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Becoming Argentina: A Review of Third World America

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Ask 100 economists and television pundits the reason for the latest financial crisis and you'll get 1,000 different answers that could leave you more confused than ever. Similarly, you would be equally confused if you asked their opinions as to why the middle class in America has suffered for decades with stagnant real wages, reduced pensions, less health care coverage, greater personal and mortgage debt, and now greater unemployment and fewer job opportunities.

Arianna Huffington's brilliance is in her realization that there is one simple answer to both of these questions. Like most third world countries, American democracy and our elected representatives have been bought and sold to the highest bidder. Corporate money in politics and lobbyists in Washington have created a government that is more concerned with the economic health of our biggest banks and corporations than with the well-being of our citizens. Huffington explains that the problem is not that our government is not working, it just isn't working on your behalf.

I say, like most third world countries, because analysis of what prevents most poor countries from developing is a panoply of oligarchs that so control their governments that the governments cannot stop high level corruption and create a level playing field for all economic participants. Economies cannot grow and develop broadly unless economic opportunity is open to all.

The sad truth about the third world is that once these oligarchs take control of a country's legislature, it is very difficult for the countries to pass legislation necessary to accomplish real reform to clean up the corruption. Once your legislature is corrupted, real reform depends on the people rising up, organizing, protesting and demanding real change to their government. That is why poor countries in Africa and Latin America have such difficulty transitioning to growth economies and end up remaining poor for centuries.

Huffington's book, Third World America: How Our Politicians Are Abandoning the Middle Class and Betraying the American Dream, is very strong on statistics that make it perfectly clear that America's middle-class is under threat. She personalizes the hard data by incorporating individual Americans' family stories at the end of each chapter.

Huffington's greatest strength is her courage and conviction to not only name names, but to raise issues which others feel uncomfortable talking about. Huffington shines a bright light on our nation's debt problems, but unlike others, she is slower to blame the increasing costs of Social Security and Medicare. Just as in this financial crisis, where the middle class is burdened with the job losses and wage cuts from problems actually caused by executives on Wall Street, she notes that it would be unfair to solve our deficit problems by cutting retirement and health care benefits to working Americans if the deficits have been caused by enormous increases in military spending and corporate welfare and bank bailouts. Military spending is now over $1 trillion a year when you include all defense expenditures, intelligence agency spending and the homeland security budget. This is more than enough in potential savings to ensure that Americans do not have to work into their seventies to afford reasonable health care and retirement.

I have been writing for 12 years now about the economic problems caused by lobbyists and corporate money in politics. I know firsthand how unpopular these ideas are on Wall Street, in Washington, amongst our corporate owned media and in the plush meeting rooms and think tanks of our country's elite. It takes a brave person to confront these issues, and I applaud Huffington's effort in this regard.

The last chapter of Huffington's exposé deals with how we get out of this mess. It is not easy. Huffington tells us that 80% of Americans now believe that special-interests in Washington are damaging America's democracy. But, until very recently, 98.6% of incumbents were reelected. Money still buys elections, even ill-gotten money. As Huffington says, the problem is not that there is too much discord in our nation's capital, the problem is that both the Democratic and Republican parties are controlled by big business and ignoring the real problems faced by ordinary Americans -- joblessness, declining wages, poor health care coverage, reduced pensions and a declining public education system. The Tea Partiers are right, our government is broken, but their libertarian approach is wrong. Less government is not the answer, big business would love that. No, the answer is better government more concerned about its citizens than its executives.

And this is where Huffington can be most helpful, in finding a solution. The Huffington Post must remain outside the control of corporate interests and broaden its base to include all Americans who have been disenfranchised or disenchanted by the system, regardless of their political party. Only through working together will Americans overcome the damaging influence of corporate special interests and lobbyists and return our country back to the people to whom it belongs.

John R. Talbott is the bestselling author of eight books on economics and politics that have accurately detailed and predicted the causes and devastating effects of this entire financial crisis including, in 2003, "The Coming Crash in the Housing Market", in January 2006, "Sell Now! The End of the Housing Bubble" and in 2008, "Contagion: The Financial Epidemic that is Sweeping the Global Economy". His newest book will be available on September 30, 2010.