What’s the New American Idea?

The Fourth of July should be less about celebrating revolution and more about promoting change.

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The United States of America celebrates its 233rd birthday this year, while its leaders try to refashion the “idea of America” for an increasingly complex and unpredictable world. The White House is burning the midnight oil deliberating on the extent to which American foreign policy should move toward national interests or national values, realism or idealism, Bush 41 or Woodrow Wilson.

Redefining U.S. foreign policy begins with change at home. It begins with revitalizing America’s social contract, those public and private structures that promote economic security and opportunity for all its citizens.

From the historic struggles for racial equality to the current state of the American economy and politics, it is fair to say that America has not lived up to its promise. The election of Barack Obama as the 44th president of the United States may have renewed the American spirit, but the emergence of a charismatic and visionary African-American leader does not render the promise fulfilled.

“We hold these truths to be self evident that all men are created equal …” Elegant words aside, the 1776 idea of America gained currency with the ability of the state to meet the basic economic and security needs of its citizens. Originally, these needs were achieved through what Alexis de Tocqueville called America’s two horrors of “Negro slavery” and the gradual extermination of Native Americans, completely undermining the legitimate claim of equality. Marked by principles of laissez-faire economics, this founding phase of the American idea eventually led to the economic collapse of the 1930s.

In response to this crisis, the Franklin D. Roosevelt administration came up with the New Deal. Based largely in Keynesian economics, this policy recognized that government had to get involved if capitalism was to be saved from itself. A majority of Americans had come to believe that strong government regulation and an economic safety net not only ensured that the nation’s basic economic needs were met, but that it would help our democracy survive.

But America has spent the last 40 years espousing, implementing and then exporting the pre-1930s idea of free-market fundamentalism and a fervent belief that rational markets can solve all our economic problems.

One of the most ideologically rigid supporters of this free market recently conceded that it may have been simply a myth. As Justin Fox articulates in his recent book, The Myth of the Rational Market, former Federal Reserve Chairman Alan Greenspan acknowledged before the U.S. Congress in October 2008 that free-market fundamentalism had collapsed.

This failure has left President Obama with an unfortunate set of choices, among which he must oversee the fire sale of the Hummer brand to a China-based firm, the selling of AIG’s global New York City headquarters to a South Korean real estate investor group and the Chrysler brand to the Europeans. He must assure the international community, and more importantly his fellow citizens, that America’s economic crisis—the cause of the global economic crisis—is on the way to some resolution.

As America’s economy comes to a crawl, we are forced to critically examine other aspects of our power. Reliance on “hard power” has led to the militarization of our foreign policy, while “soft power” (diplomacy, foreign aid, cultural influences) has been misused or neglected. Some combination of the two with an eye toward a strategic redefinition of U.S. foreign policy is the “smart” way to go, some argue. Wielding “smart power” is the policy de jour. Hard, soft, smart, whatever it is called, any new premise should be rooted in restoring the opportunities and abilities of Americans to productively contribute to shaping the new world order.  

Inaction drowned in passivity is not what makes America great. Citizen engagement beyond electoral cycles for drastically needed policy reforms in education, health care and economic access is not an option, but a requisite.