Judging by the Right Track/Wrong Track numbers on Realclearpolitics.com (-37%) it seems clear that America is going through a crisis of confidence. While Republicans might point to the number as a sign that Obama has steered America in the wrong direction, the simple fact is that the numbers were negative under George W. Bush as well. Congress has approval ratings permanently stuck below 15%, and these numbers are only slightly better when Democrats hold both houses of Congress. Looking at the numbers, listening to pundits, and talking with ordinary people, it is hard to escape the sense that something has gone dramatically wrong, and it is not clear that anyone has the answer to the problems that the country faces.
While there are many factors contributing to what is happening, at a political and governmental level, the institutions are outdated, and it is not clear that they can be changed. One of the genius features of the American institutional structures up to this point in time has been their ability to change with a changing world. Another way to look at it is that America, up until now, has not had its mistakes “baked” into the system.
However, at a political level, the political parties are wedded to out of date ideologies, and prisoners to interests that were created decades ago. The ideologies are a way of explaining the world. The problem for us today is that the dominant ideologies did work at certain points in time. For example, the Democrats ideology of a government solution for every problem worked in the 1930’s, and the result Democrat dominance of the White House, and often of Congress too, for the next 36 years. Many conservatives of the day argued, unsuccessfully, that the Democrat policies would bring ruin to America, but they didn’t. For the Republicans, their ideological affinity for tax cuts and military spending came in the 1980’s. Many argued that Reagan’s view tax cuts would spur economic growth was erroneous, and that an insane military build-up would provoke a war with the Soviet Union. But it didn’t. The economy boomed and the Soviet Union, America’s arch-nemesis, collapsed. However, the lessons that both political parties have taken and institutionalized is that government programs cure everything on one side, and that tax cuts cure everything on the other side. The response of George W. Bush to the 2001-2002 recession, and the response of Barack Obama to the 2008-2009 recession were simply textbook Republican and Democrat responses to recessions with no real thought to the fact that the 21st century might need different policies than were needed in the 1930’s and the 1980’s.
A further outdated set of institutions are the government bureaucracies. The institutional structure that we see today was largely created in the first part of the 20th century, expanded upon rapidly in the 1930’s, and been steadily added to ever since. While this structure might have made sense in a world without computers, the internet, various technological productivity enhancements, it makes no sense today. In addition, there are certain services that government (or quasi-government entities) were created to do, that the private sector now has methods for accomplishing the same task (i.e. the post office). While the private sector has had a couple of retooling/ reform periods, our government operates largely as it did in the 1950’s.
One need to look no further than Osama bin Laden to see how a handful of individuals were able to use basic everyday items that really didn’t exist in the 1950’s to attack the most powerful nation on earth; an attack reminiscent of the Pearl Harbor attack that took the power and resources of a first world nation to pull off 60 years prior. And let’s not forget that it was private citizens on United Flight 93, and not anything that a government agency was doing, that thwarted the mission of the last plane, and may have saved the lives of people in Congress or the White House. The point is that the world moves much faster than it did 60 years ago, and bureaucracies simply aren’t designed to keep up.
Additionally, the lack of faith in institutions is also due to the fact that expectations have changed. People used to a slower paced life might not like standing in line for a government service, but they know that there is, in many cases, no private entity that could accomplish the task. In addition, there experience with the bureaucracy is likely not completely divorced from experiences in other aspects of their lives. With the internet, facebook, online purchases, Amazon, 500 cable channels etc., as well as the ethos that the customer is always right (i.e. have it your way), the one-size-fits-all, slow moving, inefficient, expensive, and often incompetent government service provider stands in stark contrast to the everyday experience of the American consumer. When one considers this, it is no wonder that Americans have lost faith in the ability of the institutions to deliver what is promised.
Finally, there is perception on both left and the right that the game is rigged against the average American. When bankers can engage in illegal and unethical activity and crash the economy, or when the IRS can improperly target some Americans due to their political views, and nobody ends up going to jail, there is a sense that there is one set of rules for the powerful and politically connected, and another set of rules for everyone else. While the American promise was that everyone is equal before the law, that seems to be less and less true.
Going forward, if there is no substantial reform, America will be a different place. Trapped by the battles and institutional structures of the past, she will be unable to win the future (regardless of which political party is in power in Washington). It was the governmental institutions and structures of the past than made people willing to take risks and create global companies, products and technologies that have lifted millions out of poverty and created the most powerful, wealthy society that humanity has ever seen. Without some sort of updating of institutions (and discarding of those that no longer function), America will someday find itself eclipsed by countries whose institutions are more relevant for the the 21st century.