May 2008

Publisher’s View Governance

By Steven J. Moss

The first sign that our institutions were starting to weaken occurred in late 2000, when the U.S. Supreme Court decided which candidate would ascend to the presidency.  Amidst accusations of a deeply flawed voting process in Florida, and despite the fact that Al Gore won the election by more than a half-million votes, the Republican-dominated court put George W. Bush into the White House.  Since that time our financial institutions have been roiled by the dot-com crash, which wiped out $5 trillion in market value of technology companies; the home mortgage crises, which blew the windows out of millions of Americans’ only significant asset; and the near halving of the dollar’s value.  

Simultaneously, the transportation sector has been crushed under oil prices that have almost quadrupled, and an air transit system in which thousands of flights have been cancelled as a result of poor aircraft maintenance and airline bankruptcy.  Meanwhile, our food system is in crises:  under the weight of steady population pressures, fisheries have collapsed, and an emerging tug-of-war between crops grown for fuel versus for food has helped prompt almost a doubling in prices since 2000.  

Slower moving crises also remain unaddressed, with both Social Security and Medicare looking to become insolvent well before the last baby boomer is ushered into their final resting place.  The sky isn’t exactly falling, though it may be rapidly warming.

The irony is that every one of these crises was avoidable.  Proper – essential – regulation of our financial markets would have signaled to eager stock and home buyers that something was amiss, and put a stop to ruinously risky lending practices.  The imposition of higher federal mileage standards – which remained essentially flat for more than a decade and a half – sooner would have saved billions of barrels of oil, reducing the upward price pressure on jet fuels, and lessening the need to turn straw into fuel.  And the adoption of transparent and effective voting procedures before the turn of the century election would likely have resulted in a different presidency.

Americans have never been quick to address our national problems.  It took more than three-quarters of a century to end slavery; even then legal freedom for Blacks was only granted after a four year civil war, and many more decades passed before women and minorities achieved any kind of real equality.  The great depression lasted a decade, and was only turned around by our entry into World War II.  Our nation is akin to a large, ocean liner; slow to pick-up speed, though once in motion hard to stop.  Which also explains why many of us haven’t yet experienced any crises-induced pain.  The U.S. economy and its institutions are so large that we can coast for several years, on a sea of debt and hubris, before drifting to a stop.

Soviet-style communism collapsed under the weight of too much incompetent government.  We’re in similar danger as a result of a much smaller amount of the same.  We’ve relied too long and too deeply on capitalism to solve our problems.  We can’t consume our way out of the holes we’ve dug, no matter how green our products are or even with a few hundred dollars of extra cash borrowed from the next generation.  Instead we need to rebuild our institutions, re-regulate the economy, and re-call our brightest minds to government service.          

Chances are we’ll find a way out of our current mess:  we may be slow moving when it comes to governance, but we’re also smart, dedicated, and fundamentally well-meaning.  But we can’t take that for granted.  The sky’s still blue, and most of us still have jobs and mortgages.  It’s the perfect time to start patching our creaky ship of state.     

 


   

 

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