The Dangers of American Exceptionalism

Sean Hannity often says that America is the greatest best country God has ever given man on the face of this Earth. It’s an oft repeated mantra, which if taken in the spirit of national pride and unity would be just fine. However, it is more often interpreted as some sort of birthright that America should rule the world… militarily, economically, intellectually, spiritually, and well hey… did I mention that we’re number one?

The trouble, of course, is that when you view everyone else as subordinate, you tend to believe they have nothing to teach you. I’ve written before about how there are countries out there with proven successes in achieving exactly the goals we’re trying to achieve in healthcare and education, but we are not even seriously studying or talking about these foreign models.

Now comes evidence that Iceland has done wonders in solving their housing market issues as well as getting their financial system back in order following the 2008 meltdown of both. In a nutshell, Iceland took over its banking industry rather than just bailing it out as we did here in the US. It then forgave any mortgage debt above 110% of a home’s value for all its citizens. This dramatically reduced the debt burden for most households and kept consumer spending from plummeting. It then instituted extensive new regulations on the banking industry to prevent another 2008-style catastrophe. Further, it has actively pursued criminal charges against almost 300 banking executives who were directly responsible for decisions leading up to the crash. The result?

Iceland’s $13 billion annual economy declined 6.7 percent the following year, in 2009, but has since rebounded and will expand by 2.4 percent this year and in 2013, the OECD estimated. Meanwhile, in the rest of debt-ridden Europe, the economy will collectively expand by a paltry 0.2 percent this year and only 1.6 percent the next, OECD estimates said in November.

Housing is now just about 3 percent below values in September 2008, just before the financial collapse. So improved is the nation’s economic and fiscal outlook that Fitch Ratings in February raised the country to investment grade with a stable outlook, stating the country’s “unorthodox crisis policy response has succeeded.”

By comparison, the US is projected to grow at 2.2% in 2012, the housing market remains underwater, and the banks are returning to many of the same policies that led to the crash in the first place.

It’s not clear that what happened in Iceland is directly applicable to the US. Perhaps those programs and policies would not function here as well for one reason or another. But the crime is that we are not even talking about it—not even trying to learn from their experience. The mainstream press has given Iceland almost no coverage. Politicians are not discussing what happened there and debating its applicability to our economy. As far as the US is concerned, Iceland doesn’t exist.

Is this because we’re too proud to admit a bunch of foreigners have something to teach us? Or is it because the special interests have a stranglehold on the media and the politicians and are suppressing stories that would lead to policies unfavorable to their moneyed interests? It’s not clear. But what is clear is that other countries are solving problems that we need to solve, and we’re idiots if we can’t find something to learn from them.

America needs a 12-step program

Politicians have made it a habit to invoke American exceptionalism at every opportunity. President Obama has been repeatedly reviled by his detractors for not aggressively asserting that the rest of the world should bow to our obvious superiority. Meanwhile, pundit Sean Hannity is now famous for frequently uttering his catch phrase, “America is the single greatest nation that God ever gave man on this earth.”

That’s not to say that America doesn’t have a reason to be proud, but a little humility might help us to realize that in some ways we are quite a bit less than we imagine.

Compared to a group of our peers, the 20 most affluent countries in the world, we are number 1 in some embarrassing categories:

The highest poverty rate, both generally and for children;
The greatest inequality of incomes;
The lowest government spending as a percentage of GDP on social programs for the disadvantaged;
The lowest number of paid holiday, annual and maternity leaves;
The lowest score on the UN’s index of “material well-being of children”;
The worst score on the UN’s gender inequality index;
The lowest social mobility;
The highest public and private expenditure on health care as a portion of GDP;
The highest percentage of our population in jail;
The highest carbon dioxide emissions and water consumption per capita;
The highest rate of failing to ratify international agreements;
The lowest spending on international development and humanitarian  assistance as a percentage of GDP;
The highest military spending as a portion of GDP;
The largest international arms sales;
The lowest scores for student performance in math (except for Portugal and Italy) (and far down from the top in both science and reading);
The highest high school drop out rate (except for Spain);

These are not problems that have just come about in the last few years. We have been building our dysfunction in these areas for decades. Problems like these are at the core of our decline, not deficits. And problems like these will not be solved with budgetary adjustments or minor policy changes. These are fundamental behavioral issues.

As with any person or organization exhibiting self-destructive behavioral problems, the first step is admitting we actually have a problem. This does not require that we declare ourselves worthless and unworthy. On the contrary, a sense of self-worth is required such that we believe ourselves worth saving. But we desperately need to embrace the notion that we could be better, much better, than we are now, and further that this transformation requires dedication and sacrifice. Until we’re ready to own up to that, nothing will change.