Sunday, May 2, 2010

One Solution For Two Americas

This was previously posted on on or before 2007-12-01:

There have been numerous political disagreements in the US since its founding. The 1861-65 civil war is obviously the most famous and pronounced. More relevant to today, the modern ideological debate in the US started as contrasting responses to the October 1929 stock market crash and the depression that followed. With a brief interruption by World War 2 and foreign-policy zig-zaging in the 1950s in response to the communist invasions around the world (Eastern Europe, Korea, Cuba, this remains the heart of the domestic political debate in the US to this date.

One can argue that an additional division in US politics emerged in response to 9/11. This division is along two dimensions. First, whose fault was it? Second, what should we do about it? One side argues that 9/11 and associated acts of terrorism (such as the first World Trade Center bombing in 1993) is simply the fault of the obvious perpertrators (religious extremists) and the people who finance them (the oil-rich Wahabbis, principally in Saudi Arabia). The other side argues that the US provoked these and other attempted acts of terrorism by helping to liberate Kuwait from the 1990 invasion by Iraq, stationing troops in Saudi Arabia. Coincidentally, that's Osama Bin Laden's argument.

As to what to do about it, regardless of fault, some argue we should go after them, and others argue for kumba-ya therapy (Dennis Kucinich, assorted self-proclaimed foreign-policy experts in Hollywood).

Aside from this recent foreign-policy wrinkle with a homeland security twist, the main portion of domestic policy discourse concerns the US 78-year old argument of whether our economy should have more or less taxes and regulations. During these years, this country has seen Presidential and Congressional elections vascilate around 50% for each side. Yes, Nixon and Reagan won land-slides in 1972 and 1984, but most elections have been fairly close, some to the extreme (1960 and 2000).

With the country close to 50/50 in terms of opinion about what to do with taxes and regulations, why not divide the country into two? One half of the country would operate a big government, where most people were employed by the government and/or paid close to 100% in taxes. All forms of business, to the extent any wouldn't be completely and directly owned by the government, would need special government permits to offer products and employ people. In schools, it would be offensive to be better than other students, speak correct English, or remember history. Government-provided health care would mean that whomever needed health care would need to go abroad.

In the other half of the US, the regulatory environment for all businesses would be similar to the laws regulating Apple and Google, which is to say essentially no industry-specific regulations at all. Elementary schools would be private, just like our farms and better universities. Each family of 4 would pay a flat annual federal tax of no more than $4,000 with no need to disclose income or claim deductions.

With these two Americas, is there any doubt which one would florish, and which one would collapse? We have, of course, seen this before. East Germany vs West. North Korea vs South. The 3 Chinas until "big" China started turning capitalist some 25 years ago. The UK in the 19th century vs the mid-20th century vs Margaret Thatcher. Jimmy Carter's America vs Ronald Reagan's.

It seems relatively well-understood, even by Nancy Pelosi and Harry Reid, that full socialism as in the Soviet Union, was a really bad idea for economic progress. So why isn't it that they recognize that 50% socialism is half a cancer? Why not take it down to zero as soon as we can?

The federal government has so severely watered down the ability of any state to distinguish itself, that it is effectively meaningless for a person to try to play the state arbitrage and move to a freer state (say, in the South) compared to the more repressive higher-taxed states in the North. This is why we may need to divide America into two in order to be able to once again display the benefits of capitalism to those many among us who have never seen the contrast between capitalism and socialism up close. Most young Americans today have never experienced hardship in the form of living in North Korea, the old Soviet Union or Cuba, among other places. Even most of the poorest Americans have access to food and opportunities not dreamed of by people less than a century ago.

With prosperity comes laziness. In today's America, it has become easy to take prosperity for granted. This, in combination with having the government in charge of the school system, where history is seemingly not taught in favor of sensitivity/minority training, is the kind of societal poison from which empires such as Rome, Britain and soon perhaps the US will fall unless corrected.