Written by Phil Guarnieri, Phgrnr@aol.com Thursday, 29 May 2014 10:52
India, the world’s largest democracy, has voted for change. With the election of Narenda Modi and his Bharatiya Party, 1.3 billion people have chosen a path they hope will lead to fewer government handouts and greater economic growth. The victory of Modi to move away from the country’s left-centered politics was stunning and involved all castes and regions.
Tired of stagnation, taxation and entitlement politics, India is turning away from the oppressive regulations which has delayed the building of factories that has destroyed opportunities. Perhaps the most refreshing thing about this upheaval is that young people (100 million new voters between the ages of 18 and 24) are demanding change and forging ahead into the maw of a more unfettered entrepreneurial world.
Is there a lesson here for America’s lagging productivity and poor employment prospects? It’s pitiful watching President Obama plead for foreign investment to jigger up our catatonic economy. But heavy regulation and bureaucratic morass is not very seductive. When you combine this with an entitlement culture atomizing hard work and responsibility and you have a recipe for decline.
Without memory, judgment does its work poorly. So it’s critical to understand the historical precedents eroding the fabric of the nation. The New Deal created something unprecedented in American history: trust in government. It allowed exactly one nation-wide program, Social Security. Seeking to build upon that legacy, a half century ago, President Lyndon Johnson tapped into that same reservoir of trust to embark on a revolution. Like Archimedes in the physical world, Johnson believed that in the political world a big enough lever could move the very earth. That lever would be big government and all its accoutrements.
Its mission was to broaden the number of those who could benefit from the great American bonanza. Intractable pockets of society had not been lifted by the rising tide of prosperity, leading Johnson to marshal government subsidies to combat it. The result has been dismal.
In 1964, the poverty rate in America was 14.7 percent; today, despite the expenditure of trillions, that rate is slightly higher. Medicare, Medicaid, food stamps and other entitlements have spared the poor from material deprivation (in fact they possess more luxuries than the affluent of 35 years ago) but it has not made them self-reliant and independent. In his recent booklet Nicolas Eberstadt, from the American Enterprise Institute, makes this clear. Borrowing a phrase from Daniel Patrick Moynihan, Eberstadt notes that Johnson’s Great Society brought with it “a tangle of pathologies” that have assaulted the American character if not the dream itself. The numbers speak for themselves: 29 percent of Americans, 47 percent black and 48 percent Hispanic live in households receiving means tested government benefits; the proportion of young men who are employed has dropped from 80.6 percent in 1964 to 67.6 percent today.
Since the Great Society, three out of four males between the ages of 20 and 64 who are between jobs are neither working nor seeking work. In 1965, out of wedlock births were 7.7 percent. Today, despite the ubiquity of contraception, these births constitute more than 40 percent in the general population and more than 72 percent in the African-American community.
I’ve alluded to these numbers in past articles, but seeing these statistics collectively has an arresting effect. Anyone susceptible to empirical evidence is compelled to conclude that the Great Society is a driving force of family breakdown and a flight from work. Politics and culture are mirroring each other with a self-reflecting nihilism. Some 2,500 years ago, Aristotle observed that the worst thing about dependency is that people come to expect and desire it. It‘s time to alter the oscillations of the pendulum; “words without thoughts,” says the Bard, “never to heaven go.” Public policy is saturated with compassion, but unsalted by common sense. We must think carefully about social welfare, which affords an unwise benevolence in return for loyalty at the voting booth. We must stop being so fixated on the algorithms of income inequality and start focusing on opportunity for those who don’t have it. Income inequality is bound to grow because of the power of compounding; but I also believe in a vibrant economy new technology will decrease income inequality by creating new jobs we can scarcely imagine.
India is seizing the dream that built America. We must recapture our own past and grow out of our doldrums. Government could use the revenues for job training and teaching behaviors more congenial for dignity and productivity. India must overcome corruption, its legal structure and dynastic politics. In America the seeds are already planted; we just need to plow arable ground in order to reap the harvest.