State of the Union (Part Two)

Continuing with my analysis of Ken Manzi's Keeping America's Edge article in National Affairs, we see why America is having so much difficulty reconciling the quandary of deregulation and social cohesion.

Reconciling these competing forces is America's great challenge in the decades ahead, but will be made far more difficult by the growing bifurcation of American society. Of course, this is not a new dilemma: It has actually undergirded most of the key political-economy debates of the past 30 years. But a dysfunctional political dynamic has prevented the nation from addressing it well, and has instead given us the worst of both worlds: a ballooning welfare state that threatens future growth, along with growing socioeconomic disparities.

A dysfunctional political dynamic. I'll be the first to admit that I'm part of the problem. Granted, this is a small blog with very little readership. Nonetheless, I do add to the stink of politics and this article has made me seriously question what I am doing. Part of me wants to blow off steam when I hear people like Rush Limbaugh and Pat Robertson denigrate the people of Haiti after tens of thousands have died. Another part of me ignores them, writes a check to Doctors Without Borders. Still another is nauseated at the thought of the millions in this country who accept Limbaugh's word as gold. Any choice I make contributes to this dysfunction that Manzi has identified.

Certainly, we have the worst of both worlds. Basically, Manzi is saying that both sides lack true perception and their principles are grounded into continuing the failure.

Conservatives have correctly viewed the policy agenda of the left as an attempt to undo the economic reforms of the 1980s. They have ­therefore, as a rhetorical and political strategy, downplayed the problems of cohesion — problems like inequality, wage stagnation, worker displacement, and disparities in educational performance — to emphasize the importance of innovation and growth.

In one paragraph, Manzi sums up what I have been saying on this blog for years. Brilliant.

Liberals, meanwhile, have correctly identified the problem of cohesion, but have generally proposed antediluvian solutions and downplayed the necessity of innovation in a competitive world. They have noted that America's economy in the immediate wake of World War II was in many ways simultaneously more regulated, more successful, and more equitable than today's economy, but mistakenly assume that by restoring greater regulation we could re-create both the equity and prosperity of that era.

And here's where things get really interesting. I have espoused this on my blog as well. As we get to later portions of this document, we will see exactly how I short sighted I have been with this belief and how I was wrong.

The conservative view fails to acknowledge the social costs of unrestrained economic innovation — costs that have made themselves ­powerfully apparent in American politics throughout our history. The liberal view, meanwhile, betrays a misunderstanding of the global economic environment.

This last sentence is the bird's eye view of my lack of vision. We can't return to that "Golden Age of Capitalism." It's gone. Forever. The world has changed and I, like my colleagues on the right, have not caught up with the times. Ironically and quite hypocritically, I have accused them of believing the earth is "flat." And yet I have been thinking in just the same way.

Tomorrow we will pinpoint exactly why this happened.