Between June 2007 and November 2008, Americans lost an estimated average of more than a quarter of their collective net worth. By early November 2008, the Standard & Poor 500 stock index was down 45% from its 2007 high; prices for homes had dropped 20% from their 2006 peak. Total home equity in the United States, that was valued at $13 trillion at its peak in 2006, had dropped to $8.8 trillion by mid-2008. The value of retirement assets held by American declined by 22%, from $10.3 trillion in 2006 to $8 trillion in mid-2008. During the same period, savings and investment assets lost $1.2 trillion and pension assets lost $1.3 trillion. According to Roger Altman ["The Great Crash, 2008," Foreign Affairs] these losses, together, totaled $8.3 trillion.
The lingering effects of the Great Recession continue. As of today, one in every five Americans is either unemployed or underemployed. According to the U.S. Census Bureau, as of 2009, 50.7 million Americans lacked healthcare insurance coverage, while 43.6 million of our fellow citizens lived in poverty. This week, as the newly elected Congress takes office, the Republican majority propose to cut at least $100 billion from domestic spending, despite the evidence of continued widespread misery. These same Congressmen, however, have vowed to increase military spending which, for the 2010 budget, totaled $721.3 billion.
Something is very wrong. Austerity, as Paul Krugman and Joseph Stiglitz have warned, is an incredibly irresponsible, reckless and counter-productive policy during a recession. It produces a further contraction in the economy since government spending is no longer available to offset reduced demand in the private sector. Ironically, The "welfare-through-warfare" sector of the American economy remains the only area of economic growth, although one wonders how any rational person could accept the premise that waging perpetual warfare abroad, with a military largely recruited from the ranks of the poor but commanded by an increasingly professional warrior class of officers - many of whom are themselves the children of officers - can be a positive good.
The fist decade of the 20th Century marked the end of the Golden Era and the beginning of the Progressive Era in American Politics. Because of pervasive belief that the society was best served when individuals were left to pursue their fortunes without government regulation (laissez-faire), a few individuals - the Vanderbilts, the Roosevelts, the Carnegies - were able to amass incredible, untaxed fortunes and to exercise virtual monopolistic control over the American economy. Simultaneously, the creation of an industrial had spawned huge poverty slums, misery and economic inequality while the lack of government regulation over commerce meant that thousands were daily sickened from uncontrolled pollutants, tainted foods and adulterated products. In response to that challenge, Herbert Croly wrote The Promise of American Life in 1909.
As Croly noted, "the traditional American confidence in individual freedom has resulted in a morally and socially undesirable distribution of wealth." Croly urged the creation of national government that would break-up monopolies and pursue regulation in the public interest."It is, then, essential to recognize that the individual American will never obtain a sufficiently complete chance of self-expression, until the American nation has earnestly undertaken and measurably achieved the realization of its collective purpose. As we shall see presently, the cure for this individual sterility lies partly with the individual himself or rather with the man who proposes to become an individual; and under any plan of economic or social organization, the man who proposes to become an individual is a condition of national as well as individual improvement. It is none the less true that any success in the achievement of the national purpose will contribute positively to the liberation of the individual, both by diminishing his temptations, improving his opportunities, and by enveloping him in an invigorating rather than an enervating moral and intellectual atmosphere."
"It is the economic individualism of our existing national system which inflicts the most serious damage on American individuality; and American individual achievement in politics and science and the arts will remain partially impoverished as long as our fellow-countrymen neglect or refuse systematically to regulate the distribution of wealth in the national interest. I am aware, of course, that the prevailing American conviction is absolutely contradictory of the foregoing assertion. Americans have always associated individual freedom with the unlimited popular enjoyment of all available economic opportunities. Yet it would be far more true to say that the popular enjoyment of practically unrestricted economic opportunities is precisely the condition which makes for individual bondage. Neither does the bondage which such a system fastens upon the individual exist only in the case of those individuals who are victimized by the pressure of unlimited economic competition. Such victims exist, of course, in large numbers, and they will come to exist in still larger number hereafter; but hitherto, at least, the characteristic vice of the American system has not been the bondage imposed upon its victims. Much more insidious has been the bondage imposed upon the conquerors and their camp-followers. A man's individuality is as much compromised by success under the conditions imposed by such a system as it is by failure."
Croly's insights are as valuable and inspiring today as they were 102 years ago. Perpetual warfare; tax breaks for the wealthy; our continued acquiescence to bottom-line business decisions that are based solely upon concerns for the next quarter of the fiscal year; and business decisions that ignore the long-term adverse consequences caused by unrestrained "global" competition, with its flood of imports created by cheap labor in the Third World, will ultimately impoverish all of us.
The lingering effects of the Great Recession continue. As of today, one in every five Americans is either unemployed or underemployed. According to the U.S. Census Bureau, as of 2009, 50.7 million Americans lacked healthcare insurance coverage, while 43.6 million of our fellow citizens lived in poverty. This week, as the newly elected Congress takes office, the Republican majority propose to cut at least $100 billion from domestic spending, despite the evidence of continued widespread misery. These same Congressmen, however, have vowed to increase military spending which, for the 2010 budget, totaled $721.3 billion.
Something is very wrong. Austerity, as Paul Krugman and Joseph Stiglitz have warned, is an incredibly irresponsible, reckless and counter-productive policy during a recession. It produces a further contraction in the economy since government spending is no longer available to offset reduced demand in the private sector. Ironically, The "welfare-through-warfare" sector of the American economy remains the only area of economic growth, although one wonders how any rational person could accept the premise that waging perpetual warfare abroad, with a military largely recruited from the ranks of the poor but commanded by an increasingly professional warrior class of officers - many of whom are themselves the children of officers - can be a positive good.
The fist decade of the 20th Century marked the end of the Golden Era and the beginning of the Progressive Era in American Politics. Because of pervasive belief that the society was best served when individuals were left to pursue their fortunes without government regulation (laissez-faire), a few individuals - the Vanderbilts, the Roosevelts, the Carnegies - were able to amass incredible, untaxed fortunes and to exercise virtual monopolistic control over the American economy. Simultaneously, the creation of an industrial had spawned huge poverty slums, misery and economic inequality while the lack of government regulation over commerce meant that thousands were daily sickened from uncontrolled pollutants, tainted foods and adulterated products. In response to that challenge, Herbert Croly wrote The Promise of American Life in 1909.
As Croly noted, "the traditional American confidence in individual freedom has resulted in a morally and socially undesirable distribution of wealth." Croly urged the creation of national government that would break-up monopolies and pursue regulation in the public interest."It is, then, essential to recognize that the individual American will never obtain a sufficiently complete chance of self-expression, until the American nation has earnestly undertaken and measurably achieved the realization of its collective purpose. As we shall see presently, the cure for this individual sterility lies partly with the individual himself or rather with the man who proposes to become an individual; and under any plan of economic or social organization, the man who proposes to become an individual is a condition of national as well as individual improvement. It is none the less true that any success in the achievement of the national purpose will contribute positively to the liberation of the individual, both by diminishing his temptations, improving his opportunities, and by enveloping him in an invigorating rather than an enervating moral and intellectual atmosphere."
"It is the economic individualism of our existing national system which inflicts the most serious damage on American individuality; and American individual achievement in politics and science and the arts will remain partially impoverished as long as our fellow-countrymen neglect or refuse systematically to regulate the distribution of wealth in the national interest. I am aware, of course, that the prevailing American conviction is absolutely contradictory of the foregoing assertion. Americans have always associated individual freedom with the unlimited popular enjoyment of all available economic opportunities. Yet it would be far more true to say that the popular enjoyment of practically unrestricted economic opportunities is precisely the condition which makes for individual bondage. Neither does the bondage which such a system fastens upon the individual exist only in the case of those individuals who are victimized by the pressure of unlimited economic competition. Such victims exist, of course, in large numbers, and they will come to exist in still larger number hereafter; but hitherto, at least, the characteristic vice of the American system has not been the bondage imposed upon its victims. Much more insidious has been the bondage imposed upon the conquerors and their camp-followers. A man's individuality is as much compromised by success under the conditions imposed by such a system as it is by failure."
Croly's insights are as valuable and inspiring today as they were 102 years ago. Perpetual warfare; tax breaks for the wealthy; our continued acquiescence to bottom-line business decisions that are based solely upon concerns for the next quarter of the fiscal year; and business decisions that ignore the long-term adverse consequences caused by unrestrained "global" competition, with its flood of imports created by cheap labor in the Third World, will ultimately impoverish all of us.