Rethinking America

Beyond Trump: The US’s Wrong-Headed Priorities

Reflections on gargantuan levels of military spending, pseudo “efficiency”-minded corporate outsourcing and an ill-fated obsession with American exceptionalism.

Credit: Orhan Cam Shutterstock.com

Takeaways


  • The US social, economic and political model leads to an almost unimaginable level of risk cumulation at the individual and collective level.
  • From faulty health care to totally insufficient social protections, the entire US is based on a level of systemic risk that puts the governability of the country in question.
  • Americans must ask themselves this question: What’s the meaning of “common defense” if we get beat by the onslaught of a virus?
  • The US social and economic model works well as long as there are no stresses in the system and everything works like a charm.
  • The US does not really operate like a system. It is based on an act of delusion. Eventually, living too long in a delusional world leads to systemic collapse.

The political economy of the United States rests on three major blind spots. Viewed in tandem, they create a level of fragility that is hard for individuals to bear.

And they create an almost unimaginable level of risk cumulation at the individual and collective level in what bills itself as the world’s richest nation.

In fact, in their sum total, these factors constitute a level of systemic risk that is serious enough to put the governability of the United States into question.

Three major blind spots

The first blind spot is the outsized U.S. defense budget, the second is the outsourcing mania and the third is the exaggerated sense of American exceptionalism.

At $748 billion for FY 2020, the U.S. defense budget by itself would be the 19th-largest economy on earth – and thus just about make it to be a member of the G-20.

According to the preamble of the U.S. Constitution, the U.S. federal government is “to provide for the common defense.” In view of the onset of the coronavirus crisis, one must ask to what extent that money is well spent.

In an obvious attempt to obtain as much political buy-in as possible, defense goods are being produced in Congressional districts pretty much all across the nation. That is clearly far from what would be efficient economically.

The correct set of priorities?

A government that has a gargantuan defense budget at its disposal and troops stationed all around the world, but falls woefully short with regard to medical preparedness on such basic items as ventilators must ask itself a hard question: Do we have the correct set of spending priorities?

Americans must ask themselves this question: What’s the meaning of “common defense” if we get beat by the onslaught of a virus?

Worshipping the wrong God

A nation that worships the stock market, but plays fast and loose with its (non-)”system” of medical insurance must ask itself the same question.

With all its entrepreneurial energy and might, as well as with its immense wealth, the United States ought to be well prepared for medical emergencies.

Just how short-sighted America’s ways and means really are becomes blatantly obvious when one looks at tying health insurance to employment.

Not only are millions of Americans at present losing their jobs and therefore their income, but they are losing their access to health insurance as well and hardly can afford Obamacare without income from a job.

How civilized/advanced societies operate

In civilized/advanced societies, the smart way to organize this is to ensure that, first, the insurance system pretty much covers everybody – and, second, that people don’t get dropped when they lose their jobs.

Moreover, the U.S. system of basing health insurance on a head tax, not on income, means that health insurance is basically unaffordable – unless one is employed by a company and well-paid.

And even then, many plans feature high deductibles that individuals and families must pay out every year before any insurance payments start (between $2,000 and $5,000 per individual).

Sticking by that approach, as Republicans adamantly do, is just another form of American insanity. Never mind that it completely fails to address the broader shift in employment structures in view of the “gig” economy.

More equality in misery

In a truly absurd way, Republicans can credibly claim promoting a higher level of equality in U.S. society.

Under Republican management, exposure to poverty and the risk of individual disaster have not only become more color-blind. They have also leapt the class barrier, as many more middle-class and even upper-middle class people are finding themselves exposed to economic precariousness.

It would stand to reason that, in order to truly provide for the “common defense,” U.S. spending priorities ought to be shifted significantly. It is obvious that the health care system can do much more to provide for the common defense of Americans than the U.S. military does.

Maximum outsourcing = maximum risk aggregation

It is amazing to observe that the U.S. corporate sector, with its relentless inclination to expand the supply chains ever further, is the other major risk aggregator and hence the second blind spot.

Praying to the gods of ultra-efficiency and cost reduction is one thing. Doing so without maintaining any proper forms of back-up systems – and hence providing for even a minimum degree of resilience – is quite another thing.

To be sure, this has nothing to do with the obvious benefits of trade. This also has nothing to do with creating strong links with producers, whether in China, Mexico, Germany or wherever.

Instead, this has everything to do with corporate greed. The outsourcing practice also keeps large companies from having to train workforces. Until now, they also thought they did not need robust contingency plans should something unexpected happen. Squeezing out the last penny was all that mattered, or so they believed.

American Exceptionalism

The third blind spot is many Americans’ ever more irrational, yet collective belief that theirs is an “exceptional” country. Because of that belief, and falsely assumed superiority over the rest of creation, even the most blatant and obvious of dangers are ignored.

More astonishingly yet in a society filled to the brim with guns, the American people are inoculated with a profound, yet highly adolescent sense of immortality.

Trump: A true representative of his people

This is one reason why President Trump completely dismissed any danger from COVID 19 to the United States as recently as February. He proudly held up a map that showed that the U.S. was number 1 among 195 countries in preparedness for a pandemic.

Actually, for once, he was not lying, about the map that is. And, for once, he is not the one to blame.

That map was the result of a collaboration between the Nuclear Threat Initiative, the Johns Hopkins Center for Health Security and The Economist Intelligence Unit.

Jointly, they issued the 2019 Global Health Security Index. The United States indeed ranked number 1, with an index of 83.5 out of a possible 100.

Among many of the sub-indices, the United States ranks number 1 in terms of detection. Given the inadequacy and dramatic shortage of test kits during COVID 19, the American people can only consider that ranking to be a sadistic joke.

Of course, the President failed to mention that another sub-index, the one on healthcare access, ranks the United States 175th out of 195 countries. That was a clear harbinger of the drama playing out now.

Grandiose perspectives…

Ultimately, it appears that the sources of comparative U.S. strength are not so much entrepreneurship and ingenuity.

The risk-taking for which U.S. elites and their international support groups so richly credit their nation really translates into a blatant form of risk-taking at the collective level that affects at least 80% of the U.S. population very negatively.

… and the political consequences

While one would assume that tough times as the current ones would lead to some form of domestic reconsideration and healing, the opposite is the case. The political polarization of America continues unabated.

It juxtaposes brutal individualism and a greater sense of common responsibility. As an unabashed mouthpiece of the upper-most classes, the Republican Party does not just insist on maintaining deep political disagreements, but is keen on fomenting them.

For evidence, consider just this: When President Trump threatened last Saturday that he might have to quarantine the states of New York, New Jersey and Connecticut (of course, politically all deeply Democratic states), the Governor of New York, Andrew Cuomo, described this threat as a Declaration of War Against the States.

Conclusion

Simply put, the American model works well as long as there are no stresses in the system and everything works like a charm. But that is not really a system. It is an act of delusion.

And eventually, living too long in a delusional world leads to systemic collapse.

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About Uwe Bott

Uwe Bott is Chief Economist of The Globalist Research Center and Senior Editor at The Globalist. [New York/United States]

About Stephan Richter

Stephan Richter is the publisher and editor-in-chief of The Globalist. [Berlin/Germany]

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