[Peace-discuss] America in Decline

[C. G. Estabrook]

America in Decline

Friday 5 August 2011
by: Noam Chomsky, Truthout | Op-Ed

“It is a common theme” that the United States, which “only a few years ago was 
hailed to stride the world as a colossus with unparalleled power and unmatched 
appeal is in decline, ominously facing the prospect of its final decay,” Giacomo 
Chiozza writes in the current Political Science Quarterly.

The theme is indeed widely believed. And with some reason, though a number of 
qualifications are in order. To start with, the decline has proceeded since the 
high point of U.S. power after World War II, and the remarkable triumphalism of 
the post-Gulf War '90s was mostly self-delusion.

Another common theme, at least among those who are not willfully blind, is that 
American decline is in no small measure self-inflicted. The comic opera in 
Washington this summer, which disgusts the country and bewilders the world, may 
have no analogue in the annals of parliamentary democracy.

The spectacle is even coming to frighten the sponsors of the charade. Corporate 
power is now concerned that the extremists they helped put in office may in fact 
bring down the edifice on which their own wealth and privilege relies, the 
powerful nanny state that caters to their interests.

Corporate power’s ascendancy over politics and society – by now mostly financial 
– has reached the point that both political organizations, which at this stage 
barely resemble traditional parties, are far to the right of the population on 
the major issues under debate.

For the public, the primary domestic concern is unemployment. Under current 
circumstances, that crisis can be overcome only by a significant government 
stimulus, well beyond the recent one, which barely matched decline in state and 
local spending – though even that limited initiative probably saved millions of 
jobs.

For financial institutions the primary concern is the deficit. Therefore, only 
the deficit is under discussion. A large majority of the population favor 
addressing the deficit by taxing the very rich (72 percent, 27 percent opposed), 
reports a Washington Post-ABC News poll. Cutting health programs is opposed by 
overwhelming majorities (69 percent Medicaid, 78 percent Medicare). The likely 
outcome is therefore the opposite.

The Program on International Policy Attitudes surveyed how the public would 
eliminate the deficit. PIPA director Steven Kull writes, “Clearly both the 
administration and the Republican-led House (of Representatives) are out of step 
with the public’s values and priorities in regard to the budget.”

The survey illustrates the deep divide: “The biggest difference in spending is 
that the public favored deep cuts in defense spending, while the administration 
and the House propose modest increases. The public also favored more spending on 
job training, education and pollution control than did either the administration 
or the House.”

The final “compromise” – more accurately, capitulation to the far right – is the 
opposite throughout, and is almost certain to lead to slower growth and 
long-term harm to all but the rich and the corporations, which are enjoying 
record profits.

Not even discussed is that the deficit would be eliminated if, as economist Dean 
Baker has shown, the dysfunctional privatized health care system in the U.S. 
were replaced by one similar to other industrial societies’, which have half the 
per capita costs and health outcomes that are comparable or better.

The financial institutions and Big Pharma are far too powerful for such options 
even to be considered, though the thought seems hardly Utopian. Off the agenda 
for similar reasons are other economically sensible options, such as a small 
financial transactions tax.

Meanwhile new gifts are regularly lavished on Wall Street. The House 
Appropriations Committee cut the budget request for the Securities and Exchange 
Commission, the prime barrier against financial fraud. The Consumer Protection 
Agency is unlikely to survive intact.

Congress wields other weapons in its battle against future generations. Faced 
with Republican opposition to environmental protection, American Electric Power, 
a major utility, shelved “the nation’s most prominent effort to capture carbon 
dioxide from an existing coal-burning power plant, dealing a severe blow to 
efforts to rein in emissions responsible for global warming,” The New York Times 
reported.

The self-inflicted blows, while increasingly powerful, are not a recent 
innovation. They trace back to the 1970s, when the national political economy 
underwent major transformations, ending what is commonly called “the Golden Age” 
of (state) capitalism.

Two major elements were financialization (the shift of investor preference from 
industrial production to so-called FIRE: finance, insurance, real estate) and 
the offshoring of production. The ideological triumph of “free market 
doctrines,” highly selective as always, administered further blows, as they were 
translated into deregulation, rules of corporate governance linking huge CEO 
rewards to short-term profit, and other such policy decisions.

The resulting concentration of wealth yielded greater political power, 
accelerating a vicious cycle that has led to extraordinary wealth for a fraction 
of 1 percent of the population, mainly CEOs of major corporations, hedge fund 
managers and the like, while for the large majority real incomes have virtually 
stagnated.

In parallel, the cost of elections skyrocketed, driving both parties even deeper 
into corporate pockets. What remains of political democracy has been undermined 
further as both parties have turned to auctioning congressional leadership 
positions, as political economist Thomas Ferguson outlines in the Financial Times.

“The major political parties borrowed a practice from big box retailers like 
Walmart, Best Buy or Target,” Ferguson writes. “Uniquely among legislatures in 
the developed world, U.S. congressional parties now post prices for key slots in 
the lawmaking process.” The legislators who contribute the most funds to the 
party get the posts.

The result, according to Ferguson, is that debates “rely heavily on the endless 
repetition of a handful of slogans that have been battle-tested for their appeal 
to national investor blocs and interest groups that the leadership relies on for 
resources.” The country be damned.

Before the 2007 crash for which they were largely responsible, the new 
post-Golden Age financial institutions had gained startling economic power, more 
than tripling their share of corporate profits. After the crash, a number of 
economists began to inquire into their function in purely economic terms. Nobel 
laureate Robert Solow concludes that their general impact may be negative: “The 
successes probably add little or nothing to the efficiency of the real economy, 
while the disasters transfer wealth from taxpayers to financiers.”

By shredding the remnants of political democracy, the financial institutions lay 
the basis for carrying the lethal process forward – as long as their victims are 
willing to suffer in silence.

(Noam Chomsky’s most recent book is ''9-11: Tenth Anniversary.'' Chomsky is 
emeritus professor of linguistics and philosophy at the Massachusetts Institute 
of Technology in Cambridge, Mass.)

© 2011 Noam Chomsky

Distributed by The New York Times Syndicate.

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