On the Contrary

Fareed Zakaria, in a GPS special, “Restoring the American Dream, Getting Back to Number One.” presented what I think is one of the most important messages to the American people in a long time.  He started by treating Americans to a little reality about being number 1, and presented a well balance program on where we need to go.  He finished by summarizing that American Business is not broken (financial industry excepted), but that our antiquated political system was stifling the radical changes we need to make.  And I will give you a hint:  It is not the Republican slash and burn policies being semi-adopted by the Democrats.

Reality:

“Now I’m an immigrant. I’m not an American by accident or birth but by choice. I voted with my feet and came to this country. So of course I do believe that America is exceptional. But I think it’s important to examine the facts carefully to figure out just where we stand in today’s world. America is indisputably number one by some key measures. We have the world’s largest economy, military, scientific establishment, the biggest technology companies. We are just as indisputably falling behind in many other key areas, well behind other countries.

Let’s take a look at some recent rankings. The United States is the fourth most competitive country in the world economically. Good. We’re only the fifth best country in which to run a business.

America’s enrollment rate for elementary school, however, ranks 79th in the world. We’re only 12th in the percentage of college graduates among rich countries. America’s 15-year-olds are ranked 19th in science and 24th in math. Our infrastructure ranks 23rd. We’re 41st in the world on infant mortality, 49th on life expectancy.

Perhaps most worrying — America is no longer a place where anyone can make it. Last year the OECD issued a study of social mobility across generations. Basically that’s how likely is it you’ll jump out of your parents’ income group.

The U.S. did surprisingly poorly coming in behind Denmark, Norway, Sweden, Germany, France, Canada. Two other such studies confirmed this reality.

Now I know what my perception is about America. Anyone can make it here. And there are lots of high-profile examples of that. But those are anecdotes. The facts say that for the average Joe in recent years, social mobility has slowed and other countries have moved ahead.

Similarly, among rich countries over the last 25 years, our growth rate per person has not been the strongest. Now there are clearly places where we are still number one. The number of guns we own far exceeds any other country. We account for 50 percent of the world’s annual production of weapons.

We are number one in our terms of our total debt to other countries. But there are really many positive places where we are still number one. That’s what I began by listing.

But my point is the picture today is a lot more mixed than boastful rhetoric about America is number one suggests. The question I have really is, what would it take to keep America clearly and comfortably at the top and to restore it to that place in areas in which it has slipped.”

Getting our Mojo back:

“The problem for the U.S. is not that its government is too big or too small. In fact among rich countries our government takes up a smaller share of the economy. It’s that it is highly inefficient.

We spend lots of money on the wrong things and too little on the right things. The problem of the U.S. health care system, for example, is not that the government pays for health care, actually our government pays the least as a percent of the total for health care of any rich country.

The problem is that it is totally inefficient, subsidizing the overconsumption of procedures and technology that don’t actually improve our health.

Similarly, our huge subsidies for housing, agriculture, might be good politics but they are bad economics. Distorting the market, creating false booms and fake industries.

Much federal spending outside of defense and interest payments on the debt goes to subsidize consumption rather than investment. And most of this consumption is for the elderly.

The federal government of the United States spends about four times as much money on old people than it does on children under 18 years olds.

That is surely a sign of a society that is not building for the future but subsidizing the present.

We need to invest in science, technology, infrastructure and education. But we can’t do it unless we stop the massive wasteful subsidies. We don’t need less government or more government, we need different government. We need to be efficient and we need to be flexible.

But to be flexible we need a political system that is flexible and in fact we have one that is highly inflexible.

Now the aspect of America that everyone praises as being truly exceptional is our political system. American democracy is rightly seen as a back-breaking exercise in democracy, blazing a trail that the rest of the world followed.

But that was in the 18th century. Right now we are burdened by that same system with an antiquated electoral college that no one understands, a Senate that doesn’t work, with bizarre laws that make it possible for one senator to block the will of the majority without him even explaining why, a crazy quilt patchwork of tens of thousands of municipalities that create massive overlaps and multiple bureaucracies and total waste.

And electoral system that is geared towards constant fundraising and pandering to interest groups.

Now remember, interest groups represent the present. They lock in the existing structure, the existing mechanisms. There are no interest groups for our children’s issues, there are no lobbying groups for the industries of the future.

But it is heresy to suggest that we might need to do something about a political system that’s totally unable to plan for the future, invest in the future and build for the future.

But I will say it nonetheless. I don’t worry about the American economy. It’s amazingly dynamic and companies will find ways to be competitive in this country.

I don’t worry about American society which is the most open, innovative and amazingly broadminded in the world.

I do worry about American politics which is antique, sclerotic, and unsuited for challenges of the 21st century. If we want to fix America we will need to fix its politics.”

The bottom line is that we need radical changes to the way we are doing business and our government is locked in to protecting the status quo, or to quote Pogo, “We have seen the enemy and they are us.”