Column: Happy Birthday, America! Time to grow up
Originally published July 3 2011 Washington Post, Print edition page G1
It’s been 235 years already? America, it’s time to grow up.
~~~
Happy birthday, America!
We have a big party planned for you, with fireworks and barbecues and bands playing and lots of fun for your special day.
You are 235 years young. Compared with other countries such as England and China and France and Russia, you are but a strapping lad. Those guys are practically ancient civilizations.
But the truth is, you are no longer a new nation. You are not the child-state you once were. As you have grown into a mature country, we have been filled with a parent’s pride. There are, however, duties and obligations that come with that maturity.
America, it is time to put away the playthings of your childhood, time to reconsider the follies of your youth. You must start acting your age. I am sure you don’t want to hear another lecture (Young man, I’m talking to you!), but think of this as your graduation commencement address. I hope you begin thinking about your place in the world and what you might to grow into after your birthday bash.
Let’s start with:
Infatuation with “ism”s: Every few decades, you manage to get yourself entangled with some philosophy from the wrong side of the tracks. These torrid affairs always end badly.
Every adolescent goes through this phase. You see a pretty ideology from across the room. She bats her big, blue eyes at you, and you fall head over heels. As any more experienced country will tell you, these infatuations are merely a passing fancy. They are not the makings of solid, long-lasting philosophies.
Your parents made sure you had a good upbringing and a Constitution that sets up some fine parameters for you to live by. How about avoiding the passionate flings with these isms and instead work toward being more pragmatic, more practical, even more technocratic?
Infrastructure: As a younger nation, you could party all over the world, intervening in other nations’ affairs, and still make it to work on time the next day. But you’ve really allowed yourself to go to pot.
You need to start taking better care of yourself. Your interstate highway system was once the envy of the world. You crisscrossed the nation with railroad tracks well over a century ago. Your bridges and tunnels were second to none, and your naval ports handled more tonnage than any three nations combined. You discovered electricity, invented the light bulb, strung electrical wires coast to coast. You invented air travel and opened airports in every major city.
Now look at you: Your roads are pitted, your bridges are falling down and your airports look like they belong in a third-world nation. You call that a naval port? Not only do they look like junkyards, they are still a gaping security concern. And don’t get me started on your electrical grid! It is creaky, inefficient and vulnerable to cyberattack.
While you were getting flabby, the rest of the world was hitting the gym. Most of Europe and nearly all of Asia are in much better condition. Even emerging nations such as India and Singapore have better airports, wireless telecom and broadband Internet.
You’d best start taking better care of your infrastructure — it’s the only one you have.
Magical thinking: When will you learn there is no free lunch? Anytime some fast-talking salesman comes around promising you something for nothing, you fall for the same old scam.
Wise up! You cannot buy every nonsensical infomercial sales pitch for every foolish gadget dreamed up by these hucksters!
You must recognize that:
•You cannot take over a country with a handful of under-equipped soldiers.
•Tax cuts do not pay for themselves.
•There is no such thing as a “temporary” entitlement program.
These are just the most recent false promises made by those city slickers. We know that a sucker is born every minute, but must it be you all the time?
Health: Don’t look now, but your citizens are in even worse shape than your infrastructure. Your people are a nation of obese, sedentary, TV-addicted, junk-food loving, pill-popping couch potatoes.
I know you are a free country and you cannot simply order everyone to hit the gym and skip dessert. But you have made tremendous progress in getting Americans to stop smoking and to wear seat belts. The economic benefits of those two issues alone have been enormous.
Unless you do something about it, the health costs of your citizenry are going to bankrupt you. I have every confidence that if you seriously put your mind to this issue, you will come up with a creative solution.
Loyal opposition: Not everyone in the world (or even in the country) is going to agree with all you say and do. And you know what? That’s okay. Debate is how we reach an intelligent conclusion, how a working consensus is formed.
You unfortunately have this tendency to see the world in black and white. There are nuances and shades of gray. Just because someone disagrees with you does not make them disloyal or a traitor or a bad ally.
And your politicians must remember that every fight does not require a scorched-earth response. Learn from President Ronald Reagan. The Gipper and Tip O’Neill fought famously over all manner of legislation but could always share a beer together after the debate.
Learn to gracefully accept opposing viewpoints and loyal political opposition. It is a sign of maturity.
Money in politics: Over the past 40 years, you have allowed the inflow of special-interest dollars to overwhelm and corrupt the political process. Congress is now a wholly owned subsidiary of Wall Street. The bank bailouts benefited bondholders but not the financial system. There is no reason why your taxpayers should subsidize Wall Street speculators. With Congress in the grip of these special interests, it is impossible to even contemplate reforming the tax code or the regulatory system, much less have an intelligent discussion about a national energy policy.
What happened to your roots as a one-person, one-vote democracy?
The solution might be a constitutional amendment to provide for public funding of federal elections and to restrict, or at least require full transparency about, the special-interest lobbying that has perverted the legislative process.
Government as the problem? “Government” is not the problem, “bad government” is the problem. There is an enormous distinction between the two.
Being surrounded by two oceans — and being so powerful since WWII — has allowed you to become too insular. Your “not-invented-here” attitude has led you to miss many other good ideas. Have a look around the world and see what other countries are doing right:
Canada managed to come through the financial crisis unscathed — what was it about its banking regulations that protected it? Why is Finland the best country for education? Why does Australia have the world’s lowest jobless rate? How are Germany’s highways so darned good? What is it about Japan’s health-care system that has made it the best in the world? Norway has the highest adult literacy level and is often ranked as having the best quality of life; what is it doing right? And Singapore has the highest per-capita GDP and one of the recession’s fastest-growing economies. Why?
It sure wouldn’t hurt you to put your pride aside and take a few lessons from the best ideas in the world.
America, you are 235 years old, and you should be proud of all you have accomplished. You are still the most powerful country on Earth, but if you are not careful, China or the E.U. is going to pass you by.
Enjoy your birthday, but starting tomorrow, you have a lot of work to do. America, it’s time to grow up.
~~~
Ritholtz is chief executive of FusionIQ, a quantitative research firm. He runs a finance blog, The Big Picture.
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July 9th, 2011 at 12:15 pm
I agree we have to grow up but you misdiagnosed the problem. The root of our economic problems is operational rather than political. The objective isn’t balancing the budget. The objective is optimizing the budget. Fiscal optimization at any level of public spending requires balancing tax revenues with spending while running deficits at a rate corresponding to users saving rate. For those of you interested I’ve outlined a laymen’s explanation here – http://DollarMonopoly.com Well-intended policymakers are only as good as their economic advisers. Economists are giving the wrong advice to policymakers because they misunderstand monetary operations.
99.9% of solving complex problems is the diagnosis – not sure if that is true but in this case it sure is
~~~
BR: Who said anything about balancing the budget . . . ?
July 9th, 2011 at 1:12 pm
All of the nations you mentioned have strict immigration policies, no third world ghettos in their larger urban areas and an education system that expects students to take responsibility for their success in either college or vocational tracks.
America’s best hope is a return to the famous JFK line “ask not what your country can do for you, ask what you can do for your country.” My, have we strayed from that expectation.
JFK would probably be labeled as a racist neo-com if he lived in the present.
~~~
BR: Your statement “All of the nations you mentioned have strict immigration policies” is factually incorrect.
Canada has broad and open immigration policies, and lots of ethnic ghettos;
Australia is similar to Canada. Germany just absorbed a goodly chunk of Eastern Europe; Norway (as do most Swedish nations) have had very liberal immigration policies.
Strike one.
July 9th, 2011 at 1:19 pm
we’ll have to contend with this as we “grow up”:
http://theautomaticearth.blogspot.com/
this seems to be happening more and more often lately:
http://news.yahoo.com/wyo-man-charged-killing-3-sons-brother-233728663.html
and just to show you how anti-progressive “our” government is”
http://www.correntewire.com/president_fuck_yous_justice_department_claims_marijuana_has_no_medical_value#more
July 9th, 2011 at 1:33 pm
Time to grow up?
We consume more than we produce.
We are dependent on foreign creditors.
Our infrastructure is old and in decay.
Our population is in ill health.
Our natural resources are depleting.
We fight among ourselves over wealth re-distribution rather than wealth creation.
Seems to me you’re describing an aging, declining empire in decay.
July 9th, 2011 at 1:38 pm
About infrastructure: I’m a very provincial Canadian who graduated and went to Asia to teach English. My trip to New York last year was a shocker. I’m not trying to be an ass here, but JFK airport is not just worse than Siam Reap Cambodia, but way worse. I could go on about the subways, the buses, the museums… America needs an intervention, big time.
July 9th, 2011 at 1:42 pm
DM,
“…Economists are giving the wrong advice to policymakers because they misunderstand monetary operations…” isn’t the issue. Political contributors giving MONEY to politicians determines the effective tax rates of large corporations and the rich… the marginal rates have little to do with what they pay. Economists are fig leafs for policies the constituents demand. ie. low marginal rates for the rich.
July 9th, 2011 at 2:14 pm
[...] July 9, 2011 I have a bee in my bonnet. And it’s been buzzing about in there for a while, but became really agitated when I read Barry Ritholtz’ Washington Post editorial from July 3/2011. [...]
July 9th, 2011 at 2:14 pm
‘You must recognize that: •You cannot take over a country with a handful of under-equipped soldiers.’
True enough. But this is like telling a heart attack patient that he’s got impacted ear wax — it doesn’t begin to address the immediate crisis. And it hints, perhaps unintentionally, that a larger number of well-equipped soldiers could take over a country.
The US has a trillion-dollar-a-year global military empire which doesn’t pay for itself, and is gobbling up the money needed to fund all the other good ideas mentioned in the essay.
Since closing down NATO and bringing the troops home is not even on the political agenda, I presume that the bozos in the control room are going to drive this bus right off the cliff. I’m busy jimmying a back window to leap out before they do.
See ya!
July 9th, 2011 at 3:14 pm
VennData – Taxes should be lowered across the board. What your failing to understand is that government debt is simply the currency user’s savings as a matter of accounting. It’s a digital resource – a digital account corresponding to all the savings of currency users’ in banknotes, deposits, and treasuries. Run deficits. The US does not borrow. Currency users, like china, save in our currency. The economic profession has this whole thing backwards. The Kansas City school of folks are the only ones on the right track.
July 9th, 2011 at 5:52 pm
DollarMonopoly — the US is running the lowest taxes as a percentage of GDP in half a century. Budget balancing requires both sides of the ledger — income & spending.
And, most responsible adults do not believe the “government debt” is a matter of accounting nonsense. If you want your currency to be worthless, just keep printing (oh, wait).
As to the Kansas City school of folks — the “free lunch / print because deficits dont matter” crowd? They are a bunch of dangerous fools.
July 9th, 2011 at 6:06 pm
“You are 235 years young. Compared with other countries such as England and China and France and Russia, you are but a strapping lad. Those guys are practically ancient civilizations.”
A nation, or a Government is based on laws, words. The US is one of the oldest continuous governments in the world.
All of Europe has been made over several times (new constitution anyone?) since the 1770′s, and now they are trying yet again with another supra state, the EU.
Has someplace been called France for 400 years? Yes. Is it really the same government, under the same charter? Not at all.
July 9th, 2011 at 6:37 pm
@Barry
Hola! Congrats on the fantastic blog. I never miss a posting. I agree the MMT crowd is absolutely piss poor at explaining MMT. In fact, I went on a tirade against them this afternoon for their ridiculous doublespeak. Read the first two comments of a post they made today.
http://neweconomicperspectives.blogspot.com/2011/07/qe3-treasury-stylego-around-not-over.html
The point is the government debt of an issuer is the currency users savings as a matter of accounting. Just like every asset has a corresponding liability. Issuer debts = Users Savings. The more users save the more debt the issuer will have. The US does not borrow from China. China saves in the currency of the US. When a currency user, like China, saves the government must spend to replace those dollars to maintain a given output….or cut taxes to free up dollars that are destroyed by taxes. The point is from a monetary standpoint the goal is never to balance the budget but rather to optimize the budget. Fiscal optimization at any level of public spending of a currency issuer requires balancing tax revenues with spending while running deficits at a rate corresponding to the users saving rate. If your interested I’ve outlined a laymen’s explanation with diagrams. No econ speak i promise. If after glancing over it in 3 minutes you don’t buy it I’ll promise to bug you about it again.
http://dollarmonopoly.blogspot.com/p/issuer-user-paradigm.html
July 9th, 2011 at 6:39 pm
@ I meant not to say “not bug you”. I promise. :-)
July 9th, 2011 at 7:11 pm
Thanks for printing full article. I wanted to read it last week.
Frank Turner — PHOTOSYNTHESIS
http://www.youtube.com/watch?v=mQMVHhxTtLc&feature=player_embedded
“The best thing about the future is that it comes only one day at a time.”
~Abraham Lincoln
Some of us are taking baby steps — I think.
(at 53, this was the first summer I thought it best not to don the Bikini in public anymore!!)
July 9th, 2011 at 7:25 pm
Great post Barry. What I notice is that, like you, more and more people are growing to be absolutely pissed off and that is what it will take to truly change things. After all, satisfied people or even marginally uncomfortable people don’t rally to change. We need more REASONED outrage like yours. My thanks to you for carrying more than your share of the load.
July 9th, 2011 at 8:27 pm
crutcher Says:
“About infrastructure: I’m a very provincial Canadian who graduated and went to Asia to teach English. My trip to New York last year was a shocker. I’m not trying to be an ass here, but JFK airport is not just worse than Siam Reap Cambodia, but way worse. I could go on about the subways, the buses, the museums… America needs an intervention, big time.”
It’s embarrassing having to admit U.S. investment in infrastructure has been a disgrace for nearly 50 years. But saying America needs an intervention? Surely, you don’t realize we are exceptional.
July 9th, 2011 at 11:43 pm
“Surely, you don’t realize we are exceptional.” I’m 95% sure that was a joke, but also aware that 95% of Americans wouldn’t get it…
July 10th, 2011 at 7:58 am
crutcher Says:
“Surely, you don’t realize we are exceptional.” I’m 95% sure that was a joke, but also aware that 95% of Americans wouldn’t get it…”
By your own admission you are a foreigner (a terrorist), educated (an elitist), a world traveler (harbor a global perspective) and worst of all, a teacher (selfish, lazy, propagandizing socialist poisoning our children). – Everything about you; we here in the U.S. hate (fear).
The fact you understand only 95% about what I wrote is something we don’t have to care about because we are exceptional. The fact that 95% of Americans don’t understand about what I wrote is something they don’t have to care about because they are exceptional.
You just don’t get it, and you never will. We just don’t care, and we never will, and we don’t have to. We are exempt from caring about what anyone thinks, including ourselves, because we are exceptional. You only have to get used to it.
FYI: The fact that U.S. infrastructure degraded backward to that of a 3rd world nation is because we are a free country with an elected, representative government that spends our tax money the way we want it spent. We are the greatest country in history on earth (correction – make that the universe). So obviously, we have the infrastructure we are telling our politicians we want and deserve. Anyway, we don’t care, and don’t have to, because we are exceptional.
July 10th, 2011 at 8:47 am
873450 you nearly had me on the floor.
I really like what Andrew Bachevich has to say on this subject, but I’ve come to realize that Americans will never voluntarily re-conceptualize what it means to be American. The world-view you describe is, however, going to disintegrate over the course of our lives. What replaces it I fear.
July 10th, 2011 at 9:09 am
[...] I had an interesting/hilarious exchange on Barry Ritholtz’s blog on America’s self-conception. http://www.ritholtz.com/blog/2011/07/wapo-column-happy-birthday-america-time-to-grow-up/comment-page... [...]
July 10th, 2011 at 10:08 am
DollarMonopoly @ 6:37
“When a currency user, like China, saves the government must spend to replace those dollars to maintain a given output”
Yes it is true that if a country like China saves $1 trillion it has basically taken those dollars out of our economy and our economy would slow if nothing is done. Same goes for the other trillions that are basically just parked somewhere. But the Kansas model is a little to simplistic because it is not the amount of dollars that drives the economy it is the momentum of dollars (= amount x speed). So you can fix the problem by either increasing the amount of dollars or by increasing the speed of existing (remaining) dollars. So the problem is that China brought the speed of a trillion of our dollars down to zero, so the remaining dollars have to circulate faster in order to keep the same monetary momentum going (or else the economy will slow). Current monetary expansion is trying to compensate for slowing of the speed of money (as people are breaking money speed by putting it into savings rather than spending it). They need to also have a policy to increase the speed of money. If they want to reduce the deficit (take money out of the system) the have to have a plan for how to get the remaining money to move faster -or total money momentum (the economy) will slow further and we will be dumped into a double dip recession.