To Save America Democrats And Republicans Should Reject All Extreme Positions, Find Agreement On the Fundamentals Of Democratic Capitalism – Erskine Bowles And Alan Simpson, Co-Chairs Of The Debt Commission, Did That

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By Paolo von Schirach

September 29, 2012

WASHINGTON – America is a democratic and capitalistic society that lost its bearings in on an orgy of stupid ideology fueled by ignorant ideologues. This toxic concoction is fanned out daily by outrageously partisan media that treat politics as entertainment that has to be dished out to aficionados who want to hear their silly biases repeated again and again.

Democratic capitalism is complicated

In fairness, to create and sustain a modern society based on democratic capitalism is a really complicated matter, in fact an almost impossible undertaking. The enterprise is premised on ample doses of vision, intelligence, maturity, self-restraint and on the ability to constantly balance the promotion of private interests and the need to uphold the public good.

Balance between private and public

Indeed, democratic capitalism is about building a robust consensus on the proper mix between private and public –in everything.

To begin with, there should be a shared understanding that democracy does not mean much without sustained economic growth. Therefore democratic capitalism has to include every possible incentive to free enterprise, along with sensible regulations that will prevent capitalists to become exploiters or rent seeking monopolists.


The mix has to include basic regulations, some functions performed by public entities that will include the provision of some basic services. A democratic capitalism formula has to include a broadly shared understanding of what it takes to create the foundations for a real equal opportunity society in which all children, irrespective of socio-economic background, can acquire the tools that will give them a truly fair shot at excellent education and therefore personal growth.

By the same token, there should be a widely shared consensus as to how all citizens and corporations contribute financially, via the tax system, to the general welfare.

Growth and the environment

By the same token, it should be obvious to all that there must be a good balance between economic development and protection of the physical world in which we all live. There should be no built in contradiction between sustainable growth and sound measures to safeguard the environment.

All in agreement?

In theory, all this sounds simple and self-evident. Of course, we are for economic growth. Who isn’t? Of course, we all believe in equal opportunity. Of course we think that there should be a balance between markets and regulations as well as between development and environmental protection. Yes, we all agree, in theory.

The triumph of ideology

In practice, though, in recent years intense ideological bias and the desire to cultivate selected special interests and voting blocks created a huge mess that now risks to derail proper US governance, any residual social consensus about taxes and public services, and the entire American economy. The goal of optimal balance goes out the window when we have opposing sides vociferously advocating their own self serving reformulations of what a “fair balance” should be.

Demonizing opponents

Forgivethe over simplification, but this is the nasty predicament in which America finds itself today. On the eve of a critical presidential election, the two parties have managed to create an absurd scenario of mutually exclusive, extreme visions. Obama presents himself as moderate and socially inclusive. Romney calls his plans disastrous socialism that will kill enterprise while causing financial ruin. Romney claims that he knows how to manage public policy and how to restart the economy. Obama calls him a vulture capitalist bent on destroying social programs in order to benefit the rich.

Both candidates are right in some measure, and both are guilty of indulging in crazy hyperbole and willful slander.

No, Mr. Romney, markets are not self-regulating, as a history of boom, bust and bubbles, culminating in the 2008 disaster that almost sunk the entire US economy, shows. And no, Mr. Obama, regulation and public contracts are hardly a formula for optimizing outcomes, witness the historic disaster of the American public education system and the unsustainable debt burden caused by overgenerous benefits granted to public sector employees by politicians who want votes more than good governance.

Reject ideologies

Many say that the only way to get out of this mess is finding an honorable “compromise” between diametrically opposing visions –all for the good of America. I disagree. The healthy way out is for both parties to grow up, sober up and reject as silly and foolish their most extreme positions. As long as these ridiculous positions, (“tax the rich to redistribute wealth”, “no new taxes under any circumstances”, and so on), have legitimate standing, compromise will be extremely difficult or impossible, as the recent history of major failures attests.

As a nation, we could not have broad based agreement on sound health care reforms, on financial regulations, on air quality regulation, on a public schools reform agenda. Most notably, as the failure of the 2010 Debt Commission and subsquent efforts proves, we cannot agree on the really big ticket item of federal spending reform which has to include entitlement and tax reform.

Deadlocked America

While the picture may be very different at the state and local level, when it comes to national policies, America is deadlocked. For a constitutional system based on the separation of powers whose success is therefore predicated on the ability to reach agreements between different factions, this perpetual deadlock is the kiss of death.

In this respect, we are not faring better than any tired and litigious Southern European parliamentary system and no better than perennially blocked India.

True statesmen: Bowles and Simpson

The reasonably good debt reduction formula provided in December 201o by the Debt Commission was based on a broad policy agreement between the two elder statesmen who served as co-chairs. Republican Alan Simpson and Democrat Erskine Bowles set ideology aside and put togeher a decent proposal that should have been the basis for crafting a national plan that both parties could sign on without suffering any political consequences.

But it did not work out that way because active duty political leaders are sensitive only to immediate political pressure. In so doing, they show that they do not care that much about national priorities and even less about the price of inaction in terms of missed growth and impending fiscal disaster. Nothing was done about the Bowles-Simpson plan. Absolutely nothing.

Erskine Bowles and Alan Simpson are rare examples of genuine statesmen who put together a proposal for the common good. (Of course it helps that they are both out of the active politics arena and therefore with no concern about defending their agreement at the next election). The others, and that includes Obama and Romney, are not real statesmen. They are just myopic politicians.

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