Home > Political Animal > Debt, kudos, GDP and Hans Klemm

Debt, kudos, GDP and Hans Klemm

By Jim Sack

Fort Wayne Reader

2015-07-16

What is it about governments that causes them to go so deeply in debt? The Greek government is a good example and, nearer to home the Puerto Ricans are wallowing in IOUs. Part of it is keeping up with the Jones as if they can all afford bridges to nowhere and billion dollar warplanes. Remember how the Greeks spent beyond their means for Olympic facilities that now lie in ruins?

Part of it is the lie politicians sell to citizens in search of votes to protect said politician’s job, benefits and income. “Vote for me and everyone can retire with a full pension at 50!”

Sadly, too few of us understand debt or personal finance, so we are adrift when presented with TIFs and CREs. Our politicians and their friends in finance have created “instruments” that rely upon you underwriting private projects, such as Doden Flats, the ballpark, Randall Lofts and Enterprise Pointe. While the economic development types spout the glories of free markets they depend upon using tax incentives, your money, to pay for their projects which usually benefit the investors and politicians most and you least, and put us all in debt and risk.

Hustle

Kudos to Council President Dr. John Crawford for walking door-to-door in neighborhoods surrounding the proposed concentrated low-income housing project Brightpoint wants to stick in the middle of seven neighborhoods of single-family homes. He really walked storm door-to-storm door as if searching for votes, but in this case he was searching for insight as to whether the project was 1) welcomed and 2) beneficial to the families near the project. Reportedly, he found the closer to the project the less support existed and the farther away the more support; reality vs. concept. When he asked one distant homeowner who supported the project if they would support the project were it next door to their home the answer was no. Kudos also for asking the right questions and taking the time to care.

Top of the Heap

A European friend surprised me with her assessment of America’s position in the world. She said simply that it is still a unipolar world with the US still firmly on top of the heap and calling the shots in international affairs. No one, she said, has the military power, the economic prowess, the cultural appeal, institutional dominance or linguistic advantages as do we. While some people bemoan our falling status in the world, the rest of the world still sees us as supreme. Russia’s Putin has been straight-jacketed by American soft power, economic strength and military superiority. China’s economy is suffering the contractions of their own bubble. Iran is at the table negotiating because we compelled them to sit! Elsewhere, the Middle East is on fire, Africa suffers despots, and Europe is struggling with integration pains. At the moment the US looks to be the only stable power, unless you toss in Bhutan, the Skandinavians and Botswana…none of which are all that significant. The power in the world is America, it is a unipolar world. Now, to be fair to the critics who say America is in decline, in many senses we have lost our edge. Our GDP as a percentage of World GDP has been falling since 1960, on face value we don’t look the enforcer anymore with fewer troops around the world, instead relying on soft power, and President Obama was elected to bring the troops home and refocus on domestic issues. But, as the analyst said, there is no other country or combination of countries that can even come close to American power and influence.


But…

That doesn’t mean, however, that we are smarter than the rest or somehow intrinsically better. A case in point is our situation in Europe, specifically Romania, from where I write. For years we haven’t managed to install an ambassador here. Worse, our last two ambassadors were resented by the average Romanian. In this part of the world our ambassador is the voice of America and the face of democracy. What the American ambassador does and says here matters greatly and is reported and scrutinized in the national press for signs of American policy. Our embassy’s Fourth of July party is shown live on Romanian national TV! For years the embassy has been run by a chargé d’affair suggesting to our allies and our enemies alike an indifference toward this front-line NATO partner. Putin, of course, has noticed, so there is a cultural push here by the Russians to win hearts and minds, while at the same time the Romanian government, with whom we share secrets, is riddled with Russia’s friends and allies. Power (Putin) abhors (exploits) a vacuum. The Romanians who share our values are disheartened, but take solace that President Obama has nominated someone to fill the gap. Happily, the nominee is a career diplomat, a Midwesterner and a graduate of IU’s internationally acclaimed Russian and East European Institute. Happily the nominee is a professional diplomat, not a chummy businessman who donated oodles. Unfortunately, given the gridlock in Washington, it may be many more months before the nominee, Hans Klemm, takes his post and begins championing American/NATO interests here. With Putin just over the hill our allies are very anxious, indeed.