Atul Singh observes that a deeply divided American society is deadlocked over different visions for the future in an uncertain world and, regardless of the result of the election, the battle to define a new American destiny shall continue for another few years.

A century ago, Britain was deeply divided over two visions of the future.  The Conservatives wanted the rights of the property holders, the Dukes and other members of the land owning aristocracy, to remain sovereign as in the past.  The Liberals wanted redistribution of wealth through raised taxes and a social welfare program.  Other European countries also witnessed increased internal tensions and, at the heart of the strife, were two visions of the future.  One vision envisaged the continuation of the free market model of the 19^th century that had led to an unprecedented increase in wealth and power for Western Europe.  The alternative vision envisaged the mitigation of the excesses of the free market that had been chronicled evocatively by writers such as Dickens through increased democratization and redistribution.  America is facing a similar battle today and the choices are messy, painful and protracted.

There are two Americas, rich and poor

When America triumphed in the cold war, little did it know that its victory would be Pyrrhic.  Two Americas would emerge because of the expansion of the free market to hitherto communist or socialist countries.  Americans who owned capital could now invest in opportunities globally.  In practical terms, this meant that a CEO could decide to shift factories from Michigan with its pesky unions to Guangdong with its willing workers far more easily than before.  Any CEO has a fiduciary duty to his shareholders to maximize profits and moving manufacturing to a cheaper place like Guangdong is therefore the most rational choice.  In a global market, the price of labor has dropped because there has been an increase in its supply.  You can now get the Chinese to make stuff and the Indians to answer the phones.  This means that Americans pay less for goods and services but it also means that there are fewer jobs to go around.  Also, the jobs that are available pay less and are less secure.

Those with capital can deploy it globally.  This means that there are more rewards for risk takers but it also means that there are more risks to the system.  Boom and bust are an inextricable part of any market and the ongoing global financial crisis is an example of a bust that was long overdue.  In February 2007, this writer was alarmed at the combination of fiscal and monetary stimuli in the US.  Soaring deficits and low interest rates over a protracted period are a generally a bad idea.  Over a decade and more, asset prices had increased, people felt richer, consumed more, took on more debt and, like the Dutch tulip mania, the bubble was bound to burst.  The collapse of the housing market and the near collapse of the financial system have inflicted deep scars on society.  Many have had their savings wiped out and others have seen pensions disappear.  People have lower net worth at a time of declining or stagnant incomes.  Even those with capital are not worth as much as before.

As long as the economy was growing, the deep economic inequality scarring American society was kept under wraps.  Now the festering wounds have opened up.  Obama wants redistribution and a more progressive tax system.  Romney believes that the economy can be stimulated by lowering taxes and allowing the private sector to use the extra capital more productively.  The young, the poor, the minorities and those who tend to favor the underdog support increased taxes.  The wealthier sections of society that tend to be white naturally disagree and do not want to pay for others.  This battle will rage on for a while but the only solution to the American fiscal problem is a combination of spending cuts and tax increases.  Getting to a solution will be an incredibly messy and protracted because of the interests and emotion involved.

There are two Americas, liberal and conservative

American television is polarized to the extreme.  Watching Fox News or MSNBC is an ordeal because everyone seems to be upset or outraged all the time.  Behind this drama lies a brutal reality that the country is increasingly divided between two social visions for the future.  According to one vision, people will go to church, value home and hearth, get married, raise happy families and stem the tide unleashed by the terrible cultural revolution of the swinging sixties.  The other vision sees a society where people will have more autonomy to make choices in their private lives.  Gays, minorities and women will have a more prominent role in society.  Contraception and abortion will be widely available.  Women’s rights include the right to their bodies and they have a right to choose abortion as an option.

At a time when abortion is hardly much of an issue even in Catholic countries, it is quite extraordinary that it generates such heat in America.  Driving through America gives a clue as to why this is so.  This is a country dotted with churches.  The early immigrants who fled from Europe were often extreme Christians who wanted freedom of religion but also wanted to uphold their deep Christian values.  This contradiction runs through American society till today.  There is a commitment to freedom of religion.  Yet, for many, their lives revolve around faith, they want the laws to uphold their values and candidates have to wear their Christian beliefs on their sleeve to court the popular vote.  The coastal states that are increasingly more urban and diverse are in favor of a more secular state, support for abortion and even gay marriage.  The more rural Midwest and the Deep South have highly religious and feel threatened by the increased secularization of society.  They do not like the patronizing Ivy League elites or the sinful world of Hollywood.  They are fighting back and pop politicians such as Sarah Palin and Michelle Bachmann are poster children for the increasingly powerful religious elements in the Republican Party.  At the heart of the dispute are divergent views about religion, sex and family, and this divergence is only increasing.

The Republicans want more freedom for economic activity while the Democrats want more freedom for social choices.  This election will have a bearing on who sits in the Supreme Court.  Many judges are old and new ones are likely to be appointed.  The iconic judgment of Roe v Wade, which legalizes abortion, is at stake.

There are two Americas, white and not-white

With Obama’s election, race was not supposed to be an issue anymore.  It ignored something that those from the old world have known too well.  People are tribal.  They want their chief to be someone they can identify with.  Just as overwhelming numbers of African American and Hispanic voters will vote for Obama because they see him as one of them, white voters are insecure about a president who is not quite one of them.

At a time of economic peril, a large section of the white population voted for Obama as a reaction to the excesses of the Bush years.  Four years of hardship and unmet expectations have triggered latent insecurity about a black President who has been excoriated as a socialist and denounced as a calamity to the country.  The vitriol is reflective of the fact that many in the majority white community feel threatened by the increasing population and power of minorities in the country.  Earlier in the campaign, a key Romney supporter, John Sununu, declared that Colin Powell supported Obama because both belonged to the same race.  Clearly, American politics is far from post-racial and race continues to be a key element in elections.

Most people in America are open-minded.  Unlike nations in Europe or Asia, America is a country of immigrants.  A black man and a Mormon are battling to be president.  Yet, some minorities are more obvious than others, and race and gender tend to be the most obvious differences between people notice.  A section of the white population resents what it sees as black entitlement and dependence on welfare.  It believes that the black community has refused to move on from the shadows of its admittedly terrible past.  The specter of the angry black man seeking vengeance is embedded deep in the subconscious.  Others in the white majority agonize over the flooding of the country by Latinos illegally crossing the border.  Still others are uncomfortable about the large numbers of Asians in colleges and universities.  For the white working class that is struggling to find jobs, the specter of minority takeover is an alarming one and, in troubled times, Romney as president is more reassuring than Obama.

Race will continue to be a key factor in the years to come as America’s demography changes and power gradually changes hands.  The Irish, the Mormons and the Jews are increasingly part of the mainstream now.  It will take a while for minorities from other races to get there and until then any minority candidate will create unease.

Reality is messy, the devil lies in the details

The divisions in America crisscross each other.  Those who might want lower taxes do not necessarily oppose gay marriage.  Those who oppose abortion might be minorities such as the Hispanics.  Both parties are coalitions of widely disparate groups that have come together because one party is more palatable to them because of its stand on the issue they most care about.  Many urban professionals in cities like New York wish there were more people like Michael Bloomberg, New York’s highly acclaimed mayor who combines fiscal prudence with social liberalism.  He is not entirely happy with either side but Hurricane Sandy influenced him to support Obama.

The world is increasingly complex and the realities are messy.  One hurricane put climate change back on the map.  The sacred cows of both parties will have to be slaughtered.  Just as the Catholic Church held on to its belief in a geocentric universe, the religious right in the Republican Party continues to believe that climate change is a myth.  It still opposes the idea of evolution and is paranoiac about stem cell research.  Many who vote Republican are uncomfortable with the dogma and superstition that deeply influence the party.  Many Democrats cling on to their fantasies too.  They believe that stronger unions or unwieldy regulation will help them tame free market excesses.  They have yet to wake up to the reality that the world as they knew it is dead.  Unions chased jobs out of Detroit and led to the establishment of an automobile industry in the Deep South.  The Dodd-Frank Act to regulate the financial industry is a bloated monstrosity of 848 pages that is poorly conceived, terribly drafted and extraordinarily muddled.  It is clearly not going to work.

No party has a solution for America’s problems.  Both candidates have had to twist and turn the facts in their quest for power.  Both of them have had to play to their base.  Romney has been particularly cavalier with the facts and has gone from being a moderate who supported abortion to a conservative who opposes it.  Both candidates have been bashing China and Romney has been highly irresponsible about it.  If Obama wins, America will attempt to tamper its festering inequality through a mix of redistribution and regulation.  If Romney wins, America will attempt to unleash the markets for growth and accept inequality as a natural consequence.  Regardless of who wins, the battle between the two Americas will continue.  In a changing world, America needs to define its destiny yet again.  Expect a wild ride ahead.