But the United States merely uprooted the native Americans (to make way for imported slaves, initially) and then swamped, thinned, or drove them into Canada before the riptide of settlers moving west. It had no interest in hanging on to Cuba, unfortunately for the Cubans, or the Philippines; President Cleveland was opposed even to accepting Hawaii as a territory; and the acquisition of Alaska by Pres. Andrew Johnson was seen as a “folly” for decades. There is no immutable or irresistible force of history ringing down the curtain on America. Yet the country is in decline. It is not logical and is certainly not irreversible, but that is not entirely relevant, because it is happening anyway.

The half-century from 1939 to 1989 was a golden American strategic age, though the execution deteriorated after the early Sixties. The defeat of the Nazis and Japanese imperialists — with the Russians taking most of the casualties; Germany, France, Italy, and Japan joining the West as flourishing democratic allies; and the Soviets being compensated with rather second-rate and restive strategic acquests — was followed by the containment of Communism, which caused the Soviet Union to implode and encouraged China to become a teeming hive of state capitalism, with no fire exchanged between the major protagonists.

As this was happening, the seeds of future problems were being scattered. The U.S. — dragging, by its magnetic influence, the whole Western world behind it — became a service economy, where comparatively little that was useful was actually produced or done, and a trillion dollars was spent annually in legal fees. Millions of unskilled laborers were allowed to enter the country illegally as millions of low-skilled jobs were outsourced. Trillions were borrowed from China and Japan to buy cheap manufactures from China, luxury goods from Japan and Western Europe, and oil at ever-rising prices and in steadily larger quantities, much of it from the chief sponsors of terrorism. Respected Federal Reserve chairmen and Treasury secretaries put the U.S economy into a power dive, as the annual current-account deficit topped $800 billion, the oil price bracketed $100, gold (the canary in the mineshaft) shot over $1,000, and, in pursuit of increased family homeownership, interest rates were brought and held down, saving eliminated, and trillions of dollars of worthless mortgage-related debt were issued, rated as investment grade, and peddled all over the world in an orgiastic St. Vitus’s Dance.

The great U.S. economy, a stupefying engine of productivity and applied talent, became a mighty Ponzi scheme, as the whole nation, addicted to debt-paid instant gratification, spent the future on consumption and non-durable assets. Except for a few academic flakes, no one — business, government, academia, the financial press — saw what was coming. And so there is no obvious body of vindicated opinion to take over now; it is a terrible and vacuous crisis of leadership. And courage fled, arm-in-arm, with official judgment. The Congress and successive administrations ignored illegal immigration until border-state frictions made it an explosive issue, and have failed to address it seriously since. They ignored abortion, leaving it to the ill-qualified bench to determine when the unborn attain the rights of a person. They ignored income disparity, until the recession stared to shrink the disparity by reducing everyone’s net worth, and they ignore the debt bomb. Annual increases of $750 billion to $1.4 trillion in the money supply stretching forward a decade will destroy the currency and Weimarize America, and there is not a hint of an official preventive response. The Keynesian injection of spending has been shot, in a hare-brained stimulus package designed by cynical Democratic congressional-committee chairmen. The recession is still here, and most tax increases and spending reductions are hazardous to economic growth. No one leads and no one knows.

The bizarreries of modern American foreign policy began when the Kennedy-Johnson Democrats plunged into Vietnam, mismanaged the war, and insisted on inflicting a crushing defeat on America after Richard Nixon had brought a durable non-Communist South Vietnam within reach; and then, for good measure, they crucified Richard Nixon, the most successful president between Roosevelt and Reagan. Johnson allowed the USSR to pull even with the U.S. in nuclear arsenals, on the theory that this would facilitate serious arms-control discussions. It didn’t. Nixon revived American superiority through technological advances, called “nuclear sufficiency,” and arms control did make unprecedented progress at SALT 1. President Carter generously threw out America’s greatest ally in the Middle East, the Shah of Iran, “like a dead mouse,” in the words of his national-security adviser, and acknowledged that he had “learned a lot about” the Kremlin from Russia’s invasion of Afghanistan. Having secured the grudging agreement of the Western Europeans to deployment of the neutron warhead, he then unilaterally declined to deploy it, which doubtless told the Kremlin (and our NATO allies) a lot about Jimmy Carter too.

Ronald Reagan produced the golden Indian summer of American grand strategy. His brilliant poker playing bankrupted the USSR with the non-nuclear SDI missile-defense concept, which was ridiculed on the U.S. center-left as an unworkable boondoggle (which was irrelevant since he didn’t actually try to build it) and abhorrent to most of America’s so-called allies, who wished the tightest possible strategic balance between the U.S. and the USSR to confer on themselves the maximum influence for the least effort. President Bush Sr. rightly and very effectively ejected Saddam Hussein from Kuwait, but left him in place in Baghdad. And President Clinton imposed irritating but ineffectual embargoes on India and Pakistan because they had the temerity to develop nuclear weapons. George W. Bush had perfectly adequate international-law arguments to dispose of Saddam Hussein and did the world a favor by doing so, but his attempt at nation-building mired almost all of America’s ground-forces military capability in Iraq for most of his term and hundreds of billions of dollars were wasted by the blundering of the Pentagon and the tinkerers sent to remake an ancient land.

Obama has completely fumbled the discouragement of Iran’s nuclear program, while the U.S. beseeches the assistance of the Russians and Chinese in the imposition of porous sanctions on Iran. China operates North Korea like a mischievous robot bedeviling the world (to the assumed amusement of the ghost of Douglas MacArthur), and the U.S is on both sides of the War on Terror, assisting the Saudis (who finance jihadism) and the Pakistanis (who maintain terrorist factions in Afghanistan). Iraq, the war Obama opposed and Senate majority leader Harry Reid declared to be lost three years ago, is now pronounced a success by Vice President Biden, whose endorsement is the most worrisome danger signal around, as he is always mistaken. (Remember, he plagiarized from one of the most unsuccessful political leaders in modern British history, Neil Kinnock, the blood-curdling plaint that he was “the first Biden in a thousand generations to go to a university.”) George W.’s war is more or less working now, after lasting longer than America’s participation in the two World Wars combined, and Obama’s (Afghanistan) isn’t. The factions and allies are running for cover because the president said we would be out next year. It is now a mess of eels associated with more or less amenable members of the Taliban, not a united anti-Taliban front. The president said, “Words must mean something,” in Prague, on the subject of arms control, but his never do. (And arms control is about to degenerate into universal nuclear military capacity if Iran can deliver a nuclear warhead.)

What is needed is a colossal reorientation of the country away from consumption and toward investment, the cleaning out of the morass of the plea-bargain justice system and attendant vacuum cleaners of the legal and prison industries (and the gigantic fraud of the War on Drugs), drastic education reform, genuine health-care reform, a redefinition of U.S. national interests in the world to what is essential and defensible, and then restructured alliances to reflect shared interests. Until those issues are addressed, all talk of the American superpower is rubbish. Obama’s is the fourth consecutive failed administration, and each succeeding one will make the festering problems more dangerous and difficult. As the problem is misdirection, not internal degeneracy or imperial overreach, it is a decline that will end in recovery, not a fall. It is like a non-terminal illness: America awaits a correct diagnosis, a curative plan, and a competent professional to supervise the recovery. The patient knows there is a problem and wants the cure. To paraphrase FDR, all that is missing is Dr. Comeback.

— Conrad Black is the author of Franklin Delano Roosevelt: Champion of Freedom and Richard M. Nixon: A Life in Full. He can be reached at cbletters@gmail.com.

nationalreview.com



To: calgal who wrote (45338)9/2/2010 3:57:55 PM
From: Peter Dierks2 Recommendations  Respond to of 71588
 
Government Pay: And Now For the Really Bad News
John Tamny, Forbes
August 31, 2010

High federal pay means less capital formation, lower wages and reduced innovation.



By now, most Americans are familiar with the newly revealed statistics concerning federal pay. As we slept, as it were, our federal minders awarded themselves impressive pay/benefits increases that average out to $123,000 per year, compared with $61,000 in the private sector.

This is remarkable on its face considering that those of us in the private sector produce goods and services to earn our wages, while a federal government that lacks resources must expropriate our wealth in order to fund its own activities. To put it simply, federal employees have enjoyed larger average pay and benefits increases for nine straight years, and their benefactor has been us.

To say things are presently upside down is to describe the present situation very mildly. Most of us in the private sector have naively believed for a long time that in return for job security and the ability to work free of the profit-and-loss worries, that government workers have accepted reduced compensation. It's apparent now that all the benefits of "public service" apply, plus the pay trumps by far what one could hope to command in the private economy, recession or no recession.

Sadly, however, that's not even the bad news.

Indeed, as the defenders of federal pay would no doubt tell us, the comparison between federal and private workers isn't an apples to apples comparison. To hear them say it, federal workers have on average higher skill sets and are often advanced when it comes to education.

This should in no way appease us. If it's true that government workers are more educated and in possession of greater skills, then it's also true that a still-difficult economic situation has been made more difficult by virtue of some of our best and brightest offering their skills to the inefficient government sector over the private economy. Their gain is the recessed economy's loss.

As a Federal employee of 15 years who does not even come close to the salary you mentioned...Find your story one sided and misleading.

Read All Comments (55)Post a CommentIt should also be remembered the perverse incentives that exist among federal workers. Not able to advance based on profits, and doing more with less, workers in the government succeed the more the bureaucracy they work for grows, the more lawsuits they win against private actors, the more regulations they impose, and the more fines/fees they lift from the increasingly empty hands of the average American taxpayer.

Not only are we fleeced to cover the rising pay and gold-plated benefits of federal workers, we're essentially paying them to make our lives more difficult. The more they're able to do so, the more they advance.

Considering private businesses, whatever their size they all started out small. And irrespective of their size, businesses need "human capital" in order to grow.

The problem now is that with the federal government aggressively hiring at excessive levels of pay, it is necessarily distorting the cost of hiring for private businesses. The "unseen" is what we must consider in this scenario, and there we can only guess how many world-renowned companies of tomorrow will never see the light of day thanks to Washington increasingly snapping up potentially productive workers.

Looking at small businesses alone, it's well-known that owners often have their profits taxed at individual levels. With those levels set to go up in 2011, entrepreneurs will have their profits confiscated by the very federal government that is driving up the cost of hiring with their money.

Writing about the U.S. from the post-Civil War years up to the end of the 19th century, economist Joseph Schumpeter observed that the genius of the U.S. economy had to do with how the greatest American minds went into private business, and avoided government service altogether. As he pointed out, from 1865 to 1901, lackluster presidents such as Rutherford B. Hayes and Chester A. Arthur occupied the White House, while entrepreneurial geniuses such as Andrew Carnegie and John D. Rockefeller dotted the commercial landscape.

The problem, according to Schumpeter, was that by the 1940s, after a decade of tremendous federal government growth, private commerce had started to lose some of its human firepower to the public sector. As evidenced by present levels of federal pay, something similar could be occurring right now.

And the burden will be very much ours. Contrary to the conventional wisdom suggesting that it's our grandchildren that will pay the bill for an out-of-control government, the more realistic truth is that we're paying the government tab right now through high, and soon to be higher taxes, along with reduced innovation and productivity in the for-profit sector thanks to Washington bidding limited human and financial capital away from the productive parts of the economy. We must always consider the "unseen," and in this case it's the wealth we won't create and the companies that will not materialize thanks to the greedy hand of the federal government.

So while it's surely bad news to find out that how well compensated our federal employees have come to be on our dime, the greater shame here is what this means for the U.S. economy as a whole. Washington is in hiring mode with our dollars, and we're set to pay for its spendthrift ways through less capital formation, lower wages and reduced innovation.

forbes.com