Monday, 17 August 2009

“Reset”, by Kurt Andersen (Random House)


How the current economic and social crisis can restore values and renew America

In Reset, journalist and writer Kurt Andersen offers “a blueprint for what can be a new way of seeing America as a land of opportunity and sound values”. In today’s economic and social climate, things need to change.

“Let’s be honest: we all saw this coming for a long, long time”, we just refused to do anything about it because things appeared to be going to well. The US (and the world as well) were enjoying the good times, without any concern for when the bottom fell out – which it must, every time, and also “no one wanted to be a buzz kill”.

Andersen outlines the gloomy state we’re in now – covering both social issues and economic ones, from the macro and the micro perspectives. He mentions the obvious greed and over-indulgence evident in American society – be it the increase in obesity (more than one third of Americans, up from 15% in 1970s), the increase in size and price of houses, and so forth. Economically, the author discusses how the auto industry’s been in trouble for years; house prices are slumping after many Americans paid huge sums to own ridiculous houses (Andersen rightly points out that, maybe not everyone should be a home-owner and we need to accept that we just might need to rent for a bit longer); savings rates have diminished to nearly zero (in 2007, less than 1%; whereas in 1982 the rate was about 11%).

Exponentially growing income inequality is another social catastrophe. In 2007, upon hearing about the stratospheric Wall Street bonuses being doled out, the author calculated, at one point, that “the revenues at just one of these money-minting firms, Goldman Sachs, were larger than the GNPs of tw-thirds of the countries on earth”. This made the author for the first time understand and agree with Lou Dobbs’s nightly hour of angry populism (one can only hope this agreement doesn’t extend to the Birther nonsense Dobbs has been spouting of late).

“Just as Republicans had for forty years depicted Democrats as insanely freewheeling social experimenters determined to lavish money on the undeserving poor, now the caricature has been reversed: the GOP became the party of arrogant, reckless risk takers determined to lavish money on the undeserving rich.”

None of this should have been a surprise, and Andersen blames America’s own ability to fool itself for the ‘shock’: “We saw what was happening, for decades, but we ignored it or shrugged it off, not quite believing that push would really, finally come to shove”.

“The (Chinese made) stuff we were all buying at Walmart and Costco and H&M stayed supercheap – as did money itself, which our new best friends, the Chinese, obligingly supplied to us by the low-interest-rate trillion.”

Instead of doing something, addressing the inequalities, addressing the gambling nature of the US economy and debt-lead way of life, America “punched the snooze button” after 9/11, the event that was supposed to change everything when really it was a mere bump in the road, the country returning to normal after Bush and Co. urged us all to return to the malls and go shopping.

Instead, we are faced with a stark truth: “The party is finally, definitely over.”

While Andersen is very blunt in his appraisal of the stupidity America has exhibited, he’s also very optimistic about the future and America’s ability to overcome. Referring back to what allowed the US overtake the UK in the 20th Century, the author makes it clear that those attributes will also allow it to overcome the current downturn: “fewer fetters on individual gumption, [and] a younger nation’s ability to make faster social and economic turns.” (Andersen does, however, allow for the possibility that China is the new up-and-comer; taking the place of the reigning superpower in much the same way that the US did.)

The worst thing the author believes we can do is “start behaving now like overcautious, unambitious scaredy-cats”. While banking, the auto industry and so forth might be experiencing a tightening or restructuring, “for entrepreneurs… this great dying off and impending void present vast opportunity.”

Andersen locates the current dire situation in a detailed (though not unwieldy, and still brief) historical context. By doing so, he is able to ‘support’ his optimistic outlook by pointing to the cyclical nature of American history and economics (according to the Schlesinger model, the US is in its 15th cycle).

Commenting on doomsayers and Rush Limbaugh’s ilk, the author agrees that “This is the end of the world as we’ve known it”, before adding, “But it isn’t the end of the world.” To Andersen, it is simply time “to be more artisan/enterpriser and less prospector/speculator, more heroic greatest generation and less self-indulgent baby-boomer, to return from Oz to Kansas, to become fully reality-based once again.”

Making use of the AA’s Twelve Steps approach, Andersen offers his own “streamlined, secularized” seven-step program to fixing the damage created by a national addiction to debt and fossil fuels. The use of addiction tropes is apt, in many ways, and the author continues it to make his point: “The new America must be about financial temperance, not abstinence.”

The book is rather expensive, given its length ($15 in-store), which is likely to turn many people off; though they might just read it in bookstore coffee-shops (fabulous development, by the way). What any reader will find, though, is that in a mere 74 pages, Andersen has written a short, punchy explanation of how he sees America and where it should go from here. The shortness doesn’t impact his argument much, which is a testament to the economy of his prose and the surety of his arguments, lending an air of brevity to a field frequently beset by bloviating and tautology.

If you are interested or invested in the state of the US economy (or the global economy as a whole), I would strongly recommend you read this. Interesting, well-written, pleasantly optimistic, and easily digestible, Reset is a great little book.

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