Value

For those still following, Louis Menand's article in the December 6 New Yorker debunks the myth of the "moral values" tsunami we've been told washed over us on November 2. No less an authority than Jan Van Lohuizen, one of the Bush campaign's own pollsters, is quoted as having declared "'I've seen no data that, in the composition of the electorate, the religious voter was more heavily represented.'" The percentage of voters who attended church regularly declined in both Ohio and Florida, even though the overall numbers of voters increased.

This means two things. First, that blowsy pronouncements from leaders of the religious right are so much hot air; the floosies in our beloved national media can call a halt to their airborne sycophantics, because god-squadders are no more significant, statistically speaking, than they've ever been, wishful thinking and declaration notwithstanding.

Second, it means — as Menand points out — that Bush actually increased his support among non-church-goers since 2000. In other words, it's not just the lunatic fringe who put this team back in office. (And yes, the team is disintegrating; but that's for worse, not for better — we're out of the frying pan and into the fire.) A sizeable number of people who don't take orders from the voice in their toaster voted Bush/Cheney. In the end, this may well be worse news.

The puzzling over what this election has taught us may well continue until it's been buried under another kind of tsunami: that of history, which proceeds apace. There's far less puzzling over what it will give us in terms of policy. The latest alarm bell our press corps have decided to attend is that of the dollar's precipitous decline. It's not news, exactly; the dollar has been in a slide for about four years now. (Curious timing, that.) So I suppose what's waking everyone is that it's not turning around. Everyone, I guess, expected this to be a temporary thing, a minor adjustment to overvaluation — cyclical, as analysts are so fond of calling any unforeseen bump in the macroeconomic road. (If they're cyclical, of course, how could they also be unforeseen?) Americans, and the American press, so prone to the pathetic fallacy, no doubt figured that as soon as the national election angst was behind us — one way or another — everything else would fall into place.

But the operative principle in macroeconomics, as in all else, is inertia. Why would anything change, given that nothing has changed? With the Bush team back in place by virtue of — well, whatever it might have been — the fiscal policy of the US government remains what it was before the election. Which is to say, none at all. Or rather: no sane one. Spending on the Iraq occupation — we can finally call it that, can't we? we can dispense with the euphemisms? — continues to mount, faster even than the death toll, which has itself climbed by nearly 25% (to, by today's count, 1259) in just the last 10 weeks. The administration plans to move ahead with promised tax cuts, making old ones permanent and adding new ones under the banner of "simplification" (this is code, by the way, for requiring those with fewer resources to bear more of the national burden — a kind of rich-folks' liberation policy; and given the oppression under which the brave and steadfast American rich have been laboring, it couldn't come at a better time). There is no systemic spending-cuts plan yet, and one wonders what might be on it even if there were: the lion's share of our national budget goes to defense, and there's no hope of reducing that now. Perhaps the president could offer an "Okay, Wait: Leave Some Children Behind" revision to his first-term legislation, but since the original was underfunded it's hard to know what's left to throw out. Social security and medicare reform will take years to work out, years more to show economic fruit, assuming the seeds actually bear any; and in any event congress has shown zero political will — one might call it moral fiber, but what do I, living as I do in the satanic anarchist northeast, know about that — for pursuing reductions in lucrative porkbarrel expenditures.

What this augurs, of course, is further debt. If you've been reading your local paper during the past week, the mechanics have been spelled out for you, and I'll not repeat them. Suffice to say that the US government has been funding its day-to-day operations with credit. This is like paying your rent and your utilities with your MasterCard, and I'm not talking about the debit MasterCard. It's an extremely bad idea, with an extremely short shelf-life: temporary at its absolute best. Eventually, MasterCard has to get paid. The US government's MasterCard has been foreign investors — most significantly, foreign central banks; and most significantly among these, central banks in China, Japan, Russia and Europe. Because businesses in their nations have benefitted from their support of the dollar — a propped-up dollar allows American consumers to continue to afford their exports — these central banks have been willing to go along. But the math grows increasingly shaky, and worse still — again — there's no plan to revise it. The central banks are becoming nervous. All investment is, at bottom, a kind of bet; we're starting to look like a bad one.

The whole business is compounded by the fact that it's consumption that drives the US economy. The "recovery" of the last few years, such as it's been, rests on three things: spending on the war in Iraq; consumer spending; and real estate investment. All three are fueled by debt. It's an economic house of cards. As a nation, we rely on consumer spending — mostly from the middle class — for our economic progress. Since middle-class wages have been suffering the death-drip of a slow, steady decline, much of that spending comes not in cash but in credit. It also comes by sacrifice of savings, which in the US are lower than in any other advanced postindustrial nation — so low, in fact, as to be negligible. There is precious little fallback should the credit spigot run dry. The middle class has likewise driven the real-estate boom: low interest rates have allowed more of us to buy more expensive houses, which in turn has driven up housing prices, which has increased our net worth, which has allowed us to get more credit and thus buy even more expensive houses. Housing values may not be tied directly to interest rates, but there's certainly strong sympathy between the two. If interest rates were to suddenly and significantly rise, not one but two pillars of our current economy  — consumer spending and real estate — would tremble at the very least. What would that mean?

We may soon find out. It's not hard to understand why Japan and the EU might look at the contemporary US and find its prospects wanting. We don't invest in our future; why should they? We don't save; we don't provide the vast majority of our population with a globally competitive education; we have no rational healthcare delivery system; our policies, foreign and domestic, shift on the increasingly passionate winds of neoadolescent fervors, religious and otherwise. It's not moral fiber we lack, it's vision; direction; a sense of what it means to cultivate a society over the long term. The world has long admired our freedom, our energy, our innovation. But our freedoms are increasingly trivial, reduced to t-shirt slogans and the competitive idiocies of cable TV; our energy looks more like fanaticism each day — or, on the other hand, mere overwork; and our hold on the innovation market has been slipping for fifteen years, if not longer. We're driving our economy and our culture headlong toward neofeudalism, and the last people on the face of the earth who seem recognize it is us.

It's not surprising, then, that Japan, China, Russia, even the EU might consider shifting their investments elsewhere — might buy Euros instead of dollars, for example. Might even apply the Euro as the new global currency standard, devaluing the dollar still more. The consequences for the US economy could be severe: credit would become dramatically more expensive, not just for government but for us all. The Fed would be forced to spike interest rates. We can't say for sure what the effect would be on consumer spending or real estate, but it's reasonable to expect that both would slow, if not come to a screeching halt. Recession is probably the best we could hope for.

Nothing is inevitable, of course. But the principles of inertia still apply: unless something changes, things are bound to stay the same. The Bush administration has said publicly that it supports a strong dollar, but that's just talk; it means little to the domestic audience, still less to the more crucial international one. A shift in policy is the only thing that matters, and there's no sign of that on the horizon.

Here's another cyclical thing: the decline of cultures. We may be learning more about that than we'd like to. But then again, 51% of our voting population put in the lesson request. Too bad it's all of us who'll be forced to attend.