The Fall of America, Inc.

Francis,

How could you have bought the "deregulation failed" line? Isn't it clear this problem was caused by the GSEs, as Greenspan and others have been warning for years? Ask yourself, how did this incredibly capable risk assessors fail to see what was on the horizon, and how specifically could regulation have done a better job. I think, if you don't give people an incentive to buy up a bunch of shoddy "affordable housing" loans due to an implied government backing, you wouldn't be in this mess!

If the writer believes this, he is out of touch with reality. "We should provide better assistance to workers adjusting to changing global conditions, rather than defend their existing jobs. "

I had hoped we would be spared any more of Fukuyama's public utterances. After Fareed and Francis' roles as apologists for the Iraq invasion and occupation. the F-heads should have their soapboxes taken away. I loved the columns in Stephen Brill's now defunct Content Magazine that kept score on the talking heads articles and predictions. (Eleanor Clift did quite well) and the facts. So many of the shrills were shills. This piece, a sort of ten minute history of U.S. policy for the last 70 years makes some leaps. Like Amity Shlaes imaginative reassessment of FDR, which ought to be remaindered by now, a lot of tripe has been produced in the last decade. Now we watch the Nixonian attempts at public selff- rehabilitation of people whose faulty analysis we really could do without. Like George W. Bush, one it begs the question "How bad do you have to be to become a pariah?"

If you believe this, you are out of tiouch with reality. "We should provide better assistance to workers adjusting to changing global conditions, rather than defend their existing jobs. "

It is remains the same old story.

Professor Alexander Fraser Tyler, a Scottish historian who in 1787, writing about the decline and fall of the Athenian Republic over two thousand year before, said:
"A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury, with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship."

"The average age of the world's greatest civilizations has been 200 years. These nations have progressed through this sequence:

From bondage to spiritual faith
From spiritual faith to great courage
From courage to liberty
From liberty to abundance
From abundance to complacency
From complacency to apathy
From apathy to dependence
From dependence back again into bondage."

He was, at the time, writing of the fall of the Athenian Republic. When a society bases its political power on a majority vote, it is inevitable that those wishing to have power will seek to satisfy the needs of those who will provide it (vote) by transferring wealth. This leads to ever increasing public spending fueled by the self-interest of producers. With each increment in the common realm, more people are brought into the class of those receiving benefits . . . these people will take their benefits into account, desire to maintain or increase their level of benefits, vote for those who will support them, and thus, the level of spending will ever increase. The needs of the voters will eventually exceed the treasury???s ability, so fiscally unsound policies will be undertaken.

I think that about covers it.

I really enjoyed this article. I had been thinking about how to contextualize the shift to the right and how we might have benefitted from it. As a liberal, I was against it the whole time but somehow want to believe in the greater wisdom of the public to usher in what is needed at a time, even if it goes against my private beliefs and values. This article went a long way toward that. However, what confuses me is when the author suggests that McCain might be able to usher in Republican support. His rescue mission to House for the bailout makes it seem otherwise. Also, McCain is running on a platform of continued Bush tax cuts for the same people who have been disproportionally receiving them these last 8 years. He is also "spitballing" a spending freeze, which would not help build government infrastructure. So the author's even-handed treatment of how these two candidates fit into this schema is a bit mystifying. Otherwise, I thought it was a great frame for the history that continues on after the end of history.

As ever, brilliant analysis. My only thought is that it is not that we deregulated as much as we badly regulated. The problem is with the variety of economic mechanisms we embraced. One of the primary jobs of government in a liberal democracy is stopping assymetrical information and monopoly. Our government left in place or put in place mechanisms that both let enlightened self-interest devolve into mere crooks who both grew too big and lied too much. It is not a matter of more government but of uncorrupt and competent government oversight. My God, Fannie and Freddie guided by Barney Frank? Chris Dodd? Charlie Rangle? Please. That ain't just too much government but fundamentally BAD government

As ever, brilliant analysis. My only thought is that it is not that we deregulated as much as we badly regulated. The problem is with the variety of economic mechanisms we embraced. One of the primary jobs of government in a liberal democracy is stopping assymetrical information and monopoly. Our government left in place or put in place mechanisms that both let enlightened self-interest devolve into mere crooks who both grew too big and lied too much. It is not a matter of more government but of uncorrupt and competent government oversight. My God, Fannie and Freddie guided by Barney Frank? Chris Dodd? Charlie Rangle? Please. That ain't just too much government but fundamentally BAD government.

Liberals will never believe that they aren't smarter than Mother Nature. Of course the surrent crisis is the fault of those aweful Republicans. It can't possibly be that their desire to provide everyone with the same standard of living (whether they want it, have earned it or not), was somehow at fault. Of course the wise liberal Democrats who keep meddling in regulating the free market can't possibly have gotten something a little wrong. They're are too smart for that!

Francis - you got it totally wrong before (with End of Ideology), so until you acknowledge your past mistakes I don't see why anyone should listen to you

In 1999 the Republicans controlled the House and set the legislative agenda. Phil Gramm (McCain's economic advisor) is largely responsible for giving us much of this de-regulation. He also helped to give us the Enron collapse and the last few years of oil speculation (leading to $4.00 gas) as an added bonus. Clinton's mistake was caving to pressure and dumping Glass-Steagal (not to mention giving us NAFTA). As for 2005.... A Republican President, a Republican Senate, and a Republican House...hmmm. In case you aren't aware it's the Speaker of the House (a Republican at that time) who decides what agenda to put on the floor. The Democrats were shut-out for six years by Delay, Hastert, Boehner, and their ilk. Poor McCain couldn't even get his own party to go along with him. Now that's leadership!! By the time the Democrats tried to get a grip on Fannie & Freddie (in early 2007) it was too late. The market had started to tank (due to over-priced mortgages and the coming foreclosures) in late 2005 (especially here in Florida after Rita, Katrina, and Wilma had hit us).
The MSM being 'left' or 'liberal' was utterly disproved years ago by Eric Alterman and many others. The data supports a conclusion that television, radio, and newspapers are overwhelmingly biased toward the right. This is particularly true for the Sunday morning shows. While some newspapers may have editorial writers who are left of center, the actual 'news' itself is not. ABC, CBS, NBC, CNN, MSNBC, & Fox are owned and controlled by corporations whose primary focus is profit (much of which comes from military hardware & weapons manufacturing).
America is not socialist? How do you explain our highways, libraries, medicare, welfare, public schools, social security, etc.... The only country left in the civilized world that is trying to hold onto the worn-out notion of 'unfettered free-market with no regulation' is the U.S. What we have now is 'corporate socialism' (which is required after crony capitalism runs amuck). We have socialism for the rich and a 'free market' for the middle-class and poor.
Here's an example how well our 'free market' has served the nation over the past 7 years: The 400 wealthiest Americans have increased their personal wealth over 680 BILLION dollars. This at a time where 150 million people have seen their wages drop (while the price for virtually everything has risen drastically).
Has anyone else noticed that every time someone in this country comes along to try to 'right some wrongs' - for example Abraham Lincoln, Huey Long, JFK, RFK, MLK - the same thing always happens. I hope times have changed.... but I doubt it.

All this from a former neocon! Better late than never. Now the question is if enough neocons will come to there senses and get out of their simplistic/self-serving/self-righteous mindsets. Are you listening Sean Hannity and the Hanitized?

A

All this from a former neocon!! Better late than never. Now the question is how many other neocons will come to there senses , if they have any. Are you listening Sean Hannity and the Hannitized!

(1) Bill Clinton and his fellow Democrats had a great deal to do with the current financial situation. In 1999 the NY Times published an article in which they detailed precisely how Clinton himself urged Fannie Mae to pursue loans for people who really did not qualify for the loans. Barney Frank, Chuck Schumer and other Democrats stated they thought that was just a peachy idea and saw nothing shaky at all about Fannie/Freddie. George Bush tried a number of times to do something to correct the growing problem, but Democrats wanted no part of that. John McCain attempted in 2005 to introduce legislation to do something about it, but again Democrats wanted no part of that. You people can think what you will, but you had better take a look at how the welfare state and slide into socialism is responsible for situations such as this. The Democrat Party is attempting to convince you that socialism is the answer, because they are buying your vote with govt. handouts. That is nothing more than a BRIBE. You vote for them, because they promise you FREEBIES.

(2) The mainstream media does not report all the news to the American people. It is biased in favor of liberalism and is blatantly helping the Obama campaign. If you are a liberal and are getting your news from the MSM, be advised you are getting only a slanted, partial story. I listen to both sides and know this to be a fact. It is nowhere more evident than this election cycle, which is the most blatant and disgusting example of MSM bias in history.

(3) America is not a socialist state. If you want socialism, please go to Europe where there is plenty of it. Stop trying to steal my country. The answer to the current problem is not a continued slide into socialism, since a socialist mentality is part of the problem to begin with. Making loans to people who cannot afford them, WITH ENCOURAGEMENT FROM UNCLE SAM TO DO SO, is nothing but disguised welfare.

(4) The extreme of total deregulation on one hand, and the other extreme of a socialist state on the other, are not the answer. Both are EXTREMES. You say you think deregulation has not worked, so you wish to go to the opposite extreme of sociailsm. No, no, no. How about some common sense and balance, please.

Two concepts were sacrosanct: first, that tax cuts would be self-financing, and second, that financial markets could be self-regulating.

Both of these "core Republican beliefs" are dead wrong and have been dead wrong for some time. What has happened to this party? Debt used to be considered a bad thing. Today the government (and most Americans) are up to their eye balls in debt. I truly believe that if the state and federal governments were to drop all forms of taxation, Americans would still have high debt.

Perhaps this crash and the excessive "overreaching and utter mindless faith" in the Reagan-era policies (that became religious dogma) will usher in a new Republican party that still believes in smaller government, does regulate (within reason) the business base it loves so much, abhores excessive debt, embraces a pragmatic foreign policy and is able to more emulate the presidency and policies of the reform-minded Theodore Roosevelt rather than the overly pro-business presidencies of Warren Harding and George W. Bush.

Good luck to you Professor Fukuyama. I hope you are right, but I am not that confident. Just look at the general tone of the comments to this piece. Instead of commenting on the merits of the article, just look at the name calling, insults and vitriol that some are hurling at each other and at the author. That attitude...demonizing anyone that has a different view...is perhaps the biggest impediment to us restoring our faith in our nation. Just look at what goes on cable. How can we ever learn anything from the shouting matches that goes on there too?

My take is that because things have gone so well for us since our founding, American's generally believe that in the end things will turn out right no matter what we do, so we go on behaving the way we are now...boorish. Perhaps, this will be the case this time also. But I, for one, can't be so sure this time. This could be the end on the road. After all it has happened several times in history.

Francis, take a vacation from your post as the Right's token Asian intellectual, buy a pair of sunglasses and a baseball cap, and go check out the Singularity Summit. If anybody needs to learn to stop worrying and love the progressive futurist agenda, it's you, baby.

Personally I and a lot of other American workers would like to be "treated" to the things Fukyama mentions happening in Europe. And guess what? France has dodged the credit crisis bullet by having lots of regulation and very low personal debt. I don't think they have anything to learn from poor old us.