The war has ended. You have been destroyed. You have been conquered. You have been forced to capitulate. You are now at the mercy of your conquering masters.
Twice in this century Germany faced these prospects. In the first instance, the nation was forced into paying reparations and extreme austerity. The result was chaotic and financial ruin that seeded political insanity bent on vengeance. In the second occurrence of Germany at the mercy of victors, a reordering of social priorities and massive infrastructure rebuilding investments yielded a strong economy and good governance that produced a rational political partner with its former vanquishers.
Economically within the United States we are at a similar juncture and could learn from the lesson of the two German outcomes. Many personal balance sheets containing falling housing equity, eroded retirement savings, and education debt have been a result of actions by our conquerors from the financial industry and their tight circle of corporate allies. Our jobs, indeed our livelihoods, have been commoditized for maximum return through minimum care and rendered available for impersonal trade and export.
We are at a fork in the road but unlike the tale of the two Germanys, we have an ever narrowing window of political possibility into which we can insert ourselves to help determine the terms under which our future will be formed. It is not conspiracy peddling to recognize that huge financial interests consisting of a relatively few large corporations, a handful of investment banks, and financial instrument dealers have purchased great political clout and are ready to dictate the terms of our capitulation. Recognizing this dynamic should compel us to act with political expediency.
There are many choices that face us in charting a better economic course for our own future and that of succeeding generations but the core choice is between austerity, onerous painful payment of reparations in service to the narrow, and vibrancy, focused investments to back the broadest components of our society.
Austerity in the form of slashing government services and long term investment, continued financial allowance of debt entrapment, cutting entitlements to place more money in limited private hands for esoteric gambling by financial instrument hawkers, and above all a focus on market machinations that serve a selfish few places us all in the destructive pattern exhibited in post World War One Germany. And the results will perhaps be some on paper declines in national debt with mega-trading wins back and forth between a few wealthy individuals and corporations for perhaps a decade or so. In the end this reparations for our past “misdeeds” will lead to a yoke that must be revoked and it will engulf those who commanded austerity in a destructive epilogue to their era and error of profiteering. Despite all talk of long term fundamentals, the masters of finance are incredibly shortsighted and the outcome of austerity is a weakened and limping economy begging for political chaos.
The beneficial outcome from aiming for vibrancy on the broadest levels for the greatest number of people, businesses, and institutions of value is the lesson to be taken from the rebuilding of post World War Two Germany. Massive investment broadly applied will yield massive returns with both financial and societal benefits. By aiming our publicly shared investments at infrastructure, education, health, environment challenges, and even personal debt remedying we can move into full employment, stabilize societal disarray, and just as importantly engender the predictability, reliability, and opportunity that allows businesses that produce goods and services for people to thrive. We need to avoid a misguided focus on cutting public services and debt devoid of strategic investments that in the long run will yield a strong economic model to pay for services and debt that provided a good return on our investments. Bracketing our investments with an overarching goal of supporting long term sustainable outcomes across widest possible spectrum of definition is an added factor we should also embrace.
The two German post war outcomes provide an allegorical representation of how we might approach this county’s future. We can serve narrow or broad interests. We can make our economy work well to serve a few fortunate placed individuals and corporations or the very broadest swath of individuals and businesses of all sizes. We can choose short term maximized returns confiscated from society or long term sustainable returns shared by many to stabilize society.
We have come to the fork in the road; our choice is between austerity or vibrancy.