February 29, 2012

WALTER RUSSELL MEAD: Beyond Blue 6: The Great Divorce.

Over the years I’ve gradually come to understand that the old model wasn’t just broken by evil corporate greedsters hellbent on pillaging the middle and working classes – not that such people don’t exist and don’t need to be watched. It was being broken from below as much as from above, and the left did as much to dismantle it as the right. The Ralph Nader consumer movement, for example, set about attacking the comfortable corporate oligarchies who sold shoddy goods at high prices to the public (can you hear me, Detroit?). Nader and his followers wanted consumers to have more choices, and they favored competition over monopoly. But it was exactly their ability to sell shoddy products at high prices that made so many American companies so profitable in the golden age of the blue model – and it was those profits that underwrote the wages and benefits that gave blue collar workers lifetime security and middle class incomes. Nader’s attack on corporate oligarchy was blue-on-blue violence.

Consumers wanted better goods and lower prices than the blue model could give them. Savers wanted higher interest rates than the highly regulated blue era banks could give them. Companies and consumers wanted more innovative telecom service at lower prices (and with less arrogance) than Ma Bell was ready to offer. The whole country was fed up with the inconvenient schedules and high prices that came with the oligopolistic air travel market. Individual investors were sick and tired of high trading fees and restricted information in the stock market. And given the choice between a shoddy and expensive American car, an expensive but well made European one, or a cheap and reliable Japanese car, fewer and fewer Americans picked something made in Detroit.

Americans wanted more than the blue model could give them, and increasingly they sensed that they could get it. That, more than corporate plots and Gordon Gekko style misdeeds on Wall Street, is why the blue model is going the way of the mastodon.

It was unsustainable. Read the whole thing.