Pierre Trudeau

Pierre Trudeau

Orson Scott Card is a great science fiction writer - and arguably a great author. I can’t stand his politics, but he once said something very wise about America at the turn of the century, which ran approximately as follows - that America is doomed because Americans have lost the will to be well led.

I first came to think he might have a point during the 2004 primaries, when Dean, daring to discuss America’s real problems - and daring to admit to real solutions (raising taxes, for example), was horribly punished both by the powers that be and by Democratic primary voters. Dean famously noted that capturing Saddam Hussein didn’t make America one bit safer - one of the many unspeakable truths that helped do in his candidacy.

This is America, in which Kerry, in the second debate was ambushed by a questioner who insisted that he say, directly and clearly, that he would never raise taxes. So this year the frontrunners have all played it safe, and kept their doses of truth and realism to a minimum.

Pierre Trudeau, the late great Canadian Prime Minister, once said to Canadians “I’m willing to give you anything you’re willing to pay for.”

I don’t, I simply do not, understand what is so hard for people to understand about this. While deficit financing, debt and trade deficits all have their place in national policy, you simply cannot forever live beyond your means without it all coming crashing down eventually. Debt rarely makes sense unless you are buying assets that will eventually lead to you having greater income in the future or which are improving assets which will increase at greater than the inflation rate.

That’s it. That’s all. It’s not rocket science, it’s not high economics, it’s just household budgeting and should be familiar to the vast majority of people.

But it’s not.

There’s an old saw that when an economist can’t explain something economically he resorts to bad sociology. But I was trained as a sociologist more than as an economist, so I’m going to flip to some moralistic sociology. Policies which encourage the moral degradation of a nation’s population are bad for the nation in the long term no matter how good they are in the short term. Credit’s a good thing - lack of access to credit strangles new growth and keeps the poor from improving their situation. When you look at new immigrant groups you find, for example, that what determines their success in their new nation is often their ability to access capital - and when you look at ethnic groups with problems (like American Blacks) you often find that lack of access to credit is a big problem.

But that’s investment credit - money used to open a business or make another investment in the future. Consumer credit is another thing entirely and it seems to have destroyed Americans’ sense that they must pay. Easy credit - pay nothing for a year, but get your fridge now - that sort of credit, has expanded far too much in the US. And it’s not just that such credit is encouraged, but that consumer credit is practically required. Try and travel in the US or Canada without a credit card, using cash, for example. Try and rent a car or book into a hotel. It’s practically impossible. From a nation whose motto might be “in God we Trust, all others pay cash” it has become a nation which says “show me the plastic, we don’t take legal tender”. What I’d like to see, in the blizzard of lawsuits in the US, is a suit which takes a major hotel chain to court for refusing to take cash - for insisting on plastic. I suspect it’s illegal.

To bring it back - many Americans expect to buy now, pay later and to revolve ever larger and larger amounts of debt - even to borrow against their assets (generally meaning their houses) for consumer spending. Such borrowing against assets for consumption should be understood by everyone with any sense as profoundly foolish and only to be engaged in if you are going to starve or go without a roof over your head if you don’t. It is destroying your seed to engage in gluttony. Yet many Americans do it every day and have all their lives.

So why should they be concerned that the US government is doing the same thing - that their state government is doing it and that the economy as a whole is doing it? They’ve been corrupted by easy credit.

There is a strong economic argument for easy credit. The more people spend, the more demand there is, the better the economy is. And if all boats are rising, then you can handle the increased debt servicing charges. But over the last thirty years all boats haven’t been rising - in fact for the middle and lower classes things have, most years, been slowly getting worse. Part of this is related to offshoring and outsourcing - borrowing money to buy things created outside of the US economy practically requires it.

But the bottom line is this - the electorate has been enfeebled and corrupted to the point where they refuse to listen to leaders who tell them truth and ask them to bite the bullet and make the hard choices now rather than the disastrous choices later.

Dean fell for a number of reasons, not all related to his message (in particular he was foolish enough to challenge the media barons while treating reporters with contempt, a deadly combination). But part of his fall was related to the simple fact that he talked about America’s real problems and wouldn’t rule out real solutions (like raising taxes). Clinton, with her gas tax rebate, has certainly learned the lesson, nor can I recall Obama talking about raising taxes.

There ain’t no such thing as a free lunch. Any nation whose population forgets that is in its twilight. There’s still a chance to turn the US around, and there are favourable signs that the US population is turning itself around (the huge surge in voter registration, for example, is promising.) But there are still too many US citizens who insist on being pandered and lied to. They refuse to be led well and as such they will be led badly. No leader can lead people where they refuse to go - no one can save you from yourself. First you have to want to be led, first you want to be saved - that’s the battle. The rest is hard work, but without that first step, the rest of the journey can never be taken.

Moralistic? Absolutely. Tripe? Alas no. Some things really are simple and really do boil down to very basic moral questions.

This is one of them. Make your choice. Do you want to be saved from yourselves? Are you clear America’s worst enemy is not bin Laden or China or Islamofascists, but America? Then demand your leaders, rather than pander and lie to you - lead you. You’ll be pleasantly surprised by the fact that many of them would actually like to try and solve real problems. As for the rest, you’ll soon be rid of them. If you want to be led well, soon the bad leaders will fade.

It’s your choice.