
America in Crisis
By Dr Matt Buttsworth
Copyright 2011 Matt Buttsworth Australia
All rights reserved. No part of this publication may be reproduced, stored or transmitted by any means whether auditory, graphic, mechanical, or electronic without written permission by the author, except in the case of brief excerpts used in critical articles and reviews. Unauthorized reproduction of any part of this work is illegal and is punishable by law with the exception of public domain materials contained herein.
Published by Buttsworth Books
ISBN: 9780987062833
Books and Articles by Dr Matt Buttsworth
Historical and Political Analysis:
Essays
China versus the US - The Chinese Challenge to the World Trading System
Utøya Island - Anders Breivik and The Dangers of Theocratic Absolutism
On the Possibility and Desirability of Scientific Progress
The Death and Rebirth of God -- The Decline and Resurgence of Religious Belief in the Modern Era
Books and Articles
Polarshift -- China, India and the Rise and Fall of the West
The Rise and Fall of the West
The Rise of the West
Genghis Khan and the Creation of the Modern World
The Fall of the West
America in Crisis
Democracy and Debt -- the European Debt Crisis
Broken Glass -- The Crisis of Faith in Western Civilization in the Progress Ethos
The Rise of the East
The Dragon Wakes - The Rise and Future of China
Eden and the Fall -- the Fallacies of Radical Ecological History
The Myth of Primitive Harmony
The Civilization of the Goddess -- The Goddess Feminist Attempt to Rewrite the History of the World
The Death of Nature -- The Radical Ecological Attack Upon Science, Capitalism and the Civilization of the West
The Fatal Flaw -- Nazism, Communism and the Apocalyptic Nature of Radical Ecological History
Beyond Eurocentrism -- Rethinking the Commercial, Scientific and Industrial Revolutions
Fiction
Novels
Short Story Collections
For Details of these books go to:
The American half century came abruptly to an end in December 1978, although many did not realize it at the time, when Deng Xiaoping called for radical market-orientated reforms, reversing the fifty year disaster of Mao's economic policies.[1]
Since then, China's rise has been irrepressible, and, as a mirror image, America's decline equally inevitable. People just did not realize it for another 30 years.
At the heart of the end of American economic supremacy has been the loss of its technological supremacy. First challenged by Germany and later by Japan, America's automobile industry has been in a state of long term economic decline with Toyota becoming the world's largest automobile firm. The Chinese challenge has barely begun.
America has never competed in the very fast train market where Japan, France and Germany have become the world's leading train producers, only to be suddenly and dramatically replaced in the past five years by China.
Computer manufacturing has been lost to Japan, Taiwan, Korea and more recently China.
White goods manufacture has been lost to China.
American leadership in the world production of wind technology and solar technology has been lost in the past two years to China.
And with these losses has come a growing and crippling trade deficit which in 2010 equaled $502 billion dollars, with the trade deficit with China alone equaling $252 billion.[2] America is buying what it no longer produces and cannot export enough to pay for it.
Perhaps, rather than listing all the industries lost, the key question to ask is, in what industries created by America's victory in 1945 is America still triumphant?
The answer is in two industries - in space rocket technology, where the American heirs of Werner von Braun still lead the world, and in aircraft technology, where Boeing shares a duopoly with airbus.
China has plans to challenge American leadership in both. And will.
Intellectual Illusions
This dramatic decline in technological mastery has had many causes, a number of which will be considered in depth.
The most obvious cause is not the crisis of America, but the strength of its opponents - the Japanese challenge has been followed by the South Korean, Taiwanese, Chinese and Indian challenges, each power slightly different, with China and India looming as rapidly growing giants.
All these nations have a history of millennia of scientific and technological success, which would have been difficult for any nation to resist.
The conundrum is, America never tried.
Beguiled by false intellectual theories it never tried to defend the loss of its economic and technological supremacy at all, and only realized far too late what had been lost.
The only area where it did strongly try to defend its technological supremacy was in the field of military weaponry, but, as shown by the example of the USSR, overwhelming military strength does not create economic competitiveness. To the contrary, it is a drag, costing more and more money, which would have been better spent elsewhere.
There are a number of reasons for this intellectual failure.
One problem has been the obsession with short term economic thinking and share price, highlighted by the rapid grown of the futures markets.
Long term plans to develop irresistible products that the world wants, have too often been replaced by attempts to quickly increase share price, and to increase the bonuses that automatically flow to the firm's managers.
The exception to this has been the wonderful success of Apple, but it remains the exception rather than the rule, and, like almost all of its American competitors, it does not care where its products and their sub-components are manufactured, as long as they are cheap. Every single part of an Apple's computer, iPhone or iPad is manufactured in East Asia and the company and the nation does not care.
It should.
Furthermore, whereas in the 40s and 50s American firms were managed by engineers wanting to create the best product, too many American firms are now run by lawyers obsessed with short term profits, while, in general terms, America, like many other Western nations, suffers from having too many lawyers and not enough engineers.
The second failing was at the university and national government economic level. For decades overly influenced by Keynesianism, American policy makers were obsessed with the classical Keynesian problems of, is there too much or too little money in the economy? Should the Government increase spending and decrease taxes to create a deficit to boost economic activity, or should it decrease spending and increase taxes to create a surplus to stop inflation and pay off its debts? Although sadly, the last option was almost never attempted in America? Should the government focus on reducing unemployment and increasing production, or managing an overheated economy to prevent inflation?
Nowhere in this economic model of money-flows was there a consideration of international competitiveness. On the contrary there was a myopic obsession with the money-level of America's own economy, and the danger of the coming dragons were not imagined, let alone sighted or reacted to.
Neo-Classical economics had a more long term emphasis, but a similarly myopic focus on maintaining long term monetary stability and concomitant low inflation rates, and not of the dangers of competing beasts in the Jungle.
The beguiling belief in the omnipotence of Adam Smith's all powerful invisible hand, blinded American policy makers to the dangers of losing their competitive economic and technological dominance.
The final factor in this intellectual failure was the belief in an inevitable natural economic progression - that is that a successful economy developed from being a primary economy with its focus on food production or mining, to being a secondary economy focusing on manufacturing, before finally becoming a tertiary economy focusing on services. It was thus expected and regarded as good that America ceased to be a manufacturing power, with companies relocating manufacturing plants outside of America or sourcing new cheaper components or products from Asian competitors, while America focused on services.
But how does an economy maintain a favorable balance of trade when all it offers are services? Where are the jobs for workers who have good technical skills but are not good in person-to-person interaction? What are these service industries America will supposedly provide? And most of all, having given up its manufacturing base, why should it be blithely assumed that America would remain competitive in services?
It is this last presumption that is the most fallacious, for why should a European or an Australian or, for that matter, an American, buy an insurance product from a poorly funded American bank, instead of a stable German one? Why should, looking for tuition, an American student seek online tuition from an American, when he or she can go online and be trained by a better educated, more qualified Indian tutor for one fifth of the price?
To be competitive in services a nation must have the world's best education system to create the academic talent and to be able to offer that academic talent to people across the world via the Internet at a competitive price. Outside of the Ivy League universities, America plainly does not have the world's best education system, and it cannot compete in price with specialists from India and China.
The game is impossible to win because America never had a competitive advantage in offering services, and therefore, the vision of evolving into a tertiary economy was nothing more than a dangerous mirage, that fooled America's government leaders into allowing America's manufacturing base to collapse, in exchange for - nothing.
A contrary example to the willingness of the United States and the United Kingdom to allow their industrial sectors to disappear is Germany. With its tradition of excellence in scientific research and technical education, Germany has fought hard to recreate its industrial base after the disaster of World War Two and to develop high technology products that the world wants. These include automobiles, very fast trains, medicines and chemicals, medical technology, machine tools, and, in cooperation with France and Britain, a European airplane industry, with Airbus successfully competing with Boeing.
This enabled Germany, or more correctly, until the fall of the Wall, Western Germany, to become the world's greatest exporter, recording trade surpluses every year. Germany remained the world's greatest exporter until 2010 when it was surpassed by China, highlighting the Chinese threat Germany faces.
China has surpassed Germany in the production of very fast trains - how Siemens must regret the single example train it sent to China in pursuit of a contract - as well as in electronics and computer products. The Chinese challenge to the world automobile industry - not just to that of Germany - is coming.
At the moment Germany is profiting from the Chinese boom by selling high technology machine tools to create new Chinese factories. But what happens when these new factories start to out compete the Germans, and the Chinese develop the ability to produce their own high technology machine tools?
For how long can one well-educated, hardworking German engineer remain competitive with 10, 20 or a 100 equally well qualified and equally hard working Chinese or Indian engineers?
Maintaining German economic competitiveness will be a very difficult task.
The Debt Crisis
Just as significant as the loss in manufacturing supremacy is the related economic bankruptcy of the US. This can be seen at a number of levels.
In the balance of trade the US is no longer exporting as much as it imports, importing $500 billion more each year than it export. In that sense the US is using it's saved economic capital to pay for consumption that it cannot afford.
Beyond excessive consumption, four debt crises can be seen: personal, city, state, and national debt.
Personal Debt
At the personal level, for the poor in America there is the problem of blue-collar debt, housing debt, healthcare debt and an unaffordable pension system.
One specific problem faced by many Americans due to the deindustrialization described above is the fact that the previously well paid, blue collar workers from the car factories in Detroit, or from other manufacturing industries, suddenly found themselves without work, with peculiar sets of skills that no one wanted anymore. The reality of a well-paid working class disappeared, and displaced manufacturing workers have found it very difficult to find work in the higher education computer technology or service industries.
But this problem is not just restricted to blue-collar industrial workers. They were only the ones hit first. As competition from India and other well educated growing technology powers dramatically increases in the IT and service areas, inevitably a similar wave of lay-offs are occurring in the IT and service industries as occurred in the disappearing manufacturing industries.
Maintaining personal solvency and the self-worth that work brings are far harder in a declining power.
A more severe problem is the housing-debt crisis. The housing debt crisis is particularly interesting for it dates back to President Clinton's decision in 1995 to mandate banks, supported by Fannie Mae and Freddie Mac, to lend money to sub-prime borrowers especially from minority groups, who otherwise would not qualify for a housing loan, to encourage them to buy houses as the first step towards a more prosperous future. To do so, banks were ordered to forget normal banking prudence and to lend money by quota to poor people, regardless of their ability to pay the loan back.[3]
Initially, this led to a rise in house prices as demand increased and banking prudence was relaxed still more, as most believed anyone buying a house would be able to sell it for a profit whenever they wanted in the ever increasing prices the booming housing market was creating. But no one in these poor minority groups could afford to pay back the original bank loan, and, as such, it was a game of pass the parcel - or more aptly, pass the bomb - which could only function as long as the hypnotic music of the ever increasing-prices of the shell game continued to play.
Inevitably, when the music did stop, the housing bubble burst and the government's biggest semi-private house lenders, Fannie Mae and Freddie Mac, had to be taken over by the government with an unlimited line of credit that has cost the US government $135 billion so far and may cost anywhere between an additional $124 billion to $1 trillion to keep the two banks afloat.[4] If this massive bailout had not occurred the US housing market would have totally collapsed.
Disaster was averted, but millions suffered as they were bankrupted by being forced to sell houses for less than the price they had purchased them for, and were unable to repay the cost of the original bank loan. Whole suburbs in cities became full of empty houses with for sale prices that no one can afford to buy.
The suffering will last for decades and hopefully lead to a forced return to prudent bank house lending within the US.
The suffering of the poor has been increased by the healthcare debt with tens of millions of Americans being unable to afford the ever increasing cost of private health care - particularly if they are unemployed or on temporary staff, and their health care cover is not paid for them by their employers - and as such, suffer from great, possibly terminal, health risks, if they cannot afford, or do not get, treatment for serious health problems, and can be bankrupted by the cost of a sudden unexpected health crisis.
This is a problem that President Obama has tried to solve through the 2010 Health Care act which offers subsidies to the poor to buy private health care, but even then, the percentage of Americans who do not have health care is expected to only be reduced from 19% in 2010 to 8% in 2016 meaning that 20 million Americans will still not have any health cover.[5]
The third debt crisis facing America at the personal level is the problem of pensions. Pensions in America are paid for by nation through payroll tax and by private pensions from public organizations such as city, state and federal employee pensions and by private firms.
The ageing of the US population, as in many other nations, is creating a larger and larger number of pensioners to be paid for by a decreasing number of workers. By 2017 American payroll payments will not be large enough to pay for the pensions for retired workers and will have to be paid for by the Social Insurance Trust Fund, but that is itself controversial, because it is not made up of money saved by the United States government, but of treasury bonds loaned to the government mainly by foreign lenders, especially China.[6]
This crisis in healthcare and pensions facing America is compounded at the firm level, for example by GM in the automobile industry, by these organizations having created very generous health care and pension plans in a far more prosperous time, that they can no longer afford to pay. Faced by the need to dramatically reduce costs in the face of Japanese, Korean and German competition, the only thing GM could do was declare itself bankrupt, declare the existing health and pension plans of their retired workers to be null and void, and to offer far lower pensions and health care benefits.
Luckily for the thousands of retired GM workers facing a retired life of poverty as the pensions and health care they had worked for all their lives suddenly disappeared, the US government came to the rescue and bought the GM pension fund for a cost of $6.2 billion, but this only added to the ever increasing US government debt.[7]
Similarly, some state governments have cancelled their pension plans entirely, leaving retiring state government employees facing a life of poverty in old age with no pensions at all.
The golden years of the economic boom of the 50s and 60s now seem a long, long time ago.
The second area of debt is in government debt. Within the United States this can be seen at all levels of government, from city government to state and national government.
City Debt
At the city level many cities made unaffordable investments in the 80s, 90s and 2000s on infrastructure programs such as water or electricity. Many were poorly managed, while from the 60s until 2000, many American cities faced decreasing revenue as the middle class fled to the suburbs leaving impoverished inner city suburbs that soon became ghettoes. The flight to the suburbs was increased by the problems of racial, gang, and drug violence.
While in some cities such as New York this has been turned round by city governments reinvigorating the city core through a policy of strict policing and law enforcement, many other American cities are facing bankruptcy.
They have borrowed far beyond their means and cannot afford to pay back the tens or hundreds of millions that they owe. Jefferson County in Alabama borrowed heavily for a new sewerage system and is now $5 billion in debt; the gross debt of Harrisburg in Pennsylvania - they borrowed for a state of the art rubbish incineration system - is now so great that they owe $68 million every year in interest payments; $3 million more than their annual budget, Detroit had a budget shortfall of $280 million in a single year and has dramatically reduced police, lighting, road repairs and cleaning services affecting 20% of its population.[8]
The financial problems of many American cities have been compounded by the unaffordable health care and pension plans offered to city workers described above. New York has had to pay $8.3 billion into its pension fund in 2011 to keep it afloat.[9]
All in all, the estimated debt of American cities and states is $2 trillion, much of which cannot be repaid with 184 municipalities being unable to make payments of $6.4 billion in 2009 alone.[10]
The real question is how many American cities will go bankrupt? It has been estimated that sixteen American cities face the immediate risk of bankruptcy if they do not make steep budget cuts in 2011, while up to one hundred more American cities may go bankrupt in the near future. Cities facing bankruptcy include New York, San Diego and Cincinnati.[11]
It is a debt crisis from which there is no easy escape.
State Debt
Similar problems exist at the next level of government with numerous states facing bankruptcy. Basic infrastructure investment has lagged behind, but when funds have been invested, the problem is how to pay for them? Health and pension plan crises mirror those of the unaffordable city pension plans, and there is the looming crisis of how will existing obligations be paid for?
California, Illinois, New Jersey and New York are all in a state of severe crisis with numerous other states having financial problems. California ran out of money in 2010 and had to pay vendors with IOUs, having to borrow $8 billion dollars from the US government to stay solvent. Its total deficit is $25 billion while Illinois owes $8 billion.[12] To balance its budget Illinois has not paid money due to be paid into the pension fund for years, and in desperation, had to borrow $10 billion in 2003 to pay into the pension fund to keep it solvent, but now that payment is having to be repaid and it has had to borrow billions more to repay the debt by selling pension bonds, again creating more debt for the future. Similarly New Jersey deferred paying the $3.1 billion due to be paid into the pension fund in 2011. Other states have had to resort to drastic cuts in services, including cuts in police, firefighters, and even organ transplants to try and balance their budget.[13]
But while many states are having difficulty meeting their short term financial obligations, it is long term debt, and in particular, the debt owed by states to pay the pensions and health care of their retiring and retired employees that is the greatest problem. It is estimated that local municipalities and states in the United States face shortfalls of $3.5 trillion in the pension payments that they must pay to their retired employees, as well as an additional $530 billion in expected health care costs. Such debts will be almost impossible to pay and a municipal and state financial crisis looms.[14]
If these huge debts are to be paid, the question that must be asked is, are the states willing to raise taxes to the level required to pay back the debt obligations, earlier state governments have created?
So far the answer to that question is very dubious, as American voters do not support any government that threatens to increase taxes even if it is financially desperately needed.
A key example of this is California, which, as stated above, is on the brink of bankruptcy. Governor Schwarzenegger was elected with the promise of tackling the financial crisis but he found himself as helpless as previous governors. The problem was that while the State government could spend whatever money the governor or the State Congress wanted to - and spending money in specific cities or wards was always a good way to win elections - California has a peculiar law stating that any legislation to increase taxation has to be passed in a referendum by the voters of California. Perhaps, not surprisingly, when faced with the prospect of increasing taxes, which they, as individual citizens, will have to pay, the voters have consistently refused to pass any referendum increasing taxation to pay for the spending obligations that the government owes.
The result is that California, one of the world's biggest economies and center of the American IT industry is, in reality, bankrupt and is surviving by sacking teachers, closing schools, reducing the number of police or other government employees and paying vendors with IOUs. But how can California remain competitive as an IT center into the future, if the number of teachers and schools, as well as the quality of programs that they offer, is being dramatically reduced?
California's tale, except for the peculiarly Californian referendum provision, is mirrored in scores of other American states where governments are drastically cutting services but refusing to increase taxation. But there is any other way they can pay their debts and future financial obligations except by dramatically increasing taxes.
The only alternative is bankruptcy.
National Debt
Perhaps the biggest problem that America faces as a nation is that of national debt. While for a brief period for three years during the 1990s President Clinton created a government surplus, which was used to repay outstanding government debt, ever since 1945 the government has been spending more than it received and national debt is now at a crisis level.
The government of America now owes over $14.3 trillion and under Obama there is no serious plan to reduce this debt. Instead, the plan is to reduce the rate of growth of debt by spending cuts of $4 trillion over 12 years but that would still see the national debt increase by $4 trillion dollars during this period, and even these figures are somewhat suspect as they involve avoiding paying $1 trillion in debt repayments.[15] The urgent need to create a government surplus to pay back this bourgeoning debt has not been realized.
The causes of debt are not hard to see. As alluded to above, the health care system of the United States is a great government cost, even if it fails to offer health care cover to tens of millions of Americans. So too, the social security program and the pensions program are a great cost, with the increased level of unemployment which has hovered near 10% since 2008, creating a significant cost to the government in terms of unemployment payments. Potential pension costs will increase dramatically if the US government takes over responsibility for bankrupt city, state or private company pension funds.
Added to this must be the cost of the bank bailout of the financial crisis, including the over a $150 billion dollars - and potentially up to $1 trillion - needed to bail out Fannie May and Freddie Mac.
Whether any of this vast rescue package, given in the form of loans to the banks, will be repaid, is an interesting question for future economists.
Perhaps the biggest cost facing America is the cost of Empire. Misled by President Bush's pronouncement of the beginning of the American century and used since 1945 to being the world's greatest and since 1989 only superpower - with the possible exception of China's growing military might - the American military has been willing and able to spend whatever it wants.
America has fought in every major war of the last century including World War One, World War Two, the Korean War and the Vietnam War spending its treasure in dollars and blood. In more recent years since the US government deficits began to dramatically rise, the cost of ever increasing high technology armaments has been added to the cost of wars in Serbia, Kosovo, Iraq, Afghanistan and more recently a no fly zone regime change air mission in Libya. The war in Iraq alone has cost almost one trillion dollars.
Over $687 billion dollars was spent in 2010 on defense, to which must be added another $44 billion on homeland security and an unknown amount on security and intelligence agencies, as well as subsidies for technology research by major US defense firms such as Boeing.[16]
But, for how long can America, with its declining economy, disappearing industrial base, and facing ever-increasing competition in the area of advanced technology, manufactured goods and services, afford to be the world's only remaining superpower?
It is great for Presidential popularity to be hailed as the leader of the greatest power in the Free World, capable of deploying military force anywhere in the world, but what happens when the nation can no longer afford it, and military overstretch becomes an unaffordable luxury?
America is militarily unbeatable, but it is also militarily bankrupt.
The Economic Poison of Neo-Conservatism
The problem of an unaffordable military and ever increasing government deficits leads directly to the economic poison of Neo-Conservatism.
Supposedly supporting decreased government spending which, in practice, means decreasing government social security and health spending and little else - as well as increasing government prudence, Neo-Conservatism is a financial disaster, which, in reality means increased government deficit spending, due to their attempts to decrease taxation, while at the same time dramatically increasing government defense spending, both in terms of providing ever more high tech weaponry to the defense forces, and in terms of the willingness to use those forces in conflicts anywhere in the world.
This tendency began with President Reagan who decreased taxation while at the same time increasing military spending, including the very expensive Star Wars program, in the hope of bankrupting the USSR. It worked. The USSR collapsed under the weight of its own debt, but Reagan also began to dramatically increase US government debt.
This process reached its disastrous pinnacle under President Bush junior, who again decreased government taxation, especially to the rich, while at the same time dramatically increasing defense and security spending, in part because of the 7/11 attack on New York and the threat of Islamic terrorism which necessitated a dramatic increase in homeland security.
Under Bush the top bracket marginal tax rate was decreased from 39% to 35%, significantly reducing government revenue while military spending and military adventures abroad dramatically increased, with the very carefully curtailed attack on Iraq launched by Bush Senior with the aim of liberating Kuwait, being replaced by the wholesale invasion of Iraq by Bush junior in an attempt to dethrone Saddam Hussein and, in so doing, somehow confront Islamic terrorism and Hussein's threat to the region.[17] The cost of the war in Iraq has been almost a trillion dollars, and the cost of military adventures have been dramatically increased by the invasion of Afghanistan - somewhere Russia and the British army in all its imperial glory, never succeeded in successfully conquering - with no prospect of victory and no hope of a successful end to the war in sight.[18]
Since these wars the US has participated in the air exclusion zone over Iraq -- in practice a bombing campaign designed to destroy Gadhafi's regime -- but the fact that domestic rebels and not US troops, overthrew the regime, meant that the costs of maintaining the air exclusion zone and fighting the hatred a US led ground force invasion would have created, have been far less than the US invasion of Iraq or Afghanistan.
The result of this military-led increase in government spending and decreasing taxation was inevitable. The government deficit exploded, increasing from $17 billion 1999-2000 in the final year of President Clinton Administration to over $1 trillion in President Bush's final full year of 2007-2008. Since then, annual budget deficits have increased by 50% more under President Obama. Worse still, total US government debt, adjusted for inflation, increased from $5.6 trillion to $10 trillion in the same period, increasing by 30% more in the first 18 months of the Obama Administration to $14.3 trillion dollars.[19]
This profligate increase in debt continued by President Obama was in response to political pressure and the global financial crisis, and in so doing he has renewed Bush's financial stimulus tax cuts to the very rich, while also dramatically increasing government spending to even higher levels. This has resulted in an increase of the annual government deficit by 50% in the first 18 months of the Obama administration with government deficit spending been hidden by the linguistic sleight of hand by calling it quantitative easing. [20]
Nor does the Obama administration appear to be terribly worried about this total level of debt, for while, as stated above, there is a plan to reduce the size of the annual government deficit by some $4 trillion over the next 12 years - which means that the total government debt will still keep growing every year - there is no plan to actually return the budget to surplus so that this enormous debt can begin to be repaid.
And in political terms, 12 years is a very, very long time. By the time 12 years have passed President Obama will have been retired for 5 ½ years and there is no guarantee that his policies will be continued, if he wins the next election and remains as President for his full two terms. In short, it is Never Never Land, promising something that may never come true.
The Debt Ceiling Crisis
This ever rising level of debt created a political crisis in July 2011 when the total level of US national government debt threatened to reach $14.29 trillion dollars -- the maximum legal cap on Federal Government debt enacted by the Congress. This maximum debt level cap had of course been increased numerous times without any political crisis since 1945 as Federal Government debt steadily increased. However the Republican controlled house of Congress and Senate now threatened not to allow any further increase in Federal Government debt -- enough was enough. But government spending - whether it be on federal government or defense personnel wages, on pensions and unemployment benefits, on health or on national infrastructure - must continue and a refusal to increase the debt cap risked bankrupting the government by not allowing it the money it needed to pay ongoing costs.
Gridlock occurred as the Democrats and Republicans bitterly fought about what to do.
The Republicans argued that they would not increase the debt level until drastic cuts were made to government spending, and in particular to social security spending, although of course not to defense. The Democrats countered by arguing that no agreement to cut social security spending could be agreed to unless there was an increase in taxation, particularly to the very rich. The Republicans in turn responded by arguing that no increase in taxation could be allowed and that any decrease in the deficit -- neither party had realistic plans of creating a surplus -- could only come about by decreasing government spending.
As gridlock prevailed, in order to allow Federal government spending to continue, the Republicans then said they would accept a six month increase in total Federal government during which exact changes to Federal government spending could be negotiated. This meant the impasse, and the politically damaging controversy over US government debt, would continue during the last years of President Obama's first term, and to avoid this, arguing that a six month allowance to increase Federal government debt would create economic uncertainty, the Democrats asked the Republicans to agree to allow Federal government debt to increase by $2.4 trillion dollars more, until the debt ceiling was renegotiated at the end of 2012 -- after the campaign to elect the next American President.[21]
In the end, facing the immediate bankruptcy of the United States Government, financial and social chaos as social security benefits, civil servant pay and armed forces pay abruptly ceased across the country, as well as an implacable Republican party that was refusing to budge, it was the Democrats who blinked and at the end of July 2011 a bill was passed, allowing a six month increase in Federal Government debt which would have to be negotiated at the end of the year.
But further negotiations do not mean a solution, and the controversy over the ever increasing and ever more unaffordable level of United States Federal Government debt is certain to continue.
The Tea Party is supposedly very serious about the problem of reducing government debt, but many Tea Party supporters are even more nationalistic than earlier Neo-Conservatives and, like these early Neo-Conservatives, are talking of further tax cuts, further social security cuts, but no cuts in the unaffordable level of defense spending, and military activity around the world.
Indeed, the sad truth is, as shown by the debt ceiling crisis, is that nowhere in America today is there a plan to significantly reduce total national debt by creating a large surplus in the government budget, which requires a real increase in the level of taxation to all people and private firms, including the rate of company tax and the highest marginal tax rate for the very rich, while at the same time dramatically reducing government spending by carefully considering how to reduce all aspects of government expenditure including social security and especially defense spending.
The illusion of Neo-Conservatism continues to blind many Americans to the dramatic changes that must occur to reduce national debt.
The mirage of Empire and the power and pride of using the military to solve all global problems is addictive.
The United States has been the world's leading military and nuclear power since 1945. However, in the post nuclear age, military power has become ever more irrelevant as a measure of national power - a nation-destroying mirage. It is economic power that counts.
With the conquest of other major powers no longer being possible due to the threat of nuclear destruction, excessive military strength has no purpose and is, in fact, the destroyer of national power as it creates ever increasing costs to the government and therefore to the economy as a whole, and requires ever more researchers and laboratories to produce military weapons which have no civilian commercial use and risks destroying the nation. The USSR was bankrupted by the cost of maintaining its large armed forces and trying to win the arms race. Now, the cost of continuing to be the world's sole super power risks helping bankrupt the United States.
This ever-increasing debt has also created a threat to national security. The government debt is being bought up by the Chinese, which makes continued American deficit spending dependent upon the Chinese government continued willingness to support it by continuing to buy American government bonds. But what happens if the Chinese cease to want to buy more US government bonds? What happens if they threaten to not want to buy more US government bonds for economic reasons, such as the catastrophic effect the declining value of the US dollar is having on the value of the money owed to them by the US government in government bonds. Or because of a dispute about a particular US government policy, which the Chinese government does not approve of, a dispute that may never be made public but which the Chinese will inevitably win.
As Secretary of State Clinton declared in March 2009, when discussing problems in the American and Australian relationship with China with the then Australian Prime Minister Rudd:
"How do you deal toughly with your banker?"[22]
With ever increasing indebtedness to a foreign power, so too national power and the ability to take independent action against that foreign power, dramatically decreases. It is a dangerous loss of national power and freedom of action, which American policy makers must address.
The Tipping Point
Beyond the very significant and ever growing hidden influence of America's banker lies the issue of, at what point does the level of debt of a great power become terminal, leading to the collapse of the power itself and of the empire it once ruled?
Debt has led to the fall of great powers in the past. When Ottoman debt became unsustainable its profound decline through the 19th century up until its collapse after World War One became inevitable. So too, repeated military defeats and opium-created debt caused the bankruptcy and collapse of the Ching Empire in China, helping destroy its ability to effectively react to the Western challenge.
For Britain, the crisis came after the treasure of centuries of empire had been spent in the disaster of World War One. Although Britain and its empire survived the war, Britain was bankrupt, its industries were no longer competitive and the coal industry was declining. In the years after World War One it was forced to drastically reduce the size of its navy, abandoning its policy of keeping the Royal Navy twice as large as the navy of any other power. The United States now became equal to Britain in the size of its navy and would soon become the world's greatest naval power.
The catastrophe of World War Two weakened Britain further, with $30 billion being spent on winning the war. By the time Britain and the other allies won the war, Britain was deeply in debt, was no longer a great military power, and the pound had lost its status as the world's de facto reserve currency to the US dollar.[23]
The United States is now at the same precarious level of decreasing industrial competitiveness and increasing national debt that Britain was at after World War One. The US level of ever increasing national debt and their continued government and private consumer spending is being supported by other nations only because the US dollar is the reserve currency of the world, as the British pound was before World War One.
At the moment, US government debt equals 98% of GDP - an impossible to sustain level - that is still growing every day and does not include state or city debt.[24] With further continued, rapidly increasing national debt, a time will come when declining confidence in the economic solvency of the US and the consequent declining value of the US dollar reaches a point where other nations will no longer be willing to hold vast amounts of US dollars and to trade in them as the reserve currency of the world. At this time the other nations of the world will unload their US dollars and sell or at a minimum cease to buy US national government bonds, and at that point, the US dollar will suddenly and permanently cease to be the reserve currency of the world.
This will lead to a dramatic fall in the price of the US dollar and a sudden, forced drastic reduction in US government spending, as it will no longer be able to borrow more and more foreign funds to finance its deficit spending. This, in turn, could cause a cascading crisis in the other layer of governments, as the national government is no longer able to bail out state or city governments, which also have unsustainable debts, or to buy as a lender of last resort, the unaffordable pension funds of private firms.
It will be a crisis as or bad or worse for the United States as the Great Depression and will lead to a dramatic and permanent decrease in the living standards of individual Americans as health, social security and pension payments as well as government services are reduced dramatically, a crisis that is already beginning in many cities and states.
It will furthermore lead to a dramatic decrease in US military capacity as the cost of its existing armed forces becomes unaffordable. At that point, as has been seen in the case of Britain, the US will cease to be the world's only superpower, but will instead be a far diminished military and economic power, a power in competition with the rising economic and military power of India and China.
When this tipping point will come cannot be said and whether it is a matter of years or a few short decades is unknown but it is coming.
How close this tipping point is was revealed on April 19 2011 when Standard and Poor's changed its rating of US government debt from stable to negative for the first time in its history creating a one in three chance that it will devalue US government debt from a three star to a two star rating, saying:
Because the US has, relative to its AAA [top-rated] peers, what we consider to be very large budget deficits and rising government indebtedness and the path to addressing these is not clear to us, we have revised our outlook on the long term rating to negative from stable.[25]
The tipping point must be very, very close and it is getting closer every day.
Great empires can take centuries to create, but need only a few short profligate decades to be destroyed by bankruptcy, by the illusion of fighting for victory in too many costly wars, or the bitter reality of military defeat.
And bankruptcy leads inevitably to the fall of the empire.
A long, dramatic fall from imperial greatness to poverty, from which few empires ever recover, and never to the same level.
And the nation who will decide when that tipping point comes will be China, a nation which the US government is dependent upon to continue to buy billions of dollars of US government bonds every year to finance its ever increasing national government debt?[26]
The Chinese reaction to the downgrade of the US credit rating by Standard and Poor's was very harsh. The Xinhua Newsagency spokesmen declared -- undoubtedly representing the views of the Chinese government -- that:
"The US government has to come to terms with the painful fact that the good old days when it could just borrow its way out of messes of its own making are finally gone." It continued: "China, the largest creditor of the world's sole superpower, has every right now to demand the United States to address its structural debt problems and ensure the safety of China's dollar assets..."[27]
The Xinhua spokesman went on to say that the US must slash its "gigantic military expenditure and bloated social welfare costs" arguing for international supervision of the vast debts of the United States and for the creation of an alternative world currency.[28]
This was no longer a growing economic power offering advice to its powerful by larger rival. It is the Middle Kingdom reborn as the world's sole financial superpower lecturing a falling nation that it regards as bankrupt due to its profligate wasteful ways, unable to ever repay the vast amount of money it owes.[29]
China's words have been followed by action.
In October 2011 it was a net seller of US government bonds, selling $14.2 billion worth of bonds, while in November a further net sale of $1.5 billion dollars of US government bonds has occurred. And the trend has continued with each month, and while China will undoubtedly lose billions in the declining worth of its holdings of $1.16 trillion of US treasury bonds, the real question is how will the US continue to fund its unsustainable deficits if the money tap is turned off?[30]
What will happen to the US social welfare system, the US healthcare system, to City, State and National spending programs, and above all to the US military machine, when the money to fund all the programs that the United States governments spend their money on is no longer available?
The tipping point has come. And the way down is very, very long.
Democracy and Debt
It is possible at this point to argue that there is a direct relationship between the inability of democracies to control government spending and/or increase taxation and their resultant debt crises.
If one considers the major nations of the OECD this certainly appears to be true. In 2011 the average public debt/GDP of major OECD countries was estimated to be at the frightening level of 100%. The levels of major OECD democratic countries were:
Public Debt in 2011 by OECD Country[31]
Many of these nations will find it immensely difficult to pay back their government debt and the difficulty in reducing these deficits is highlighted by the violent demonstrations and street battles in Greece and by the peaceful mass demonstrations that have been held in Britain to oppose government spending cuts.
Some of these countries such as Britain and, as stated above, the United States, have large unfunded pension liabilities, waiting to explode, although the contrary example is shown by Germany which was the first nation in the world to introduce old age pension insurance in 1881 under Bismarck.
Nowhere in the world is the debt crisis of democratic governments worse than in the Euro countries of the EU.
The European Debt Crisis
While the likelihood of US national government debt becoming a sovereign risk exists only in the future, unsustainable, unaffordable national debt has created a contagion of sovereign risk that is tearing the Eurozone apart and threatening to begin a world financial and economic crisis on a scale not seen since the Great Depression.
The crisis first became openly apparent in Greece in May 2010 when it was forced to ask for an EU/IMF loan of 45 billion Euros of which 8.5 billion was used to cover Greek government bonds that were now due to be repayed. But the Greek government had not fully disclosed its debt liabilities and it was forced to ask for more and more loans to avoid bankruptcy, until it became apparent that the true Greek debt level was some 304 billion Euros or 143% of GDP. As the full scope of the crisis became apparent, the markets began to lose faith in the Greek government's ability to repay its existing debt, and in April 2010 Standard and Poor's downgraded the status of Greek government debt to "junk status" estimating that there in the event of a default, investors would lose 30-50% of their money. Not surprisingly interest rates on Greek government bonds rose dramatically, and the annual interest cost of a 10-year Greek government bond reached 30%.[32] No one in the market thought they could repay it, and few would be willing to buy it no matter what was the interest offered.
To get more European money the Greeks had to accept ever worse austerity cuts -- dramatic cuts to government spending, wages of government employees, pensions as well as selling off government assets -- but these only caused the economy to shrink making the total debt to GDP ratio even worse. By the time the third tranche of Greek emergency loans were being negotiated, key European lenders, and especially Germany, were forced to admit that the Greek government could not afford to pay its debts, leading to an EU proposal that banks who had lent to Greece would have to accept a 50% 'hair cut' on their loans. Sovereign risk now became a terrifying reality as banks faced the loss of tens of billions in written down loans to Greece. But if Greece, backed by the full power of the EU and by the IMF could not afford to repay its debts, who could?
The Greek debt crisis was quickly followed by the Irish debt crisis, the Portuguese debt crisis, the Spanish debt crisis and now the Italian debt crisis with yields on Italian bonds going over the crucial 7% level at which debt can no longer afford to be repaid.
Governments across southern Europe have fallen and now a global economic crisis threatens as the future of the Euro hangs by a rapidly fraying thread.
How much worse will it get? How long can that fraying threat hold? What effect will the European debt crisis have on Chinese exports and on the Chinese economy itself, which is the sole motor of growth saving the world economic system from collapse? Will the European debt crisis trigger a world financial crisis or a global depression?
It is the greatest economic crisis the world has faced since the beginning of the Great Depression in 1929.
While some of the origins of the European debt crisis are peculiar to the Euro, others point to a deeper Western economic crisis and to a crisis in Western democracy.
The immediate causes of the European debt crisis lie in the creation of the Euro - an attempt to have a common currency without a common fiscal policy for all Euro members, or at a minimum, highly regulated, enforceable rules, which prevent member states from running up deficits they cannot ever repay. But such enforceable, strict regulations did not exist, and like a class of young boys let loose in a lolly shop the staff have fled, Greece, Italy, Spain and Portugal went on a financial binge, spending much more than they had, and creating a future of nightmarish austerity. Perhaps the best example of this profligate spending being the very fast train networks in Italy and Spain which go very fast, but which both run at a loss and which both cost tens of billions that neither nation can afford.
The amount of money spent by Greece on the Athens Olympics and on improving the transport systems of Athens, including a new underground railway, is a simple example of unaffordable, economic madness.
The solution suggested by Chancellor Merkel has been closer economic union with a new EU treaty tightly regulating budgets and stopping deficit spending, but such a treaty has already been vetoed by Britain with Hungary and the Czech Republic also declaring that they will not agree to any EU treaty giving the EU power over their finances. Having just escaped Soviet dictatorship, neither is willing to give up their long awaited national economic power to another multinational power. To negotiate and ratify a treaty binding for Euro members alone will take years and there is no guarantee that such a treaty creating a central financial body with powers over the budgets enacted by individual Euro members would be legal in a European Union, in which all members are meant to be formally bound in one common market ruled by one legal framework.
But the idea of such a treaty also hides the impossibility of the Euro itself. It ties the weak economies of nations such as Greece, Spain, Portugal, Ireland and Italy to the very strong economy of Germany, in a market in which open trade for all supposedly compensates for the economic union with such an overwhelmingly powerful partner. In the short run this has proved advantageous to Germany in that the Euro has proved weaker than the Deutschmark, allowing them to export their products much more cheaply across Europe and the world. But for nations used to having the drachma, the lira, peseta and the escudo it has been a financial and now a human disaster.
Traditionally, to keep their economies competitive and to reduce the real value of their wages and debts, they have periodically devalued their currencies in an ever downward spiral. What it lacked in national prestige, it more than made up for in keeping the country cheap, keeping the tourists coming, and keeping existing industries competitive. Without the devaluation cycle, and confronted with -- until 2010 -- a rising Euro, all these nations became increasingly uncompetitive and over-priced, resulting it very low rates of growth, increasing unemployment, and eventual economic crisis.
This situation was worsened, by the expectation of high social benefits in terms of fully funded pensions paid after an early retirement age, high government wages, chronic overstaffing of government agencies, and often corrupt nepotism which made government finances very hard to balance. In Greece, but also to an extent in Italy, Spain and Portugal, the ability of the government to get enough revenue to pay for their spending has been chronically weakened by a tradition which makes tax dodging a national sport, and supports everything possible being sold or conducted on the black market with no tax being paid at all. The popularity of such a tradition makes balancing the budget impossible.
The fundamental problem is that the citizens of Greece, Portugal, Spain, and Italy were enabled by continued deficit spending by their governments to live a standard of living that was neither economically justifiable, nor economically sustainable. After the collapse of the Greek shipping industry due to Japanese, South Korean and later Chinese economic competition, what industry does Greece have other than tourism to support the living standards its citizens demand, and the generous pension system and other government benefits that they enjoy? In what industry are Spain and Portugal competitive other than tourism and the growing of olive oil? What internationally competitive industries or firms does Italy have other than Fiat? Can the success of Fiat alone pay for Government deficit spending on projects across the whole of Italy?
If living standards, and the pensions and other benefits and spending programs of these south European countries could not be paid for by the taxation produced by a growing economy, then they only way they could be paid for was by governments openly or hiddenly spending more money than they received for year after year and borrowing the rest. Which is exactly what they did, until the music finally stopped and the banks finally realized that the money they had lent to governments across southern Europe, was never going to be repaid.
It is an unsustainable situation, which now has rebounded on Germany, for while it profited from a relatively lower Euro in the short run, in the long run, it was the economic powerhouse of Germany that these nations turned to Germany -- as the nation which contributed the highest percentage to the EU budget -- to bail them out when the financial crisis finally struck, with a demand for a stabilization fund of a trillion Euros to be set up, with the bulk of it being paid by Germany.
Most of these emergency funds which have or will have to be loaned to Greece, Portugal, Spain and Italy will never be repaid.
Germany now faces a start choice. Does it support the continued increased regulation of Euro member finances, at the cost of heavily funding bailouts to all its bankrupt members? Or does it allow the Euro to collapse, creating economic chaos across Europe, as Greece, Portugal, Spain, and Italy are cut loose from the Euro to survive as best they can, and default on their debts if necessary?
Germany under Merkel has made the decision to strongly support the further centralization of the finances of Euro members in a regulatory process that, even if its aims sound wonderful, will take years for all Euro members to enact and to put into practice, if it is able to be enacted by the 27 member states of the European Union at all, at a time when the economic crisis of the southern Euro states is becoming ever worse with every day that passes.
As loans to Greece begin to add up towards 400 billion Euros, and as other crisis stricken members require more and more money to fund their debt costs, the real question is: how much can Germany, the EU, the IMF or even the world afford to bail out these nations? The nations of Europe could afford to fund the Greek debt crisis. They were able to fund the Irish and Portuguese debt crisis. But which nations in Europe or global organizations such as the IMF can afford to lend to Spain all the funds it will require if it can no longer meet its debt payments? Or to Italy?
At what point will Germany decide that it cannot afford to lend an infinite amount to nations across southern Europe in loans that will never be repaid? That given a choice between risking the bankruptcy of Germany, or risking the bankruptcy of the nations of southern Europe, Germany will decide to maintain its own financial solvency and let the nations of southern Europe look after themselves, no matter how great are the financial crises and chaos that this decision makes.
The bankruptcy of others is better than going bankrupt yourself.
And what about the banks?
How much stress can the banking system survive after a 50% Greek haircut? How much money did the French banks lose in Greece? Or the Germans? What could they lose if Spain and Italy collapse into economic crisis?
The dimensions of the Euro debt crisis are so vast that if Italy collapses on top of the existing Greek, Portuguese, Irish and Spanish crises, then it will be impossible for Germany, or for all the contributing nations of the EU, or the IMF to supply enough funds to the Italian government to prevent disaster and possible default, which is why at the last EU finance crisis meeting President Sarkozy made a desperate plea for China to pour trillions into its emergency fund.[33]
China did not respond.
And in the absence of a huge injection of funds that no existing international financial institution can raise, the crisis, no matter how much EU leaders are wishing that it wouldn't, is getting worse than every day. On January 14 2012 Standards and Poor's reduced the credit rating of nine EU countries, stripping the triple AAA rating from France and Austria, and downgrading 7 others including Spain, Portugal and Italy. Only Germany retained its triple A status. Six other EU nations have been put on notice that their credit ratings may be downgraded in the near future. [34]
This reduced credit rating will not only make it more expensive for European nations to borrow money to pay government bonds when they fall due, it will also make it more expensive for the European Financial Stability Facility to borrow money, because the creditworthiness of the Emergency Fund depends directly upon the credit worthiness of its EU members. [35]
If terrible news could possibly get worse, on January 13 2012 talks between Greece, the IMF and a consortium of banks to which Greece owes an enormous amount of money, wanting a 50% 'haircut' on its debt have now broken down over what interest rates the banks are to be offered for the remaining 50% of their loan. They have now retracted the offer, and few in the banking world now believe that Greece will be able to raise the 14.4 billion Euros needed to repay the next government bond that falls due on the 20th of March. If Greece does not make this payment then it will formally have defaulted on the debt that it owes, a default that will unleash a sovereign debt crisis across the EU.[36] In all likelihood Greece will be forced to abandon the Euro to save the currency, but if Greece defaults and is forced to abandon the Euro what about Portugal? Spain? Ireland? Italy?
What about Japan's 205% Debt to GDP? How safe will the bondholders of Japan's vast government debt feel? Or the holders of US government debt?
How far with the global sovereign risk crisis ricochet across the Western world?
The crisis is only beginning. Who knows where it will end?
The Examples of Australia, New Zealand and Norway
Despite these tales of despair, it is also true that not all democracies have high levels of government debt, with Australia, New Zealand, Sweden, and some of the Baltic and Eastern European states including Latvia having low levels of government debt. While Australia and New Zealand have always bought their government debt back into balance, never creating a debt mountain, Sweden was one of the first European nations to face a debt crisis due to its very generous social warfare system, which had to be drastically reformed at a severe social cost. Similar drastic reforms were undertaken in Latvia, and Sweden and Latvia are now both enjoying the benefits of having a sound national financial position.
Similarly, the new Conservative government in the United Kingdom is now trying to make serious cuts into government spending, although sadly, influenced by the earlier policies of Neo-Conservatism and Reaganomics, they are also significantly lowering company tax levels in direct contradiction to their attempt to balance the government budget by drastic fiscal cuts.
Perhaps the most admirable example amongst Western nations is that of Norway, which is using the oil sales from its state oil firm to fund a sovereign wealth fund that is buying shares in companies and assets across the world to ensure the future prosperity of Norwegian citizens when Norwegian oil runs out.
But Norway is an exception. Shortsighted Australian governments have not copied this example, and are spending profits all the profits of the China-driven mineral boom as fast as they can get it. Indeed the current Labor government is in fact spending so much that it is running a budget deficit while Australia is in the middle of the greatest mining boom in its history.
Worse still, in most Western countries, success is regarded as a successful management of the size of the total level of debt, while failure is out of control debt. Nowhere, with the exception of Norway, is there an attempt within the nations of the West to create and invest a large surplus that will benefit the future.
The problem is perhaps inherent to high income, profligate democracies. Used to the high living standards of the 50s to the 90s, their citizens are demanding that their governments increase their living standards artificially by reducing taxation and increasing government benefits which are paid for by borrowed funds. It is a debt mountain being created for future generations to pay in order to sustain the high living standards of the present. Political parties which campaign on the economically responsible policy of creating a debt-repaying surplus by promising to increase taxation and decrease government spending are never elected, while political parties which promise what they cannot afford are.
The East Asian Alternative
In contrast to the chronic debt problems of the Western democratic states, China has a national government debt to GDP ratio of only 17.5%, while South Korean government debt equals 24% and Taiwanese government debt equals 33% and Hong Kong government debt equals only 18%, reflecting the economic prudence and future responsibility of China and these Confucian governments. The only exception to the excellent government debt ratios of China and the Confucian states are Singapore, which has a government debt ratio of 102%, and Japan, which, as noted above, has a terrible government debt ratio of 205%.[37] These East Asian nations also have very high trade surpluses with five of the ten largest dollar reserves held in the world being held by Confucian economies - China, Japan, South Korea, Taiwan and Singapore, with India holding the seventh largest reserves.[38] These Confucian economies are interesting in that they are using their massive trade surpluses and the high saving rates of their citizens to create gigantic sovereign wealth funds, which are buying assets across the world.
China, too, is using its massive dollar surplus both to buy US government bonds, in a possible attempt to maintain exports to the US by funding their deficits, while at the same time, gaining leverage over the US government. Large Chinese firms, either under the guidance of the state or partly owned by the state, are buying up sources of raw materials around the world including oil, minerals and rare minerals, as well as prime agricultural land. The ownership of such mineral assets across the world by a mercantilist economy which sees trade as war, may lead in the future to a resource crisis, in which the Chinese government directs companies owning these assets to sell their products purely to Chinese private or government owned firms on long term undervalued contracts, rather than selling them on the open market to firms belonging to other countries across the world.
Resource control will become a key form of state economic policy, challenging the world free trade system. This challenge has already begun in the past two years with the Chinese state forbidding the export of Chinese rare minerals to the international market and, in particular, to Japan during a clash over the control of two small islands in the waters between China and Japan.[39]
The economic implications of Chinese mercantilism will be considered in more depth in a later chapter.
The buildup of these huge dollar surpluses, built upon a global economic imbalance in trade caused, in part, by the artificially low rate of the Chinese Yuan, the competitiveness of Chinese export industries, and the high savings rates of the citizens of these Confucian states, has been criticized by nations of the West, who argue that the Confucian economies should allow their currencies to rise and encourage their citizens to reduce their historic high saving levels and consume more, so that they can become more like Western consumers, creating larger domestic markets for their nation's own producers. However, this advice raises the question of why on earth, with Western investment being crippled by the very low saving rate of Western citizens, and huge trade deficits being created by the unquenchable demands of Western consumers, should the citizens of the Confucian nations of East Asia ever desire to be like the low saving, profligate consumers of the declining West?
They would be far better off to stick to their high saving traditions to create a better future for themselves and their families, both in terms of individual savings and in terms of the wealth that their governments' sovereign wealth funds will bring their nations.
Contagion
As considered above, the Euro debt crisis threatens to create a global economic crisis ricocheting across the world, as trust in government sovereign debt collapses, interbank loans collapse, and as European banks sell off their holdings around the world, in order to remain solvent in Europe.[40] What happens if the Euro suddenly collapses when one or more Euro members -- as may occur due to the election of the anti-bailout 'True Finns' party in the Finnish Parliament - refuses to pay the new bailouts that will be needed, Portugal, and possibly in the near future, by Ireland, Greece, Spain and Italy as well.[41]
Such a sovereign debt crisis could help trigger the US sovereign debt crisis as trust in sovereign debt dramatically falls.
At what point will China stop funding the US consumption and deficit spending binge?
No nation or institution in the world could counter such a global crisis, with the high deficit levels created by government spending to counter the 2008 Global Financial Crisis leaving governments without the borrowing capacity to pump trillions more of government funds into the global economy.
Worse still, however the world battles through the immediate crisis, and whether there a contagion of economic collapse occurs across the Western world or not, the reality is that the fact that the level of government debt in so many Western nations, as well as Japan, has reached a level of over 100% - a level not seen since World War Two -- means that such debts will prove impossible to repay, no matter what austerity plans are enacted. This bitter reality must create continued and worsening financial crises, decreasing Western living standards as pensions and other benefits are slashed, and the ultimate consequence will be not simply that there is a national realignment of global economic power away from the United States to China, but a global realignment of economic power away from the increasingly impoverished nations of the West, to the rising nations of East Asia, and to the mining resources rich and oil states.[42]
If one looks beneath the emphasis on bank bailouts in Western nations in the global financial crisis of 2008, 2010 and 2011, its real significance was not the indebtedness, bankruptcy or imprudent lending policies of some Western banks or nations. It is the realignment of global financial power from the insolvent nations of the West to the rising economic powers of East Asia and India.
[1]. Jeffrey Hays 'China under Deng Xiaoping 2008' http://factsanddetails.com/china.php?itemid=80&catid=2&subcatid=7 sighted May 2011
[2]. Christine Hauser 'US Trade Deficit with China Widens' New York Times October 14 2010 http://www.nytimes.com/2010/10/15/business/economy/15econ.html and Kimberly Amadeo 'US Trade Deficit with China' About.com http://useconomy.about.com/od/tradepolicy/p/us-china-trade.htm sighted May 2011
[3]. Peter Wallison 'The True Origins of the Financial Crisis' American Spectator February 2009 http://spectator.org/archives/2009/02/06/the-true-origins-of-this-finan and Charles Louch 'Democrats caused the Financial Crisis' Frustrated Conservative November 2008 http://frustratedconservative.blogspot.com/
[4]. Zachary Goldfarb 'Fannie Mae, Freddie Mac bailout cost is likely to rise to $154 billion' The Washington Post October 2010 http://www.washingtonpost.com/wp-dyn/content/article/2010/10/21/AR2010102101941.html and Lorraine Woellert and John Gittelsohn 'Fannie-Freddie Fix at $160 Billion With $1 Trillion Worst Case' Bloomberg June 2010 http://www.bloomberg.com/news/2010-06-13/fannie-freddie-fix-expands-to-160-billion-with-worst-case-at-1-trillion.html
[5]. 'Health Care Reform in the United States' Wikipedia http://en.wikipedia.org/wiki/Health\_care\_reform\_in\_the\_United\_States#Guaranteed\_issue.2C\_community\_rating.2C\_individual\_mandate sighted May 2011
[6]. 'Social Security (United States)' Wikipedia http://en.wikipedia.org/wiki/Social\_Security\_(United\_States) sighted May 2011
[7]. Mary Walsh 'Government Takes Over Delphi's Pensions' New York Times July 22 2009 http://www.nytimes.com/2009/07/23/business/23pension.html
[8]. Sara Behunek 'Three American cities on the brink of broke' CNN Money May 2010 http://money.cnn.com/2010/05/28/news/economy/american\_cities\_broke.fortune/index.htm and '100 US cities risk bankruptcy in 2011' Press TV December 2010 http://www.presstv.ir/detail/156881.html
[9]. '100 US cities risk bankruptcy in 2011' Press TV December 2010 http://www.presstv.ir/detail/156881.html
[10]. Sara Behunek 'Three American cities on the brink of broke' CNN Money May 2010 http://money.cnn.com/2010/05/28/news/economy/american\_cities\_broke.fortune/index.htm and '100 US cities risk bankruptcy in 2011' Press TV December 2010 http://www.presstv.ir/detail/156881.html
[11]. Gus Lubin and Leah Goldman '16 US Cities Facing Bankruptcy If They Don't Make Deep Cuts In 2011' Business Insider December 2010 http://www.businessinsider.com/americas-most-bankruptcities-2010-12##ixzz1M1jDVXzE, '100 US cities risk bankruptcy in 2011' Press TV December 2010 http://www.presstv.ir/detail/156881.html
[12]. 'More U.S. cities, even states face bankruptcy in 2011: report' Xinhuanet December 2010 http://news.xinhuanet.com/english2010/world/2010-12/31/c\_13671301\_4.htm
[13]. 'Mounting Debts by States Stoke Fears of Crisis' New York Times December 2010 http://www.nytimes.com/2010/12/05/us/politics/05states.html and More 'U.S. cities, even states face bankruptcy in 2011: report' Xinhuanet December 2010 http://news.xinhuanet.com/english2010/world/2010-12/31/c\_13671301\_4.htm
[14]. 'Mounting Debts by States Stoke Fears of Crisis' New York Times December 2010 http://www.nytimes.com/2010/12/05/us/politics/05states.html
[15]. Mark Knoller 'Obama deficit reduction plan leaves deficits' CBS News April 13 2011 http://www.cbsnews.com/8301-503544\_162-20053681-503544.html and 'Obama lays out deficit reduction plan' Los Angeles Times April 13 2011 http://www.latimes.com/health/la-na-obama-spending-20110414,0,4297685.story
[16]. 'List of countries by military expenditures' Wikipedia http://en.wikipedia.org/wiki/List\_of\_countries\_by\_military\_expenditures Sighted May 2011 and U.S. homeland security budget gets small budget boost Reuters February 14 2011 http://www.reuters.com/article/2011/02/14/usa-budget-security-idUSN1428690620110214
[17]. Stephen Bloch 'U.S. Federal Deficits, Presidents, and Congress' http://home.adelphi.edu/sbloch/deficits.html Sighted May 2011
[18]. A conservative estimate is $800 billion. See 'Iraq War not Worth the Cost' My Central Jersey.com http://www.mycentraljersey.com/article/20111217/NJOPINION01/312170012/Iraq-war-not-worth-cost?odyssey=nav%7Chead
[19]. Stephen Bloch 'U.S. Federal Deficits, Presidents, and Congress' http://home.adelphi.edu/sbloch/deficits.html Sighted May 2011
[20]. Stephen Bloch 'U.S. Federal Deficits, Presidents, and Congress' http://home.adelphi.edu/sbloch/deficits.html Sighted May 2011
[21]. See Carol Lee and Natafli Bendavid 'Gridlock for Debt Talks -- Parties Remain Split as Deadline looms adding Jitters to Global Markets' Wall Street Journal 25 July 2011 http://online.wsj.com/article/SB10001424053111903591104576466121576263998.html and Michael Bowman 'With US Debt Crisis Looming, Partisan Gridlock Hobbles Washington' Voice of America 25 July 2011 http://www.voanews.com/english/news/With-US-Debt-Crisis-Looming-Partisan-Gridlock-Hobbles-Washington-126195538.html
[22]. Paul Kelly 'Rudd plays the long game on China' The Australian December 8, 2010 http://www.theaustralian.com.au/in-depth/wikileaks/rudd-plays-the-long-game-on-china/story-fn775xjq-1225967242894
[23]. Donna Grieves 'The Buck Stops Here - is the dollar's reign as the world's reserve currency coming to an end?' The Trumpet.com February 2004 http://www.thetrumpet.com/print.php?q=874.298.60.0
[24]. 'United States Public Debt' Wikipedia http://en.wikipedia.org/wiki/United\_States\_public\_debt Sighted May 2011
[25]. 'US warned on top credit rating by Standard & Poor's' BBC News April 19, 2011 http://www.bbc.co.uk.news.business - 13118834C
[26]. 'United States Public Debt' Wikipedia http://en.wikipedia.org/wiki/United\_States\_public\_debt
[27]. John Chan 'China lectures Washington on S&P downgrade' World Socialist Website 9 August 2011 http://wsws.org/articles/2011/aug2011/chin-a09.shtml . See also Steve Jones 'China Lectures US Over Debt Crisis - Says America Has "Addiction" To Debt' US Foreign Policy About.com http://usforeignpolicy.about.com/od/asia/a/China-Lectures-Us-Over-Debt-Crisis.htm Sighted 28 January 2011
[28]. John Chan 'China lectures Washington on S&P downgrade' World Socialist Website 9 August 2011 http://wsws.org/articles/2011/aug2011/chin-a09.shtml . See also Steve Jones 'China Lectures US Over Debt Crisis - Says America Has "Addiction" To Debt' US Foreign Policy About.com http://usforeignpolicy.about.com/od/asia/a/China-Lectures-Us-Over-Debt-Crisis.htm Sighted 28 January 2011
[29]. John Chan 'China lectures Washington on S&P downgrade' World Socialist Website 9 August 2011 http://wsws.org/articles/2011/aug2011/chin-a09.shtml . See also Steve Jones 'China Lectures US Over Debt Crisis - Says America Has "Addiction" To Debt' US Foreign Policy About.com http://usforeignpolicy.about.com/od/asia/a/China-Lectures-Us-Over-Debt-Crisis.htm Sighted 28 January 2011
[30]. Ian Talley and Jeffrey Sparshott 'China was November Net Seller of US treasuries, still biggest holder' Dow Jones Newswires reprinted in The Australian January 19, 2012
[31]. 'Public Debt by Country' Global Finance http://www.gfmag.com/tools/global-database/economic-data/10394-public-debt-by-country.html#axzz1M9T1mWJ0 Sighted May 2011
[32]. See 'Q&A: Greek Debt Crisis' BBC News http://www.bbc.co.uk/news/business-13798000 and 'The European Sovereign Debt Crisis' Wikipedia http://en.wikipedia.org/wiki/European\_sovereign\_debt\_crisis sighted December 2011
[33]. Vidya Root 'Sarkozky's Political Rivals Criticize his Request for China to Help on Debt' Bloomberg http://www.bloomberg.com/news/2011-10-26/euro-rescue-fund-chief-goes-to-china-as-europe-seeks-investors.html October 31 2011. See also Parameswaran Ponnudurai 'Will Europe Kowtow to China' Radio Free Asia 29 October 2011 for a very critical analysis of the true cost of this European cry for help.
[34]. David Gauthier-Villars and Charles Forelle 'France, Spain, Italy among eurozone nations downgraded by Standard and Poor' Wall Street Journal reprinted in The Australian January 14, 2012 http://www.theaustralian.com.au/business/wall-street-journal/france-spain-italy-among-eurozone-nations-downgraded-by-standard-and-poors/story-fnay3ubk-1226244330493
[35]. David Gauthier-Villars and Charles Forelle 'France, Spain, Italy among eurozone nations downgraded by Standard and Poor' Wall Street Journal reprinted in The Australian January 14, 2012 http://www.theaustralian.com.au/business/wall-street-journal/france-spain-italy-among-eurozone-nations-downgraded-by-standard-and-poors/story-fnay3ubk-1226244330493
[36] Iain Dey and David Smith 'Greek debt talks break down, country heads for March default' The Sunday Times (reprinted in The Australian) January 15 2012 http://www.theaustralian.com.au/business/markets/greek-debt-talks-break-down-country-heads-for-march-default/story-e6frg91o-1226244653719
[37]. 'List of National Debt by Country' Economics Help February 7 2011 http://www.economicshelp.org/blog/economics/list-of-national-debt-by-country using CIA Factbook as their source and 'Public Debt by Country' Global Finance http://www.gfmag.com/tools/global-database/economic-data/10394-public-debt-by-country.html#axzz1M9T1mWJ0 Sighted May 2011
[38]. 'List of countries by foreign exchange reserves' Wikipedia http://en.wikipedia.org/wiki/List\_of\_countries\_by\_foreign\_exchange\_reserves May 2011
[39]. Jonathan Sobie and Leslie Hook 'Japan sees Chinese ban on mineral exports' Financial Times FT.COM September 10 2010 http://www.ft.com/cms/s/0/05867216-c7b1-11df-8683-00144feab49a.html#axzz1M9Ln76Ki
[40]. Sam Flemming 'IMF deputy chief John Lipsky fears a fiscal debt crisis in the West' The Times March 21 2011 reprinted in The Australian http://www.theaustralian.com.au/business/news/imf-chief-john-lipsky-fears-fiscal-debt-crisis-in-the-west/story-e6frg90o-1226025140371
[41]. 'Finns savage eurozone bailout plans as nationalist party steals election' The Australian April 19 2011 http://www.theaustralian.com.au/news/world/finns-savage-eurozone-bailout-plans-as-nationalist-party-steals-election/story-e6frg6so-1226041157612
[42]. 'International Monetary Fund and World Bank hold Spring meeting April' World News Forecast, News Ahead 17, 2011 http://www.newsahead.com/preview/2011/04/17/washington-dc-16-17-apr-2011-international-monetary-fund-and-world-bank-hold-spring-meeting/index.php
Chapter 2 - The Loss of Excellence
While the terrible debt crises threaten many Western nations, there are also other serious problems that the West must face. Namely, the crisis in education and of the loss of the pursuit of excellence.
The Crisis in Education
Along with the crises of deindustrialization and debt, there is a growing crisis in education in many schools and universities across the Western world.
The Decline in Standards
In the United States, while its best universities - Harvard, Yale, MIT - are the equal of any in the world, below this sharpened shiny spear tip, there is a real crisis in education in schools and non-Ivy League universities.
The most obvious symptom of this educational crisis has been a decline in educational standards. Many students finish school barely literate and experienced physics teachers have commented that physics textbooks from 20-30 years ago were far more complex than they are today.
The decline is undeniable. A more interesting question is why?
The first cause is the decline of discipline in schools. Drug use has spread across many schools, bringing with it problems of violence and the increasing use of knives or guns in fights at school, resulting in a number of massacres in Western nations across the world. At times, these conflicts have had a racial base, with African American boys faring worst in inner city, ghetto schools, very often facing problems of drugs, gangs and violence, leading to a flight of the middle class to the safer life of the suburbs and, very often, to the higher achieving private schools.
The gang culture of gangster rap and the easy money that can be made through the sale and resale of drugs has worsened the situation, creating an anti-intellectual environment in which the potential profits of participating in the drug trade are seen as far greater than of succeeding in exams. The result of this is that students from some minority groups, such as those of Latin or African-American origin, have had a real problem achieving basic levels of education, creating generations of poverty and ghettoization.
However, it would be wrong to presume that the attraction of gangster rap, drugs, violence and computer games has been restricted to African-American or Latino students. It has affected students of almost all racial groups and in particular boys.
In the past 40 years, as the education levels of girls has been steadily rising, those of boys have been falling, so that now far more girls enter universities than boys, including in law, medicine and increasingly in the sciences. Boys have far lower rates of literacy, have more discipline problems, are far less likely to finish school and, in Australia, now make up only 43% of tertiary education students.[43]
One reason for this is that boys are being caught in the trap of violence and drugs, including addiction to computer games and the anti-intellectualism of gangster rap. Furthermore, the rising popularity of drugs, violence and gangster rap in many schools has created a crisis for teachers, particularly in inner city schools. Instead of focusing on education, the focus of many teachers has had to be on crowd control, achieving and maintaining minimum levels of discipline in class. This has been worsened by the banning of corporal punishment and in many schools, of detention after school, meaning that the teacher has few weapons in his or her arsenal to cope with unruly students of their parents. Not surprisingly, many teachers have refused to teach in inner city schools or have left the profession entirely, increasing the crisis in education.
Similar problems exist amongst the desert schools of the Aborigines in Australia with attendance problems, addiction problems and violence problems.
Boys have also been badly affected by the collapse of the nuclear family in many Western countries, with many boys growing up in single-mother households, and not having a male role model to interact with, until upper primary or early secondary school, as fewer and fewer males teach in primary schools.[44]
The result of these various social trends is that many boys have shown little or no interest in participating in the educational race, and instead prefer the inanity of techno, rap, drugs, violent computer games and twitter.
If one sex is failing ever further behind the educational standards required by the Progress Ethos to successfully compete in the scientific/technological/educational race, how can a nation or a civilization remain competitive?
The best achieving minority group in education in America and Australia has been those of Asian origin, including the children of Japanese, Chinese and Indian parents, who have achieved educational standards higher than that of Caucasoid students. Studies reveal that Asian-American students study for twice as many hours as their Caucasoid or other ethnic counterparts and succeed better at school, with the result that 44% of Asian Americans now have a bachelor degree compared with 26% of Caucasoid Americans.[45] One Asian mother, the eminent historian Amy Chau, went so far as to argue 'Tiger Moms' were superior mothers, wanting and pushing their children to succeed, disciplining their children if they failed or went badly in tests or misbehaved.[46] Reasons for this lie in the far higher value that the Indian and Confucian cultures place on achieving excellence in education.
The strict, ambitious nature of Chinese parenting, where success or failure are strictly defined and praised or criticized, is in marked contrast to Western parents or teachers who are often stopped from criticizing poor results or failure amongst their children or students, for fear of hurting the child's 'self-esteem.' The dangerous myth that 'everyone's a winner' and that it is dangerous for a child to have their self-esteem damaged by criticism for poor test results, or negative comments written in red pen on their assignments, tests or exams has led to a farcical situation where teachers have to praise all work submitted by students or give all students positive semester comments or term grades, no matter how bad the student's work is, or how weak or poor is the effort they have made in that subject.
In the real world, failure and success do exist, and the consequences of failure can be very real, ranging from being sacked to prolonged and bitter bouts of unemployment.
In the real world, not everyone is a winner, and to succeed you have to work.
The widespread popularity of mobile phones, tablets, computers and computer games also raises another issue. Earlier generations grew up reading the classics such as Dostoevsky or Tolstoy, Conrad or Shakespeare. With the exception of the enduring popularity of such books as Lord of the Rings or the massive popularity of new books such as the Harry Potter series, books are no longer the dominant medium for entertainment or literature of the young. Instead there is the widespread popularity of the 'click click' unthinking 'shoot em' games, and the flash flash from one page to another on Wikipedia. Related to that is the inane popularity of the 'I lv u so mch' conversations of twitter or earlier email fame, in contrast to the beautiful prose of earlier letters.
It is arguable that the constant changing of pages or images on the Internet or computer games is also changing the very structure of our brains, reducing our concentration and reasoning ability. Instead of immersing oneself in reading The Brothers Karamazov or The Heart of Darkness for 2 or 3 hours at a time, there is instead a 3-5 or 10 second glance at a page, which is quickly replaced by another.[47]
It is claimed, of course, that it is simply a new form of concentration with superior abilities to assimilate multiple sources of information at once, rather than focusing on one particular source.
But the defense is weak. The declining concentration and attention span on any one text must affect the higher order ability to concentrate and analyze a text, to critically assess whether the information and arguments it contains is trustworthy or not, and to ponder the implications of the thoughts and ideas that it contains. Such a loss of concentration and conceptual ability must cause a decline in intellectual standards.[48]
The consideration of the implications of this profound change in concentration is only just beginning.
It must be emphasized though that the effect of Internet skimming on concentration and reasoning ability is a global problem and not a problem of the students of the West alone.
Related Social Crises
These profound educational problems are mirrored by deeper social crises that need to be discussed in more depth. That is the absence of the father, the popularity of violent computer games, and the widespread prevalence of drug use and violence amongst boys already suffering from inferior educational achievement.
As noted above, many boys are now suffering from drug and Internet game addiction, from increasing violence, decreasing attention span and performance at school, college or university and are falling under the influence of the attractiveness of gang and drug distribution culture. Added to this are the rare, but tragically far too often, examples of male youths running amok, often in their old schools, armed with automatic firearms, shooting and killing until they are killed.
There are no examples of girls committing such a murderous crime.
Clearly something has gone wrong in the ability of boys to care for others, including strangers, and to control potentially violent outbursts of behavior and while suggestions may be made about the causes of this change, hard evidence and solutions are far harder to find.
The first potential cause, considered briefly above, is that of the missing father. The legal acceptance of no fault divorce in the 1970s, coupled with increasing work opportunities for women and benefits for single mothers, has seen a tsunami wave of divorce sweep the Western world, with single parent families often equaling close to 50% of families of children attending a school. Almost all these single parent families - differing slightly, according to which Western nation is considered and its particular divorce laws - have the single mother as the custodial parent. Access to the father is limited, and, in practice, often not at all, and at times the right of access of the father to see his children has to be fought through the courts, with counter claims of sexual abuse reducing access still more.[49]
The result is that almost 50% of children grow up without a father figure at all, and given the disappearance - in part also due to sexual abuse cases and laws - of male teachers from lower primary school and often from all primary school, many boys do not experience a male figure in authority role until secondary school. It is arguable that the absence of male authority figures hits the development of boys far harder than the development of girls, in that they have no male authority figure to relate to, or to learn rules or acceptable forms of social behavior from. In such a situation, it is not surprising that the standards of boys' behavior have steadily declined, as has the rapid growth of male behavior problems.[50]
The second potential cause, as considered above, is the widespread appeal of computer games, particularly of the shoot 'em up variety - bang, bang, your dead, shoot, kick, maim or kill the next opponent. As noted above this has been associated with the rise of random or gang violence of a frequency and of a severity not seen before in Western society, with the worst, but by no means the only, examples being the amok killings in schools across the Western world. The reduced attention span and concentration and reasoning abilities are also serious effects of too much Internet skimming.
One very interesting study of this phenomenon, that has just been published, has found that by doing MRI scans of 22 adult males between 18 and 29, that playing violent computer games for 10 or more hours per week alters the very structure of the brain of whoever plays it, reducing activation in areas of the brain associated with controlling emotion and aggressive behavior. Whether the widespread, addictive popularity of violent 'shoot 'em' computer games among young males is the cause of the growth of violence -- and in particular of random acts of extremely violent, unprovoked attacks on other people often causing grave physical harm or death -- is not yet proven, but as a presumable logical consequence, it is a phenomenon that clearly something that merits further investigation.[51]
Something has changed.
Society is now much more violent, more people are getting suddenly attacked and killed, and something must be the cause.
The third potential cause, which is also a profound problem in itself, is the widespread popularity of drugs amongst the youth, especially amongst young males, and the concomitant attraction of the drug dealer culture. Many drugs, such as marijuana, are thought of as very mild and as something that many believe should be legalized, but the use of drugs such as marijuana can spark serious mental illnesses such as schizophrenia or bipolar disease which may afflict the drug user for the rest of their lives.
Added to that, in some communities, is the attractiveness of the drug dealing as a profession, of a man or woman who can gain a great amount of money for very little effort, furthering the idea that there is nothing wrong with taking drugs. But who suffers from the drugs they sell? How many hundreds become hopelessly addicted to drugs as a consequence? How many thousands or tens of thousands? And what of all the thousands or tens of thousands of people that these drug addicts mistreat, rob or attack?
It is a dangerous, destructive attractiveness.
A society in which drug use is widespread, both amongst the youth and the now ageing, once counter culture, baby boomers - many of whom passionately believe there is nothing wrong with taking marijuana, ecstasy, speed, or cocaine - is a society that is sick and a society that will only face increasing behavioral, social, and criminal problems.
In that sense, parts of American society now resemble that of Ching China between the years of 1850 and 1914 in which, due to British action, the sale of opium could not be banned and addiction to opium was widespread in all social classes. It was a society in decline, unable to solve the legal and social problems it faced, hard hit by the widespread acceptance of an opium-induced decadence, including gambling dens and prostitution.
It is not a model to emulate, but similarities, sadly, can be clearly seen.
No Child Will Be Left Behind
The response to the crisis of deteriorating standards in American public schools, especially in inner city areas, began with President Bush Junior introducing the 'No Child Shall Be Left Behind' policy, a policy that has been continued by President Obama's 'Race to the Top' initiative.
The aim of President Bush's policy was to focus spending and teaching expertise in specific problem schools to ensure that all students have the chance to achieve minimum standards thereby ensuring that 'No Child Shall Be Left Behind.' The emphasis therefore is on helping the weakest pass specific tests and exams, which in some ways has been a laudable aim, with the program being supplemented by a national testing scheme to measure if all schools can achieve the specific standards necessary for them to retain Federal Government funding.
The first and most obvious problem with this scheme, and in other countries such as Australia and the United Kingdom where similar schemes have been tried, is such is the importance of achieving specific test results for the school's future, that teachers have been instructed to spend an inordinate amount of time teaching for the test, rather than teaching to extend student's minds. Another less popularly known result of the importance of achieving specific test results is that schools will cheat to achieve them, so that, for example, if passing the test requires that a certain percentage of students present achieve the required result, then schools will order students who are likely to fail the test to stay home, thereby artificially boosting their percentage results.[52]
At a system wide level the desire to ensure that a certain percentage of students pass specific tests in a specific year levels has led to a dumbing down of the syllabi offered to the students, both in terms of a reduction in time spent on subjects not within the restricted testable syllabus, and worse still, a dumbing down of the tested syllabus so the government can proclaim how successful its educational system is. This dumbing down of the tested syllabus is reflected in the simple, far too often, multiple choice nature of the testing in America, leaving no opportunity to display higher level reasoning skills, with subjects the require profound cognitive skills in terms of analytic ability or imagination not being tested. This dumbing down of the tested syllabus accentuates the decline in academic standards referred to above.
However, the greatest problem with the doctrine of 'No Child Shall Be Left Behind' is not on the dumbing down of educational material offered to weaker students, or if the weakest students are being forced to stay home on test days, but what happens to the best?
If teachers' class effectiveness is measured by what percentage of students in their classes achieve the required, designated minimum standards, then they will focus their time on helping the weakest students to pass so that their class achieves the highest pass rate possible. This focus on the weakest students is increased by the requirement of teachers to maintain acceptable class behavior in a difficult class, which is frequently a severe problem in inner city schools. The cost of this focus on helping weaker students achieve acceptable results and on maintaining class control in difficult classes is that less time is left to focus upon helping very good or gifted students.
The inevitable corollary of 'No Child Shall be Left Behind' is that 'No Child Should Get Too Far Ahead', as neither the school nor the teacher have the time or the desire to focus upon them or to set them special tasks or lessons.
This may cost the best students a number of grades in their Advance Placement or International Baccalaureate exam scores as well as entry to the best universities, but it is also at the cost of engaging the best students in advanced work that enriches and enthuses the class as a whole, expanding students minds and opening them to the wealth of more complex and advanced knowledge that exists beyond the specific set task being done and beyond the textbook.
This emphasis on 'No Child Shall Be Left Behind' also highlights the problem at the societal level of excellence. If no weaker students are ever to be left behind, where is the love of excellence in the society as a whole? Where is the national government emphasis on helping the excellent students to excel? Whatever happened to the state or nationwide scholarship systems once awarded to the brightest students to help them through university?
What is wrong with helping the very best do better? Why should it always be the mass that is favored?
The worst aspect of this debate is the argument put forward by some left wing educational experts that no such thing as excellence or inferior ability exists in students exists at all, that all students are essentially the same and that if weaker students were helped enough they would be as good as the best students! Or to quote the latest fad, "Every baby can be a genius."[53] If this was said about college basketball or football players the reply would be astonished laughter. You cannot put in what God left out. But it is often said about preschool or school students without any contradictory response.
But all students are not the same, there is something called an intelligence quotient, and while it is the school's duty to educate all students to perform at their best so that they can achieve a qualification that allows them to live a good life - whether this be by working in a shop, a skilled job as an apprentice, a scientist, doctor, businessman/woman, or academic - it is also the school's duty to foster excellence both for the good of the student, for the good of society, and for love of knowledge itself. Excellence exists and without the essential realization by the school and by the educational system and society as a whole that it does exist, or in rare cases, that genius exists, excellent students will inevitably be neglected and instead regarded as 'problem students' instead of being helped to excel and to fly.
The chasm that exists between the reaction to the Sputnik shock and the current policy of 'No Child Shall Be Left Behind' could not be greater. In reacting to the Sputnik shock Presidents Kennedy and Johnson initiated a program of supporting "the Best and the Brightest" to be educated in mathematics and engineering so that America could effectively compete in the Space Race and become the first nation to reach the moon. The best students from across America were supported by their government to achieve their best by financial help or special tuition and such national government education policies were used to strengthen the nation's ability to compete at the spear tip.
The opposite is occurring now is that the dictate of 'No Child Shall be Left Behind' is at the direct cost of the education of 'The Best and the Brightest' inevitably reducing the nation's ability to compete with the best from Germany, China and India.
Promoting mediocrity instead of excellence as a national aim in education can only come at great national cost.
Nor has President Obama's 'Race to the Top' program substantially changed the situation. Indeed it may have made it worse as not only are schools survival but teachers' pay is now linked to the performance of their students in nationwide tests on a very restricted curriculum. As Professor Diane Ravitch critically argued:
The curriculum will be narrowed even more than under George W. Bush's 'No Child Shall Be Left Behind', because of the link between wages and scores. There will be even less time available for the arts, science, history, civics, foreign language, even physical education. Teachers will teach to the test. There will be more cheating, no more gaming the system. [54]
Furthermore, when one looks at President Obama's initiative, with all its talk of Charter Schools and improving the quality of education, there is not a single mention of helping truly excellent students excel. Instead, the emphasis is still upon improving total class scores which inevitably will lead to teachers focusing on teaching the restricted, limited curriculum at length to the class as a whole, and helping the weaker students to understand and regurgitate what has been taught, with the excellent students being bored, neglected and ignored within this single minded focus on simplified standardized tests.
This deterioration in the quality of many American schools has also occurred in many other Western nations. In England, the introduction of the comprehensive school system, mirrored in Germany by the introduction of the 'Gesamtschule' model, has seen the destruction of the earlier very successful streamed school model in favor of having children of all abilities in one class, with the argument that this helps in particular the education of the weakest children who earlier would have been sent to in the German model to a 'Volkschule' and that this Gesamtschule model helps maintain social cohesion by having children of all classes and educational ability in one class and one school.
The problem with this comprehensive school system is similar to the American 'No Child Shall be Left Behind' policy is that much more classroom time is devoted to classroom management - a problem which earlier existed only at a minimal level in gymnasiums - and a tendency to teach towards the bottom so that all children in the class can understand, rather than extending the very intelligent kids who earlier would have gone to gymnasiums. A similar change has occurred in Sweden where the earlier existing gymnasium system was abolished in favor of comprehensive schools. In all places where this experiment has been conducted the consequence has been a loss of quality of education of the best students.
As in America, this situation has been worsened by the discipline problems of increasing violence or drug use in particular of inner city schools, leading to in Australia, England and other countries a flight to the private schools, further exacerbating the problems of retaining quality of education in the state schools. Who would want to teach at a disadvantaged inner city school in London or Liverpool? Who would want their child to go to an English inner city school?
In Australia this problem of the quality of education offered by the state schools has been compounded by the introduction by left-wing pedagogues of a curriculum framework system doing away with exams and a set syllabus in favor or achievement of an extremely complex, impossible to comprehend spiral of over a thousand specific learning outcomes that had to be taught by individual teachers creating their own learning materials. The lack of external testing until the year 12 exams has worsened the chance of children at state schools to perform well in those exams, exams which the supporters of the curriculum framework wanted to do away with entirely, making it impossible for anyone to assess the success or failure of their model. Fortunately they were stopped by representatives of high quality university courses such as medicine, who demanded that there be entrance exams for students wishing to enter their faculty.
The pressure of an impossible system - particularly for new teachers to invent from scratch their own syllabi for each of the subjects they teach as well as increasing discipline problems - has led many experienced and new teachers to quit the state school system in Australia further decreasing the quality of that system.
Fortunately, the curriculum framework model was short-lived as a national system of regular standardized education tests, Naplan, a direct copy of the failed American system, was introduced a system, which directly contradicted the methodology and aims of the curriculum framework system. However terrible the Naplan tests are, they are at least better than the curriculum framework.
The chronic shortage of teachers in Australia, America and Britain has led to a new policy of fast tracking "specialized" subject teachers from the commercial or government world, with only six weeks in training into government schools, in return for a commitment to spend two years teaching in disadvantaged schools![55]
Six weeks training is no training at all and how these teachers will cope with their first month or six months in teaching real students in real classes at a disadvantaged school can only be guessed at.
A final problem across the Western world has been that too many lawyers and social workers have been produced and not enough engineers, scientists or mathematicians. In part, this is because the falling quality and shortage of existing teachers in these disciplines - due to the increased resignations rates and declining popularity of teaching for specialists in these areas - has led to declining standards in what is taught in mathematics and the sciences for students of these areas. This has been coupled by an increasing perception amongst students that these subjects are too hard, and it is easier to get good marks in university entrance exams, and therefore a good future income, by taking easier exams such as English or History in the university exams, and by studying law or commerce at University to become a lawyer or merchant banker.
One indication of this deterioration in mathematics and science standards in Western nations is that when the head of an international student training firm, Kit McGrath, expanded his organization to set up branches across East and Southeast Asia, he found to his surprise that he had to create special courses for ethnic Chinese students from Singapore, Hong Kong and mainland China who want after school tuition, because they are 1 to 2 years ahead in their mathematics and science level than Western students in the same school year.
The consequences for the competitiveness of the nation are profound.
Of course, not everything is bleak in every Western nation. Switzerland has a very strong gymnasium system which trains the best students very well, while conservative areas of Germany, such as Bavaria, did not institute the reforms of the 1960s and 1970s and have retained the gymnasium system in its original competitive form. And the gymnasium system has survived in many other areas of Germany as well without being replaced by the Gesamtschule model, although the student intake of the gymnasiums has been widened so that they could offer a very high quality of education to a larger percentage of students but this had the inevitable consequence of reducing the quality of gymnasium students, and therefore also of the syllabi material which they can master, which totally defeats the purpose of the original gymnasium system.[56]
Perhaps the most interesting example is Finland, which has a comprehensive education system, but has consistently achieved top place in the Pisa studies. To understand the specialized reasons for Finish success one would have to be an expert on Finland, but it can be suggested that the small size of Finish cities and the homogenous almost entirely ethnically Finnish nature of Finnish schools has helped Finish schools to escape the inner city and social problems that plague comprehensive schools elsewhere, and that the Finns as a people have a doctrine of hard work, achievement, and a desire for success in education, which has allowed their students to succeed despite their adoption of a comprehensive school system. Interestingly, the Finns are descended from an Asian Uralic people, and Finnish is related as an Altaic language not only to Estonian and Hungarian, but also to languages of peoples across the Northern edge of Eurasia, stretching from Finland and the Atlantic coast of far northern Norway in the far west to Amur and Sakhalin island on the Eastern Pacific coast. More distantly, Uralic languages such are Finnish are also related to the Altaic Central Asian languages of Mongolian, Korean and Japanese.[57]
The Eastern Challenge
This decline in educational standards would be significant, but not disastrous, if it came at a time when the West was not under challenge. But it is under challenge, and that challenge is from the increasingly well-educated Asian nations of India, China and the Confucian states of Japan, South Korea, Taiwan, Hong Kong and Singapore.
India alone is producing 500,000 engineers per year, with an Indian female social analyst declaring that, whereas in America degrees in science, mathematics or engineering are somewhat looked down upon, and attacked as being as being 'Geek', and something that only nerdish intellectuals would do, in India, because of the salaries that such talented, well-educated graduates in science, mathematics and engineering can attain, they are the most wanted degree for future husbands to advertise themselves with is engineering.[58]
This high rate of production of highly trained engineers, scientists and mathematicians is mirrored in Japan, South Korea, and Taiwan, where it is the basis of their success in manufacturing cars, ships, computers and all sorts of electronic goods.
The coming world's biggest economic power, China, is, like India, producing a massive number of engineers, who are world class, or world leaders in all fields. And while many choose what topic they want to study, in other areas scientists are directed what to research by the government. In a crash program to research how to design and how to produce the world's fastest trains, the state-owned train firm employed over 1,000 scientists working seven days a week, to produce the world's first very fast commercial train, at the direct orders of the central Government in Beijing. It is military discipline that no purely commercial firm could match.
By contrast, in the West, many firms are complaining of increasing shortages of all types of engineers reducing their own and their nation's growth rates. While at schools many lessons in mathematics and science are taught by non-specialist teachers with little or no teaching in the mathematics and sciences at all, because they are not regarded as 'sexy' enough to learn, because there are not enough trained specialist teachers in science and mathematics to teach them. This is because the best mathematicians and scientists are grabbed by higher paying private firms, and because the most intelligent high school graduates who did study mathematics and the sciences and resisted the lure of other easier disciplines designed to gain entry into commerce and law, are channeled into medicine and dentistry with their promises of social prestige and a guaranteed very high income, and not into the disciplines needed for maintaining or increasing industrial/technological competitiveness -- namely engineering and scientific research.[59]
There is, of course, a standard defense of Western education, arguing that the supposed disparity in educational standards between Asian and Western nations is false or does not matter, because, whereas Western students are trained to think which encourages creativity, Asia students, and especially Chinese students, are just trained in rote learning and cannot think independently, with the proud boats that Finland ranks highest in the Pisa tests every year, with the only Asian nation to score highly being South Korea while the other East Asian nations are nowhere to be seen in the Pisa rankings. But in 2010 there was a new leader in the Pisa ratings - the government schools of Shanghai! No longer is Finland in the lead! [60]
The 2010 Pisa results, actually based on tests conducted in 2009, bear close consideration, because they totally explode the myth that Western education is intrinsically, and analytically better![61]
PISA 2010 Results
Not only did China, Shanghai have the highest score in all three categories, but the Confucian nations of China, Hong Kong (China), Taiwan, Singapore, South Korea, and Japan scored five of the top six places mathematics, five of the top six places in the sciences, and four of the top six places in reading. Ethnic Chinese nations and administrative regions scored four of the six top places in mathematics, three of the top six places in the sciences and in reading.[62] Such incredible success in global educational testing is due to the very high emphasis Chinese culture puts on education and educational success, on the refusal of Chinese, and other Asian parents to accept poor educational results or failure by their children, and upon the very high respect teachers are held in Confucian society, where parents support teachers in educating and if necessary disciplining their children, instead of almost automatically taking the side of their child against the teacher, complaining immediately to the school principle and threatening, or taking legal action against the school and the individual teacher who originally disciplined their child. [63]
These results reinforce the argument put forward in the American school context by Amy Chau, about the superiority of "Tiger Mums." [64]
Failure can never be accepted, and the achievement of excellent academic results, whether it be at school or university, is one of a student's and of a family's most important achievements in life.
A final cause noted in the analysis of the Pisa results was that less time is wasted in on extra-curricular activities such as sport in East Asian schools than in American, and to an extent other Western, and especially private schools.[65]
In contrast to the ethnic Chinese and East Asian success, in the United States American students scored 17th in reading, 23rd in science, and 31st in mathematics.[66] It is a dismal and disappointing result that can only portend further future economic and technological decline.
Another extremely significant finding is the incredibly rapid rise of China in terms of published scientific research papers reflecting new scientific discoveries and the comparative decline of the US. In 1996, in the first year of the study, 252,513 scientific papers were published in the US, which was more than ten times China's figure of 25,474. By 2008 the US figure had risen to 316,317 -- an increase of approximately 25%, while the Chinese number of published scientific papers had surged to 184,080 - an increase of 700% and equaling almost 60% of the US number. Based on these trends China is expected to surpass the US in world scientific leadership in 2020 or before - at least in terms of published scientific papers.[67]
Such a stunning number of original research papers would be impossible if Chinese schools only taught 'rote' learning and if Western schools were intrinsically superior and more creative.
But the term 'published' is a very interesting one. Published means research that China is willing to release to the world scientific community who can then read and then further develop the discoveries China has made. But do China's scientists, often working in semi-state or state owned firms or research institutions really publish all their discoveries for others to copy and further develop? The idea that they do is extremely doubtful, but the possibility that many of their discoveries have not been published raises perhaps an even more frightening question - how many actual discoveries are now being made in China that the rest of the world does not know about, and in what scientific/technological fields are the Chinese already far ahead?
A final thought about the 316,317 published scientific papers made in the US in 2008, is how many of those discoveries were in fact made by American scientists born in America, educated in American schools and colleges and achieving their PhDs in American universities? And how many of those discoveries were made by extremely intelligent scientists who came from Japan, China, India, Russia, Persia or other nations across the world where they had been educated at a higher level than they would have able to achieve at an American school or college?
The answer is very many, and they came because they wanted the lifestyle and wealth that the American dream could offer that bought the best and the brightest from all across the world to New Mexico, to Detroit, to Utah, and now to Silicon valley.
It is all well and good for scientists to seek and gain that wealth, lifestyle and recognition, but that is becoming harder for American firms to offer that as growth slows and becomes more sluggish after the Great Financial Crisis of 2008 and the US Debt Crisis of 2011, as growth stagnates, and relative living standards, compared to the booming economies of India and China begin to dramatically fall. However, it could become far worse still, if reaching the tipping point in the American national debt causes a sudden and permanent fall in American living standards as too late, drastic attempts are made to finally cut into the nation's ever mounting city, state and national debt.
Already, many Chinese are returning home to Shanghai, Guangzhou or another city to try and make a fortune by working in the very rapidly growing and immensely profitable, Chinese industrial manufacturing firms, with just as many Indian scientists returning to Bangalore for similar reasons. If US living standards rapidly decline because the tipping point in American debt has final been reached at the city, state and national level, causing a stagnation or fall in consumer demand and in company profits, then this stream of returning Chinese and Indian scientists will become a flood as scientists seek to find their fortune elsewhere.
At the point US leadership in the world technological race - as shown by the number of published papers or more seriously the publication by scientists from across the world in hi-tech firms doing research in the United States that United States government and American firms desperately need to stay competitive - will have been lost, never to be regained.
The US is falling behind in the intellectual race.
Anti-Intellectualism and the Loss of the Canon
Anti-Intellectualism
This argument about the weakness of the ability of nations of the West to effectively compete in the intellectual race against the rising nations of the East, infers, of course, that they want to compete. This is not always the case, for at times the nations of the West neglect the importance of intellect completely, and treat it with a mixture of disdain, or as an oddity, reflecting an underlying and dangerous anti-intellectualism at the heart of many Western societies.
In America, England, Australia and other countries there is the ideal of the sporting hero, and national and individual success is judged not by Nobel prizes won, but the ability to run 100 meters in under 10 seconds, to swim 50 meters in the fastest possible time, or to kick a goal or kick a pass from an impossible distance.
Such success requires hours of daily dedicated training over years to reach the highest level, medical, physiological and psychological support, and individual or team coaching.
It is in some ways a noble goal, reflecting humanity's physical origins and dating back to the Olympic Games in Ancient Greece, but does it create new inventions or industries for the country? Does it generate national wealth or create thousands of jobs? Does the adulation of the sporting hero, in fact, reflect the relative wealth or good that a sporting hero can create for the nation or for humanity as a whole when compared to the wealth that a businessmen creates or the wealth or good that the discoveries of a scientist or inventor makes after years of long effort?
Coupled with the adulation of the sporting hero is the dangerous ideal of the high school dropout working from a garage in the IT industries. Now, the brilliance of Bill Gates and Steve Jobs is undeniable. Their ability to create functioning operating systems that power Windows and the user friendliness and beautiful technology of Apple products has defined the modern PC and technological entertainment industry and made them two of the richest men in the world.
The problem with the idealization of the image of the high school dropout making billions and changing the entire world is that it infers that the years of further study and dedication required to finish a mathematics or science degree and the brilliance needed to write a very good PhD are all unnecessary. Truly successful IT entrepreneurs should not waste their effort and time in completing a science degree, a Master's degree, and then a PhD, but should leave school during high school or at the beginning of college, and never go to university at all, instead writing a simple but brilliant program and make billions.
However, while that may have been exactly what Bill Gates or Steve Jobs did, a nation needs scientists and mathematicians trained to participate in the spear tip of the knowledge race, so that it can effectively compete at the spear tip of the world technological/scientific race by inventing and further developing new IT products, technologies, and discoveries.
For every one brilliant product created by a Bill Gates or a Steve Jobs, there are a thousand products, or a thousand refinements of products, created by highly trained software engineers, mathematicians or scientists, who have spent years studying to complete their university degree and get their PhD so they can reach the spear tip of their particular specialist in the global knowledge race.
It is the thousand products created by well-trained specialists that ensure national success, and national long term economic growth, and not the single maverick brilliant product by a unique individual genius.
There is one more negative side to the idealization of the image of the high school dropout. We know very well about the brilliance and billions of dollars earned by Bill Gates and Steve Jobs. But what about the thousand products high school dropouts have attempted to create which had no commercial success at all, because they contained little technological or scientific complexity, or were, in fact, technological or scientific impossibilities? They made no money. And what about the 10,000 or more high school dropouts who not only did not discover anything at all, but found it difficult or impossible to get a good job or indeed any first job at all, because they lacked the necessary high school or university qualifications necessary to be selected for the position? These thousands or tens of thousands or truth be told millions and tens of millions, fall into the darkness, suffering years of unemployment or being forced to take jobs that paid very little at all. Or at worst they become trapped in the profitable, but very dangerous, careers of drug distribution or prostitution.
Far from being a sign of individual brilliance, not having a high school degree may be the first step to a high risk of unemployment, underpay, or even a violent, dangerous life of crime.
To play the odds in order to achieve a very economically and personally successful life, it is far better to finish high school, go to the best university possible, and then do a PhD in one's own desired field.
Finally, this dangerous illusion of being able to make millions without completing a high level, or any level, of formal education, has been worsened by the popularity of Big Brother.
Around the Western World, scores of duplicate studios create exactly the same formula of streaming the inane, very often ignorant, and sometimes racist conversations and acts of behavior, to tens of millions of viewers content to have no intellectual stimulation at all. This combination of ignorance mixed with a limited amount of sexual innuendo or behavior has proved immensely popular, making the program's designers millions of dollars, but what does it say about a society that offers instant fame to the inane with no effort at all? What does it say about the tens of millions of viewers who want no intellectual stimulation at all, but are instead apparently satisfied to endless watch never ending inane conversations, and occasional snippets of risqué conversation or a mildly sexually exciting scene somewhere through the night, with no intellectual challenge at all?
Again, why train for years to reach the spear tip, to study, discuss and debate ideas at a high intellectual level, to answer, consider, and rebut opposing ideas, to make new exciting, world changing discoveries, when all that is needed for fame and fortune are a couple of tattoos, a stream of thoughtless, controversial remarks, and an ability somehow to survive into the next round of Big Brother after one of the other participants has been kicked out.
It is not a challenge to an intellectual idea or belief. It is the total death of respect for intellect within Western popular culture and as such is indicative of an intellectual crisis at the heart of Western Civilization.
Where is the respect for the intellect and for intellectual ideas that was once central to Western civilization and to the triumph of the Progress Ethos and the Enlightenment?
The Loss of the Canon
The anti-intellectualism of Western culture is also indicative of another serious, profound crisis within Western civilization - the rejection of the Canon.
In rejecting the Canon, in rejecting the central treasures of Western civilization, the King James 2nd translation of the Bible, the beautiful melodies and complexity of Brahms, Beethoven, Handle, Tchaikovsky or Strauss as something everyone should know and love, in rejecting the texts of Shakespeare, Goethe, Dostoevsky, Conrad, Tolstoy, Ibsen, or the works of Leonardo da Vinci, Rembrandt or Van Gogh as irrelevant pieces of art created by dead white males, in favor of a politically and sexually correct, mediocre, quota chosen set of texts reflecting nothing more than the habits, political correctness and often the profanities of the present and of the institutionally dominant intellectual elites, who cannot deny that something profound has been lost?
What comparison is there between the violin music of Beethoven or Handel and the ugliness of techno? What comparison is there between the language and rhythm Keats and Milton, and the ghetto drug culture of Gangster Rap? How can one compare the descriptive power and complexity of Joseph Conrad in Lord Jim or Heart of Darkness with the "Hw r u? Luv u soo mch!" of twitter or emails frequently defended as a new form of linguistic expression and not see an immediate, crippling, tragic linguistic loss?[68]
A cultural chasm.
In rejecting its own Canon, the inhabitants of the civilization of the West has lost their sense of the sublime, of the excellence and beauty that exists beyond individual limitations and is perhaps indicative of the divinity of the universe, which only a select few can truly grasp.
It is a rejection of the ideal of genius, and of the stupendous wonders of genius, that all can marvel at.
The rejection of the Canon has also had another destructive effect on Western civilization. This rejection of the Canon has also cut those educated in the present, from their own civilization's religious, musical, literary, and artistic past. Instead of being able to value the brilliant art works that Western civilization has produced, what they can say about the human condition, and to appreciate the development and magnificence of Western culture, people are caught in the miasma of a rootless presence, that may link back as far as the counter-culture of the 60s, if it looks that far back at all.
People of normal education in the 30s knew the language and stories of the Bible, could recognize the key melodies of Beethoven or Strauss, could appreciate the romantic poetry of Keats or Wordsworth, and would have read some of the works of Conrad, Dostoevsky, Tolstoy or Kipling.
Sadly, that is no longer the case, and instead of an appreciation of a civilization, the wonders of which have taken thousands of years to create, there is only the rootless present, with no past, and no true vision of the future.
It is a tragic loss that should be mourned.
[43]. 'Issues: Boys and Education' Men's Health Australia http://www.menshealthaustralia.net/index.php?option=com\_content&task=blogcategory&id=19&Itemid=84 Sighted May 2011
[44]. 'Issues: Boys and Education' Men's Health Australia http://www.menshealthaustralia.net/index.php?option=com\_content&task=blogcategory&id=19&Itemid=84 Sighted May 2011. One of the few authors to consider the full impact of these changes is Francis Fukuyama The Great Disruption: Human Nature and the Reconstitution of Social Order Free Press, New York, 2000
[45]. Kathy Seal 'Asian-American Parenting and Academic Success' Miller-Micune December 13 2010 http://www.miller-mccune.com/culture-society/asian-american-parenting-and-academic-success-26053/ and Ian Hodge 'Why Asian Children Find So Much Success Today' Wisdom's Edge 15 June 2007 http://www.wisdomsedge.com/wejoom/index.php?option=com\_content&task=view&id=180&Itemid=28
[46]. For the debate about Amy Chua's comments see 'Is There a 'Tiger Mother' Effect? Asian Students Study Twice as Many Hours, Analysis Finds' Science Daily May 8 2011 http://www.sciencedaily.com/releases/2011/05/110505103345.htm
[47]. Nicholas Carr 'Is Google Making Us Stupid? What the Internet is doing to our brains' The Atlantic July/August 2008 http://www.theatlantic.com/magazine/archive/2008/07/is-google-making-us-stupid/6868/
[48]. Nicholas Carr 'Is Google Making Us Stupid? What the Internet is doing to our brains' The Atlantic July/August 2008 http://www.theatlantic.com/magazine/archive/2008/07/is-google-making-us-stupid/6868/
[49]. 'Issues: Boys and Education' Men's Health Australia http://www.menshealthaustralia.net/index.php?option=com\_content&task=blogcategory&id=19&Itemid=84 May 2011. One of the few authors to consider the full impact of these changes is Francis Fukuyama The Great Disruption: Human Nature and the Reconstitution of Social Order Free Press, New York, 2000
[50]. 'Issues: Boys and Education' Men's Health Australia http://www.menshealthaustralia.net/index.php?option=com\_content&task=blogcategory&id=19&Itemid=84 May 2011. One of the few authors to consider the full impact of these changes is Francis Fukuyama The Great Disruption: Human Nature and the Reconstitution of Social Order Free Press, New York, 2000
[51]. 'Violent Video Games Alter the Brain' Medical News Today 29 November 2011 http://www.medicalnewstoday.com/articles/238352.php
[52]. Miki Perkins 'Teach for tests, teachers told' The Age February 5 2010 http://www.theage.com.au/national/education/teach-for-tests-teachers-told-20100204-ng6o.html sighted May 2011
[53]. See 'The Genius Program' TeachMyBaby.com http://www.teachmybaby.com/?hop=0 Sighted May 2011
[54]. Diane Ravitch 'Obama's Race to the Top Will Not Improve Education' Huffington Post August 1 2010 http://www.huffingtonpost.com/diane-ravitch/obamas-race-to-the-top-wi\_b\_666598.html
[55]. Bethany Hiatt 'Plan to train teachers in six weeks' The West Australian March 18 2011 http://au.news.yahoo.com/thewest/a/-/breaking/9032912/plan-to-train-teachers-in-six-weeks/
[56]. Conversation with Dr Erik Pederson United World College Norway, 2008
[57]. 'Uralic Languages' Uralic Language Family sighted December 2011 http://peacecountry0.tripod.com/langclas.htm
[58]. Karishma Vaswani 'India's IT marriage boom' BBC News www.bbc.co.uk June 13 2007
[59]. Andrew Trounsen 'Shortage of specialist maths teachers' The Australian May 28 2008 http://www.theaustralian.com.au/news/nation/maths-now-a-zero-sum-game/story-e6frg6nf-1111116397919
[60]. 'Shanghai is Number One in World Education Rankings' English Online sighted December 2011 http://www.english-online.at/news-articles/education/shanghai-number-one-in-world-education-rankings.htm
[61]. 'Shanghai is Number One in World Education Rankings' English Online sighted December 2011 http://www.english-online.at/news-articles/education/shanghai-number-one-in-world-education-rankings.htm
[62]. 'Shanghai is Number One in World Education Rankings' English Online sighted December 2011 http://www.english-online.at/news-articles/education/shanghai-number-one-in-world-education-rankings.htm
[63]. 'Shanghai is Number One in World Education Rankings' English Online sighted December 2011 http://www.english-online.at/news-articles/education/shanghai-number-one-in-world-education-rankings.htm
[64]. For the debate about Amy Chua's comments see 'Is There a 'Tiger Mother' Effect? Asian Students Study Twice as Many Hours, Analysis Finds' Science Daily May 8 2011 http://www.sciencedaily.com/releases/2011/05/110505103345.htm
[65]. 'Shanghai is Number One in World Education Rankings' English Online sighted December 2011 http://www.english-online.at/news-articles/education/shanghai-number-one-in-world-education-rankings.htm
[66]. For the debate about Amy Chua's comments see 'Is There a 'Tiger Mother' Effect? Asian Students Study Twice as Many Hours, Analysis Finds' Science Daily May 8 2011 http://www.sciencedaily.com/releases/2011/05/110505103345.htm
[67]. David Shukman 'China to overtake US on science in two years' BBC News March 28 2011 http://www.bbc.co.uk/news/science-environment-12885271
[68]. For an example of this defense see Rob Forbes 'Don't listen to the purism pedants, English is doing just fine' The Age May 13 2011 http://www.theage.com.au/opinion/society-and-culture/don t-listen-to-the-purism-pedants-english-is-doing-just-fine-20110512-1ekl9.html
About the Author
Dr Matt Buttsworth is a historian, author and world politics analyst who lives in Perth Western Australia. Books for sale by Dr Matt Buttsworth include the incisive political analysis book Eden and the Fall, a study of the dangerous apocalyptic nature of Radical Ecological history, and the thought-provoking historical analysis book Polarshift, a long term historical analysis from the time of Genghiz Khan to the present of the rise and fall of the West and the rise of India and China. Fictional work written by Dr Matt Buttsworth includes Zheng He, a fascinating historical novel about the greatest admiral to have ever lived, and the whimsical, idiosyncratic short story collection The Cyclist.
America in Crisis is part of Polarshift.
Dr Matt Buttsworth is now working on a historical novel about the Portuguese discovery and conquest of the sea routes of the Indian Ocean.
Dr Matt Buttsworth's books and articles are available for sale at all major ebookstores.
To see all of Dr Buttsworth's books and articles go to www.mattbuttsworth.com
Dr Matt Buttsworth may be contacted at: matt.buttsworth@hotmail.com
Table of Contents
Copyright 2011 Matt Buttsworth Australia
Books and Articles by Dr Matt Buttsworth
Historical and Political Analysis:
Fiction
Chapter 1 - America in Crisis
Intellectual Illusions
The Debt Crisis
The Economic Poison of Neo-Conservatism
The Tipping Point
Democracy and Debt
The East Asian Alternative
Contagion
Chapter 2 - The Loss of Excellence
The Crisis in Education
The Eastern Challenge
Anti-Intellectualism and the Loss of the Canon
About the Author
Table of Contents
Copyright 2011 Matt Buttsworth Australia
Books and Articles by Dr Matt Buttsworth
Historical and Political Analysis:
Fiction
Chapter 1 - America in Crisis
Intellectual Illusions
The Debt Crisis
The Economic Poison of Neo-Conservatism
The Tipping Point
Democracy and Debt
The East Asian Alternative
Contagion
Chapter 2 - The Loss of Excellence
The Crisis in Education
The Eastern Challenge
Anti-Intellectualism and the Loss of the Canon
About the Author

