Saturday, August 24, 2013

America Creaks Along

As Pindelski puts it, to compare a low or middle income economy with that of the US is Arrant Nonsense.  And yes,  America is far from finished, and is still the envy of the developing world, including China.


The appropriate comparison of the US is with those OECD countries that have roughly equal levels of income.  In that respect, the US is falling behind.  Where it used to rank in the top three in various measures, it is now often in the bottom three of a list of twenty.

This includes things like:
  • language, science and math abilities of students on completion of high school.
  • completion rate of high school
    This despite being near the top in per student spending K-12.

  • percentage of people who complete a college degree
  • teenage pregnancy rate
  • people without adequate health care
  • life expectancy
  • infant mortality
  • incidence of various life-style diseases
    This despite spending more per person on health care - by a lot - than any other country.
  • lack of social mobility - it is now easier for people in the other OECD countries to climb the income ladder than it is in the US.
  • non-growth in the median income - other OECD countries are also afflicted with Chinese take-over of low-end manufacturing, but haven't succumbed to this.
  • poverty rate  (and the outcome for children born into poverty is apparently worse than children born crack-addicted because of their mothers' usage of the drug)
  • rates of violent crime
I can grow this list, but I hope the point is made. Let me be VERY clear - India or China would be eager to exchange their problems for those of the USA. China and India have large economies because they have lots of people, not because the average person is really well-off.

BUT - the US is sliding down the rankings of its peer group of nations. Perhaps part of the reason is that the US spends as much on defense as the next fifty nations combined. People should reflect that it is soft power - Pindelski's post is a paean to soft power - that keeps America admired, feared and safe, not its military power.

"America is not finished", "America is just getting started", a truth and a pious hope, respectively.  This hope may not be unfounded, BUT!

Pindelski talks about the resurgence of California.
With city finances rapidly recovering in California, I have noticed that many of the chewed up city streets in the SF Peninsula where I live are undergoing a transformation, and such was the case with mine.
But this recovery is because California threw out the Republicans, ended an era of bad governance and fixed the state's finances.  It is not at all clear that the nation as a whole is willing to do the same.  The Republicans will hold on to the House of Representatives in 2014, it is almost mathematically impossible to dislodge them; and the Republicans are given a better than even chance of winning the Senate in the 2014 elections.  The current set of Republicans are threatening to shut the government down, or even to force a default on its obligations by the Federal government (a default would put the world economy into a tailspin) in order to get their way.