America, quo vadis et cui bono? (updated 20jun13)

George Rebane

Economic historian Niall Ferguson invites an answer to that question by first addressing ‘How America Lost Its Way’.  As the Laurence Tisch Professor of History at Harvard, Senior Research Fellow at Oxford, and Senior Fellow at Stanford’s Hoover Institution, Dr Ferguson is a man of some accomplishment and moment.  His new book The Great Degeneration: How Institutions Decay and Economies Die publishes this Thursday.  The punchline of his message is that “it is getting ever harder to do business in the United States, and more stimulus won’t help: Our institutions need fixing.”

I bring this latest expose of America’s decline to the attention of RR readers as a matter of strong corroboration of the same message being documented regularly in these pages.  The Left’s echo chamber continues to divert the dialogue to discounting these warnings as the product of isolated sclerotic minds disconnected from the progressive push to recovery, now that the messiah is in the Oval Office, after having banished the deviltries of Bush2 and his crowd.  Ferguson argues that nothing could be further from the truth.

Citing metric after international metric, he shows the steady, alarming, and accelerating decline of the US in the last years.  We rank in the mud – the sixth worst in the world - with the likes of Zimbabwe, Burundi, and Yemen in the growth of regulatory friction that it takes to carry out a set of benchmark business practices.  And it is all due to the bureaucracies that our governments have set up.  Ferguson confirms that the recent and biggest buckets of sand into the country’s productive gears are Frank-Dodd and Obamacare, with the damage from these growing by the day.

And as we all know, the direct beneficiaries from all this bureaucracy and regulatory fog are not only the liberal politicians but also the “lawyers, not forgetting lobbyists and compliance departments. For complexity is not the friend of the little man. It is the friend of the deep pocket. It is the friend of cronyism.”  In the World Economic Forum’s Global Competitiveness Index we have dropped from first place (yes, at the depth of the Great Recession) to seventh place on Obama’s watch.

In this light Ferguson asks, “What is the process at work here? Perhaps this is a victory from beyond the grave for classical Western political theory. Republics, after all, were regarded by most ancient political philosophers as condemned to decadence, or to imperial corruption. This was the lesson of Rome. Democracy was always likely to give way to oligarchy or tyranny. This was the lesson of the French Revolution. The late Mancur Olson had a modern version of such cyclical models, arguing that all political systems were bound to become the captives, over time, of special interests. The advantage enjoyed by West Germany and Japan after World War II, he suggested, was that all the rent-seeking elites of the pre-1945 period had been swept away by defeat. This was why Britain won the war but lost the peace.”

In the meantime we are busily building up our cadres of rent seekers, assured by progressive economists that our salvation lies in ever more borrowing, fiscal stimulus, higher taxes, and quantitative easing (money printing).  No one in Washington, and most certainly not in Sacramento, is facing up to the real impediments to growth and the resurgence of America.

[20jun13 update]  Niall Ferguson's The Great Degeneration is out, and it has been reviewed by no less than George Melloan in today's WSJ ('A Jeremiad To Heed').  The book report is a worthy read as is the book.  ("U.S. future obligations exceed future revenues by $200 trillion, and state and local governments face $38 trillion in unfunded obligations.")  I again feel a bittersweet vindication, for the volume is a 174 page condensation of what I have attempted to communicate in these pages over the last seven years.  Yes, and Professor Ferguson also considers less than bright the masses of voters who have inexorably brought the country to its present state, and who still see no reason to change their behavior.

Comments

[Bill Tozer]

Excellent link Dr. Rebane. Although not directly mentioned in the article, QE is turning out to be a problem instead of a solution to our mediocre job growth:

http://silveristhenew.com/2012/12/05/citi-on-why-qe-isnt-working/

[Ben Emery]

George,
I guess you are as phony as the rest of the media in your never ending left wing straw man descriptions. Once again those on the left not those who are told they are on the left because they vote for the conservative Democratic Party. I have given you link after link of media outlets who would be considered square on the left side raking Obama over the coals on a daily basis but you continuously frame the left as being lock step and supporters of the Obama administration and his policies. Nothing can be further from the truth.

[George Rebane]

BenE 612pm - In the "phony" appellation, you did mean me and Niall and ..., didn't you?

[Russ Steele]

[email protected]:12PM

I do not see the left as being in lock step support of the Obama administration and his policies. I see Obama in a heroic attempt to implement the coveted policies of the rabid left, and apparently falling short. After all he is the product of the left having risen to power under the tutorship of the some of America more violent left, the bomber of the 60’s, the preachers full of hate for America, and the thugs of Chicago politics. He struggles daily to win the approval of the left, the academic socialist and communist festering in our universities. He wants to be their heroic leader, to show the world that his grandfather, mother and academic tutors were right, that only socialism, the gentler kinder version of communism is fair to all citizens. He wants to demonstrated that capitalism is not fair, that it is mean and not worthy of his support, unless he needs some money from some of America most successful capitalist, then he resort to the ends justify the means. He is not worried about the current scandals, he is more worried that his is not meeting the expectations of his tutors and mentors, who had such great faith in his messianic ability to sell socialism to the American people, and he is falling short.

[Ben Emery]

Obama's rhetoric sounds very nice but his actions write a much different story. He is as slimy as Clinton and I am talking about both of them but not a blatant sociopath as Bush II or just straight up evil as Cheney. My guess if Obama could just be himself you would be correct but he has turned into a very polished politician and luckily we only have him for another three and half years. Unless the House republicans can put down their ridiculous claims about birth certificates, Obamacare, and Benghazi long enough to inquire about kill lists, NSA, drone killings of innocent civilians in sovereign nations, NDAA, ect...

There are more legitimate issues the throw at the Obama administration but they R's don't touch because it will implicate themselves and republican party at the same time. I believe this why the D's took impeachment off the table as well. I think Rockefeller, Reid, Pelosi, and Daschle among many other D's would have been entangled in the net cast out to get Bush and Co.

[Bill Tozer]

Touching on just two words included in Dr. Rebane's fine post (Quantitative Easing), I found this interesting:

http://www.zerohedge.com/news/2012-12-05/citi-why-qe-isnt-working.

Back to the political debate, we usually have the Justice Department investigate scandals occurring in the Oval Office or within an Administration. Unfortunately, the current head of the Justice Department has proven to be just a political hack and has thrown all sense of duty out the window.

I don't know what happened to Judge Eric Holder. People who worked before the bench when Holder had the gavel say he was courteous to all parties, respectful, and displayed judicial temperament and issued reasoned decisions. Both plaintiffs' attorney and defendants' attorneys have said this. Something has happened to his mind and memory and since taking up with Obama.

Holder may have been a decent judge, but has proven to be a partisan paid liar for The White House, adding to most peoples' distrust of government.

Goes to prove than a good judge does not make a good Attorney General, just a respected professor of economic theory does not make a good adviser to the President. Neither does a good community organizer make an adequate choice for taking up residence at 1600 Pennsylvania Ave. I ain't looking for Superman, just a leader than is a super man. Don't think Romney would have been as deceitful. But, then again, Romney never had the go for the jugular temperament that politics requires. Think Mitt would have been had his conscious and morals control the urges and secrecy this Administration does with impunity. Deja Vu all over again.

[Bill Tozer]

Sorry, that was the link, but not the article. I will try again, but if it ain't about QE not having the desired results and exactly WHY, then forget it. Night night y'all.

http://www.zerohedge.com/news/why-qe-not-working

[Michael Anderson]

George wrote: "We rank in the mud – the sixth worst in the world - with the likes of Zimbabwe, Burundi, and Yemen in the regulatory friction that it takes to carry out a set of benchmark business practices."

George, this is complete nonsense, and the main reason why I have resorted to Archie Bunker quotes, expert abater comedy, and kicking the Todd box-of-puppies when I ask him if he's ever been to Scott's Flat Lake (thank you RM and I'm still awaiting an answer from Todd).

I just don't know what else to do. Perhaps I should just refrain from reading and posting? Is that what you want from me?

[Ryan Mount]

Micheal-

Mr. Ferguson does provide the data points from places such as the Canadian Frasier Index and the World Economic Forum. What he doesn't do, is qualify how the United States of America, is anywhere near the likes of say a craphole like Zimbabwe. to include them in the same sentence is quite a bit more than misleading rhetoric. But I know Mr. Ferguson's right of center agenda before reading his Wall Street Journal piece. The the answer is: another muddled gray area of truth.

However, we're drowning in regulation and civil lawsuits which arise because of it. The more regulations we have, the less important the Rule of Law is. All "laws" then become a byzantine web of regulations, which become civil matters. That has the effect of turning neighbor against neighbor (well, lawyer against neighbor) in civil court actions. Crap, you see this litigiousness in these very threads.

Anyhow, this is all a symptom of the good-old USA being too big for its britches. It happens to every entity that becomes a behemoth almost without exception. Add in representational democracy, then everyone from the out of work mill employee to General Electric gets their share (obviously some a bigger share) of free cheese via lawsuit.

Add to that the fact that we have this patently dumb bifurcation of civil and common law (note the terminology is counter-intuitive in the American experience). What we really need to have, which in my mind is an elegant and simpler solution, is a "loser-pays" litigation solution. In a nutshell, if you sue, and lose, you pay for all of the costs of the proceedings. Think about the consequences of that for a moment.

The other thing we could really use, which is beyond the scope of this discussion but worth mentioning frequently, is an Alternative "ranked" Vote system. That will break the Tweedledee and Tweedledum stranglehold on our government immediately.

[Ryan Mount]

I beg everyone's pardon for the numerous typos above up review. I've got my eyes on too many things this AM.

[Gregory]

George, you did misinterpret an item from the story...
" We rank in the mud – the sixth worst in the world - with the likes of Zimbabwe, Burundi, and Yemen in the regulatory friction that it takes to carry out a set of benchmark business practices. "

The sixth worst metric was not for the absolute number of days it takes to perform the benchmarked tasks, it was for the number of additional days that has been added over the past seven years, and that Zimbabwe, Burundi and Yemen's absolute number of days taken is much higher than ours.

Of the only 20 countries whose regulations had made those benchmarks worse in the last 7 years, we'd added more days than all but 5 of them. Nothing to be proud of, but it would be nice to see what the absolute ranking is.

What MA could do is be rational and factual when there's an apparent error, rather than just fly off the handle as he once again did at 11:09PM. Otherwise, shutting up is a perfectly good option.

[George Rebane]

Ferguson's citations are clear. The one business regs and time to perform the listed seven functions is a matter of counting days. I believe that the US may even rank lower given the recent and planned increases in red tape, especially those continually threatened by the eco-nazis.

That the Left does not recognize or accept any of this, and just continues our country's descent. As long argued here, the isheeple are no longer worried about their freedoms, money, or property rights.

The Right believes that growth through lower taxes, fewer regs, smaller govt participation in the economy, and more freedoms is the way out of our mess. The Left diametrically believes that higher taxes, more regs, greater govt participation (e.g. spending and picking winners) in our economy, and greater management of our lives (i.e. fewer freedoms) is the Light and the Way. It is what it is.

[Ben Emery]

The longer you ignore my requests to stop misrepresenting the left the more it becomes apparent you are less about reality and more about demonizing the opposition to make your positions seem not so bad.

"The Right believes that growth through lower taxes, fewer regs, smaller govt participation in the economy, and more freedoms is the way out of our mess. The Left diametrically believes that higher taxes, more regs, greater govt participation (e.g. spending and picking winners) in our economy, and greater management of our lives (i.e. fewer freedoms) is the Light and the Way. It is what it is."

This is utter nonsense and it is embarrassing that you perpetuate what the corporate media wants us to believe. All Americans want a fair wage for fair work, ability to give their children more opportunities then they had, to live in relative peace, to have privacy from government and corporations, to be able to afford health care if needed, to be able to live out their lives with dignity, and to believe that our government truly is a representative of their interests not big money special interests. This isn't right or left it is what the thousands of people I have talked to over the last few years have told me with their stories and concerns. When we went on our campaign or when I go and talk about democracy to groups I ask for suggestions and personal stories not donations. People are what matter and those who are important in their lives non of the bs you keep getting people to comment on.

[Ryan Mount]

George-

I know you know Michael, so I've seen attempts on this blog to characterize him with our foothill Leftist brethren.

Michael is definitely not a member of this amorphous "Left" by any stretch of the imagination. I would characterize him, to his chagrin, as a pragmatic middle of the road local who likes beer. More on that in a moment.

He is also successful business man who keeps Nevada County's vital IT pipes moving and growing, who's managed to keep his business a float during a massive downturn. And keep people employed to boot.

He also likes beer (a fault), Volvos, Beckett plays, warm bubble baths and long walks at sunset.

[Ryan Mount]

George-

(I think my posts are going into the SPAM bit-bucket. This is a second attempt. I will refrain from including male enhancement drug links. For now.)

I know you know Michael, so I hope we can set the record straight. Michael is not a part of the local amorphous “Left” as he’s been categorized on these pages and perhaps in your comment above. (not sure if you were including him in the target audience)

I would characterize him, much to his chagrin, as a pragmatic, local centrist. He is also a successful business owner who has kept the local IT pipes a-flowing and a-growing amidst one of the biggest economic downturns. He also likes beer. (more on that in a moment).

He also like Volvos, beer (which is a fault, IMO), The Giants (another fault), warm bubble baths and long sunset walks.

[George Rebane]

Gregory 808am - You're right Greg, I failed to include 'growth of' in the following -
"We rank in the mud – the sixth worst in the world - with the likes of Zimbabwe, Burundi, and Yemen in the *growth of* regulatory friction that it takes to carry out a set of benchmark business practices." I recall that the citation was a rate, but my fingers didn't pick it up ;-) I've corrected it. Thank you.

RyanM 849am - Readers have forwarded to me MichaelA's comments from other blogs that leave no doubt in the mind of the reader that the man effuses leftwing sentiments. Perhaps he is adaptive in what he writes where. I started with the notion that he was a centrist, and given his remarks here and elsewhere, I have had to modify my assessment. Perhaps I err.

[Ben Emery]

Nobody is sits solely on the left or right. Guaranteed in my personal life I am more traditionally conservative then almost everybody on this blog. In politics I land in the common area between true progressive and libertarian. It is considered a center position. Michael A is much like the rest of us a hybrid of ideals in which he chooses to fight for based on his own priorities.

[George Rebane]

re BenE's 958am - Don't we all have a "hybrid of ideals" based on our "own priorities" for which each "chooses to fight"? Appellations are awarded to people based on where the weight of their expressed ideals is preponderant. And even that appellation is in the eye of beholder. No one here has claimed to meter ideologies from the heights of Mt Olympus.

[Ben Emery]

George,
Lumping people into camps left of right based on the topics chosen for us by yourself kind of limits the true depth of our political ideology. That is why I continue to push back at your false categorizations of the left. If we took a poll whether or not we condone the NSA spying despite which political party is in office the response would be overwhelming "NO". You go the route of presenting a left straw man then counter it. Both are then pointless and false because the solution or counter is based on something that isn't real.

[Ben Emery]

For the record as you know I do not consider myself politically on the right on just about any issue so I don't feel the need or have the authority to defend the false characterizations of the right. I am a civil libertarian first and foremost.

[George Rebane]

BenE 1032am - You're off topic again; to what NSA spying "straw man" are you referring? And does anyone really understand what is a "civil libertarian", and how that dovetails with your economic socialism?

[Gregory]

"Guaranteed in my personal life I am more traditionally conservative then [sic] almost everybody on this blog."

Bullsh*t. You don't even know "almost everybody" on this blog, so you're not even in a position to start to know this, let alone "guarantee" it.

[Gregory]

"In politics I land in the common area between true progressive and libertarian. It is considered a center position."

Ben, there is no common area between "true progressive" and libertarian, which is why Democrats (including "progressives") are so keen to group libertarians on the Right.

[George Rebane]

Confirming the astute and oft repeated admonitions of our liberal readers, the recent (9-11 June) poll results show that only the following percentages of Americans think that Congress should continue to investigate these fast fading Obama scandals.

IRS - 78%
DOJ - 76%
Benghazi - 73%
(MOE +/-3%)

This is probably the last week that we'll hear anything about them.

[Paul Emery]

Do you have a link to that poll George?

[Russ Steele]

PaulE @05:56

Just saw the results of the poll on Fox Cable News. Did not catch the source.

[George Rebane]

PaulE 556pm - Reported tonight on Fox News. Here are the entire poll results (see page 11).
http://www.foxnews.com/politics/interactive/2013/06/12/fox-news-poll-voters-weigh-in-on-obama-administration-scandals/