Will America Rise from its "Comatose" State

In view of Trump's Victory at The Elections, I'm republishing the following discussion between me and an American for the readers of this blog.  

By Con George-Kotzabasis

A reply to a very clever American Open Salon

The Global Credit Crunch and the Crisis of Legitimacy
By RCMoya612

RCMoya, after your excellent and resplendent analysis I feel, if I captiously quibble about few points, like a bat squeaking in the dark. First, inequality might have “continued its forward march” but I would argue that it did so on a higher level of general economic prosperity in America following the up till now unassailable historical paradigm of capitalism and free markets that has made the poor ‘richer’ in relative terms, as Amartya Sen has contended.

Secondly, America’s “hectoring and ignoring” has its counterpart in Europe and in other continents whose countries were strong allies of the US during the Cold War but with the collapse of the Soviet Union have reappropriated their independence both geopolitically and culturally and expressing this in their own hectoring and ignoring against America, thus continuing the irreversible law of the political and cultural competition of nation-states.

Thirdly, I would argue that as long as America continues to be the centripetal force attracting the “best and the brightest” to its shores and not stifling the Schumpeterian spirit of entrepreneurship and “creative destruction”, it will be able to rise again even from the ashes of a comatose state and will continue to be in the foreseeable future the paramount power in world affairs.

And fourthly, the rejection by Congress of the funding plan that would have a better chance than none to prevent the economy from collapsing was inevitable in the present political climate where reason cannot compete with populist emotionalism and when a swirl of weak politicians, like Nancy Pelosi, and, indeed, Barak Obama, are its ‘slaves’. Only by cleaning out these wimpish politicians from positions of power will the political narrative reassert its legitimacy.

RCMoya says


kotzabasis
October 01, 2008 07:26 AM
Thanks for the points. Interesting thoughts.First, I'd be careful in praising the 'unassailable historical paradigm' of capitalism and free markets. That has never really been the case elsewhere in world--including Japan and Europe, and definitely not in the third world--and yet that has not stopped those countries from reaping the benefits of a globalised economy. Simply put, capitalism may have been successful--it is--but it is not the case that completely 'free markets' have played a central role in the enrichment of advanced economies. That was probably the result of a misleading analysis (an altogether too cheery one at that) of Adam Smith's 'invisible hand'--which has monumentally failed more than once since the 1980s.

Second, Europe may have been an American vassal in the early parts of the Cold War--and yet still managed to create economic structures that were different from the United States. Britain, France and Germany have had distinct economic approaches--and that's to say nothing of more interventionist Scandinavia--and in all of these countries (save for the UK) the post-war years were considered an extraordinary period of growth.You're probably right that we're now re-entering a period of political and cultural competition between states. I think this is a good thing, though it'll take some time for Europeans to get used to the idea of a weaker America.Your third point is probably concedable...though only to a point. The 'best and the brightest' only go to America because of its perceived economic vitality. Take that away and there'd be less of a reason to head over. Also, buying into the 'Americans are so entrepreneurial' myth is rather problematic--because some European states, for example, have a greater slice of the economic pie coming from small and medium-sized business owners than America, land of the corporate shopper, has. Maybe it's the contrary situation at present: maybe Europeans have 'stifled' entrepreneurialism here...and in any case releasing it would help, not hurt it.

I'd warn that nothing lasts forever, that nothing is ever guaranteed; if America's financial system DOES go under even further America's future role as a power would be substantially jeopardised.Your last point starts off well...until you reveal your partisanship. The Democrats certainly don't have a monopoly on forceful politicking, to their detriment. I would argue that their greatest weakness is in their 'social democracy light'-style of policies.Yet, all the perceived 'strength' in the world hasn't made the belligerence of the Reagan-Bush-Republican era any more palatable to the world--and, in fact, has in the longer-term probably weakened America considerably.Strength alone cannot substitute for pragmatism, intelligence and good policy.

Kotzabasis says

OK, but you have to answer the intruding historical questions under what economic system Japan and Europe developed and which was the motor of the globalised economy? One would be silly to say that capitalism is an ‘absolute monarch’ and free markets are the ‘Sun King’ of economic development. But we are talking here about basics and not the sometimes necessary state intervention which has been merely, if you allow me to use this metaphor, a changing of an occasional punctured wheel (excepting the present situation) of an omnibus that has been running quite well for a long time on all rough terrains.

And you have to be consistent with your own logic, if you accept the reality of a globalized economy, as you do, which was the offspring of a long gestation starting in the 1980s, how can you imply at the same time that this globalized economy was begotten by the “monumental” failure of the 1980s? The question of Europe is what cemented more the “economic structures” of Europe. Was it the working spirit of capitalism or the working spirit of socialism? And if a mixture of both is your obvious answer, I’ve to remind you that mixtures are not equal and on the scales of economic development capitalism continues to ‘tilt the scales’ in its own favour contra socialism, and that also applied to your economic model in Europe. Perceptions do not have a long life and for more than a hundred years now America continues to attract the best and the brightest on its shores. So its economic vitality must have more solid grounds than perceptions. Again you are inconsistent with your own logic; if the best and the brightest are in America, as you concede, then your “Americans are so entrepreneurial” cannot be a “myth”.

Needless to say “nothing lasts forever and... ever guaranteed” since man’s fate is to live and cope in a world of uncertainty.Lastly, I’m surprised that you consider my judgments on person’s characters, in this case of Pelosi and Obama, and on political parties as being partisan. Under your criterion only a person who made no judgments would be absolutely impartial. The facts are that the Democrats have cut their sails to the populist wind and are running their campaign on the emotional hate and animadversions many Americans have for the Bush administration and by association the Republicans. “Pragmatism, intelligence and good policy are the offspring of strong genes.

Austerity in Greece a Remedy not a Penalty for Self-made Ills

By Con George-Kotzabasis --September 23, 2016

My short reply to a political theorist of the Jurgen Habermas School of Critical Theory

It is rather surprising to see a votary of Jurgen Habermas in using an analytic blunted tool that leads to the false inference that malevolent Europeans wilfully imposed upon Greece austerity measures to punish it. The truth is, that these measures were saddled upon Greece as a result of a consumer’s binge and an exuberance of public spending, fuelled, by a profusion of borrowed funds which inevitably pushed Greece into the quagmire of bankruptcy. Austerity therefore and the economic structural changes imposed on the country were a remedy, not a penalty, for the self-inflicted ills that past government policies, mainly of Pasok, engendered.

My question is, why you have not mentioned anything of the pledges, that Kyriakos Mitsotakis had made in his speech at the Exhibition of Thessalonica last Saturday, with their great potential to pull Greece out of its long economic crisis. In my opinion, a government, under the strong and astute leadership of Mitsotakis, will pull Greece out of its immiseration—as the Samaras government was close in achieving. An immiseration that the totally inept Tsipras government is exacerbating, with its historically obsolete neo-Marxist fixations and panaceas.

Democracy Being a Free Good Endangers its Existence

By Con George-Kotzabasis 

Breathing democratic freedom is neither easy nor free; it entails both rights and obligations and most importantly knowledge of current fundamental issues. But in most democracies their constituents tend to uphold and demand more their rights than their obligations, and more deplorably, a sizable number of them exercise their rights in a state of ignorance. This imbalance, however, between rights and obligations, as well as lack of knowledge of the real issues, puts in jeopardy the functioning of a politically just and economically productive democracy, and indeed endangers its existence as a form of government.

Moreover, it makes its voters who are uninformed of the points at issue captive to populist slogans and to that everlasting traducer of democracy, identified by Aristotle, demagogy, that appeals to the hopes and fears of the electors and by propagandistic lies and false promises opens the doors of power to demagogues. This is exemplified by two recent political events in our times: Alexis Tsipras and his party of Syriza winning the elections in Greece on a wave of populism and unprecedented lies and false promises in the political history of the country, and of the plebiscite of the UK, whose two leaders of Brexit, Boris Johnson and Nigel Farage, with a farrago of lies and dire fictions were able to hoodwink a major part of the populace to vote for the exit of Britain from the European Union. On a smaller scale this also has happened in the Australian elections, when the Labor Party by its scare campaign that the Liberal Coalition would privatize Medicare, succeeded in convincing a large part of the electorate of this fictitious threat with the result of Liberals losing so many seats that brought the country on the edge of a hang parliament.

How can one remedy the weaknesses of democracy and protect its constituents from becoming victims to populism and to demagogy with catastrophic results to the well-being of society and to its continued economic prosperity? Some people believe that the answer lies in bringing cultural and ethical changes among the people that would make them immune to this toxic virus of populist-demagogy; and thus leading gradually to the cashiering and inexorable dismissal of all demagogic and populist leaders from the domain of politics. The difficulty and danger of such a solution however is that cultural change is a slow process and during its gestation and vicissitudes in a long run may in the meantime unhinge democracy from its door of freedom, by the actions of feckless, inept, and irresponsible politicians, and incarcerate it within the dungeon of dictatorship. A safer and faster solution would be to enact radical changes to the electoral voting system by suspending in certain circumstances temporarily parts of the electorate from voting.

On what principle could one suggest such an unequal voting system that would discriminate so deliberately between social groups in the ambience of democracy, and which group would be the unequal part in the democratic process? The guiding principle of the first part of the question must explicitly aim to the continued viability and stability of a democratic system, in the context of which, the economic well-being of society depends and guarantees the further expansion of wealth that renders to the people a wide choice where to employ their talents and skills that would push their living standard onto higher plateaus and make their lives congenial to their desires. The second part, i.e., the social group that would be unequally treated, would be identified as that part that depends on welfare for its living and as a ‘debtor’ client of the government easily succumbs to populist slogans and rabble rousing; also, due to its low educational level and lack of interest in important matters, it deprives it from having adequate knowledge of the issues involved and hence is completely unqualified to make a sober judgment on these issues. It is mainly this social group that brings to power demagogues and millenarian ideologues that imperil the stability of the polity and its economic system. And, indeed, ironically pits this same social group into absolute poverty, and in turn destabilizes democracy itself, as it has happened with the political rise of Hugo Chavez and Nicolas Maduro in Venezuela; where its people after a contrived false prosperity are presently hunting dogs and cats to feed themselves. The same has happened with the Marxist Alexis Tsipras in Greece, where the pauperization of many of its ordinary people is exacerbated every day and has reached unprecedented high levels under his totally inept, ideologically barren and irresponsible government.

The enactment of this radical legislation would specifically suspend from the right to vote any person who had been on social welfare or unemployed for more than a year, and only with his/her ceasing on being on welfare or unemployed his/her right to vote would be restored. Such legislation would not only strengthen and secure the viability of democracy and the prosperity of its economic system, but would also deprive populist demagogues and political parties of a constituency upon whose existence they depend. Moreover, it would substantially reduce the spending of the welfare state and make it less precarious to the fiscal policy of the state and hence to the well-being of the country. This radical enactment takes a leaf from the cradle of democracy in classical Greece, Athenian democracy. The latter disenfranchised and suspended from voting citizens who had failed to pay a debt to the polis. Likewise, in a modern democracy people who were in debt for their living to the government, that is on welfare, would be suspended from casting a vote.

Needless to say, such a radical proposal, to occur in the ambit of the 'spoils' of the welfare state that has spoiled at least two generations of people by our carefree and stand at ease democracy, will not be easy to implement as it will rouse all the wrath and opposition of the ‘progressive’ bien pensants and the ‘good fellows’ of the dole. It will require extraordinarily strong and sagacious political leadership that will unite parliamentary opposition parties into a gigantic wave that relentlessly will sweep away this ‘progressivist’ praetorian guard of the human rights, without responsibilities, of the dole takers, and throw this defiance of the sanctimonious goody-goodies into the dust bin of history.

I rest on my oars: Your turn now

Smart Politicians Stand Naked Before Labor's Master: Ideological Stupidity

By Con George-Kotzabasis June 28, 2016

Since the economically profligate Whitlam era, the only Labor government that was bracketed off from Labor’s inveterate stupidity was the Hawke-Keating government. The present leadership of Shorten-Bowen taking a leftist turn in its politics, like the Rudd-Gillard administrations had done, as adumbrated in its pre-electoral commitments of “big-government,” is repudiating the prudent policies of Hawke-Keating and wilfully adopting, retrogressively, the stupid and disastrous paradigm of European socialism that had sunk Spain, Portugal, Ireland, Greece and Cyprus into the abyss of bankruptcy, economic crisis, and political instability. Moreover, it is doing so in the face when even the Scandinavian haven of the social democratic Welfare state is severely clipped of its largesse, as at last has been realised to be no longer economically viable. Anders Borg, the wunderkind as finance minister of Sweden, initiated the incremental dismantling of the Welfare state, lowered taxes in the private sector, which has galvanized the creation of new jobs.

Returning back home. The leftist political editor of The Sydney Morning Herald, Mark Kenny, is forecasting “dire trouble” for Labor on the debt and deficit front. Terry McCrann, of The Daily Telegraph, ominously declares “Shorten would plunge the country into greater debt”. And Henry Ergas, of The Australian, claims that even the latest backflips of Labor will not be sufficient to close the deficit gap and its “mythmakers” will be tempted “to conjure revenue increases out of thin air, just as the Rudd-Gillard governments did pointing to a golden future time when receipts would soar.”

But to believe in myths and tales of future increases in revenue, when The World Bank and the International Monetary Fund slash hopes of economic growth in the near future, is highly precarious, as it would lead the country into complacency and prevent it from taking the necessary measures to countervail a looming long recession. Furthermore, such a possibility is strengthened with the present event of Brexit, which could ominously beget both the dismemberment and the disintegration of the UK and the European Union, whose widespread ramifications upon the geopolitical and economic spheres of the world would devastate any prospects of economic growth for many years. And it is most unlikely that there will be, like in 2008, another China to save Australia from woeful economic distress.

Further, Labor with egregious lack of imagination and foresight is not factoring-in such imponderables as a precipitous fall in world prices of minerals in a context of world recession and the calamitous consequences that would follow, hitting public finances to smithereens and engendering a seriality of deficits with no hope of being reduced, with the outcome of plunging the country into the abyss of bottomless debt and insolvency. Is Bill Shorten going to be the “Maduro” of Australia, who, as the world price of oil dropped to lower depths, as a socialist president of Venezuela, continued the dissolute economic policies of his predecessor, Chavez, that turned the country from contrived prosperity to real poverty, once the government coffers were emptied, and indeed, into a hunting ground for dogs and cats to feed his people?

It goes without saying, of course, that this is an exaggeration and one could hardly imagine Australians shooting dogs and cats to feed themselves. It is merely used as an example to emphasize the dangers overshadowing an economy, when its Stewarts, the government, insouciantly do not take in consideration future possible events that could dramatically affect the economic course of a country and do not take prospective measures that would shield the country from such catastrophic effects.

One asks the question why the smart as they come politicians of Labor, such as Andrew Leigh, the assistant shadow treasurer of Labor, let their guard down and are reluctant to prepare themselves for these uncertainties of the future, believing that Australia somehow is protected by divine mandate from the ills of world recession and that Australia’s “economy is indestructible”, to quote Rex Connor, a minister in Whitlam’s government? For people who have studied the policies of Labor over a number of years the answer is simple and obvious. All their major policies are motivated by their passionate belief in the socialist utopia. And the implementation of these policies requires, according to this ideological schema, big and interventionist government and hence, high taxes; and the redistribution of wealth and not its greater increase are their priority. Despite the glaring evidence showing that augmenting the size of wealth is the only and sure way to enhance the standard of living of the ordinary people. The latter proposition has indisputable historical precedents, as it was the flourishing and ever increasing wealth of capitalism, that for the first time in history, pulled millions of people from the hovels of poverty onto peaks of prosperity. But Labor is blind before this historical fact. Like a drug addict Labor is fixed to its socialist doctrine and lives in a stupefied world of unreality and wishful thinking.

The matchsticks foundations of socialism are collapsing all over the world, especially in Europe, yet Bill Shorten’s Labor continues adamantly to believe that from this wreckage one could still build the just and equal society as envisaged by Labor’s quixotic visionaries. It is under this standard of socialist ideology that Shorten undermines and repudiates the prudent and pragmatic policies of the Hawke-Keating government, whose “Accord” between employers and workers engendered a congenial milieu for investments and the creation of new jobs with the consequence of increasing the living standard of Australians. Bill Shorten’s silence about these productive structural reforms and fiscal frugality of the Hawke-Keating era that had put Australia on a track of prosperity is a contemptuous affront to the two architects of these reforms. It was therefore rather surprising and amusing to have seen the two conductors of this inimitable political and economic performance sitting on the front-row of Shorten’s Launch of the Labor campaign, clapping at a leader who had mockingly renounced their wise policies. For Paul Keating, especially, standing next to Bill Shorten who had adopted and announced policies that would lead to a “Banana Republic,” it must have been an exceedingly painful occasion. Perhaps as painful as replacing Placedo Domingo with rock-and-roll.

I rest on my oars: You turn now