There are some mistakes so ridiculous and so deadly that only experts can make them. That’s happening now, every time some economist or policy wonk or government official or business “leader” comes up with some new plan to bail out the economy or some new rationale for keeping the status quo. For today’s economic crisis is the product of a moral self-delusion. And neither Adam Smith’s invisible hand nor all the upturned palms of corporate America nor all the fists in government can solve it.
That’s up to us, the citizenry of the United States. So I write this for those who understand that citizenship has an economic as well as a political aspect, and who wish to be honorable citizens in both dimensions.
The economic surface of the fallacy, which everyone understands but few care to address, is that we could go on forever outsourcing jobs by the millions, bringing in and letting in immigrants by the millions to drive down wages, while gorging on cheap imports, living on credit and assuming that endlessly rising real estate and investment values would redeem our folly. Yes, America, there is a connection between millions of jobs, especially manufacturing jobs, shipped overseas and millions of foreclosures at home. Yes, America, there is a connection between our collapse and the fact that we now import our doctors and engineers as well as our hotel maids and construction workers. And yes, America, there is a connection between the fundamental delusion of capitalism-the market is always right-and our conflation of the market with predatory lenders, greed-driven speculators and the “managerial capitalism” that permits senior executives to loot their companies, then move on.
Today, America leads the world: in debt. We haven’t run a trade surplus since 1975. Direct Federal debt now exceeds $10.5 trillion, not to mention additional scores of trillions that will come due via Social Security and Medicare. Consumer debt and collapsing real estate values are driving millions into bankruptcy, a situation which, thanks to the draconian “Bankruptcy Abuse Prevention and Consumer Protection Act of 2005” (which the credit card industry spent $100 million to pass), now promises not to give them a second chance, but rather a crippling burden for decades to come.
You may drone on that paying one’s debts is a moral issue. So it is, when human beings trade as human beings. It’s morally wrong to stiff the local grocer or mechanic or farrier. But there is no longer any moral connection between the heinous, corrupt, predatory and suicidally greedy thing that American corporate capitalism has become, and individual morality.
We the People are not the ones who broke it. But We the People are the ones who will have to restore it, and best we not pretend that a few trillion dollars more down various corporate rat holes, plus a new tsunami of regulation and class-action lawsuits will do it.
A new economic morality is required. And I would base that new morality on a variation of Abraham Lincoln’s great dictum: “As I would not be a slave, so I would not be a master.”
As we would not be exploited, so we would not be exploiters.
In practice, this means three things.
First, whether it’s cheap imported products from China or cheap labor at home, “cheap” is a luxury we can no longer afford. We must recover our ability to supply and demand material quality, produced by American citizens who receive a living wage-and by foreigners who receive the same. This is no plea for autarky. It is the realization that an honest country, like an honest individual, must do productive work.
Second, we must return credit to its proper role: as a means of financing investment and large purchases, not as a way of life that, a prop for consumer addiction, or a screen for and tool of corporate greed. An honest country, like an honest individual, can’t live on credit forever. Honest economies don’t depend on it as a substitute for living wages. And if it turns out that a lot of indebtedness never gets repaid, let’s use the relief to do better, not to return to our old ways, chastened but unrepentant.
Finally, if we wish to avoid ending up in foreign receivership, we must make our terms of trade clear to the world. We will not accept the products of environmental irresponsibility, exploited labor-which by definition includes prison and child labor-or debased standards of safety and other corrupt practices. That which we do not tolerate at home, we should not tolerate abroad.
Abraham Lincoln concluded his dictum on masters and slaves: “This expresses my idea of democracy. Whatever differs from this, to the extent of the difference, is no democracy.”