Remember America in early 2009? It was such a heady period. America had just elected the first African-American President in history. And not just any African-American President but a leader with semi-divine oratory, a visionary, a man who promised to lead America from the darkness of the 2008 recession into a promised land of prosperity with social equality. The inauguration of President Obama was the most moving day in recent memory.
The only blemish on Mr. Obama was that he had no executive experience at any level. He would just have to learn on the job. Because America elects a chief executive, a commander-in-chief and the buck stops with him. We all know what has happened since then.
Now imagine the 2009 America with a parliamentary system. In that system, the leader of the majority party is paramount and not the prime minister, the chief executive. Normally, the party leader does become the Prime Minister but that is not required or even necessary.
In a parliamentary America, the newly elected but inexperienced Leader Obama would not have needed to actually govern. He could have announced a cabinet led by Prime Minister Joseph Biden, a veteran senator and Timothy Geithner, the proven financial expert who had successfully presided over several previous crisis at the New York Federal Reserve.
In that America, Leader Obama could have given a televised address to the Nation and announced that he would devote all his energies to focus on the change he had promised, to implement his vision of an American system that would make America work for all Americans, not just the few who had done well under the old system. He would have told the Nation that he had chosen a veteran cabinet of experts to whom he would delegate the mundane task of governing while he focused on creating the new America.
Leader Obama would have been heralded as the ultimate non-politician who gave up the selfish trappings of power to work for America’s greater good. This would have been a brilliant political strategy as well. His popularity would have risen to an unprecedented level and his political capital would have been massive. The Republicans were already shell shocked and their ideas would have seemed utterly selfish, archaic and unworthy of the new America.
Remember that the ruling party can pass any law with a simple parliamentary majority in that system. And the Democrats already controlled both houses of the Congress. So every reform dear to Leader Obama’s heart would have passed with record speed in the Democrat controlled Parliamentary Congress. Obamacare, Obama Stimulus Program, Obama Safety Net for all Americans, Obama Pension Guarantee for Labor, Obama Pay Your Fair Share Tax Reform, Obama Solar & Wind Power, Obama Freeze on Oil & Gas Exploration,- all these would have become laws under the Democratic Parliamentary Congress before you knew what was happening.
Before the glow of his inauguration could fade, Leader Obama would have given another brilliant television address to inform America that he had already delivered the first part of the change he had promised. His supporters and the controlling Democratic Party would have proclaimed him the Deliverer and derided the Decider George W. Bush.
But Deliverer Obama would not need to share even a shred of blame when deficits skyrocketed, when American business stopped hiring or investing and when the American economy ground to a snail’s pace under the weight of huge deficits. Because the entire blame would fall on the veteran cabinet members who let down Leader Obama so badly. The vision was great, noble but the implementers screwed up.
This isn’t real but simply what we asked you to imagine. Unfortunately this is the reality for today’s India.
That is what happened in India post 2009
What we imagined above for America with Leader Obama actually happened in India with Leader Sonia Gandhi. She was the architect of the election victory in 2009. She renounced both power and the trappings of power. She announced a cabinet led by Prime Minister Manmohan Singh and Finance Minister Pranab Mukherjee, both proven veterans. Her message was that she was the simply dressed woman who devoted herself to the noble mission of removing the yoke of poverty from the necks of hundreds of millions of poor Indians.
Her advisers, her shadow cabinet as New York Times called them, came up with laudable, noble programs to guarantee a minimum wage for India’s rural poor without them having to work for it, programs to deliver a minimum levels of food or equivalent money to over 60% of India. This sounded great in 2009 when foreign capital was eager to come in to India.
Frankly, Mr. Obama just talked about reforming American society by using the American Treasury. Mrs. Sonia Gandhi actually implemented her reforms, noble social welfare reform goals that sought to reduce the misery of the poor. The trouble with this strategy was that India was borrowing the money, importing capital from foreign investors to deliver to India’s poor. This strategy worked as long as foreign capital kept pouring in attracted by India’s high growth, stable, democratic growth.
The consequences became obvious by late 2011. Inflation shot up, the economy slowed and foreign capital began leaving India. The result is what we see today, high structural inflation that is making the poor even poorer, sky high budget deficits in a country that does not collect taxes from over 70% of its citizens, a currency collapse accompanied by a stagflationary bust.
could have easily happened in the parliamentary America we imagined
earlier. It could also have happened on a smaller scale in the real America in 2009. But it didn’t. Why?
Why Not in America?
The first reason is the wisdom of America’s Founding Fathers. They had escaped from repressive but semi-democratic regimes to come to America. They knew what power an aggressive, ambitious government could wield especially with an election mandate. Therefore they designed the American System to protect Americans from such a determined Government. They made sure that passing new laws would be a tough and long drawn out affair with checks and balances.
In a parliamentary system, Leader Obama could have passed Obamacare in one day with Democratic control of Congress. Look how hard it was for President Obama to do so in the American system. That fight was long, arduous, and used up a tremendous amount of political capital. After that fight, the Obama Administration was too fatigued to pass its other cherished initiatives.
Just as important was the will of the American people. The silent American majority liked the American system just fine. They wanted to make it better but they had no desire to uproot it and get a new system. They were upset at what they saw as out of control spending, they were appalled at the massive rise in America’s debt that would be passed to their children. They revolted against what they saw as redistribution policies constructed to take their wealth away and give it to others.
So the silent majority rose up in loud, strident protest. Most societies protest and stop at that. But the American people got together and self-organized to form what became known as the Tea Party. We all know what happened after that. The November 2010 election buried the Spend & Change agenda and resuscitated the fiscal discipline objectives.
We sincerely feel that every one of us ought to thank the Tea Party for what they accomplished for all of us in 2009-2010. If you don’t agree, just look at what has happened to India. The Tea Party made sure that America did not take the path that India took.
But we cannot rest on our laurels. The demographic reality of America is slowly, inexorably
taking America towards a date when non-taxpayers become the clear majority in America. That will be an America in which the new majority will view the Government as a benevolent power that gives them benefits, entitlements and sometimes cold, hard cash. No Tea Party will arise in that America. And in the bust of the next bubble, what happened to India between 2009-2012 could happen to America then.
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