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Post details: Quo Vadis, America?

Quo Vadis, America?

Fourth of July.

It's that time of the year when the sky blooms with sea anemonies of colorful sparks and the smell of hot dogs overpowers any resolution to wiggle back into last year's pants. This is a hallowed night which presents a great opportunity to pause and ponder the direction in which this young country is going.

Naturally, opinions on that vary greatly.

Many on the right are worried that the country is lurching to the left. The commentators are calling Obama a socialist, the economists are wringing their hands at every bit of expenditure, pointing to the imminent death of the dollar and the shock jocks are dusting off the specter of U.S.S.R and promptly rebranding the country's abbreviation into a sinister sounding U.S.S.A. But they are all way off the mark. I grew up in the Soviet bloc and I can tell you that we are not a socialist country any more than North Korea is a thriving democracy. By historical standards Obama maneuvers in the center-right space, so if we are to fret about any extremist labels at all, it should probably be "fascism". After all, if we had socialism, the wealth gap would be narrowing, not widening. However, despite the lack of signs that we are tacking to the left, there are certain parallels with the former Soviet Union that warrant our attention. Over the past 20 years that I have lived here, these parallels have grown more visible and should be closely monitored by the politicians, by the punditry and above all by the public.

Here they are:

a. militarization of economy: it is not a secret that overextended military and increased economic emphasis on arms and weaponry production is what did the Soviet Union in. We keep shedding whatever consumer oriented production we still have and larger and larger share of our GDP goes to the (unproductive) military complex. The fact that we alone account for 40% of the world's military budget tells you most of the story. The warning of President Eisenhower is half forgotten and military industrial complex is stronger than ever.

b. erosion of civil liberties: the process that started with the Patriot Act in the atmosphere of post-9/11 shock has taken life of its own and as the time goes on, its intrusive scope is waxing, not waning. As the recent NSA revelations show, one by one our liberties are being undermined and the freedom to pursue happiness as we see fit is becoming lost in the labyrinth of laws, regulations and privacy intrusions. The tightly bound police state that the Soviet Union was infamous for is hardly an example to emulate and certainly not a recipe for developing a dynamic and thriving society. Intolerance breeds suspicions which in turn limit the overall mobility of individual citizens as different segments of the society feel shortchanged and crawl into their defensive shells.

c. financial centralization: a system as complex as the national economy needs to be controlled by a robust and decentralized network of thousands of local decision makers, all armed with boots on the ground, equipped with streams of real life data and controlled by self-adjusting feedback loops. A handful of wise men has little chance to appreciate all the details and interconnections of the whole system, much less make decisions beneficial to it. And it matters little whether the building in which they ply their wisdom is owned by a central bank or by a politburo of the communist party. The aftermath of the global financial crisis diverted enormous power into the corridors of the former. The central bankers may think they got all the answers, but at the end they cannot plan the future any better than the old Soviet style apparatchiks could. The hamfisted money printing is distorting interest rates, inflating prices of commodities, stifling markets' ability to correctly choose capital allocations and, in general, turning our economy into a centrally planned morass.

Each of these trends poses a clear and present danger. For now, we are slowly drifting in the wrong direction and fortunately there is no reason to panic yet. We are reasonably far away from the rocks and we have one big advantage: a strong tradition in democracy. While Russians were used to living under tzars for centuries - and that is a lot to saddle the national psyche with - America was built on the spirit of defiance and individual rights. The threshold for totalitarian pain is much thinner in this country. And that gives me hope that the only existential question the fireworks in the future will bring about is whether we should go for that extra hot dog.


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