The Politics of Decline

It's not a mystery to anyone who watches the political goings-on in Washington D.C. and elsewhere that the two parties are in terminal gridlock over not only what to do but over what is the reality we should be doing something about. Perhaps the only consensus to be found is that the position of these United States is very tenuous. I call the gridlock "terminal" because as each party is prevented from putting forth any program based on it's version of reality in a meaningful way, the efficacy of the differing programs can never be fully measured. The result is a stasis at a time when the systems that the country have operated by for decades are showing their age and in serious need of a revamp. But rather than plumb the depths of the revamping I would like instead to survey the two parties basic assumptions as I understand them currently and argue why I believe a fundamental clearinghouse of many of these assumptions is in order.

Again, in the spirit of full disclosure, I am a Democrat who has never voted for a Republican ever. And, if it matters, I supported Hillary Clinton in the Minnesota Caucus in 2008. As far as what I think is real I'll refer you to the 20-odd blog entries I've posted below. It is a Leger of what people are not talking about.

Republicans and Democrats are not, I believe, two sides of the same coin. The fights, the antagonism, the bodily loathing and disgust with one another are all real enough. The two parties represent different beliefs, understandings, values, attitudes, and whatever else that are often irreconcilable. In good times, that can be an amusing sideshow to the work that is done in Washington, as long as things are moving forward.

Now things are very different. The two parties are, and have been, polarized to the point of this terminal gridlock and it's hard to say how that could be broken. It's possible that a third candidate from a third party, probably someone claiming the center, will come in 2012. This could begin the breaking down of the two party duality and perhaps providing a voice for the disenchanted voter. If the Republican Party continues it's purification efforts, then it would be the far right party. The Democrats, on the other hand, are primarily centrist as it is, the way I see it, and it's difficult to see how it would play out if someone claiming the center challenged Obama.

Given my grim outlook generally, events are likely to be the driving factor in determining what voters will be looking for in a candidate. If the economy doesn't produce jobs, or, as is equally likely, begins a debt-deflation brought on by a massive and rapid deleveraging of assets, something that surely must happen, then people will lose confidence in the two parties. In fact, the economy could go south for so many reasons beyond the control of the government that the chance of a prolonged recession or a depression is highly likely. A property bubble in China, sovereign debt in a dozen or two countries, derivative market meltdown, or the strong probability of a multitude of asset bubbles created by all the cheap money in the system popping all at once as soon as interest rates rise or demand continues to drop could take down the tightly wound and interconnected global economy. Or, closer to home so to speak, the second wave of housing bubble craziness, this time in the form of option ARM mortgages resetting starting in earnest in the second half of 2010, will cause prices to drop and defaults on derivatives, causing a meltdown like that of 2008.

In the midst of all of this turbulence, the parties will be seen to have no explanation, at least one which has been presented in the lead-up to the land mine laden future we are entering. Trust in government could plummet in such a scenario. If no third party candidate emerges, then people might try the Republicans for another round. This is likely to be short lived. The Republicans have no positive program for government. The free market, limited government belief, emphasizing self-reliance and chastising the welfare state as having instilled moral weakness in society might not please the ears of the formerly employed without the prospect of finding a job and sound callous to those who still have one. It also precludes making reasonable investments by the government in the physical and social infrastructure based on an outsized belief in the ultimate futility of those investments by virtue of their having been made by government. We will see how this belief stands up in the face of the capital destruction that occurs in a deflation.

The popular will during the 1930's led, in effect, to the rejection of unfettered capitalism. The modus operandi for the next five decades was to share broadly the gains made through economic growth. The Republicans have, as a part of their political agenda, dismantled to the extent possible the New Deal reforms made under Roosevelt that sought to correct the economic imbalances of the time. To the extent the Republicans were successful, we have seen a corresponding increase in the amount of wealth rise up to the already rich. Rhetorically, the main claim is that individuals earn their money, not the government, and individuals should keep what they earn. The effect has been to enable the wealthy to dominate the political sphere. Up to about 2008, the decline of the middle class had been relative. Now it is absolute. The justification for megariches in the hands of experts, and the conspicuous consumption as a mode of social interaction, should become an embarrassment of riches , an uncouth display of fabulousness that won't likely be stood for by the folks dropping out of the broad middle class. It will be hard for Republicans to convince voters that they are better off by letting the rich keep their money when so many others are suffering.

There is more to say about the Republicans on the question of the ideological positions they take. In the spirit of fairness I will take on the Democrats in the next post and what I think are the unteneble positions to take in a resource constrained world.