что делат?

Peoples, countries, states are often asking themselves, “What is to be done?” Certainly since the time of Vladimir Lenin’s question, Что делать, and probably long before. If the problems are acute enough (or the leaders of the revolt unscrupulous enough) the answer is/may be revolution, as in French, Russian, and earlier English (1649 and 1688).

In more recent times the answer is a “spring” or political liberalization, coming at the end of a winter (of authoritarian rule), as in the Prague or Arab springs, and to a much lesser extent, the Beijing, Beirut, Seoul, and any number of others, most recently, as in spring time in Rangoon (Yangon) with the freeing of Aung San Suu Kyi.

Now what about us, America as in the United States of, still for many the “exceptional” land? We certainly have our problems. And in the past we too have gone the way of “revolution” looking for solutions.

At least we called it a revolution, although when we look closely at the time we don’t see the heads rolling, and in spite of George Washington’s harsh 77-78 winter at Valley Forge  (and it could get extremely cold in the new land) what happened in those years was more like telling Dad, in very strong words, where to get off.

Today, however, we seem unable to even confront, let alone solve our problems, in particular those concerned with two of our government’s principal functions, health care and education. We do OK with our defense spending, and we did develop the atomic bomb and we did and on the moon.

In regard to our principal problems there is the evident inability of our elected representatives, including the president himself, to take action, any kind of action, and thereby govern, and do what they/he are supposed to be doing.

Instead our elected representatives spend their time squabbling among themselves, directing whatever energies they do possess, not to solving problems, but to being reelected to office.

Furthermore these same ‘do nothing’ elected officials continue to grow the responsibilities of the Federal government, by in large in the form of national defense and entitlement spending, (which together along with interest payments on our debt, comprise nearly 70 % of our national budget) while being clearly unable to finance the additional expenditures without surpassing our debt limits, that meaning, of course, without growing the debt burden on our children and grandchildren.

Finally while the elected officials are not governing other things are getting out of control. The financial sector, for one, of the economy is growing by leaps and bounds, seemingly outside of the influence of government altogether.

Simon Johnson, in an Atlantic article of May, 2009, “The Quiet Coup,” writes of this  growth:

From 1973 to 1985, the financial sector never earned more than 16 percent of domestic corporate profits. In 1986, that figure reached 19 percent. In the 1990s, it oscillated between 21 percent and 30 percent, higher than it had ever been in the postwar period. This decade, it reached 41 percent. [And pay in this sector rose no less dramatically.]

Now the financial sector shouldn’t be calling the shots in the overall economy, but it is. Our financial house is a loose canon, and so far anyway, out of anyone’s, let alone the government’s, control. No longer is it the farm, or Detroit, but rather Wall Street that is driving the country’s economic health, up or down. Lately mostly down.

While the Federal government may have been able to sensibly regulate first agriculture and then the manufacturing sector of the economy it now seems clueless in regard to the regulation of our financial houses. With the result that extreme risk taking with harmful consequences for the economy overall goes on mostly unchecked.

The problems I’m describing are not explicitly the issues of the various groups clamoring to be heard, principally now two, the Tea Partiers and the Occupy Wall Streeters, there being a number of the latter.

But in my opinion these and other groups are out there making noises only because of such things as the failure of our elected officials to act responsibly, the out of control national debt, and the lopsided influence of the single financial sector on the economy as a whole.

So back to my original question, what to do? New faces in government? There is probably little chance that the elections of 2012 will give us leaders able to make the tough choices, such as, to reduce the growth of unfunded mandates and entitlements, or to increase taxes and thereby federal revenues, both of these actions being at the present time third rail choices for any office holder wanting to hold onto that office.

So again, what to do. As I say we’re no longer able, as much as we’d like to, to make heads roll, such no longer being the way of liberal democracy. In fact it does seem more and more to many of us as though there is nothing to be done.

I’m certainly not alone to recognize our problems, —principally government’s evident inability to govern and a financial sector out of anyone’s control. Two recent articles, one by Tyler Cowen in the American Interest, The Inequality that matters, and the other by D. W. MacKenzie in the Mises Daily, No, Melissa, There Isn’t a Santa Claus, come to the very same conclusion, that the solution to our problems will not, in fact can not come from government bureaucrats or elected officials.

Tyler Cowen writes about the undue influence of the banking sector:

What about controlling bank risk-taking directly with tight government oversight? That is not practical. There are more ways for banks to take risks than even knowledgeable regulators can possibly control; …it is naive to think that underpaid, undertrained regulators can keep up with financial traders, especially when the latter stand to earn billions by circumventing the intent of regulations while remaining within the letter of the law.

We probably don’t have any solution to the hazards created by our financial sector, not because plutocrats are preventing our political system from adopting appropriate remedies, but because we don’t know what those remedies are.

Then, MacKenzie on the cluelessness of bureaucrats:

It is true that Congress often seems ineffective in dealing with modern affairs, but this is what we should expect. The contemporary American government intervenes into nearly every aspect of our lives. How can any senator or congressman comprehend all of the interests at stake in all of the matters that the government tries to regulate?

We live in an extraordinarily complex society. There are literally millions of businesses in America, and a larger number of households. These organizations deal in countless products and services, each of which is produced in complicated ways.

Legislators have staffs to help manage their affairs, but the fact of the matter is that modern economies are complex beyond the comprehension of any staff or committee. Consequently, legislatures that try to manage a modern economy in detail become ineffective talking shops, and must defer to [and] reliance on bureaucrats is a necessary part of government, but hardly desirable….”

Now it could be that our problems will remain without solutions. Certainly it won’t be the first time that a people allows the country’s infrastructure to collapse around it while demanding only bread and circuses and other such for themselves, in our case, while attending national football and national professional basketball events.

But, and it may be that things will get better in time, although not necessarily for us. The dinosaurs didn’t survive but we came along, and, according to most observers, we were/are a more marvelous creature than the dinosaur.

And the hundreds of American Indian tribes, because unable then, as we at present, to join together and take the proper actions for survival, did not last much beyond the coming of Columbus, their hundred fold and more civilizations disappearing into unrecognizable groups of survivors somehow existing on the reservation but no longer alive as they once were.

So things change and those involved in the changes don’t see the changes coming. Just as the Russians never saw the end of the Soviet Union until it was ended. Maybe we are just as far now from seeing our own “end,” this stemming in good part, I believe, from our failure to bring about change ourselves, before change just happens to us, because it will.

Holding on to what one has, not upsetting the applecart, maintaining the status quo, being reelected, all that sort of thing trumps there being any real action, such as that of Alexander when he cut through the Gordian Knot with a single bold stroke of his sword.

Do we have such a stroke of the sword available to us? Might something yet be done? I find a hint of possible actions in the two articles by Cowen and MacKenzie referred to above.

For MacKenzie, as well as for the Mises Institute, there is a savior, and that is the free enterprise system. In brief, this needs to grow while government needs to contract. In his own words:

There is no reason to believe that our current system of politicized crony capitalism will ever improve. There is no reason to believe that we will ever attain, or even agree on, social justice. We should believe in the free enterprise system, not simply because of faith in any ideal, but because theory and evidence indicate that this system works best.

Cowen takes his reasoning a step further. Government can not be a principal part of the solution because the best and the brightest of our young people are not entering government service but rather are going into the financial sector.

Might it not follow from his observation that the financial sector replace the government in selected roles, certainly that of the redistribution of federal tax revenues to those in need, a job that government has failed to do without going into unsustainable borrowing with the burgeoning deficit.

Cowen writes:

In so-called normal times, the finance sector attracts a big chunk of the smartest, most hard-working and most talented individuals. That represents a huge human capital opportunity cost to society and the economy at large.

Would a way out of this situation, an elimination of this cost, be that we turn over our problems to the free enterprise system, to private efforts to find solutions? No longer lose as now, for example, the most hard-working and most talented individuals to an irresponsible financial sector? And no longer going ahead with but bits and pieces of a solution, as now, when we allow a few private foundations and private educational institutions to replace government programs, but totally?

Would not the best and brightest of our young people (for if there are solutions they have to come from them) flock to be a part of this effort, not a moon or Mars landing, but an attempt to create, not rocket science, but autonomous and private structures capable of delivering effective and affordable health care and education to the American people?

So my answers? Take power away from the elected officials who in any case are not doing the job, and have them become at best referees in the game, whose principal players will all be within the private sector, financial or otherwise.

For only when people have ample opportunity to use their talents, and no less important only when they are able to see the results of their work, will things change for the better. In our present government that is not happening. That such does happen has always been the strength of free enterprise. Why would we interfere with that?

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