AN AMERICA LOST IN FANTASY MUST RECOVER ITS DREAM / THE FINANCIAL TIMES COMMENTARY & ANALYSIS ( VERY HIGHLY RECOMMENDED READING )

An America lost in fantasy must recover its dream


By Simon Schama

Published: December 23 2010 22:47

As it says goodbye and good riddance to 2010, is America also saying so long to depression, both the economic and the psychic varieties? Is double-dip now just another way to get your hot fudge sundae?
Riding the Metro North commuter train from Pleasantville to Grand Central Station on the last weekend before Christmas, you’d certainly suppose so.

The consumer confidence index had been rising for two straight months now and most of it seemed to be on board, wallets bursting to get in on the action. Heavy-set thirtysomethings on parole from suburbia, fists popping cans of Bud Lite, boomed to all who wanted to hear (Ben Bernanke maybe?) that they were “gonna do some serious shopping DAMAGE dude!” In the month before Christmas Grand Central turns into a retail bazaar, and to the strains of jingle tills vendors selling silk scarves, Thai and Polish jewellery, hammered leather goods and fancy stationery were all doing brisk trade to elbow-working crowds.


Is this Manhattan or is this America? Over the West Side Highway, a habitually witty storage company billboard proclaims – against its own self-interest, you might think – “NY. Where people are openly gay and secretly Republican. Why leave?” But the US lame duck Senate, in one of a series of valedictory superquacks, has just enacted the repeal of the “Don’t Ask, Don’t Tell” policy that prohibited lesbians and gays in the military from declaring their sexual orientation. There was some hurrumphing amidst the Marines but a poll of the public showed a majority of those asked believing military morale would improve, not deteriorate as a result.


Ride the train in the opposite direction and rosy scenario, even in New York, gives way to rust-bucket gloom. Upstate towns such as Poughkeepsie and Buffalo have unemployment rates not seen since the war. One in seven adults lives below the official poverty line; for children it is one in three, a truly shaming statistic. Life for millions in burgered America goes on only through food banks and food stamps. Seventy per cent of the population have a close friend or family member who has lost a job. We are still living in 3D America: desolation, devastation, destitution.


But look on the bright side! Barack Obama, we are told by the pragmatists, has just taken his presidency back by doing an extension swap with the Republicans. They have agreed to extend unemployment benefits while he has extended Bush-era tax cuts for the richest 2 per cent of the country. So the poor catch a break while the rich catch a flight to the Caribbean.

But that’s OK because, as the pontificators of the rightwing media insist, it’s only deluded bleeding-heart liberals who persist in thinking that massive and growing income inequality is a bad thing when why-oh-why can’t they understand it is actually the engine of national prosperity! The farther apart the haves and the have-nots get, the more loaded the plutocrats are with tax-cuts, loopholes and tax-free inheritances, the more likely they are to give job-hiring business some of that good old trickle-down.


But they haven’t and they don’t. Not where it counts anyway, in the unemployment rate, even when the stock market is up nearly 90 per cent on its low of March 2009. Cue up a touch more quantitative easement, in the shape of that big bad bond buy. This has become target number one for the incoming victorious Republicans of the 112th Congress, who have roundly denounced it as an irresponsible enabler of inflation.

Hang on a mo, you say, what inflation? It’s been running at record lows and shows absolutely no sign of going in any other direction. But this is just a sign of what is in store for American governance in the wacky world of the 112th House; reality taking a back seat to self-reinforcing collectively chanted mantras against which the facts make little or no impression. The dominant reality for the Republicans will be who can recite the nostrums fiercely enough to establish themselves as the true voice of the Tea Party; the cant of the disingenuous directed at the aggravation of the credulous. Instead of an honest look at the chastening of America – whether in military overreach or corporate irresponsibility – their hope is for a perpetuated national tantrum all the way to a foot-stomping, red-in-the-face, shrieking and bellowing election in 2012.


Sadder, wiser, those of us gathered on the Washington Mall in the freezing morn of Mr Obama’s inauguration can see now that of all the brave, unsustainable hopes uttered by the new young president, the most unsustainable of all turned out to be his Biblical plea to “put away childish things”. He might as well have tried to legislate the word “dream” out of American public discourse. Dreams? Reality? It’s not even close, is it?


Whether fantasy will prevail over factuality, adolescent wishful thinking over maturity, will be the great political motif of the next few years.

The omens are not auspicious. People who dwell in fiscal Neverland are about to be appointed to oversee the very institutions they wish never were. Thus, Representative Spencer Bachus of Alabama, the chair of the House Committee charged with implementing the Dodd-Frank financial reforms, tells us he thinks regulators should “serve” banks. The gold-standard nostalgic Ron Paul (a very peculiar position for a populist) who has published a book urging the abolition of the Federal Reserve System, will now, as chair of the committee on monetary policy, be in a position to move central banking back to the days when JPMorgan had to ride to the rescue of a meltdown of the proportion of 1907-8. And at the heart of this thumb-sucking juvenilia is the playpen fantasy that you can do something significant about the deficit without ever reducing military spending, cutting entitlements such as Medicare and Social Security (not a great vote catcher among the silverhaired marching troops of the Tea Party) or raising revenue. Just cut discretionary spending, redirect the odd earmark or zero fund that nest of socialism, public broadcasting – and, hey presto, the budget is balanced.


There is, of course, the odd Republican such as Representative Paul Ryan of Wisconsin with the balls and the brains to face facts, who actually has the temerity to say that if conservatives are serious about the deficit they must consider military reductions or the electoral poison of Medicare cuts and Social Security postponements. Good luck on that one, chum.


Whatever else we might now think of the 44th President of the United States, no one supposes him dumb. In all likelihood, he and Michelle will raise a glass beneath the starry skies of Oahu on New Years Eve, toast 2011 and mean it. A basketful of legislative victories – from the Start treaty to medical cover for chronically ill 9/11 volunteers – has suddenly positioned him as the can-do President against the nay-sayers of the new House. And while Mr Obama knows full well the measure of Democratic unhappiness, he also can see the coming divisions of his enemies: between pie-in-the-sky tax cutters and true deficit hawks; between military trimmers and Big USA maximalists; between Tea Party tribunes such as the sublimely named champion of all things corporate Jim de Mint and wild-eyed libertarians such as Pa and Son Paul; between the oligarchs who still run the party, such as Karl Rove, and the mavericks who detest them, such as Sarah Palin.

Mr Obama’s temptation will be to stand back and let it all play out, as he has done so many times before, with the steady thrum of a recovery whispering “take it easy, boss” in his ear. But he owes the long-suffering, still-suffering, country more. He owes it the truth, delivered in such a way that Americans might yet feel that absorbing its seriousness is not the bar to but the condition of their collective reinvigoration. He has an opportunity to deliver that truth in the State of the Union speech; a moment in which he can still reboot America and re-make its politics once again. For what it’s worth, I’m ready to put money on a bet he will.


The writer is an FT contributing editor


Copyright The Financial Times Limited 2010.