The Wizard of Odd
“…all the talk of America’s economic decline is political hot air.” – President Obama
It is odd that the president said this about the economy last Tuesday in his State of the Union Address. With the U.S. national debt nearing $58,000 per citizen, personal debt that averages $53,000 per citizen, unfunded liabilities (medicare, social security, etc.) estimated at $382,000 per citizen, stagnating wages, rising inequality and a stock market off to its worst start to a year ever, how can this possibly be true? How can our economy not be in decline when the United States has run a trade deficit each of the last 40 years with no indication that this will change any time soon?
It is odd that earlier in his speech to the nation President Obama said that the anxiety Americans feel is not due to a declining economy but to one that he referred to five times in his speech as the “new economy”:
“Anyone claiming that America’s economy is in decline is peddling fiction. Now, What is true — and the reason that a lot of Americans feel anxious — is that the economy has been changing in profound ways, changes that started long before the Great Recession hit, changes that have not let up. … Companies in a global economy can locate anywhere, and they face tougher competition. As a result, workers have less leverage for a raise. Companies have less loyalty to their communities. And more and more wealth and income is concentrated at the very top. …bouncing back from job loss has gotten a lot tougher. Americans understand that at some point in their careers, in this new economy, they may have to retool, they may have to retrain, but they shouldn’t lose what they’ve already worked so hard to build in the process.”
These statements are more than a nod to globalization; they are a total surrender to it. Nowhere in his speech does he question that global trade is partly to blame for many of our economic woes. Instead, he treats increased globalization as an inevitable trend that either cannot or should not be reversed. Therefore it is each individual’s responsibility to adapt to this “new economy” and government’s responsibility to make sure no one gets hurt in the process. I am not convinced, as the president suggests, that Americans are keen on making a mid-life career change just so globalization can continue its incessant forward march.
It is odd that he said this – “Let me start with the economy and a basic fact. The United States of America, right now, has the strongest, most durable economy in the world.” I’m not sure how one would prove or disprove this, but even if true my reply is – what good is it to be the prettiest horse in the glue factory?
It’s no secret that the world is full of nations that have a sick economy. Trade imbalances have reached such dangerous levels that their unwinding threatens both debtor and creditor nations. Debt is a universal problem, though some nations, like Greece are farther along the road to disaster than we are. Inequality is increasing, not only within individual nations, but between them as well. In such a precarious and economically sick world is it really a good idea to compare our economy with those of other nations so that we can declare ourselves healthy? Our public debt to GDP ratio looks good when compared to Japan or many European nations, but not so good when compared to South Korea or Mexico.
The reality is that our economy is in decline, it is not strong and it hasn’t recovered from the 2008 crisis. Worse still, much of the world is in the same boat.
But reality takes a back seat to hope in the land of Odd – hope in a government that is not only able but called with a holy calling to solve all of society’s problems. Touting a recovery that doesn’t exist while denying the existence of a looming economic crisis will not make America great again. And no wizard can change that fact. Not even in the land of Odd.
All quotes are from the State of the Union Address posted by the White House. You can read it in its entirety here.