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In Aftermath of Supercommittee Failure, Macro View Needed for Future Economic Reforms

Submitted by: Michael Shank

Posted: Nov 28, 2011 – 02:43 PM EST

Tags: economy, inequality, leadership, future thinking, business

 
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By Michael Shank

With Washington blaming the failure of the supercommittee on partisanship and lackluster presidential leadership, it is worth taking a different tack—examining the whole system not merely the parties operating within it.

This is important for America because it’s drifting away from the fundamentals that once kept it strong. The Institute for Economics and Peace recently took a macro view, identifying eight economic, governance and cultural attitudes and institutions essential in any peaceful, democratic state. 

How does the US fare within these taxonomies? The first, ironically, has to do with a “well-functioning government.” Congress is at record lows with nine percent approval. But dig deeper, beyond political partisanship, to understand poor functioning. The lack of electoral and campaign finance reform ensures that a two-party system, beholden to industry interests, prevails.

What about other factors, like a “sound business environment?” The fact that industries remain unregulated, tax havens and loopholes abound and monopolies undermine local economies, means the environment is good for some but not all business. It also means the markets are unpredictable and insecure.

The third factor requires the “equitable distribution of resources.” Reports by the Congressional Budget Office, United Nations and US Census Office show that inequality is at its highest since the Great Depression. A minority maintains America’s wealth. The majority struggles to survive. This must change: inequality brings a host of social and health problems (e.g., crime, illness, addiction, mortality, obesity, etc.).

The fourth – “acceptance of the rights of others” – is an America tenet. Human rights are core principles, as are tolerance for ethnic, linguistic, religious and socio-economic diversity. This doesn’t always play out. Classism and racism continue, as does the propensity to marginalize groups during wartime (e.g., Japanese American internment, Islamophobia).

The fifth – “good relations with neighbors” – is a toss up. We know that countries with positive relations are more peaceful and politically stable, but where does that leave the US? Next-door neighbors are friendly (sans drug and gun wars), but America is at war with at least six foreign countries and on near-war terms with another six.

The sixth – “free flow of information” – sounds like it’s up America’s alley. Yet the crackdown of WikiLeaks and current administration’s classification of more documents than any in history tell a different story. While our media is generally free, the mergers and acquisitions have left mainstream media in the hands of few.

The seventh – “high levels of education” – finds America with consistently poor math, science and reading scores, as compiled by the OECD’s Programme for International Student Assessment. Most rich nations outperform America on education, leaving it with less comparative human capital and competitiveness.

Lastly – “low levels of corruption” – may seem safe for America but the level of purchased influence found in corrupt societies is equally apparent in our political system. It’s just legal here.

In sum, America has work to do on the structures that can help it promote resilience, overcome adversity and peacefully resolve internal economic, cultural and political conflict. It is time for a supercommittee of super proportions.

About Michael Shank

Michael Shank is the US Vice President for the Institute for Economics and Peace. Follow the Institute on Twitter at twitter.com/GlobPeaceIndex.

Readers: Is America’s inequality damaging the nation’s future? Weigh in on Talkback!

The opinions, beliefs and viewpoints expressed by CSRwire contributors do not necessarily reflect the opinions, beliefs and viewpoints of CSRwire.

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