February 22, 2009

End of An Era?

When I first moved back to the US I remember riding around my rather upscale town, seeing big open derelict spaces left behind by dead industries and nearby direly poor districts inhabited mostly by people of color.

I said to myself, "The Bastards!! Of all the nerve!!"

I was used to the untarnished image of America as seen from abroad. It was the country touted as "Number One" in the world, and California, the seventh largest economy on the planet, was its crown jewel.

But the truth is I never saw urban decay or poverty to that extent in France where I was based.

Little by little here in the US I saw the devil in the details: mind-wrenching traffic jams because the highway systems don't keep up with the growing population, regular deaths from train accidents because no one invests in overpasses, beautiful urban green spaces that never get tended to, homeless people pissing on themselves next to high-rolling financial planners.

Then I got my first job and couldn't get a doctor to accept me despite my shiny new healthcare policy. After that I went to grad school where I painfully forked over $25K for a masters (gulp) - and that’s cheap, I discovered!

A few years ago France elected their first ever money-loving president, a man who avowedly hangs out with mega-rich businessmen and believes in the power of entrepreneurship. Quelle scandale!

France was tired of watching people in the US and the UK make huge salaries, buy lots of brand-name creature comforts and benefit from much faster national growth. They were fed up with selling their beautiful family farms to foreigners with higher incomes.

They realized they needed a leader who could deregulate, speak up to the unions, make hiring and firing easier, and break through some of the unusual relationships French have to money, government perks, entrepreneurship and vacation.

I imagine I am not the only one noticing that our wonderful laissez-faire capitalist system that the world envied us has just seriously tanked.

And most experts agree we’re just seeing the tip of the iceberg.

Suddenly it's the cold shower after a long party and we're noticing that we haven't done a very good job at keeping our roads in good shape, our electrical grid up to speed, our schools and hospitals working and our prisoners locked up. Not to mention develop smart public transportation strategies and green energy. We're wondering why we don't have enough doctors per capita and we're starting to worry because we no longer have the top research schools in the world to attract the grey matter we once did.

I am by no means saying France is perfect - far from it. Having worked in government-run hospitals, to just mention those, I can cite dozens of ways to improve them.

However there is a fundamental difference that is noteworthy: France’s heavier taxes and regulation allowed it to have all of the above-mentioned things we need, plus everyone has the assurance that they’ll get healthcare and access to a higher education for a very low price (France actually has too many doctors and you can still get a house call for a reasonable price, imagine that!)

I have also spent plenty of time in poor countries: Morocco, Algeria, Palestine, Thailand, Eastern Europe.

I love dirt roads, mud houses and thatched roofs. I enjoy the sluggish speed of a crowd-filled bus or a rickety train. I enjoy having a huge service industry - because few people have a post secondary education. I fondly remember a three hour haircut/massage/shave in Thailand that cost me about 4 dollars and was a delicious part of my stay there.

In Morocco friends of mine returned to the shop of a wood worker who had built a door for their house. They wanted another one only this time they wanted it with the elaborate, hand-carved moucharabia design. When they asked the price of this second, much more labor-intensive door, the old woodworker looked at them perplexed. “Why would the price be different?” he replied, “It’s the same amount of wood.”


Labor laws are weak in these countries and people are regularly abused by employers. Weekends and vacations are not very clearly delineated. At the same time all of these countries also have a small minority of extremely wealthy individuals who navigate a parallel world that looks something like that of a 19th century colonial land-owner.

These are two different models on the continuum of how a country can be run and I’m not suggesting that we should become one or the other, though I do see aspects of both in this supposedly wealthy country of ours.

I think it is pretty obvious that we need to make some clear legislative decisions toward which way we want to go.

Do we want to keep defending our survival-of-the-fittest system where every man is free to create his or her own wealth and the infrastructures get kept up when the market demands it or do we want to pay the cost of enhancing quality of life for all levels of society at the risk of slower growth and less dynamism?

But before we really engage in that debate it seems to me there are two notions that many decision-makers don't want to embrace. In doing so they are hampering the efforts to decide on a solution.

1 - The trickle-down model just failed (or seriously floundered at least).

Highly sophisticated electronic tools, globalization, greatly increased distances between buyers and sellers, enamored blindness for profit-at-all-cost all skewed seriously skewed the game and turned it into something not very pretty. Giving huge sums of free money so that the same people can go back to business as usual isn't the answer.

2 - Running a modern democracy is expensive.

Even if we never espouse the idea practiced in all the other developed nations that we need to invest in the well-being of our citizens through cheaper health-care and low-cost education, its' imperative that we recognize that it costs a lot of money to keep up highways, dams, courts, antennas, buses, hospitals, law enforcement, prisons, food production, embassies, parks, coasts, government buildings, schools, museums, wars, military personnel and equipment.

How do we maintain these things if we are convinced that lowering taxes and smaller government are ALWAYS the answer?

To quote the pot-selling son of a retired Marine in the film American Beauty: “Never underestimate the power of denial.”