The City on the Hill is Bankrupt: Politically, Not Economically.08-07-2011
AAA is gone, and with it, one fears, the City on the Hill. American exceptionalism is a fraught theme, and yet it still provides a demand for action that inspires and stiffens the Emersonian backbone of the nation. It is not the economy that will burn the city to the ground, but our collective political weakness. The question before us is whether there is still enough common spirit left in the United States of America to undergird a regeneration of public life and a commitment to the public good--or will the country drown in a flood of individuals unapologetically craven to their private interests.
We could use some of Emersonian self-reliance right now. For our problems, despite the very real and extraordinary debts we have, are less economic than political, moral, and spiritual. Which is why the calm pleadings of economists saying "its not so bad" ring hollow. And why Standard & Poors was more right than wrong to base its decision not only on economic factors, but also on our political swamp:
The political brinksmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed.
Of course this political morass is not limited to the United States. The European Union has been uniquely incompetent in owning up to the size and severity of the crisis in the Eurozone—consider Italian politicians who refuse to understand that a low-growth economy with 120% of its GDP in debt is a problem. Leaders in Japan have been equally oblivious for 15 years to the fact that their massive debt and culture of passing the buck is simply not working.
But let's return to the City on the Hill. U.S. politicians continue to promise rosy days ahead, talking about the greatness of America as if the dream were eternal. But it is time to wake up and one can only wonder what or whom today will serve as Henry David Thoreau's cock crow to rouse us from our debt-financed consumer binge. Someone, somehow, needs to wake us from our looming bankruptcy.
As Walter Russell Mead wrote earlier today, our bankruptcy is more than just an economic problem:
Of what does this looming bankruptcy consist? In our case it is the looming inability to pay the trillions in unfunded liabilities of all levels of government, but behind it lies a deeper failure and a poverty of soul. Spiritual near-bankruptcy is the common condition that binds China, Japan, Europe, the US and much of the rest of the world together.
Here in the U.S. as in much of the world, we refuse to take seriously what any sane person knows to be true, that the standard of living that has characterized the American Dream for half a century was and is founded upon funny money and debt. We need to take political control of our destiny, but that first requires that we be honest with ourselves and admit that whatever solutions we offer to our problems, most of us will suffer a decrease in the standard of living.
It is an open question how this will happen. Will the highest earners retain their privileges? Yes, barring a political revolution of some sort, which is also a possibility. Will those with wealth keep their money in the United States pay taxes as citizens, or will they move that wealth to tax havens around the world even as they militate for tax rebates and lower tax rates at home? Will we as a nation recognize the need for everyone to suffer together, or will we insist on slogans like "no taxes" and "soak the rich"? But the biggest question is: Will we suffer for nothing or will we somehow find a way to make suffering meaningful so that the city on the hill might rise again?
The changes that come—soon or possibly pushed down the road into the future— will encompass all areas of American life. Medical care will be rationed (rationally or economically); the unique privilege of every family living in its own house is already eroding as college graduates move back in with family; salaries and average wages will decrease; our consumption economy will contract. This will be painful but there is no way to avoid it. The question is, when will we find a leader or a political movement that will actually call upon us to face up to our future, inspire us to build a new city on the hill, and and imagine a way for us to get there?
No thinker understood the threat to public society and public action as clearly as Hannah Arendt. She saw that the philosophy of representative government fit all too well the bourgeois desire to focus on one's private interest and let paid representatives go to Washington simply to ensure that one was left well enough alone to pursue one's dream. She also saw that a consumer society values the immediate needs of life over the more diffuse and human need to build a common world. Amidst all the post-9/11 rhetoric of patriotism, it is easy to forget that we are living through an utter loss of public feeling and common sense in this country and in others beyond. The bond with our past as well as with our future has been cut and the question for all of us is how, or if, we can in some way live in a world without that sense of connection to a past and a future. This is what Arendt meant with the title of her book Between Past and Future, that space of thinking without bannisters, divorced from tradition, where we have nothing to fall back upon but ourselves. It is a scary proposition, but we have no choice but to live up to it.