It wasn't that long ago that my co-workers, including RedStateVT, accused me of always seeing the worst in terms of the credit markets and that I needed to present an optimistic outlook to our main client.
Well I am usually an optimist, but I cannot help but feel that populism is running rampant around the world and we are not a better place for it. Thus, I am discouraged.
The impetus for this today is Thomas Friedman's column highlighting how collections of minority special interest groups have overcome mechanisms to enforce the will of the majority. i.e. partisan politics without compromise in the middle. One effect of this is the risk that the U.S. discards a basic building block of our historic economic success.
The U.S. enjoys its economic position because the government created a system that enforced a rule of law, regulations that encouraged risk taking but prevented recklessness, built infrastructure, educated the workforce and funded scientific research. All this is at risk today because we do not have a balanced approach to deficit reduction and global competitiveness.
The reason is partisan politics are being rewarded by the lack of competitive districts as my friend Jeff S commented on recently and was further elucidated upon in a Washington Post column that I provide the following link to.
How populism is destroying compromise
I don't have a solution for this and the U.S. is hardly the only country in the world where this exists. Argentina has firmly established itself as the least creditworthy country in the world. All in the name of the government handing money to its supporters. Greece is a close follower of Argentina. Other places in Europe can't agree politically on where to draw the lines but people are angry that big business gets rescued and they get gored. We will see where the elections take everything in Europe. Putin survives in Russia by maintaining certain standards of law & order (and the use of crude Mafia techniques on political adversaries), but complements this with a certain kind of populism.
The only place where populism really doesn't exist is Asia where the societal impulse is aimed at the individual supporting the group's goals and people generally comply.
So why am I Blue? Well, I don't see an end in sight to the following fundamental disagreement between Democrats and Republicans on entitlements and how to pay for the War on Terror. Republicans want to pay for the War on Terror by reducing entitlements and leaving other forms of corporate welfare in place. Democrats want to raise taxes to pay for the War on Terror and preserve entitlements while leaving other forms of corporate welfare in place. Both parties are dominated in their core by an unwillingness to compromise.
The U.S. must address its fiscal situation in a manner that Simpson Bowles laid out: 2/3's expense reduction and 1/3 revenue enhancement. The U.S. will only be globally competitive if we separate health care from employment and make it both an individual responsibility and as affordable as possible. Getting there is neither simple nor following a clear path. Populism aimed at getting partisan votes prevents intelligent discussion of choices and modifying mistakes while trying new things to see how we get there.
That is why I am feeling Blue today.
You were on to something here, but then let it drop. Dems have carved out seemingly endless special interest groups and convinced them they are being screwed by - you name it - Repubs, the rich, corporations, etc. If you want to make the rich pay more or eliminate corporate tax breaks, fine. But you cannot have a society where more than 50% of the people pay NO taxes!
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