by Elliott Morss
For larger image of caption map, click here.
Editor’s note: A GEI Analysis article last week discussed the condition of the U.S. as an empire. This article presents Dr. Morss’ opinions on how to address some of the problems of that empire.
Introduction
In a recent article, I highlighted a number of problems the US faces as it moves into the 21st Century. Many readers were troubled that I described problems but offered no solutions. In actual fact, I have given careful thought to what can be done about each problem, and my ideas are presented below.
Let me start with what I ended my last article with: Is the sun setting on the US Empire? Probably. But there are far worse things that could happen, both for the US and the World.
Energy Dependency
Per capita, the US consumes almost four times as much oil as other OECD countries. What to do?
- Impose an additional $3 tax per gallon on both gas and diesel fuel. It would generate $512 billion annually and significantly cut into US gas consumption.
- Get serious about alternate fuels. Research conducted by Shanghai Jiaotong University concluded that solar water heaters in Shanghai cost 70 percent less to operate than electric water heaters. The US should introduce its own subsidies so solar water heaters cost 70 percent less to operate than electric water heaters.
- Pass a Federal law, as now exists in Hawaii, so that all new homes are required to install solar water heaters.
Foreign Policy
Serious problems started in Vietnam – 55,000 Americans lost; more than 2 million Vietnamese killed; the US pulled out – nothing accomplished. The Cold War ended when the USSR economy collapsed. The Middle East – the US is not popular
What to do?
- Reinstitute the draft. Right now, the military attracts children from low income families. What happens in US wars does not matter to most Americans. It is summarized in short news clips that go in one ear and out the other. With the draft, better educated, higher income families with political clout will start questioning where their drafted children will be sent. Remember the Vietnam War protests? A lot of it had to do with the draft. The protest that finally got the US out of Vietnam was fused by parents who started thinking if they wanted their children fighting in Vietnam.
- Stop trying to affect an Israeli/Palestinian 2-country solution by offering bribes to Israel. Israel is not ready to accept a Palestinian state, and consequently, it is unseemly to offer Israel 20 F-35 fighter jets as part of a diplomatic effort to revive direct peace talks between Israel and the Palestinian Authority. Such offers accomplish nothing and generate more hatred of the US in the Middle East.
Immigration Policy
10 million illegal workers are not going to be sent home. What to do?
- Make them legal, and require all American to have ID cards.
- Stem the flow of illegal immigrants by making it a serious offense for anyone to hire a worker without an ID card. (The US Chamber of Commerce along with a lot of us who employ “landscape gardeners” will not like this).
Health Care
The US spends far more than any other developed nation on health care, and its health outcomes are the worst of any developed nation. I am writing a series of articles on this subject. Major changes are needed, and they will set forth and explained in Part 5 of the series to be published in the next 10 days.
Education
US test scores on reading, math and science are low relative to other developed nations. I don’t know what to do about this. I don’t think more money is the answer. Looking at Table 1, I guess the problems stem from students’ lack of motivation and family support.
Table 1. – US Graduation Rates
| High School | |
| Group | Graduation Rates |
| US Total | 70% |
| Asian | 80% |
| White | 76% |
| Hispanic | 58% |
| African | 53% |
| Native Indian | 49% |
Source: http://www.all4ed.org/
Debt Dependency
The US unemployment rate is 9-10%. I am more worried about US unemployment than I am about US debt. To increase jobs, I recommend:
- The Federal government should continue to run large deficits until there are 4 consecutive months of private sector job growth of at least 200,000 each month.
- Hopefully, this money printing effort will weaken the dollar internationally and start bringing manufacturing jobs back to the US (for more on this, see my previous article).
Obesity
Two thirds of Americans are overweight and one third is obese.
73% of US agricultural subsidies go to meat and dairy products, with grains getting 13%. Vegetables and fruits get less than 1% of the subsidies.
What to do? Start by ending meat, dairy, and grain subsidies.
Financial Sector/Paying People Too Much
The new financial reform will not protect the World from another US banking collapse. What should be done? As I have written, FDIC deposit insurance should only go to banks that:
- Manage their own loans;
- Do not engage in trading.
Paying People Too Much
No other country in the world matches the US in what it pays CEOs. Here I am not talking about people with good ideas, like Steve Jobs. I am talking about the heads of large corporations – the chief “bureaucrats”. Blankfein, the CEO of Goldman Sachs, took home $43 million in 2008. What happened to US banks in 2008? They collapsed! Pandit, the CEO of Citigroup, took home $38 million in 2008. The amounts are obscene, and they are still in charge.
For my recommendations, see my article on Paying People Too Much.
Guns
This was not one of my original US problems, but in light of recent U.S. gun tragedies, I have been reminded of what has happened in this country.
A personal aside: perhaps foolishly (I think not), JFK inspired me to think the world could be a better place. I spent 20 years in Washington hoping I could make a small difference in his memory. During that time, both Martin Luther King and Robert Kennedy were gunned down. I remember sitting in a bar on M Street between 19th and 20th Streets with a couple of friends. We agreed to give up on DC.
How much evidence do we need? Two Kennedys’ and Martin Luther King killed by nut cakes. I quote from Wiki: “There have been over 20 known attempts to kill sitting and former Presidents. Four died. They almost got Reagan. Truman was shot at as was Teddy Roosevelt and FDR.”
And beyond that, the almost monthly rampages of crazies killing people in schools and shopping centers. What is the common element? Guns.
Back in the ‘70s, the association between violent TV and aggression in children was shown to exist: children who viewed terrorism on TV were for more aggressive than other children[1]. Today with the Internet, there is no limit to the violence people can see and come to believe in.
How much evidence is needed to demonstrate that allowing any American to buy a gun no longer makes sense? What did this most recent nut cake just do? With a record of serious mental problems, he was able to buy a Gluck semi-automatic pistol in Tucson on November 30.
The US has a serious problem: nut cakes have easy access to guns.
Now, who benefits from interpreting the 2nd Amendment to the US Constitution literally? It states: “A well regulated militia being necessary to the security of a free State, the right of the People to keep and bear arms shall not be infringed.”
Three groups benefit:
- Arms suppliers;
- People wanting to protect themselves;
- Hunters.
Forget about arms suppliers – they are mostly decent people just supplying a market.
People who want to protect themselves? Ask any policeman and they will tell you they want them “off the street”.
Hunters – only 12.5 million left.
What to do?
Do we need an Amendment to the Second Amendment of the US Constitution?
Maybe so. At the very least, we need to ban anyone who is not a government official to have access to an automatic or semi-automatic weapons. “The right to bear arms” has to be reinterpreted to mean that no civilian has the right to own a gun that can fire more than one bullet at a time.
Why is All This Happening? – Governance
In the US, it does not matter much whether Bush or Obama is President or whether the US Congress is primarily Republican or Democrat. Unlike China, a dictatorship where the Communist Party wants to please the people, elected US officials do what special interest groups want them to do.
There were 13,644 registered lobbyists in 2008, and lobbying expenses were $3.3 billion. Political action committees spent $412 million to get people elected. 527 groups are tax-exempt organizations that engage in political activities, and they spent another $238 million.
Like US educational problems, I am at a loss to know what to do about governance. Without reforms in this area….
Footnote
[1] Monroe M. Lefkowitz, Leonard D. Eron, Leopold O. Walder, and L. Rowell Huesmann, Growing up to be violent: a longitudinal study of the development of aggression, 1977, Pergamon Press, Chapter 4, “Television and the Development of Aggression”.
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A Brief Overview of Global Empires by Elliott Morss
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From Stimulus to Austerity – What Role for Taxes? by ElliottMorss
Is Ignorance Bliss? A Look at U.S. Income Inequality by Elliott Morss
Inequality, Leverage and Crisis by Michael Kunhof and Romain Ranciere
U.S. Problems are Institutional by John Lounsbury
Bad Education by Malcolm Harris
Elliott Morss has a broad background in international finance and economics. He holds a Ph.D. in Political Economy from The Johns Hopkins University and has taught at the University of Michigan, Harvard, Boston University, Brandeis and the University of Palermo in Buenos Aires. During his career he worked in the Fiscal Affairs Department at the IMF with assignments in more than 45 countries. In addition, Elliott was a principle in a firm that became the largest contractor to USAID (United States Agency for International Development) and co-founded (and was president) of the Asia-Pacific Group with investments in Cambodia, China and Myanmar. He has co-authored seven books and published more than 50 professional journal articles. Elliott writes at his blog Morss Global Finance.
