October 3, 2013
Nation divided as American dream becomes a nightmarePosted in Global Economy · 251 comments ·
Despite the outrage and theatrics in the partisan TV studios, last night the average New Yorker seemed more concerned about how ‘Breaking Bad’ ended than what was happening down on Capitol Hill.
And yet it is a strange vista in America when a few free-market capitalists succeed – where Marx and Mao failed – in paralysing the United States government. But that is America these days. It’s a place where flag-waving, war-supporting patriots rail about the dangers of the US government, while traditionally anti-establishment, left-leaning liberals jump to the defence of the institutions of state.
The country does seem truly divided.
Political and social enmities run deep and for the first time in many years this foreign visitor, watching TV and reading the papers, notices the amount of fear that is being pedalled.
Everywhere you read and hear about these internal “threats to the middle classes”. The threats themselves are rarely specific, but centre on job insecurity, failing education outcomes for the average guy and, of course, an understandable paranoia of the ageing baby boomers about healthcare, medical outlays and pensions.
Fatalism and fear are not the stuff that built the American dream.
The project is built on a belief in the future and the notion that tomorrow will be better than today. This is the great social contract that drives America forward. Yet it seems to be, if not quite unravelling, certainly fraying at the edges for many Americans.
Maybe it is beginning to dawn on people that there is actually more social mobility in socialist Sweden than in capitalistic America.
Maybe the soaring rhetoric of the initial Obama months raised expectations to such a high level that now reality is causing a more dramatic slump in people’s perceptions.
Five years into a patchy recovery, things are undoubtedly better, but confidence – that magic elixir of any economic renaissance – is in very short supply and where it might be evident, on Wall Street, simply reinforces the notion that the rich are doing just fine, while the middle classes struggle.
Outside New York, deep in the heart of the country, in Indiana, I got a similar impression. Chatting to regular guys, all baseball caps and “Fighting Irish” T-shirts, in the Linebacker bar in South Bend, the normal effervescence of ‘Middle America’ appeared to be dented. And it has been undermined by politics.
Ahead of a Notre Dame – the Fighting Irish – American football game and to the background music of Garth Brooks (who else?), most people are resigned to the fact that politics has become so divided in Washington that it is more of a spectator sport than a political process; unless, of course, you are involved in the game. Then it is personal and each side blames the other.
One guy I talked to before the game was wearing an original Irish rugby shirt from the 1980s . Do you remember the type with the big collars and plenty of material – designed before rugby shirts went all aerodynamic?
He had picked it up in Ireland on a visit to the homeland in 1987. His people were from Kilkenny and he had been back to Ireland plenty of times.
We talked about all sorts of stuff but when we discussed politics he became quite animated and believed the problem to be Obama’s intransigence and refusal to engage with the Republican Congress.
How could he pick up the phone to the president of Iran and not his fellow American politicians in the Senate?
Up to now I had heard the opposite about the shutting down of the government. The typical line was how could these renegades in the Congress put over 700,000 people out of work just because they don’t want medical care extended to 11 million citizens?
However, this Irish-American was telling me it was all Obama’s fault and that the Republican Congress was being logical and yet being treated by the president with less courtesy than the president of Iran!
It was only after our chat that I discovered his brother was Paul Ryan – the Irish-American Republican Vice Presidential candidate.
So, to Republicans, it is all the fault of a remote, ideological president to do a deal.
To the Democrats, the Republicans are conservative loons who are intent on shutting down the government to prove a point. So where does America go from here?
Although it sounds apocalyptic, shutting down the government isn’t that rare. Such shutdowns have occurred many times, although not since the Speaker Gingrich-versus-President Clinton battles in late 1995 and early 1996. There were 17 shutdowns between 1976 and 1996.
What is truly worrying is if the US fails to increase the debt ceiling in the next few weeks. Politicians have to raise the ceiling for overall American government debt levels. Since 1917, America has had a legislative limit on the amount of debt the state can incur.
But every time the limit is close to being breached, politicians arrive at a consensus after much talk-show posturing and the ceiling is lifted.
But what if relations are now so strained that they can’t reach accommodation and the government shutdown debacle is a dry run for a catastrophic debt-ceiling denouement?
Failure to lift the debt ceiling by October 31 would result in the US Treasury running out of money and it would destroy fragile confidence as millions of workers wouldn’t be paid.
Now that is the real threat. If something dramatic doesn’t happen politically in the next few weeks, the US could be on the cusp of engineering a politically driven slump.
In an era of great US TV dramas, that may be beyond even the most imaginative of scriptwriters.