Exceptionalism

Sometimes a year makes headlines. 2011 looks like it’s more likely to make academic subtitles – books like British journalism 1785 to 2011 or Arab democracy 2011 to 2054, or 2011 – when Greece burned. Already it looked like history students would be sick of 2011, which would be one of those recurring dates like 1789 or 1648. Then, late last night, we got another prospective title – Half Eagle: the fall of American economic power 1945 to 2011.

It’s going to be hard to pick out the worst piece of news this year, but last night’s announcement that America’s sovereign debt rating had dropped to AA+ might scoop the prize. Not because of real danger – given the circumstances in which the UK managed to keep a AAA rating in the forties, the risk of American default has been grossly exaggerated. But in terms of symbolism, downgrading America is as significant has the same sort of symbolism as Berliners climbing onto a wall with pickaxes.

Last week’s Economist downplayed the American debt ceiling farrago by saying that the problems in Europe were economic, while the problem in America was political. To me, such a serious, easily avoidable political crisis looks a lot more worrying than something based on actual problems. Great world powers can be brought to their knees by economic crises; but it’s usually political crises that finish them off. Take 18^th century France – decades of analysis have gone into examining whether the causes of the Revolution were political (lousy government) or economic (lousy harvests). A good compromise is to say that there was an economic crisis, and one which the political system was unable to deal with.

I’m not predicting sans culottes on the streets of Washington; but what we’re seeing right now would be in keeping with this model of decline. The American system of government has been pretty ineffective from the get-go, mostly because it’s purposefully designed not to work. The Founding Fathers, based in an agricultural country that had never seen a steam train, a factory or a city with more than 40,000 people, decided that the most important thing to do with government was stop it from becoming a tyranny. The easiest way to do this was to make sure that government never did anything, other than things that were widely agreed on.

My brother says this is a very good idea – a government that does nothing is a government that doesn’t get in the way. A bit like letting the kids play in the cellar where they can’t cause a mess. But when US government debt is the foundation of the planet’s economic system, this nonchalance can’t be sustained indefinitely. American politicians have spend generations working on the assumption that everything is affordable (wars, tax cuts, healthcare) without the need to ever raise taxes to cover it. Someone has a magical money tree, and they pay the bills.

This isn’t just Obama’s fault – the Bush administration spent like a sailor on shore leave, with trillion dollar tax cuts, unnecessary foreign wars and massive medical benefits for pensioners, all of it without even attempting to find revenues to cover it. But to extend that analogy from earlier, we’re starting to realise that the cellar is packed with dynamite, and that the kids spent all of the morning fooling round with matches.

America’s weakness to a political crisis is threefold:

• Most countries run their politics through a system of ministerial patronage – if you are loyal, you might get rewarded with high office. In America, the rigorous separation of powers rules that out. Instead, the usual way to get a member of Congress to vote for a measure is to provide some sort of bribe. Of course, the more difficult you are, the bigger the bribe you can command; so politicians on both sides are awkward by default. And if you’re trying to cut the deficit, it’s a bit hard to offer bribes to everyone.
• Nowhere other country in the world holds its own constitution in such high regard – it’s practically a sacred text. Elsewhere in the world, if the political system is broken then you build a better one. Most Americans simply couldn’t conceive of the idea of changing the system of government – it would be like chiselling extra commandments on the bottom of the ark of the covenant.
• The whole system is designed to prevent strong leadership – America could never produce a Thatcher or a de Gaulle. Instead, it specialises in large blocks of undisciplined non-entities, all of whom are mostly out to get their share of the gravy train. So the only real way for change to happen is if the status quo becomes utterly unbearable – a good approach to string from crisis to crisis, rather than provide global leadership.

When you look at the rise and fall of various great powers, you can find something I call the ‘arrogance overlap’. It goes like this: At the start, you have the good times. That’s when everything is going right, so clearly people wouldn’t want to change the way the country works. Then, at the peak, people look at their institutions with pride – at how far they’ve carried the nation until it is the envy of all others. It’s only by the time that decline has seriously set in that people start to ask whether those wonderful institutions actually had a positive effect in the first place. Usually, people don’t look to reform until it’s much too late.