Popular Economics Weekly

Former CIA assistant director Mike Morell lamented on a recent CBS 60 Minutes that he didn’t understand why congressional Democrats and Republicans couldn’t work together to boost economic growth for “the good of the country” when our weak economy was the greatest problem facing US, above even terrorist threats.

“I don’t understand the inability of our government to make decisions that push our economy and society forward,” he said. “Our national security is more dependent on the strength of the economy and society than anything else.”

The real answer is that we are living in two countries at the moment, mainly divided into anti-government Republican Red states and pro-government Democratic Blue states. And the Red states are suffering, with the lowest per capita incomes, education levels, and everything else that modern economies need to thrive.

To be sure it’s about politics and Republican ideological intransigence. But in the Old South it’s also about fighting the last Civil War—which means preserving racism. They are getting their wish to secede from the union, but it’s economically rather than politically.

This is while those states depend on government most for their social safety needs, whether it is farm subsidies or food stamps and Medicare for their poorest populations. More government monies flow into their states than flow back to the federal government, in other words.

This is a little-known fact that puzzles economists. Why are the states most dependent on government aid most opposed to it, particularly to Obamacare and the expansion of Medicare?

“A South Carolina legislator put it bluntly earlier this year,” in a recent Huffington Post column. “State Rep. Kris Crawford told a business journal that he supports expansion, but said electoral math is the trump card. "It is good politics to oppose the black guy in the White House right now, especially for the Republican Party," he said.”

Most of the Red states also adamantly oppose the expansion of voters’ rights, union collective bargaining, better healthcare, immigrants’ rights, environmental regulation, abortion and women’s rights, as if they want to turn the clock back to the last century.

Government gridlock not only endangers our security, but the resultant inequality—greatest in the Red states—endangers our democratic system itself, needless to say. The CIA should know, as it has kept track of the economic well-being of nations in its World Factbook, with the U.S. now ranked below other developed countries in income equality, birth-death rates, longevity, and health outcomes.

The problem today is the huge amount of damage gridlock is doing to economic growth, from downgrades of government debt by Standard & Poor’s rating agency to reluctant consumer spending. Even Moody’s has put U.S. debt on credit watch. The Red and Blue states seem to still be fighting the Civil War all over again after 150 years, as I’ve said in past columns.

So the question is, government and the Congress should work for the good of whose country? Tea Partiers and southern politicians in particular want to take back “their” country. If that is their sentiment, we will have two countries living a century apart.

Harlan Green © 2013

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