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More “bread and circus” for 2012 – but we are running out of bread….

by Aaron McCormack on January 5, 2012

Thumbs down for politicians' performances in 2011

The New Year is a great time for reflection and renewal. With organizations (e.g. governments)  simply reflecting the human characteristics of their constituent parts, it is no wonder that we feel a certain sense of “this year it will be different”.  Whether it is that gym-membership and 20lb weight-loss goal, or a determination to really deal with countries’ debt crises, I often wonder why the time to start dedicating ourselves to the things that must be done is the “New Year” rather than “right now”?

It is certainly politics as usual as far as the eye can see.  In the USA we just had the Iowa caucus.  Not much sign of a real alternative narrative for the future of the USA in that race.  And while the President is running a “we can’t wait for the Republicans” end-around, not much substantial is happening to help fix the debt and jobs crises in the United States.

Bear in mind that, even with the arrival of the tea-party caucus in Congress in 2011, the USA added over $1trillion of debt in the last 12 months.  Even if a person or people with great ideas attain a degree of power in the US, it is unlikely that they can begin to implement their wishes.  Just think back to the two years when the Democrats had the executive and legislative branches of government locked up – we got a half-hearted attempt at healthcare reform, a half-hearted stimulus, no progress on GitMo, etc. etc.

The US political system as it is constituted is designed for two things – inertia and influence-peddling.  This is a near-invisible state of affairs when times are good.  But when the country loses its way, and things have to change, the inertia of the separation of powers, the bitterness of a parliamentary-style politics and the pervasive corruption of money make substantive change difficult if not impossible.

In fact, I don’t think that a lot of people in the US political system really want to see change.  After all the two constituencies of the “great plutocracy” are doing rather well.  Elected politicians are prospering in power or en-route to K street.  Corporations (post Citizens United they are now “people too, my friend”) are creating record piles of cash.  Just look how former Homeland Security Chief Michael Chertoff has feathered his own nest with his actions around those controversial “nude” body-scanners now appearing in US airports.  You couldn’t make it up, but it goes on day-in and day-out with the vast majority of citizens either not knowing or not caring.

I don’t believe that the individual actors are in a conspiracy – but they are far removed from the real struggle that is now afflicting around 50% of the US population struggling to make ends meet.  With drains on resources (particularly pensions and healthcare) increasing rapidly and no sign of any real job growth, the future is bleak for many Americans.

The circus of the Republican Presidential Nomination race (a circus that I admit to being enthralled by and enjoying…) is a wonderful distraction.  Between it and the full Presidential race in 2012, the process and the drama will dominate.  Real action on the debt crisis and the jobs crisis and the infrastructure crisis in the USA will continue to have to wait.

Europe is no better in that regard.  We have a significant debt and jobs problem in many countries, coupled with a social safety net that we can no longer afford.

It is a one or two decade exercise to restore real competitiveness to any major economy.  It takes investment in infrastructure and skills that are long term projects, not just simple subsidies to corporations.  Finding the money to do this is tough, which means that we have to go much deeper to cut entitlements as well taxing corporations and rich folk optimally.

Healthcare is one area that will dominate public indebtedness in the UK, Ireland and the USA for years to come.  Now is the time when radical reform is most needed.  I believe that the reform is as much cultural (in terms of how we view public health) as it is structural – the two need to go hand in hand.

Personal accountability for health and an understanding of rationing are two concepts that are inevitable if health spending is not to crowd out everything else we want to do collectively as societies.  Poor life choices and behaviors are going to need to have consequences.  Someone, somewhere, will need to make tougher decisions about what money is spent on treating what conditions.

The one thing that we know does not work is the American insurance-based system.  The country spends twice as much as other developed nations on healthcare – but I would challenge you to prove to me that health outcomes are that much better in the USA than they are in France, UK, Germany or even Cuba for that matter.  The USA is the best country in the world to be sick if you are rich.  But, as we know, that doesn’t apply any more to a majority of Americans.

These are great challenges that face Western nations and the citizenry need to wake up to them now.  Like a sovereign debt crisis, they will resolve themselves in a disorderly fashion if not fixed beforehand in an orderly way.  Pretty soon the circus and the “drama” will have to give way to real concern over the direction of our countries.

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