Normally I prefer not to post complete articles, put this is really quite good and important, I will remove it if asked by the author.From David Goldman/Spengler at inner workings:
The Collapse of American Governance
July 29th, 2011
By David Goldman
History is full of examples of people who would rather perish than accept the misery of their circumstances; our prime example is the American South during the Civil War, where a poor man could borrow money, buy land and slaves down the river, and get rich in ten years on cotton. Most southerners were very poor, but they had opportunity, and perhaps 30% of their military-age men died fighting for a system that offered them opportunity. After the end of slavery the South underwent a century of poverty at half the living standard of the north.
Perhaps I’ve looked at the budget crisis through the lens of Wall Street and forget what Main Street is thinking. Most American households don’t own a lot of equities, which means that the bifurcated wealth recovery of the past two years–sharply rising stock prices and slowly falling real estate prices–hasn’t done much for most American households. Even with the rise in stock prices, the vast majority of American households can’t fund a retirement; the $6 trillion lost to households in the great home price debacle was the retirement fund of a substantial part of America’s middle class. Small business, meanwhile, hasn’t had any recovery, for reasons we have published before: small business was concentrated in precisely those sectors, housing and related, that collapsed the farthest. The businesses that have done the best are large, global, capital-intensive enterprises that can benefit from low borrowing rates and economies of scale.
The Tea Party is a middle-class uprising, and it comes from parts of the country that I don’t visit too much: places where you can’t sell a home, maintain a business, and fund a retirement. It’s flyover country, where most people don’t know how they’ll live in retirement, or pay for their kids’ college education, or get their kids out of the house to which they have returned after earning an expensive but useless college degree. Americans don’t have a lot of reason for optimism right now. None of the parties is talking about growth.
It may be that the Tea Party, as I said the other day, is the Ghost Dance of American growth, another millennial movement inspired by sinking circumstances. The book to read on this might well be Richard Landes’ new book Heaven on Earth, on millennial movements. America has its history of such things, and the Tea Party–for all its worthy intentions–has a bit of millennial flavor about it. With the economy dead in the water, the folks in flyover country have no wind at all in their sails. They are becalmed. As things are going, they will perish slowly; they have an incentive to try to force a big change right away. No Republican mainstream candidate has so much as offered a solution to their problems. So why not pick a fight as soon as the opportunity presents itself?
Even if the Republicans get their act together and work out a debt ceiling compromise, the world has seen the cracks in America’s social fabric, and things won’t be the same. If you come home, and your spouse is holding a Molotov cocktail and threatening to burn down the house, you will look at things quite differently in the future, even if the threat is not implemented. If not today, perhaps tomorrow. America runs on hope. Obama offered hope and failed miserably; the Republicans haven’t even put the subject on the agenda. Hopeless Americans can turn very nasty indeed.
Furthermore, and more comprehensively from his Spengler article:- The collapse of America’s middle class, which is really worth reading. Though I disagree with some of the economic assumptions, still.