Thursday, June 23, 2005

Limits to the American Economy

You may have heard me say this before, but I'll say it again.

I firmly believe that the West has certain things right and the East has others right.

By the West, I mean America, Canada, Europe, etc. By the East, I mean China, Japan, India, the Asian tigers.

I think the West got it right many years ago with two things: capitalism and democracy. These two in combination have proven to be excellent growth catalysts and have truly made for a great, lasting economy.

I think the East got it right thousands of years ago with two different things: religion and healthcare. Traditional Chinese Medicine (TCM) and Indian ayurveda are vastly superior systems of medicine than what we have in the West. Yes, we can put a person back together quickly after they've been in an accident. But we seem totally clueless when it comes to cancer, diabetes, all the chronic diseases and even more clueless when it comes to prevention. The only thing saving us is a general switch by Americans to the healthcare systems of the East.

I also feel that Asian religions seem more sensible than Western religions. Catholicism, Protestantism require a high degree of "suspension of disbelief" and have such an emphasis on "selling" the religion to other people, making conversions, etc. It is like religion combined with sales. It seems weird to me. I know a lot of you will disagree, but this is my way of thinking.

Having said all that, I found it very interesting to read about a comment made by Paul Volcker, former chairman of the Federal Reserve, who said that our habit of making public policy based on the short-term needs of special interest groups has created a "looming celing on our standard of living."

Are we giving up this incredible gift we have with capitalism? True capitalism is not fostered by large corporations trying to create mini-monopolies for themselves by jiggering the laws. But, unfortunately, that is what is happening, and, in fact, it is only encouraged by the Bush administration, who are brazenly making these concessions to industry without even trying to hide it. Past administrations were no less guilty of this, but they seemed to at least be a little embarrassed about it, whereas our current administration seems to feed on it.

I hope this trend reverses. I think that perhaps as the power of small business grows and the power of the large businesses weakens, we may see the trend changing. I've often thought there should be a "Small Business Party" that represents the interests of small businesses. Small businesses needs of the government are usually the opposite of what large businesses ask for. Large business wants their mini-monopolies. Small businesses want a level playing field.

But as large businesses drain away their workforce and small businesses continually scoop up those people, the influence of the large businesses will also drain away in their ability to shape policy.

What will that be like? I think we only need to wait 5-10 years to find out.

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