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The Tentacle


November 29, 2004

America Is Headed South

Tony Soltero

Back in 1980, when Ronald Reagan was elected President, many thoughtful and rational Americans resisted the urge to buy into the Gipper's shallow feel-good sloganeering and image-heavy, substance-free rhetoric. Among these was the Frank Church, the venerable senator from Idaho, who remarked upon Reagan's election: "What I fear most," he said, "is the Latin Americanization of America."

It was an obscure, almost unnoticed little comment from one of the most liberal elected officials of that generation. Those who did hear it quickly dismissed it as misguided and alarmist. And so it got all but forgotten, even after President Reagan proceeded to plunge us into the worst deficits in the nation's history up to that point.

After Senator Church died in 1984, no other political figure - Republican or Democrat - ever thought to bring the remark up again, even after the Iran-Contra scandal pierced Reagan's media-supplied Teflon.

So here we are in 2004. And what do we see? Senator Church's bleak prognostication has all but arrived upon us.

We did take a welcome detour in the 1990's, as Bill Clinton reversed most of the damage done by Presidents Reagan and Bush (41) and put our economy back on a first-world track again. He gave us our first budget surpluses in 30 years. Things looked good.

But the last four years have returned us on a path to Brazilization at an astonishing rate of speed. And this time it doesn't look like anybody's going to save us. Americans are ready to throw away their first-world standard of living as long as it means Fred and Steve can't get married.

Ever been to a Latin American country? They're not pleasant places. They're oligarchies characterized by extreme wealth polarization, desperate poverty, an almost complete lack of social services, bad infrastructure, undrinkable tap water, unreliable power, massive environmental degradation, and astronomical crime rates.

Political freedom is close to nonexistent, with rigged "elections," silenced political dissidents, and the ever-looming threat of military coups. Governments are dysfunctional, corrupt, and unaccountable to the public. Economies are forever subject to the whims and priorities of foreign banks and organizations like the International Monetary Fund (IMF).

The middle class is tiny, almost imperceptible; even educated professionals don't live very high above the poverty level. Most of the wealth in those countries is concentrated among a few elite families, and passed along by inheritance.

Hard work doesn't get you anywhere much - you might be able to afford a microwave if you're willing to do 80-hour weeks. And even if you're one of the comfortable few, your life is filled with all kinds of major and minor inconveniences - you can't so much as go shopping without an armed bodyguard.

Oh, sure, the tourist attractions are kept nice and scrubbed clean, but beneath the facade lies real, sustained, profound misery.

This is where the Bush administration is taking us. Real appealing, huh?

The warning signs are all around us. We are no longer in control of our fiscal solvency - we're at the mercy of Chinese and Japanese investors to keep our consumer-driven economy afloat. For most of the recent past the Chinese have been willing to prop up our falling dollar, as they want to keep their main export market alive and kicking.

But since it became clear that George W. Bush and his merry band of neo-conservatives are going to stay in power, the Chinese are beginning to lose faith that we're ever going to get our deficits under control. So they're beginning to dump our dollars and look to more fiscally responsible countries for investment.

We can see how the Euro has been steadily tracking up against the dollar. Even the chronically undernourished Canadian dollar has been showing signs of robustness.

So the dollar's plunge gathers momentum. Now this can have some positive effects, as it makes our exports cheaper and more competitive in international markets. This would be great - if we actually manufactured anything in the U.S. anymore.

Alan Greenspan, who's been keeping interest rates low to protect Bush politically, is now going to have to raise them (it's safe to do so now), in order to generate returns palatable to the foreign investors upon whom we're so dependent.

This is bad news for the housing market, the automobile market, and consumer spending in general, with the resultant ripple effect on the rest of the economy. A whole new generation of indebted Americans is about to find out how poor they really are. Some will lose their homes, especially if they locked themselves into adjustable-rate mortgages. And the middle class will take another hit.

Compounding this bleak scenario are the actions of the Bush administration itself, which is busy trying to rewrite tax policy to further sock it to the middle class.

The latest proposal involves stripping away our ability to deduct our state income taxes from our federal tax returns, just to finance more giveaways for the Wall Street crowd.

Oh, and did I mention that they're also trying to do away with the business tax deduction for employee health care? Try not to get sick anytime soon. You have to hand it to this crowd - they'll put the screws on you with cold, wide-ranging efficiency.

Americans who have drunk deeply of the Bush Kool-Aid remain in happy denial. We're America. We're rich and strong. It can't happen here.

A little history lesson is in order. At the turn of the 20th Century, the Republic of Argentina was one of the world's most prosperous countries, an immigrant magnet with an educated population, a thriving economy and a rock-hard currency. Argentines really did eat steak for almost every meal, well into the 1950's.

But they were plagued with bad, corrupt governments that pursued irresponsible, short-sighted fiscal policies, ran up gargantuan amounts of debt, and eventually left the once-proud country a shambles. They didn't think it could happen there, either.

We're beset by a similarly misguided (to be kind) government. Ask President Bush himself: he's never made any mistakes.

But back in the reality-based community, unless our Democratic Congress people convince enough moderate Republicans (if there are any left) that the Bush agenda is extremely damaging to our nation's well-being and first-world status, we'll be joining our Latin American neighbors in their poverty.

Trust me, gay people can't get married in Brazil either.



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