What Will America Become?

We are survivors, spirited pioneers and entrepreneurs, have lived through catastrophic wars, horrific depressions and even a devastating Civil War. We will make it, perhaps more slowly than we might have before, but we have too many assets to throw in the towel. The issues seem to devolve around uncertainty. Christina Romer, writing for the December 4^th New York Times: “The deepest and most destructive uncertainty we face centers on the overall health of the economy and its prospects for growth. Unlike other postwar recessions that were caused by tight monetary policy and high interest rates, the recent downturn resulted from the bursting of a housing bubble and a financial crisis. Because we are in largely uncharted territory, figuring out how and when the economy will recover is much harder than usual.

“Some forecasters say that consumer spending is on the rebound and that housing construction will bounce back as the normal demographic determinants of housing demand reassert themselves. Others say that the process of de-leveraging — getting debt burdens back down to normal levels — will continue to inhibit the growth of consumer spending and business investment, and that the oversupply of housing and commercial real estate built up during the bubble will continue to depress construction and real estate prices.” And exactly what will this country look like if that elusive recovery doesn’t stick to our hopes and dreams?

The simple answer is that we would probably follow in the well-worn tracks of previous economic powerhouses, like England and France, countries whose colonies supplying raw material and natural wealth to the homeland disappeared as their spheres of influence contract, as new nations were born where subservient and exploited peoples and resources once were the rule. The patterns are not particularly pretty, but it’s why Europe evolved the massive social safety nets to serve a population where jobs and opportunities were increasingly scarce, where even a college degree didn’t buy economic certainty.

The ugly word is polarization, a sad fact that is overwhelmingly clear in the schism between Wall Street – the rich predator – and the rest of the country – now seeing itself as a victim of greed and excess. But those at the top of the food chain have learned to associate their causes (deregulation and lower taxes) with basic American virtues and conservative Christian values, so that voting for those values automatically generates a “ka-ching” sound in the coffers of corporate America and the millionaires and billionaires who benefit from “business America.”

Gangs represent the extreme of disenfranchised “Americans”; they don’t look at our legal system as applicable to them, don’t see any particular reason to buy into the traditional economy and reject the value system held by the majority of “everybody else.” They are a country within a country. As jobs disappear, an increasing number of Americans are letting go, permanently, of their middle class dreams. We could easily be heading into that ugly level of employment “stasis” where 8 percent unemployment is the new normal, a European tradition.

As global demand for resources continues to push (shove?) the law of supply and demand to hyper-accelerating commodities’ prices, Americans will be downsizing and living with less in small homes, and renting is likely to replace buying for millions of Americans. For housing tracts built far from urban centers , the aftermath of the subprime building boom, it’s hard to believe that these structures will ever be restored to anything near their original selling prices, especially as oil prices skyrocket and commuting is no longer viable. Expect pricier digs close to the action, bought and sold by the “haves” in our economy, to recover (perhaps well in advance of general real estate predictions), however. A new emerging class of disenfranchised Americans, with less to lose… no longer quite so content with their form of government that no longer seems to represent their interests. Sound a bit Tea-Partyish? Angry, but not quite sure what the answers are? Easily co-opted by special interests able to use this new-found angst to further their own ambitions? Polarization.

To make matters worse, the great equalizer – public education (from pre-school to graduate school) – is unraveling under budgetary pressures, and private education is drifting farther and farther away from the financial wherewithal of what was once the middle class. Without the rising skills to compete in what is clearly a global labor marketplace, it seems probable that standards of living are likely to drop for most people, but those with great business plans aimed at growing international markets will prosper as never before… and the global financiers, with no real loyalty to “buy American,” will ply their trade and make money anywhere on earth it can be milked. Polarization.

Add environmental damage from dwindling water supplies, rising coastal waters to unanticipated damage from terrorism and military conflict and you have a very dark period that could be staring us down for the foreseeable future. But Americans are good at surprising people, inventing new businesses, creating wonders (from art to technology) that amaze the rest of the world, and building/creating something no one could possibility imagine that soon no one will possibility want to live without. But getting there takes effort and confidence. We have to believe… no, to know… that we can rebuild, better and more exciting than ever before.

I’m Peter Dekom, and when the majority of Americans believe that the economy is recovering and act as if it were recovering, it will recover!