A Socialist Behemoth?

To Washington Post columnist George F. Will:

George F. Will

Your noteworthy and extremely well-written column of January 6, 2012, appeared online as "Government: The redistributionist behemoth," but in the print edition it was called "The socialist behemoth." The implication of the morphing headline makes the point of the whole column: you think our federal government's policy inclinations are "redistributionist," thus "socialist," thus bad.

As an old-style liberal, I disagree with both epithets.

True, our government has been shaped by progressive policies for more than century. I don't dispute that. But I take exception to your finding this an increasingly degenerate and bankrupt way of doing things today.

I do agree that many of Uncle Sam's longstanding policies have redistributionist consequences, either intentionally or as side effects. Since we started paying federal income taxes a century ago, they have typically been progressive, with the rich paying higher rates than the less affluent. The primary intent has been to sufficiently finance government outlays. The secondary intent has been to distribute the tax burden upward. That, as a matter of simple fairness, leaves more money in the pockets of those who need every dollar they can get.

A bad idea, that? I can't see why.

Is this, as you put it, an instance of government "supplanting markets as society's primary allocator of wealth and opportunity"? It might be so if the top tax rate were downright confiscatory, with every extra dollar taken in by the wealthy vacuumed right out of their pockets, leaving no spare change. But the top rate is now only 35 percent ... far from confiscatory.

You say the redistributionist lust of progressive government "constantly expands under the unending, indeed intensifying, pressures to correct what it disapproves of — the distribution of wealth produced by consensual market activities." Were those "unending, indeed intensifying, pressures" toward ever greater wealth redistribution why we enacted the Bush tax cuts, then? But they favored the entire range of taxpayers, no? They were anti-redistributionist.

Given our country's history, in fact, I'd say that we tend to slosh back and forth between redistributionism and anti-redistributionism. Progressive government's urge to redistribute and equalize does have its checks and balances.

You note that "the elderly are, after a lifetime of accumulation, better off than most Americans: In 2009, the net worth of households headed by adults ages 65 and older was a record 47 times that of households headed by adults under the age of 35 — a wealth gap that doubled just since 2005." But that's an argument for means-testing Social Security and Medicare. It's not an effective argument that entitlements for the elderly are simply bound, by their very nature, to become a behemoth that will one day devour America.

I support means-testing, and I think many other progressives do, too. Means-testing old age entitlements is a tweak we now need to implement.

As for tweaks: you say that our tax code — "government’s favorite instrument for distributing wealth to favored factions" — gets repeatedly tweaked: " ... about 4,500 times in 10 years."

What's bad about that? At least it bespeaks that Congress can do things, despite what so many are claiming today.

Redistributionist government "siphons power into itself," you say. Concomitantly, we see a political culture of increased "rent-seeking." Rent-seeking is, says Wikipedia, an attempt to obtain economic advantage "by manipulating the social or political environment in which economic activities occur, rather than by creating new wealth."

David Brooks

New York Times columnist David Brooks writes in his recent op-ed piece "Where Are the Liberals?" that rent-seeking, run amok, convinces us that "the whole system is rigged."

And, yes, we do hear that kind of talk today. I admit it. But what's the fix for the problem?

We learned in the late nineteenth century that unfettered economic activity on the part of railroad barons and manufacturers' trusts likewise made people feel the system was rigged. The progressive era got its start when the federal government stepped in to bust the trusts.

Sometimes effective progressive government is the fix.

Brooks calls rent-seeking "the disease that corrodes government at all times and in all places." And I would agree with him, and with Will, that we now have too much of it — what Brooks calls the Instrument Problem:

Americans may agree with liberal diagnoses, but they don’t trust the instrument the Democrats use to solve problems. They don’t trust the federal government.

But, I would say, what is needed in not government that is less progressive in its goals. Rather, we need government that is less bureaucratic and more transparent in its methods.

To get it, as Brooks points out, today's liberalism desperately needs "a Martin Luther, a leader committed to stripping away the corruptions, complexities and indulgences that have grown up over the years."

So true. President Obama ran on "change we can believe in" in 2008 and won handily. Many, myself included, thought he would become liberalism's Martin Luther. It's not too late for him to do so now. If he does, he could put paid to George Will's "socialist behemoth" argument for a generation or more.

Don't Even Scan My Junk!

To Washington Post op-ed columnist Ruth Marcus:

As a liberal Democrat, I generally agree with your practical yet slightly-left-of-center opinions, if I may so characterize them, but your column "Don't touch my junk? Grow up, America" (Nov. 24) is unconvincing to me. I just don't want to have my genitals subjected to a stranger's gaze or touch so that some bureaucrat's or politician's idea of enhanced airline security is served.

I have been patted down in an airport, by the way. It happened years ago, in Kenya, which is a country that may need such intrusive procedures. I'm not yet convinced such procedures are needed here.

Maybe "whether this is real security or security theater is to some extent unknowable," as you admit. Yet I want to be shown some hard evidence, please, before I submit to the depersonalization of a full-body scan or patdown that is not clearly for my own individual — or at least somebody else's — benefit.

Here are actual airport-style scans of a woman and a man, with faces blurred:

Those are "millimeter-wave" scans. The alternative Rapiscan process gives:

The second impresses me as quite graphic, the image of the male notably so. How exactly, I'd like to ask, is it any less depersonalizing if a scanner blurs or obliterates my face while it's outlining my "package" so faithfully?

Many of the things you wrote bother me greatly, Ruth:

" ... where is the harm if some guy in another room, who doesn't have a clue who I am and doesn't see my face (it's obscured on the machine), gets a look at my flabby middle-aged self?" Maybe so, but you're still being depersonalized — rendered anonymous — while your "junk" is put on display. This is acceptable???

The question of one's flabbiness being limned, and one's middle-aged sag being exposed to view, makes your position more tenuous, not less, I'd say. I myself am far enough past middle age to expect to hear loud guffaws emanating from that nearby room of high-tech privacy invasion. But even if I were young and buff, I'd still loudly say, "Keep your eyeballs off my junk." (And, by the way, are those prying eyeballs ensconced in a nearby room female eyeballs or male eyeballs?)

"The images are automatically deleted once the screening is completed"? Not necessarily ... from Gizmodo.com, "One Hundred Naked Citizens: One Hundred Leaked Body Scans" is proof that they don't always get dumped into the bit bucket.

"'Don't touch my junk' may be the cri de coeur - cri de crotch? - of the post-9/11 world, but it's an awfully childish one"? It misses the point for you to say how immature some of the blogging has been about this issue. Immature men and women, like the rest of us, have a right not to be ogled by complete strangers or patted down by begloved officials in Transportation Security Administration uniforms.

"The marginal invasion of privacy is small relative to the potential benefit of averting a terrorist attack," you say? Two thoughts:

• One, the invasion of privacy is not marginal, it is (as I said) depersonalizing. Patdowns are no better just because the patter-downer can see our face and we his or hers. Breast, genital, and posterior prodding, no matter how brief, is depersonalizing. What is depersonalizing is never marginal.

• Two, exactly how much do the odds of a terrorist attack decline if this kind of scanning/body-touching is insisted on? I'd like a rigorous comparison, please, between:

1. The odds of my plane crashing with no survivors, due to causes other than a terrorist bomb
2. The odds of my plane being blown up by a terrorist bomb if we go back to the older, less intrusive screening procedures
3. The odds of my plane being blown up with the new procedures in place

If odds-number-three can't be demonstrated to be palpably greater than odds-numbers-one-and-two, is odds-number-three justified?

"We let people touch our junk all the time in medical settings"? Air travel is a part of many people's day-to-day lives. If I had to have my "junk" put on display on a basis more regular than an annual doctor's exam or mammogram, I'd certainly start to feel I was getting "objectified," after some period of time. In the case of frequent air travel — which I personally don't engage in — I'd like to feel that the benefits-to-depersonalization ratio was as significant as with the oocasional medical procedures I do voluntarily undergo.

"I undergo the pat-down, if I must, for the greater public benefit"? Again, where are the numbers to show how great the public benefit is?

Breast cancer survivors having their prostheses inspected; bladder cancer survivors having their urine bags ruptured ... yet you cover this by saying, "Effective screening does not require a complete suspension of common sense"? Do we really expect common sense to govern what each one of dozens or hundreds of TSA employees do in the performance of their duties?

An obvious problem with scanning/patting procedures that are this intrusive is that the line between what is OK and what is unacceptable is way too slender for unintentional oversteppings of that line to be rendered sufficiently uncommon.

And that doesn't even include the potential for intentional overstepping. Why might one think TSA employees any less immature than the average blogger?

"The stepped-up screening has generated a fascinating fusion of left-right outrage"? Well, duh. Maybe that's because there's no quantifiable, objectively verifiable case to be made for the stepped-up screening!

I could go on and on, Ruth, but I think you get my point. In a nutshell, I just don't see that stepped-up, intrusive screenings and pattings down of my private bodily parts in an attempt to reduce the likelihood of someone secreting non-metallic explosives on board an airplane enhances the public welfare in a quantifiable way.

And even if it truly forestalled what it purports to forestall, what is to stop the bad guys from, as you so delicately put it, "hiding explosives in body cavities" as the next phase of their war on civilization? If it ever comes to that, what would prevent your "reasonable" depersonalization-creep from one day acquiescing in anal and vaginal inspections?

An Old-Style Poll on the Debt Crisis

First, take this poll:

1. Raise your hand if you think Uncle Sam — the United States government in Washington, D.C., that is — has been living way beyond his means.
2. Raise your hand if you know what the phrase "President Obama's budget commission" refers to.
3. Raise your hand if you know that the co-chairs of that commission came out with a paper last week that gives some ideas about reining in our ballooning federal deficit and debt before they rein in America's future economic growth.
4. Raise your hand if you have the slightest idea what it was that the co-chairs suggested.  
5. Raise your hand if you believe the federal budget needs to be balanced — or, if the budget is not balanced entirely, at least the remaining yearly budget deficit has to be reduced to a fraction of what it is today.
6. Raise your hand if you think the budget can be balanced, or the deficit sufficiently shrunk, without any tax increases.
7. Raise your hand if you think the budget can be balanced, or the deficit sufficiently shrunk, without cutting federal spending in any major way.
8. Raise your hand if your hand was up for either of the previous two questions.

Now, if your hand was up for question 8 — or even if it wasn't — read Ruth Marcus's column in today's Washington Post and then take the poll again.

If you are still left with your hand up on question 8, congratulations! You may be one of the roughly half of Americans who believe the "budget fairy [can] magically solve the problem by tucking a trillion or two under the national pillow," and that "snipping away at waste, fraud and abuse and sprinkling magic growth-dust on the economy" will fix everything.

Income Inequality: Way High by Historical Standards

The Washington Post's economics columnist Steven Pearlstein has an article and graph in today's newspaper showing how high income inequality has gotten in America.

Here's his "Percentage of Americans' pretax income going to top 10% of households" graph:

Before the recent economic downturn, fully 50% of the (pretax) income received from private (non-governmental) sources went to the top "decile" (10 percent) of earners. The bottom nine deciles (90 percent) of earners were left to split the remaining half of total pretax income.

SInce the downturn, the share of the top 10 percent has edged downward. But it still receives fully 48 percent of private pretax income!

The last time the slice of the pie going to the richest 10 percent was in the same high range as it is today was around 1929 — just about the time a stock market crash led to the Great Depression!

From the end of World War II until about 1976, according to the graph, the top 10 percent took home only about one-third of private pretax income. Pearlstein calls these "the 'golden years' for the U.S. economy."

As you go higher up the income ladder, things get more and more skewed. "By 2007, the top 1 percent of households took home 23 percent of the national income," writes Pearlstein. That's almost a quarter of national income, going to just 1 out of 100 American households.

That figure was attained after "a 15-year run in which [the top 1 percent] captured more than half — yes, you read that right, more than half — of the country's economic growth." Translation: from 1992 to 2007, as gross domestic product and national income rose mightily, the bottom 99 percent of households took home less than half of the overall increase.

Here's a chart showing the inequailty in income in a different way:

(It's from this web page. Scroll down about halfway to the "August 3, 2008--Growing Inequality in Income" entry.)

In this second chart we see that as of 2006, the bottom 90 percent of earners had an income level that was, on average, $30,173 — down from $31,437 in 2000. Meanwhile, the average family in the "top 10% to 5%" range of incomes took home $117,688 in '06. There were almost 7.5 million such families, compared with over 133 million in the bottom 90 percent.

Then, once you get into the "top 5% to 1%" range and above, the income disparity grows by leaps and bounds. There were, for example, fewer than 15,000 families in the "top 0.01%" in 2006, each taking home an average income of over $17 million dollars!

* * * * *

Pearlstein adds:

Because so much of the nation's income is siphoned off to the super-rich ... a struggling middle class trying to maintain its standard of living [must] take on more and more debt. ... [Meanwhile,] in order to respond to the stagnant incomes of their constituents, politicians took a number of steps to keep the "American Dream" within reach, including subsidization of home mortgages and college loans [and] politicians also were quick to cut taxes for the middle class even when it meant running up the national debt to pay for popular entitlement programs and government services.

See the common thread? When income inequality is high, there are irresistable pressures both at the national and at the family level to take on huge amounts of debt.

In an earlier post, I showed this graph:


It illustrates the fact that the percentage of our gross domestic product represented by the size of our national debt (i.e., the total amount of debt owed by the federal government to those holding its bonds and other debt instruments) has never been higher in our nation's history ... with the single exception of the years immediately following World War II.

The national debt represents the accumulation over time of our annual federal budgetary deficits. Unless we quickly rein our annual federal deficit in by means of a series of difficult political choices, this ratio of national debt to GDP will (according to the Congressional Budget Office's "alternative baseline scenario") soar way past the sky-high post-WWII level, sometime during the 2020s.

Even if we make the tough political choices now, the CBO's rosiest scenario — the "extended baseline scenario" — has the debt-to-GDP ratio increasing from today's already high-by-historical-standards level.

Pearlstein also points out that the "polarization of income distribution in the United States coincides with a polarization of the political process. Just as income inequality has eroded any sense that we are all in this together, it has also eroded the political consensus necessary for effective government."

Translation: don't hold your breath until the politics-as-usual we see in Washington and around the country today steps up to the tough political choices that will make the CBO's disturbing "extended baseline scenario" come true, as opposed to the truly scary "alternative baseline scenario."

* * * * *

We await with bated breath, meanwhile, the report forthcoming by December 1 from the National Commission on Fiscal Responsibility and Reform. Appointed in early 2010 by President Obama and headed by Alan K. Simpson, a former Republican senator from Wyoming, and Erskine Bowles, White House chief of staff under our last Democratic president, Bill Clinton, this commission (see its website) is ...

... charged with identifying policies to improve the fiscal situation in the medium term and to achieve fiscal sustainability over the long run. Specifically, the Commission shall propose recommendations designed to balance the budget, excluding interest payments on the debt, by 2015. In addition, the Commission shall propose recommendations that meaningfully improve the long-run fiscal outlook, including changes to address the growth of entitlement spending and the gap between the projected revenues and expenditures of the Federal Government.

The recommendations of the commission will be non-binding on Congress or the president. It is just barely possible, however, that they would be submitted to Congress for an up-or-down vote, without allowing Congress the ability to pick and choose among the recommendations. If that even succeeds, it's unclear how the package would be translated into actual legislation and passed as such, with the president's eventual signature.

Even so, the commission approach may be our best hope to rein in deficits and balance the federal budget any time soon. Doing so is the only way to get the debt-to-GDP ratio back under control, barring stunning GDP growth which is not likely to happen.

Meanwhile, we need to address income inequality. There's no way we will be able to rein in the federal largesse aimed by politicans at "keeping the American Dream within reach" of the broad middle class if a fairer distribution of income is not somehow brought about, thus reducing the pressure on the politicians to keep the federal money tap flowing, deficits be damned.

* * * * *

The figures I gave earlier were for pretax income. We use a "progressive" income tax in the U.S. to charge the well-to-do a higher percentage of their income, based on their tax bracket. Hence, after-tax income distribution is not quite as skewed as pretax income.

You can check out an easy-to-use tax calculator here to see how tax brackets work. Try it! Enter your filing status (single, married filing jointly, etc.) and the tax year you are curious about to see what the tax brackets looked like in that year.

Now set the filing status to married filing jointly, the most common status for the proverbial "family of four." Advance the tax year in successive steps from 2000 through 2003. Notice how the tax rates for the top three brackets suddenly dropped in 2003.

By 2003, taxpayers in the third bracket from the top — with taxable incomes of at least $114,650 — were taxed at 28 percent of the taxable income above the lower edge of their bracket. The same bracket was taxed at 30 percent the previous year. Meanwhile, the two top brackets went from 35 percent and 38.6 percent to 33 and 35 percent, respectively. Those changes reflected the "Bush tax cuts."

According to Steven Pearlstein's article, households that take home more than $110,000 a year (in today's dollars) constitute the top 10 percent of our population income-wise. But in the 2010 tax year, as the tax brackets worksheet shows, the bottom edge of tax bracket #3 is fully $137,300. That means that a huge slice of America's top 10 percent income-wise currently gets taxed in the fourth bracket down, at a maximum rate of only 25 percent!

* * * * *

The Bush tax cuts will expire at the beginning of 2011 unless Congress steps in. It is not entirely clear which earlier year's brackets would be reverted to, or whether the dollar amounts associated with those reverted brackets would be raised to offset inflation. Yet if one assumes the 2001 brackets would come back into force, possibly with inflation-adjusted dollar amounts, the worksheet suggests that the three (no longer four) tax brackets embracing roughly the top decile of incomes would have to pay taxes at maximum rates of 30.5, 35.5, and 39.1 percent. Thus, everyone in the top decile would pay taxes at higher maximum rates than now.

We hear that Democrats want to let the Bush cuts expire for the most well-off while keeping them in force for the vast middle class. But we also hear that they would raise taxes (by letting cuts lapse) on only the top two brackets, not the top three, as would be needed to pull in extra tax dollars from the over 13 million households in the top decile but below (roughly) the top 1 percent.

In my opinion, we will instead need to raise taxes on the entirety of the top decile if we want to be able to afford not raising them on those in the bottom 9 deciles!

Why doesn't it feel like an economic recovery?

Today's The Washington Post features "Why it doesn't feel like a recovery," a revealing graph accompanied by a short article. They are presented interactively here.

Here's the crucial graph itself:



You'll need to view the online presentation for full details. Here's a summary:

Our economy's "size" is given by its gross domestic product: how much valuable "stuff" gets produced by Americans each year. The potential GDP grows as the potential size of the workforce does. Meanwhile, improved techniques of production are usually expected to increase the "productivity" of workers, so they can make ever more "stuff" per hour on the job than they otherwise could. That's why there is an almost straight diagonal line in the graph that steadily ascends as the years roll by, reflecting a GDP that potentially grows at a nearly constant rate.

But the actual GDP is currently under — less than — that potential GDP. That's the area shown in red on the graph.

Actual GDP can sometimes exceed the line shown as potential GDP, during short, unsustainable bursts of economic activity. The areas shown in blue — the bigger of the two that are shown comes around the years 2000-2001 — reflect that.

The key point is that the vast shortfall between actual and potential GDP that we see today is what is wrong with the economy. Too many people without jobs, too much industrial machinery idle, too many office buildings under full capacity — it all adds up to a woefully underperforming economy.

This is so even though actual GDP stopped dropping and began heading upward in the middle of last year, 2009. The graph shows that fact ... and it is what economists mean when they say that the recession officially ended then. We are no longer in recession because we have positive GDP growth now; that's all that means. It does not mean the economy is in good shape.

What would it take to get the economy back to the level where actual GDP matches potential GDP, so that everyone who is not simply "between jobs" actually has a job, factories are all humming, office buildings are full, retail stores are not empty, etc.?

As the graph shows, we can get back to that point as soon as 2012 — in time for the next presidential election — if only actual GDP could rise at the rate of 6 percent per year between now and then. 6 percent growth would so far outstrip the more modest expected rise in potential GDP, that all but the roughly 5 percent of workers who are typically "between jobs" at any given moment are actually working.

However, if actual GDP growth takes place at a more modest rate of 3 percent a year, it will take us until 2020 to squeeze all the red out of the graph.

And it gets worse. If the rate of actual GDP growth tops out at only 2 percent a year into the foreseeable future, we will never squeeze all the red out. In fact, in that scenario the unemployment rate, which is now at an unacceptable 9.7 percent, would rise to fully 11.9 percent by 2020 if GDP grows at a scant 2 percent between now and that year.

In short, this graph gives us all valuable insight into why words like "the recession ended in mid-2009" are meaningless from a practical — and political — perspective today.

The "Relocating" of America

My last post, America Dislocated, was about how America needs to recover its old, small-town values. I said I believe that our loss of erstwhile small-town values is like a joint that has been dislocated. We've been successfully favoring it for decades, but now it needs to be (painfully) reset.

That is what is in fact in store for us, I said, owing to a huge impending crisis over our national debt. According to Congressional Budget Office estimates ...

From CBO's deficit forecast shows need for early action, Washington Post editorial, Saturday, July 31, 2010

... between now and about 2035 the ratio of federal debt to the size of our economy — the debt-to-GDP ratio — is likely to soar to unprecedented, unsustainable levels. This so-called "alternative baseline scenario"(the top blue line in the graph) could, if everything goes right, fail to materialize ... but even the rosier "extended-baseline scenario" puts debt-to-GDP ratios at levels higher than at any time in our nation's history, with the exception of the period surrounding World War II.

Even the rosier projections involve debt-to-GDP levels that are exorbitant by all peacetime standards, and look like they will continue long into the indefinite future ... unless something is done. What might that something be?

• We can try to head off the crisis by raising taxes, thereby shrinking the annual budget deficits that feed into the national debt.
• We can cut expenditures, with a similar belt-tightening result.
• We can grow the GDP. (If GDP grows, the ratio of debt-to-GDP shrinks.)

Growing the GDP is problematic. If we could do that at will, we'd have no lingering recession today.

Raising taxes is likewise problematic. Republicans emphatically don't want to raise them on the rich, which would happen if the Bush income-tax cuts are allowed to expire on schedule at the end of 2010. GOP members of the House and the Senate would prefer to renew the Bush cuts in their entirety, but, failing that, they would like to renew the Bush cuts as they affect the top two income brackets specifically. Democrats want to keep the cuts for middle-income taxpayers and eliminate them for the top two brackets. Who knows where all this will end up, in a midterm election year?

Cutting expenditures is also problematic. Where do you cut?

• Cutting interest payments on the debt is out, right off the bat.
• So, effectively, are cuts in spending on the military, national defense, and homeland security.
• Cuts in entitlement programs like Social Security and Medicare are super-hard to accomplish ... and it is increasing Medicare/Social Security outlays for retiring baby boomers that most threaten to break the bank.
• The recent health care reform package makes things even worse by imposing a yet greater financial burden on Uncle Sam, and even many of its supporters agree that its failure to seriously contain medical costs will have to be remedied in the very near future.
• Remaining items in the federal budget are called "discretionary spending" — and they're almost as hard to eliminate as all of the above. Many of them are instances of "pork," a.k.a. "earmarks," that legislators get inserted in bills to help the folks back home in some way. Constituents love pork/earmarks when their own state or district is benefitted ... and hate it as a general concept when they themselves are not the beneficiaries. But because locally helpful pork gets legislators re-elected, it's nearly impossible to eradicate.
• Much of the rest discretionary spending goes to programs that benefit everybody, such as federal assistance to local schools. You have to be a curmudgeon to oppose that ... or a member of the extreme political right which insists that Uncle Sam has no business telling the states and local school boards what to do to keep the "money tap" open.

Whatever the category of federal spending, it is hard to cut.

Why? At bottom — and this applies even to military, national defense, and homeland security expenditures, most of which wind up in pockets of us Americans here at home — it's because we have developed an "entitlement mentality." Put bluntly, we depend on the federal "money tap" to shield us from our onetime small-town, communitarian obligations.

The urge to leave
Bedford Falls is strong
for George Bailey.

Think of George Bailey in "It's a Wonderful Life." He wants to leave Bedford Falls, see the world, make his mark on it. And why not? He's seemingly not needed at the Building & Loan his father founded.

But, as it turns out, if he leaves (as he learns from the guided tour an angel gives him of the dystopia Bedford Falls will become if he goes) he will in effect be killing the community his father helped build. Instead, he stays and sets things to rights. Cue the happy ending!

In 1946, when "It's a Wonderful Life" was made, the federal "money tap" had been opened wide due to WWII and, before that, the New Deal during the Great Depression. Frank Capra, the film's director, was clearly worried that America's small towns were dying, as was the sense of communitarian responsibility which George Bailey dodged until set straight by an angel.

After WWII we had ... yet more federal programs. One was the G.I. Bill of Rights that sent returning veterans to college and on to lives in the new suburbs, such as Levittown, that were springing up like mushrooms. Federal largesse grew, and as it grew, it was more than matched by GDP growth for quite a long time, as cheap oil from America and abroad fueled economic progress. (Our "cheap oil tap" was shut off in the 1970s with the first Arab oil embargo.)

But we were also getting warnings, in the form of books like Sloan Wilson's 1955 novel "The Man in the Gray Flannel Suit," that there was trouble in paradise. In 1956, the casual, carnal, illicit sex going on among neighbors on Grace Metalious's imaginary "Peyton Place" showed us how a real place like Levittown could turn into the complete antithesis of our old, small-town values.

When we left small-town America behind, three important, and interrelated, things happened:

First, we freed ourselves of strictures that formerly held our individual behavior in check. We became what George Bailey might have become if he had in fact left Bedford Falls.

Second, we accordingly grew able to shine — brightly, individually — and to live unprecedented sorts of lives that were ofttimes super-productive economically, technologically, or in some other important way. But we at the same time became "men in gray flannel suits" — à la the currently popular TV series "Mad Men."

There was, as I say, trouble in paradise.

Third, those who for various reasons were unable to shine in the brave new world we were creating were made wards of the expanding welfare state.

If the welfare state now has to be curtailed to head off a debt-to-GDP crisis — and I think it must — then how will that affect American lives? My hypothesis is that at some point we will have to rein ourselves in, in terms of the individual freedom we have known. It was that freedom which, in effect, allowed us to "leave Bedford Falls behind" and to live life on our own unfettered terms.

Why will that happen? Because we will have to reinstate our presently dormant communitarian values, the ones that prevailed cinematically in Bedford Falls, and actually in the small towns of America's past.

And why will we have to reinstate our dormant communitarian values? Because the only alternative would be, as the federal money tap dries up, the dystopia which George Bailey's angel showed him.

Nobody wants that.



***

But we have to be on guard here. Small-town values have traditionally been narrow-minded values.

Nobody ought to want those again.

I talked in my earlier post about a recent Washington Post op-ed piece by Kathleen Parker, Olive Street, by heart, which extolled her tiny three-block enclave in Washington, DC. On Parker's street ...

Olive Street, NW
in Washington, DC

... the people are kind. The kind people of Olive Street include (gasp!) a pair of gay men, next door to Parker, who have been together for a quarter century. They also include those who, like Parker, help watch over neighborhood children whose ethnicity (gasp! again) is not the same as that of their adoptive parents. Would such families fit in, in Bedford Falls?

They are going to have to fit in, in a "relocated" America.

I see the "relocating" of America as upholding the good, communitarian values of our small-town past and as refusing to uphold the narrow-mindedness of that past.

For Joel Fleischman, it's
4,000+ miles back
to the Big Apple

Remember "Northern Exposure," the early-1990s TV series? The denizens of fictional Cicely, Alaska, were about as variegated as those of Olive Street, Washington, DC, but that didn't matter: they somehow coexisted as an egalitarian, big-tent community.

Dr. Joel Fleischman, fresh from from New York and medical school, had managed to get deposited there and desperately wanted to get away. A lucrative career awaited elsewhere. But he was under contract; he had to stay. As he became unwillingly enmeshed in the Cicely community, he learned values of self-denial, mutual caring, and communal integrity that he'd never imagined as a medical student.

We are about to become Joel Fleischman ... all of us. We are about to be permanently relocated to community-minded, tolerant, self-sufficient Cicely, AK.

This has to happen: the federal money tap is about to dry up. We, in all our variegated diversity, are going to need a resuscitated Bedford Falls Building & Loan — a metaphorical stand-in for local, communitarian spirit  — to come back to life and help us over the rough patches, real person face-to-face with real person.

America Dislocated

Well, go on now and kiss it goodbye,
But hold on to your lover,
'Cause your heart's bound to die.
Go on now and say goodbye to our town, to our town.
Can't you see the sun's settin' down on our town, on our town,
Goodnight.
—Iris DeMent, "Our Town"

Post
Columnist
Kathleen
Parker

In a recent Sunday Washington Post, in Olive Street, by heart, 2010 Pulitzer Prize-winning columnist Kathleen Parker is right on target: Today's America is pining away for lost small-town values.

Parker describes an idyllic three-block-long enclave in Washington D.C. where she has nurtured her own personal desire for community for the past four years. Then, after extolling Olive Street's virtues, the columnist reveals she is pulling up stakes for "a much bigger town — New York City — to begin a new adventure."

In the Big Apple, will she find next-door neighbors like Jack and Craig, who took her in the night a friend died? Among the "daily expressions of what it means to be human" that Parker attributes to this gay couple of 25 years' standing have been ...

... the dozens of times I knocked on their door to say, "I'm hungry and out of food," knowing they would say, "You're in luck!"

Will Parker find in NYC another ...

... Meaghan, a widow [who] went to Guatemala to adopt Josephina, who, now bilingual and a determined tricyclist, has become the block's child. Not long ago, Meaghan married Nigel, who added Reagan and Drew to our neighborhood brood.

Maybe Parker will find another Olive Street. Or, maybe not.



Another piece from the same Sunday Post, Crafton family enjoys rare closeness after seven years together at sea, tells of a family-of-five who bought a double-masted, oceanworthy sailing vessel in 2003 and, with several months-long stays in various island communities en route, took it all the way around the world. Dad, Mom, two teenage girls and one teenage boy, living and sleeping together in a cabin no bigger than a hotel bathroom ...

The Craftons in their cabin

... and they had the time of their lives.

What's leaving America entirely and then enduring the culture shock of coming back home after several years away have to do with small-town values? Three things. One: father Tom Crafton reports, "The day we moved onto the boat, the sibling rivalry stopped. I don't think [the kids] ever complained, not once." Two:

Vanuatu, where the people owned the least and smiled the most, was one of their favorites [among stopping off points]. They stayed three months. "They are the happiest people in the world," Tom says. "It reinforced everything we believed about putting time with the family over this blind pursuit of material things."

Small-town values — Vanuatu is essentially a small town on a tiny island — are family values. Three:

Rudest encounter: a few days after reaching Maryland [upon their return home], when a cranky boat owner warned Jena and Ben to keep their rowboat away. "I can't remember a mean word anywhere else on our trip," Tom says. "We're relearning how things are around here."

Williamsburg
reenactor

Yet another article in the same edition of the Post, "Tea party" activists drawn to Williamsburg and its portrayal of Founding Fathers, talks about a recent influx of sometimes temper-toting tourists to Colonial Williamsburg, Virginia, where scenes of our country's founding are reenacted daily. These members of the Tea Party movement are ofttimes speaking up, and out, at the reenactments:

They clap loudly when an actor portraying Patrick Henry delivers his "Give me liberty or give me death" speech. They cheer and hoot when Gen. George Washington surveys the troops behind the original 18th-century courthouse. And they shout out about the tyranny of our current government during scenes depicting the nation's struggle for freedom from Britain.

"General, when is it appropriate to resort to arms to fight for our liberty?" asked a tourist on a recent weekday during "A Conversation with George Washington," a hugely popular dialogue between actor and audience in the shaded backyard of Charlton's Coffeehouse.

Standing on a simple wooden stage before a crowd of about 100, the man portraying Washington replied: "Only when all peaceful remedies have been exhausted. Or if we are forced to do so in our own self-defense."

Williamsburg tourists being instructed
in using a musket

In pre-Revolutionary America, Colonial Williamsburg was a small-town seat of local government set in a farming community. Thomas Jefferson, who lived at Monticello, another dot on the map in Virginia, was a farmer.

Add all three of these recent Post pieces together, and you get an indictment of today's dislocated America. If you don't actually live in a small town — as few of us do today; this blogger comes from small-town people but has never himself lived in a small town in 63 years — you have to be extremely lucky to find an Olive Street where you live. You have to go to great lengths, such as sailing the whole family around the globe in a cramped twin-master, to put aside today's hyper-material culture and bond tightly with your own kin. And you are likely to be increasingly angry that the simpler America Jefferson and others knew has vanished.

Ex-Alaska
governor
Sarah Palin

Which is why this blogger thinks Sarah Palin will be elected our next president in 2012.

I think of Palin as Ronald-Reagan-in-a-bra — which, for all you misogynists out there, is not meant as a slight or a slap against the former Alaska governor and GOP vice-presidential candidate. This country is overdue for a female chief executive, and I think Palin will presently become its first.

President Reagan was much like Palin in many ways. He had little grasp of the nuances of current affairs in the 1980s and was the exact opposite of a policy wonk. Ditto, Palin. (Except that both were/are much smarter than we liberals give them credit for. It was just that they had/have the gift of sieving out the daily buzz that stands in the way of their enacting their guiding principles, whatever they actualy are. We'd all be better off if we had a little of the same.)

Reagan was a consummate actor, folksy and telegenic. Ditto, Palin — though she has never been paid to read lines in movies and on TV, as Reagan was for decades. Palin is simply a natural at it — as was the young Reagan. He just happened to stumble into a profession that gave him an outlet for his inborn acting bent.

Then he stumbled into another: politics. Reagan the politician could come up with lines, pithy and humorous, that epitomized what he wanted to make us believe he stood for. Ditto, Palin.

Reagan:

Government is like a baby. An alimentary canal with a big appetite at one end and no sense of responsibility at the other.

Palin:

I love those hockey moms. You know what they say the difference between a hockey mom and a pit bull is? Lipstick. 

Reality check time:

• Under Reagan, the national debt ballooned as a percentage of GDP. Reagan wanted to convince the Soviet Union, through an American arms buildup, that we were dead serious about opposing the "evil empire." Reagan also wanted smaller, cheaper government, true, but he wanted to scare the communists in Moscow even more.
• We have yet to see which of her pet convictions Sarah Palin will sacrifice in the name of ... well, of whatever it is that really motivates her. We do know (see Anne Applebaum's recent Post op-ed piece, GOP shows historic amnesia on spending cuts) that "as mayor of Wasilla, Sarah Palin hired a former [ex-Alaska Senator Ted] Stevens chief of staff to be a Washington lobbyist. As a result, the 6,700 inhabitants of [Palin's own small town of] Wasilla enjoyed $27 million in federal earmarks over a four-year period." That's over $1,000 of federal largesse per Wasilla resident per year!

Still, even if she's not always made good on her small-govrnment rhetoric, it's clear to me that Palin marches to the beat of her own drummer — as did Reagan — and will not be hemmed in as president (should she be elected) by the Tea Party movement or anything else.

How American, by the way, for Sarah Palin to have a quintessentially small-town independence from any and every mainstream set of beliefs and constraints that may come down the pike.

President
Barack Obama

President Obama, whom this blogger adores, will, in 2012, lose to Palin because he has taken on the thankless task of trying to heal the side effects of the dislocation of America without necessarily fixing the dislocation proper.

Small-town, Main Street America would never have produced the fat cats on Wall Street who made a financial balloon out of "bad paper" — subprime mortgages that no local savings and loan would have countenanced — and inflated it to the point where it burst, taking the economy down with it. Now Obama, with his bailouts and stimulus plan, is trying to patch things up and put Americans back to work. But what he doesn't seem to get is that Americans want their jobs back, sure, but they also want to get back to small-town values that the faceless Wall Street fat cats, like other miscreants before them, have blithely detonated.

In a small town, everyone takes care of everyone. When people are down on their luck or in poor health, other people step in to help. Today, with that small-town mentality a perennially endangered species, we need hugely expensive, massively intrusive "Obamacare" health reforms, bailouts, stimulus plans, etc., etc., etc., in lieu of what was once the American way of life.

We now face a ballooning of the national debt over the next decade or more that will make the Reagan balloon in the 1980s, extending as it did into the 1990s, look like a baby bump. By 2020, if things don't go exactly right — and they won't — our national debt as a percentage of GDP will dwarf even that of the World War II period:

From CBO's deficit forecast shows need for early action, Washington Post editorial, Saturday, July 31, 2010

That steeply rising top blue line which will breach a debt-to-GDP ratio of 150 percent by about 2030 is the Congressional Budget Office's "alternative baseline scenario." It will be, says the Post editorial cited in the caption, what happens if our political leaders wimp out and extend the Bush tax cuts, index the alternative minimum income tax to the rate of inflation, and fail to reduce Medicare payments to doctors dramatically. But that's not the main point. Even if those bad choices are avoided in the short term ...

... growth in spending on federal health-care programs and Social Security would drive up debt to about 80 percent of GDP by 2035. That is, actually, the rosy scenario.

In Reagan's time, debt-to-GDP never got above 50 percent.

The CBO's best case/worst case scenarios reflect the huge cost, I'd say, of trying to use big government to offset our loss of small-town values. Small-town America would never pollute the well everyone drinks from, but our pollution levels today threaten to inundate coastlines everywhere with polar icecap meltdowns due to global warming. The Tea Party right resists believing that because ... because what, after all, is the proposed solution? More massive government intrusion in the form of a carbon tax — whether it's an explicit one or a hidden one that emerges from a cap-and-trade system!

The CBO's frightening debt-to-GDP predictions largely reflect spending on federal health-care programs and Social Security as the baby boomers retire. Those programs are, I'll say again, substitutes for having a "small-town someone," perhaps kinfolk nearby, who will set aside their own private pursuit of more and more "stuff" and take care of you in time of sickness, old age, or economic need. Social Security was a product of the New Deal in the Great Depression, which in the graph above shot America's debt-to-GDP upward to then-unprecedented heights. This was also a time of massive human dislocation: think of the small-town Okies forced by adversity to migrate from the Dust Bowl to California.

Sign of the times
in the 1970s

That there was not a similar blip in the 1960s, when Medicare began as part of President Lyndon Johnson's Great Society initiative, is very likely a reflection of strong GDP growth during that era — fueled by cheap petroleum, a sweet situation that ended abruptly in the 1970s with the first Arab oil embargo. Since Reagan, the only period in which debt-to-GDP has shrunk has been under President Clinton. As Anne Applebaum points out in GOP shows historic amnesia on spending cuts, President George W. Bush, supposedly a small-government consrvative, expanded government spending ...

... by an extraordinary 104 percent. By comparison, the increase under President Bill Clinton's watch was a relatively measly 11 percent (a rate ... lower than during Ronald Reagan's). In his second term, Bush increased discretionary spending — that means non-Medicare, non-Social Security — 48.6 percent. In his final year in office, fiscal 2009, he spent more than $32,000 per American, up from $17,216.68 in fiscal 2001.

It's only gotten worse under President Obama, says Applebaum, "the Obama administration is far more profligate than Clinton or Bush, terrifyingly so."

So it looks to me as if the so-called welfare state, full of ever-expanding federal entitlements, is a dangerously overinflated tire that has already been patched too much. It looks as if the only way to avoid a blowout is to get debt-to-GDP radically back in check — which is going to mean massive new tax revenues, as well as cutbacks in "discretionary spending" and maybe even in entitlement benefits and eligibility.

Or, put it another way: It looks like the only really effective way to deal with the coming debt-to-GDP threat — given that new taxes and spending cutbacks are, both of them, political poison pills in today's culture of dependency on Uncle Sam's largesse but resentment of the tax hikes which, short of going further into debt, are necessary in order to pay for it — is to somehow reconstitute small-town values in America. To eliminate the need for massive federal entitlements in the first place, by making people's general welfare a matter of local, face-to-face concern.

Sign of the times
in the 1930s

Our society, I am coming to believe, has been "dislocated" and "out of joint" since at least the New Deal under Franklin Roosevelt in the 1930s, when Uncle Sam began taking responsibility for helping Americans who could no longer rely on local, face-to-face charity to keep them afloat in hard economic times such as the country had never seen before.

It was a pragmatic response to being between a rock and a hard place, economically and socially. Local, face-to-face concern for one's hard-luck neighbors was not going to get the job done. The federal government had to step into the breach. The New Deal didn't so much set our country's "dislocated joint" properly as give us a crutch so we didn't have to walk on it.

I think that in view of the debt-to-GDP crisis that loom just ahead of us, we now need to reset the nation's "dislocated joint" properly, for a change — which, like all joint resettings, will unfortunately involve a lot of short-term pain and will require a physician (our political leadership) with great courage and resolve.

By "resetting the joint" I mean weaning ourselves off federal largesse and reinstituting the small-town concern for our neighbors' welfare that is the best — nay, only — real alternative. No one says that will be easy.

This need for short-term pain on the part of the populace and political courage on the part of its leaders is what just about all of the ambitious Obama agenda is trying to head off, through ever greater federal tinkering with the way things get done in this land, and also with what things (eschewing health insurance, for instance) Americans are allowed to do.

This insistence on re-patching a bulging, unpatchable tire is what Sarah Palin symbolically stands against. What she symbolically stands for — whatever her actual record as mayor of Wasilla — is a return to America's small-town values and a concomitant reduction in the size of federal discretionary (and even entitlement) outlays.

That's why I think she'll be our next president, come January 2013.