American “declinism” revisited

Back in June ’08 I wrote a post answering notions of American “declinism.”

That seems long ago; and now, a few trillion dollars later …

America’s longtime sources of strength have been its spirit of individual enterprise and innovation, people motivated to work hard and try new things, confident in their ability to succeed and confound naysayers. This is propelled by America’s freedom and openness, as a meritocratic egalitarian society – egalitarian not in results but, rather, with every person standing on his or her own merits (not pedigree or privilege). Of course it’s imperfect, but these fundamental characteristics are in America’s DNA.

Now, however, a different strand has crept into our national DNA – the ethos of entitlement. It’s a recrudescence of the old world paradigm of entrenched privilege that America was founded to get away from. But in today’s USA, entrenched privilege is everywhere, exerted not by some elite oligarchy but by practically every segment of society.

We see this among young people, pampered and coddled, their self-esteem puffed up by well-meaning parents and teachers who raise kids’ safety and comfort to a veritable obsession. Nurtured in this entitlement cocoon, they understandably grow to worship themselves and their needs and wants, as though the world somehow owes it to them; woe to any who would deny them.

We see it too in attitudes toward the global economy. Many seem to believe that, even if Indian workers are just as educated, talented, and productive, American workers are nevertheless somehow entitled to continue being paid several times more.

And these crybaby whiners can’t seem to remember that we live today 100 times better than past generations; so if it goes to 98 or 99 that’s, like, the end of the world. As in the recent financial wobble, when retrenchment by a few percentage points was apocalyptically described as “collapse.”

The State of New York has entered a surreal zone where no entitlement will accede to the reality of empty governmental coffers. Newspapers and TV are flooded with pleas from interest groups all clamoring to preserve their place at the public teat as though nothing has changed. State employees just got a 4% raise, negotiated years earlier in flush times; the union will not hear of foregoing it. The state will just have to go deeper in hock. Next year’s budget gap promises to be yet more huge. No one will face it.

And of course, at the federal level, just when the writing is on the wall, writ large, of a looming financial black hole, still the trillions and even new entitlements flow out. George W. Bush’s prescription drug entitlement was already fiscal madness. Then Congress used the pretext of a recession to pillage the treasury with a “stimulus” bill. Then the health care bill, piling on yet more entitlements, more trillions (with a fig leaf of promises for future financial austerity that no one believes).

How will this tale end?

I label myself an optimist. The question is which force – which strand in America’s DNA – will prove the more powerful. Will it be our ancestral DNA of individual enterprise and drive – or the new mutant DNA of complacent entitlement?

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11 Responses to “American “declinism” revisited”

  1. Alfredo De La Fe Says:

    Frank:

    I had not given it much thought, thanks for giving me something to consider. One of the problems I will label “progressive entitlement”, where parents now are doing things “better” because they want something better for their children. Heaven forbid they tell their children no or punish them. Or worse, give them a spanking. All because they were punished or spanked as a child and did not like it.

    We have a generation of spoiled brats and a society that coddles them to the extreme. God forbid you say something to SOMEONE elses child. I once asked a neighbors child to please stop jumping on my air conditioner (I live on the first floor and the kid had to CLIMB my window gates to get on top) and the mother almost hit me. I feel as if we live in bizarro world.

    Best,

    Alfred

  2. Kimberly Draiss Says:

    Unfortunately, I would tend to agree with Alfred, which is precisely why my children are home-educated and taught the value of hard work and their earning of any desired material pleasantries, even if we could just deliver them with a bow on top. They were also taught obedience all along, and it continues to baffle my husband and myself when people marvel at what we believe should be the expected behavior of all children. It is a most frightening situation that our national DNA faces in light of the current so-called “parenting” trends, where children are treated as their parents’ peers, and homes are run as democracies. Yes, you may voice your opinion. Yes, you are valued more than our very lives. But, no, you may not have the final say in the matter.

    I was taught to love my country deeply; my dad was a serious Sousa-marching, flag-waving, proud American. But; I think mine was one of the last of the generations that were shaped by this strand of our common DNA. If we who were taught these principles of industry are vocal enough, I would like to think our glorious nation still has a chance. It is usually at this point in the conversation, however, when my husband reminds me about the history of so many empires that fell after a couple of centuries. I am not well-versed in ancient history, so I cannot say for certain, but I would like to think that our America is not on that course.

  3. Lee Says:

    Thanks for the thought provoking ideas. To play devil’s advocate….

    I don’t see this bevy of spoiled children of which you speak. Perhaps it is because I don’t see the whole cross section of children. For instance, is it because my children go to public schools — maybe the spoiled brats are in some other subculture??

    Or maybe I’m miscalibrated relative to your view as to what is a reasonable level of entitlement. I feel that, for my tax dollars, I am entitled to police protection, firefighting help, and an army, navy, air force, marines and coast guard to protect my country — all without having to pay a per use charge. (I also like that the city has built a road that goes by my house, which I can use free of charge.) Is that just me being spoiled? (They’re all government financed and managed — socialism is taking over!!!) Or is it that I am daring to push the line — when I call 911, the emergency response for police and firefighters are free, why shouldn’t the medical emergency care be too? Surely, this is a point about which reasonable people can disagree, without the proponents being labeled as spoiled.

    As to the fiscal stimulus, the formula should be extra government spending when economic woes are endemic — that is, we should have extra spending when businesses are failing not because they are individually bad, but are failing because the system is bad — balanced by extra savings when economic times are flush. If there is a problem here, it is that we didn’t save when times were flush.

    As to the entitlement of American workers who don’t like seeing their jobs sent overseas — the issue is that the playing field is not level. Because of the globalism movement, companies are free to move money and production facilities around the world so as to seek out places where labor is traditionally cheap, and this is lauded as the proper course of action. But lo, any labor that dares to cross borders in order to seek out places where labor is traditionally better respected, why they’re illegals, criminals, the lowest of the low. I don’t think we should label as overly entitled those who see this as an injustice; at the very least, I think that we should be able to agree that this is an issue over which reasonable people disagree.

    Reading back over what I wrote … that came across more antagonistic than I intended. I think I need some sleep. I apologize and I hope you can find the wheat among the chaff. I look forward to your thoughts on these issues.

    FSR COMMENTS: l) “bevy of spoiled children.” Knowing you, Lee, I am sure yours are not in that category. But it’s striking how many educators I have heard lament the entitlement mentality of college students in particular and their imperviousness to the idea that they actually have to work for what they get. I have personally observed it in various contexts.
    2) “police protection, fire fighting, army, navy, air force,” etc. I think the most rabid libertarian would agree these are the proper province of government. However, the preponderance of government outlays go on other things, most of which do not target the needy and disadvantaged. Indeed, if we cut out all the welfare for the rich and for corporations, there’d be plenty available to meet all genuine social welfare concerns. I myself am now ENTITLED to collect Social Security. I would be in favor of eliminating this entitlement for people at my income level — given the fiscal abyss into which America is heading. But how many would join me in that view? This is what I mean by the entitlement mentality.
    And as for your saying that some forms of medical care should be “free” — that mindset illustrates the problem. It’s never free. It has to be paid for. But too many Americans have the idea that medical care should indeed be, well, “covered” — that is, they should receive it, but not pay for it, or at least not have to pay the full costs. Nor are they willing to pay the level of taxation, or health insurance premiums, that this implies.
    In fact, there is a major disconnect between the government goodies people want doled out and the taxes they are willing to pay. In a sense they are right — because tax levels high enough to actually pay for it all would be ruinous in their effect upon the economy.
    3) I agree with you about one thing: we should welcome people who want to come to America to work. But there is just no sense to the notion that it’s somehow “unfair” for jobs to go to other places where people will work for less than American levels. Don’t Bangladeshis have as much right to good jobs as Americans? Especially if they perform just as well, for lower pay? What makes Americans entitled to immunity from such competition? And anyway, how can any American company stay competitive, and thus remain in business, if it pays its employees a premium for no reason other than that they’re Americans? Trying to sustain such economic irrationality will not protect “good American jobs,” it will destroy them by destroying the business viability of the employers.

  4. Lee Says:

    Thank you for your response. Here are some follow up remarks.

    By “free” medical care I mean the same way that police and fire fighting and (most) roads are “free” — we pay for it, but not on a per use charge. My family is fortunate enough to pay more than our per capita share of taxes so I realize that this will cost ME money.

    Why do I think I should have to pay for others’ medical care? — it is for many of the same reasons that I think I should have to pay for others’ police, fire protection, roads, etc. For reasons ranging from pure altruism to a practical need to keep the emergency rooms unclogged, I think that medical care belongs there right beside police and fire protection. (If you want a Cadillac plan then you can pay more for the likes of cosmetic surgery, private security guards, and a halon system, but that’s another story.) Since this is going to cost me $$, I may be the opposite of the entitled mentality — perhaps you could call it “noblesse oblige,” though that makes it sound more altruistic than it is.

    [FSR COMMENT: We as a society have a consensus on a “social safety net” for people unable to provide for themselves; however, that doesn’t entail a living standard equal to that of society’s affluent members. When it comes to “medical care” we haven’t come to grips with what that means in safety net terms. Saying that “medical care” should be available to all is a fine sentiment — but does that mean every test, treatment, medicine, or procedure — no matter the cost? Who will pay for that?]

    A significant fraction of the social security you receive is your money. The rest is “entitlement,” though your income tax on the social security income may take away much of that entitlement. Maybe I’m wrong, I haven’t run any numbers — is your net really a measurable amount more than you and your employers put in?

    [FSR COMMENT: Social Security is really a tax plus a welfare program. Benefits are largely unconnected with contributions; we don’t have “accounts” that we own within Social Security. (This was exactly what G.W. Bush wanted to change — lotta thanks he got for that.) When the cost of the welfare program overwhelms the tax revenue, as it soon will, something has to give.]

    I argue that a significant reason that Bangladeshis will work for significantly less than Americans is that Bangladeshis cannot leave Bangladesh. If we put employees and employers on a level playing field — both given equal amounts of free rein — then the huge wage difference will be sharply reduced. IMHO, the huge wage imbalance is artificially maintained by the current “rigged” system, and it is fair game to complain about it. IMHO, it is incorrect to cast this as an entitlement mentality.

    [FSR COMMENT: The main reason for low wages in low-wage countries is low productivity. It’s investment in infrastructure and technology that is raising that productivity and closing the gap. Some Indian workers already earn pay approaching Western levels. The world economy is not “rigged.” It follows economic rationality. In the big picture, workers are paid according to what they produce and hence what they are worth. Any insistence on a pay premium unrelated to that competitive economic reality is entitlement whining — IMHO!]

  5. Lee Says:

    I don’t follow your latest points on the wage discrepancies between countries. How about a thought experiment? Suppose all national borders were open to all people to cross at will, much as our state borders are for American citizens. Don’t you think wages and standards of living would quickly equilibrate around the globe — roughly to the extent that they have equilibrated within these United States?

    [FSR: No. Bangladeshis who actually come to America in your “open borders” hypothetical would see higher wages — but not those still laboring in Bangladesh at lower productivity. The salient fact is Bangladeshis’ lower productivity — NOT the barriers to their emigrating.]

    Much as police don’t obviate the need for private security guards, and fire fighters don’t promise to install halon systems, I imagine that public health care would provide only the common denominator basics.

    [FSR: You imagine that public health care would provide only the basics? I suspect Dennis Kucinich might not subscribe to that notion. And what, exactly, do we mean by “the common denominator basics”? And who will decide? This is in fact a problem we, as a society, have not even begun to grapple with, which is my point.]

    To the extent that social security is a welfare program, I agree that it is unnecessary for those of us with decent income to collect that portion.

    [FSR: Good. Now let’s find some heroically courageous politicians to advocate for this.]

  6. John Says:

    “Many seem to believe that, even if Indian workers are just as educated, talented, and productive, American workers are nevertheless somehow entitled to continue being paid several times more.”

    Advocating that American workers be equalized to India is unrealistic and oversimplified. The duty of the Indian and American goverments is to protect the economic interests of their citizens (with out killing the goose)

    Please do not take the following as a personal attack, but I find your extreme global free market views ironic given your past career as a state employee. Could judicial decisions be outsourced as well? Did not the sense of entitlement in American contribute to your workload as a bankruptcy judge?.

    I agree with your post in spirit, just not the extreme free market advocacy. Look at the positive signs:
    -Even pro union New England states are reigning in their Teacher’s Unions
    -Military retirement benefits (20 years in, 50% pay for life, health care for life) have been cut drastically
    -Even the UAW has started to face reality (to a degree)
    -Public scrutiny has questioned executive compensation, and reduced the danger of U.S. capitalism turning into an incestous wealth transfer / protection racket such as found in many developing nations.

    [FSR: I was not a bankruptcy judge, but no matter. Yes, maybe my past job could now be outsourced. So? If New York State could get just as good work from someone else at a lower wage, doesn’t its duty to taxpayers suggest it ought to? BTW, studies by the Dartmouth School of Business have shown that outsourcing jobs by U.S. firms actually leads to HIGHER employment of AMERICANS by those same firms — for the simple and obvious reason that it makes such firms more competitive and successful. Is THAT what you think govt should “protect” us against?]

  7. Lee Says:

    I am still missing something here — if a foreigner is only 70% as productive as an American but demands 70% of the wage, is there any incentive for the business to employ the foreigner over the American? (I’d think not, but maybe that’s where I’m wrong.) Since the jobs /are/ moving, I am thinking that it must be that the foreigners are cheap even when productivity differences are taken into account. I am thinking that it is that /excess/ cheapness (rather than the productivity gap) that will reduce if borders are opened; and when it is reduced there will be little incentive to export jobs.

    Thanks for entertaining my madness –Lee

    [FSR AGAIN: OK, you are partially correct. The prevailing wage levels in a low-wage country are low because the prevailing productivity level tends to be low. That means a business can profit by making an investment in a factory in such a country that employs people at that prevailing wage level BUT gets more productivity out of them by bumping up the technology or training them or whatever. That’s a win-win for the business and for the local workers, who can ultimately gain higher wages because their labor becomes worth more. In the long run such wage gaps will close because the productivity gap will close. In the short run there are economic opportunities to “arbitrage” the differential. Businesses seeking out and exploiting such opportunities is NOT a bad thing. It enlarges the worldwide economic pie, and hastens the ultimate closing of the wealth gap.

  8. Lee Says:

    That is making more sense. I too favor companies profiting from taking technology and training to places where it is lacking.

    The part I find inappropriate is where that profit is boosted by the rigged playing field that denies the free market (open borders) to the employees. I think the employees are entitled to a free market — an entitlement that perhaps you would agree with! Is it your thinking that this effect is relatively minor or, if not, do you have any ideas on how to make the market more free?

    [FSR: I agree with opening our borders to allow more migrants to come here. I believe it makes a better world and a better USA.
    Enough.]

  9. John Says:

    “So? If New York State could get just as good work from someone else at a lower wage, doesn’t its duty to taxpayers suggest it ought to?”

    -Yes and No. New York State has an obligation to use tax revenue efficiently. New York has no obligation to seek savings at the cost of harming local interests. When state workers are justified, a state’s first responsibility is to offer the employment to ones own citizens. Failure to do so can have serious local stability concequences.

    “Businesses seeking out and exploiting such opportunities is NOT a bad thing. It enlarges the worldwide economic pie, and hastens the ultimate closing of the wealth gap.”

    -Except that closing the wealth gap could take generations. In the meantime, it is not reasonable to expect Americans to forsake their own local economic interests. Local interests have always trumped international interests in every nation.

    Any government needs to protect local interests to remain stable and viable. Policies to the contrary will only risk more instability due to inevitable backlash. Of course the same government cannot allow the goose that lays the golden eggs to be killed by locals.

    “BTW, studies by the Dartmouth School of Business have shown that outsourcing jobs by U.S. firms actually leads to HIGHER employment of AMERICANS by those same firms…”

    -Is there a link to the study? That has not been the case in the clothing industry. The objectivity of the study maybe in question. Of course, my objectivity could also be in question (wink).

    “I think the employees are entitled to a free market — an entitlement that perhaps you would agree with!”

    -The biggest threat to personal freedom is socio-economic turmoil. Such turmoil leads to a nation seeking either far right wing or extreme left wing solutions that restrict freedoms. Many libertarian economic concepts will lead to turmoil.

  10. Alfredo De La Fe Says:

    I somehow missed your responses Frank…

    This is old, but still figured I would throw in my 2 cents:

    While Social Security does not go in an “account” for each contributor, I still object to the idea that someone that made a “contribution” to a retirement plan should not be entitled to get their money.

    The problem we have is that SS is mismanaged AND that we dole out money to those that have never paid into the system. While SSI TECHNICALLY does not come from the same “accounts”. someone that came here legally yesterday and reaches retirement age automatically qualifies for a monthly check. Take this money and use it to shore up Social Security. Please dont give away my tax dollars to those that never paid into the system.

    [FSR comment: Social Security is not a contributory pension scheme. Benefits are not tied to “contributions.” Social Security is a TAX plus a WELFARE program. George W. Bush wanted to change this by giving people a vested property interest in the amounts they pay into the system. Opponents managed to convince people this was somehow bad for them!!!]

  11. Alfredo De La Fe Says:

    Frank, I realize that this is the case, but it has been “sold” to the American people as a system which we contribute to and we are told that our manditory “contribution” eventually comes back to us.

    I dont think I have a problem with individuals that earn over 100K a year not qualifying for Social Security, but in principle, I dont think it should matter how much a person makes. If they paid into the system they are entitled to receive the “dividends” and if a person has not they should have to either work hard or depend on the charity of others as opposed to our tax dollars.

    I think it is a mistake to give people that are not deserving a free ride. All that this does is teach their children that it is OK to be lazy and to be parasites.

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