Current Challenges to the U.S.

Session 7

ContentsI. The American Century

II. The 9.11 Crisis

III. The Financial Crisis in 2008

IV. Political Challenge

V. Challenge from Inequality

VI. Education Challenge

VII. Environmental challenge

VIII. A Fundamental Challenge from the American Way of Life

IX. Conclusion

I. The American Century

A term coined by Henry Luce in 1941

1945: Leading to the victory of WWII

“Made in America” a logo of the time

GM, Ford, Mobil, IBM, Coca-Cola, McDonald, Wal-Mart, Microsoft, Apple, Google, Wall Street, Hollywood, Peace Corps

Continue1991: Leading to the victory of the Cold War

Fall of the Berlin Wall in 1989

Fall of socialist countries in Eastern Europe

Collapse of the Soviet Union in 1991

US-the only superpower in the world

Francis Fukuyama published his provocative essay: “The End of History?” “The collapse of Communism in the Soviet Union and Eastern Europe signaled the end of historical progress and the de facto victory of liberal democracy over all other forms of political ideology”

ContinueAmerica has the money, the political nous, the military might, the industrial capacity, the high tech, the labor and the talent: it knew where it wanted to go and, had the muscle to get there.” Dambisa Moyo

The Apollo program vs. Sputnik “We choose to go to the moon in this decade and do the

other things not because they easy, but because they are hard.” JFK in 1961

The NASA: $20-25 bn ($135bn in 2005) Talents: from 100,000 in 1960 to 376,000 in 1965.

“Where the talent did not exit, NASA created.” Dambisa Moyo

The Washington Consensus in 1990s

Neo-liberalism it advocates deregulation, praises market fundamentalism and opposes government interference. it advocates privatization, blazons the perpetual role of the "private ownership myth" and opposes public ownership. it stands for global liberalization, protects the liberal economy under the US' dominance and opposes establishing a new international economic order. it affirms the individualization of welfare, emphasizes the shift of responsibility of social security from the government to individuals and argues against welfare society. Internationally unilateralism -The Iraq War

II. The 9.11 and Its Impact

1. Impact of the 9.11 on the Americans

http://www.youtube.com/watch?v=owfKzWkOZ70

Discussion

What is the impact of the 9.11 on the U.S. and Americans?

The Impact of the 9.11Unilateralism and two wars of Iraq & Afghanistan Alienated friends like Germany and FranceHuge deficit because of the two costly wars

According to the Center for Defense Information, the estimated cost of the wars in Iraq and Afghanistan will reach $1.29 trillion by the end of fiscal year 2011.

Psychological fear & Insecurity A loss of innocence, trust & confidenceA loss of liberty of the people: the PATRIOT Act

abuses by the US military have undermined America's standing in the world

Ignore the importance of East Asian countries

III. The Financial Crisis in 2008

Understanding the financial crisis http://www.youtube.com/watch?v=h4Ns4ltUvfw

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There were roughly twenty-five million subprime and other nonprime mortgages outstanding, with an unpaid principal balance of over $4.5 trillion.

The twenty-five million subprime and Alt-A loans amounted to almost 45 percent of all single-family mortgages in 2009.Current foreclosure rates are 30 percent (in the worst downturns in history, foreclosure rtes rarely reached 4 percent). P.10, Friedman

Continue It resulted in the collapse of large financial

institutions, the bailout of banks by national governments and downturns in stock markets around the world.

The housing market also suffered, resulting in numerous evictions, foreclosures.

Prolonged unemployment. It contributed to the failure of key businesses,

declines in consumer wealth estimated in trillions of U.S. dollars.

Significant decline in economic activity, leading to a severe global economic recession in 2008.

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"that the crisis was not a natural disaster, but the result of high risk, complex financial products; undisclosed conflicts of interest; and the failure of regulators, the credit rating agencies, and the market itself to rein in the excesses of Wall Street."[12] the Levin–Coburn Report from the Senate

IV. Political ChallengeConstructive PartisanshipThe Marshall Plan was supported in 1947 by

both parties, particularly, Arthur Vandenberg, Republican leader of the Senate Foreign Relations Committee-restored Europe economically and politically. Moreover, Germany became a close ally.

GI Bill-made American workforce the best one in the world

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Destructive partisanship Partisan bickering has paralyzed American

capacity to take action: the budget control & the debt ceiling.

Campaign CorruptionPresidential election campaign 1976, Ford vs. Carter: $67 million 2000:Bush vs. Gore $343 million 2004: Bush vs. Kerry $718 million 2008: McCain vs. Obama $2.4 billion 2012: both Obama & Romney $6 billion

Congressman campaign: 1974 $44million, average $53,000 2004: $581 million, average $773,000

Senate campaign

1974: $28 million, average $437,000

2004:$367 million, average $5.4 million

ContinueIn the 2010 midterm election cycle, candidates for office, political parties, and independent groups spent a total of $3.6 billion on federal elections.

The average winner of a seat in the House of Representatives spent $1.4 million on his or her campaign.

The average winner of a Senate seat spent $9.8 million.[5]

Continue“Politics today is all the money.” David Boren

“Senators & representatives spent at least a third of their time raising money instead of what we elected them to do” p.65, Boren

Impact of Interest groups’ lobbyDeregulation from the Wall Street led to housing

bubble and global financial crisis in 2008Auto industrial lobby led to slow improvement of

energy efficient car, pp.41-4 Friedman’s Hot, Flat & Crowded

ContinueSenators/representatives became lobbyists http://www.republicreport.org/2012/make-it-rain-revolving-door/

Republic Report’s investigation found that lawmakers increased their salary by 1452% on average from the last year they were in office to the latest publicly available disclosure.

out of the 44 lawmakers who left office in 2010 for a lobbying-related business.

Former Congressman Billy Tauzin (R-LA) made $19,359,927 as a lobbyist for pharmaceutical companies between 2006 and 2010

ContinueFormer Congressman Cal Dooley (D-CA) has

made at least $4,719,093 as a lobbyist for food manufacturers and the chemical industry from 2005 to 2009.

Former Senator Chris Dodd (D-CT) makes approximately $1.5 million a year as the chief lobbyist for the movie industry.

Former Congressman Steve Largent (R-OK) has made at least $8,815,741 over the years as a lobbyist for a coalition of cell phone companies and related wireless industry interests

……

V. Challenge from Inequality

Congressional Budget Office (CBO) -- "Trends in the Distribution of Household Income Between 1979 and 2007". The report found that real household income after federal taxes and including government transfers (payments from Social Security, unemployment insurance, etc.) grew by 62%. The top 1%: income of households grew by 275%, The next 19%: 65% The next 60%: under 40% The bottom 5%: 18%

ContinueThe top 10 percent of American collect almost 50 percent entire national income

90 percent received the other half.

The shrink of the middle class threaten the health of the US.

“You can have a democracy and a society sharply divided between the rich and the poor, but you cannot have both for very long.” - Justice Louis Brandeis

The Shay’s rebellion is between "the class with, and [the] class without, property." James Madison

VI. Educational ChallengeCollege tuition has a rapid increase when the government funds became smaller & smallerUMass: state funding from 80%- current 19%

Among the 20 OECD (the Organization for Co-operation Development) countries, American high school students’ math performance ranks in the bottom forth.

15 fewer days than those in OECD countries and 28 fewer days than students in East Asian countries

The quality of education depends on quality of teachers. But low salary and social status cannot attract the best and brightest teachers.

ContinueThe GI Bill of Right helped create the best educated force, which made the US the most productive country

One of the reasons from the global outsourcing is the shortage of knowledge and skillful workforce“This education failure is the largest contributing factor to the decline of the American worker’s global competitiveness, particularly at the middle and bottom ranges.” – Todd Martin

Environment challengeThe U.S. is the second largest energy consumer next to China in 2010.

The U.S. is also by far the biggest per-capita energy consumer, with the average American burning five times as much energy annually as the average Chinese citizen.

the United States is the second largest emitter of greenhouse gases. In 2008, China contributed 22% of global emissions, followed by the US with 20% of emissions.

ContinueTotal U.S. greenhouse gas emissions have increased by 11.0 percent from 1990 to 2010

If greenhouse gases continue to increase, climate models predict that the average temperature at the Earth's surface could increase from 2.0 to 11.5 ºF above 1990 levels by the end of this century (IPCC 2007)

Energy Footprint

Challenge from the American Way of Life

The Protestant way of life in early colonial periodworldly asceticism Hard work ethic Shrift and simple lifeFortune accumulation not for personal

pleasure, instead for the service of GodNo drinking alcohol banned many secular entertainments, such as

games of chance, maypoles, and drama, on moral grounds

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Consumerism replaced Puritanism May 7, 2001, White House spokesman Ari Fleischer’s

reply to this question “Does the President believe that, given the amount of energy American consumer per capita-how much it exceeds any other citizens in any other country in the world-does the President believe we need to correct our lifestyles to address the energy problem?”

Fleischer: “That’s big no. The President believes that it’s an American way of life, and that it should be the goal of policy makers to protect the American way of life. The American way of life is a blessed one.”

ContinueHot, Plat, and Crowded – Thomas L. Friedman

At the core, the China-America growth engine worked like this: We in America built more and more stores, to sell more and more stuff, made in more and more Chinese factories, powered by more and more coal, and all those sales produced more dollars, which China…

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We cannot just be the consumer and China the producer, and neither of us can allow the good produced on the scale that we have been. This way of growing standards of living is simply unsustainable - economically unsustainable and ecologically unsustainable……

ContinueThe Great Depression was the moment when the Market and Mother Nature got together and said to the world’s major economies, starting with the United States and China : This cannot continue. Enough is enough.

Movie

The Chinese Are Coming

http://www.youtube.com/watch?v=6617B1HMBak&feature=related

Discussion

Can the American way of life become sustainable? Why?

ConclusionThe Pilgrims came to this new world with a dream of “building a city upon the hill” in 1620. Their dream became true after great efforts from many generations. The victory of the Cold War in 1991 made the U.S. the only superpower. The victory and superiority led to a new critical crisis. As Paul Romer has said “A crisis is a terrible thing to waste.” Could Americans learn from this crisis and move forward?

Questions?

Xie XieZai Jian