American Weakness

It often seems America is increasingly sclerotic, with a diminishing capacity to cope with challenges it faces. For instance, apropos of the inept security that enabled a deranged knife-wielding Iraq War veteran to make his way deep within the White House, the New York Times noted that

“the Secret Service has revealed itself to be as bungling and dysfunctional as many other once-revered Washington institutions.”

and Frank Bruni wrote that

Time and again, Washington validates the naysayers who like to dismiss it as the capital of bureaucratic incompetence.

Michael Ignatieff’s recent New York Review of Books article Are the Authoritarians Winning? provides an interesting overview of the problems of America and other modern democracies. Here’s an excerpt:

In the 1930s travelers returned from Mussolini’s Italy, Stalin’s Russia, and Hitler’s Germany praising the hearty sense of common purpose they saw there, compared to which their own democracies seemed weak, inefficient, and pusillanimous.

Democracies today are in the middle of a similar period of envy and despondency. …

… America sets a dismaying example to its allies and friends. For two centuries, its constitutional machinery was widely admired. Now, in the hands of polarizing politicians in Washington and in the two parties, it generates paralysis. …

It’s difficult to defend liberal democracy with much enthusiasm abroad if it works so poorly at home. …

[Harvard economist Joseph] Stiglitz argues that the fiscal crisis of the liberal state is to be attributed squarely to three interrelated phenomena: rising income inequality, money power in politics, and systemic tax avoidance by the superrich and globalized corporations.

As inequality rises, Stiglitz argues, it suppresses effective demand. Unequal societies hoard wealth at the upper end instead of spreading consumption and investment through a broad middle class. When inequality holds back demand, corporations sit on large cash hoards, unwilling to invest or consume. As the rich become ever more ingenious in avoiding taxes, the cost of carrying the liberal state falls on a middle class forced to shoulder the burden alone. It is hyperinequality that is choking off demand and starving the liberal state.