The Identification and Analysis of the Economic, Political and Social Issues Facing the US - Essay Example

? The identification and analysis of the economic, political and social issues facing the United s BY YOU YOUR SCHOOL INFO HERE HERE The identification and analysis of the economic, political and social issues facing the United States Introduction Historically, the United States has maintained a relatively stable economy, a mixed economy in which both direct and indirect governmental intervention served to maintain market equilibrium and ensure economic solidity. However, in recent years, the United States has undergone significant changes in the economic, political and social environments that have changed the foundation of a free market economy to one that has become reliant on governmental funding and legislative assistance as a means of ensuring growth in the public and private sector. A combination of reduced market entry barriers for a multitude of different industries has increased competition in a country that is highly saturated with consumer product competition. Renewed reliance on foreign imports to sustain quality of life from emerging or developing countries such as China has, today, begun to impact supply and demand in the United States. In addition, with many foreign nations changing their fiscal policies to ensure economic stability during an ongoing international recessionary environment, currency valuation has become unpredictable, thus impacting profitability for companies that have made considerable profit producing products in countries where labour costs are low. Furthermore, political actors in the U.S. government continue to divest financial resources into the free market environment to assist large banking and lending facilities, as well as a variety of corporate industries, through bailouts and short-term tax extensions. All of these factors, and many more, have raised the consumer price index and increased inflation, thus diminishing real consumer incomes. This report identifies and analyses all of the economic, political and social issues facing the United States and offers recommendations for increasing economic growth in the country. The political and economic factors The United States is considered a federal, constitutional democracy. Weingast (1997) reinforces that stable democracies can only be sustained when values, principles and beliefs are shared by all citizens of the nation, a phenomenon referred to as civic culture. “If there is no consensus within a society, there is little potentiality for peaceful resolution of political differences” (Weingast 1997, p.248). According to Barrett (2011) there are a series of distinct constructs that must exist in order to be a stable and thriving democracy, including equality, accountability, fairness, transparency and trust. Why is this necessarily relevant to assessing the current condition of the United States? In 2008, President Barack Obama and the authorities of Congress committed billions of dollars to banking and lending facilities and a variety of corporate entities that were failing due to a surplus of economic problems stemming from the mortgage crisis, inflation, market speculators, and diminished consumer incomes that were negatively impacting revenue growth in a variety of industries servicing consumer products. Corporations, consumers and market investors alike have grown inter-dependent on governmental intervention and commitment of taxpayer capital to continue to bailout businesses and financial industries. Where it was once considered unmentionable for government to take such a critical and active role in the free market economy, today consumers and business leaders are placing considerable pressure on governmental actors to develop routine and synchronized financial rescues in order to guarantee short-term economic stability in the country. This change in social and political attitudes seems to have now created a somewhat unified set of cultural values related to government involvement in business, industry and investment that has changed the dynamics of the traditional constitutional democracy. The United States is quickly transforming into a consociationalism, a type of government structure that maintains very close ties with corporatism and where repair of social fragmentation becomes a priority in a deeply-divided nation (O’Leary 2005). In the United States, the Republican party believes in limited government and the sanctity of a free market economy. In opposite accord, the Democratic party believes more in Socialism, which focuses on redistribution of wealth between classes in a way that is fair and equal in such distributions. Herein lays the difficulty as it pertains to business stability and internationalisation: The current majority party in the United States, the Democratic party, continues to make risky decisions regarding foreign investment, international banking bailouts, and cost controls against the consumer price index. According to Markey (1999, p.151), leaders cannot use rhetoric or arguments of “balance of power logic” in order to achieve public support for risky foreign investments. While the current dominant party in the United States, the Democratic party, continues to reinforce a basket of socialist-based values to justify using taxpayer revenues to ensure financial stability with foreign banking and lending institutions, it is not necessarily gaining majority public support during a time period where consumer incomes and private investment are being affected by recurrent business and market failures that continue to plague the U.S. economy despite ongoing fiscal interventions. Using the argument that such governmental investments will, ultimately, reallocate wealth in a method that is akin to Socialism goes against the principles widely held by the Republican party and its followers. Those who prescribe to Republican values reject all dimensions of Socialism, following the doctrine of Adam Smith regarding the acceptability of corporate wealth attainment for privileged or fortunate higher-resource citizens. All of these differing values between party affiliates dramatically impact the scope and purpose of legislative creation that is designed to facilitate equilibrium in a variety of markets. Republican party members within the legislative branch of government continue to attempt to rally support for rejecting legislation proposed by the Democratic party holding the executive branch authority, oftentimes striking down spending packages that are, ideologically, designed to foster a more fair and balanced redistribution of wealth. All of these activities are highly promoted in the United States in a variety of media, thus creating mistrust and uncertainty about the sanctity and trust of governmental actors and their ability to create effective legislation that will stabilize a struggling national economy. “Political actors must adhere closely to the principles which guide democratic philosophy and avoid using covert or otherwise self-serving agenda to serve the needs of influential elitists or secure their own sovereignty and authority by manipulating legal terminology to their own advantage” (Montero 1998, p.120). This appears to be what is occurring politically in the United States, Democratic elitist factions in government using manipulative legal terminology to camouflage the genuine intention of various international financial bailouts and risky foreign investments being construed. In reality, as identified by Schedler (2002) when elitist pretences exist in government, political actors will initially agree to liberalise based on civil or corporate pressures, but later create democratic processes under the smokescreen of securing the property rights of government. In 2008 and 2009, the government of the United States invested billions of dollars in stock security procurement, making the U.S. government prominent investors in a variety of different corporations and financial institutions. Over the last several years, these investments have only inched forward in valuation or declined considerably, thus leaving the government with questionable and unpredictable asset accumulations. It would appear, largely, to be an elitist mentality of securing property rights and investment stability for the government that continues to drive the montage of risky foreign and domestic investments backed by Federal finance issued by the taxpaying people of the United States. It should be identified, then, that the United States political environment is one that is highly divisive and where uncertainty over corporate stability and governmental morality and ethics is questionable and speculative. Numerous quantitative easing packages and restructured fiscal policies have met with very limited or zero return on investment, further adding debt burden to the government and the people of the United States. Compiled with instability in the consumer and investment markets in the country, businesses leaders remain unsure of whether to consider foreign direct investment for profit gain or whether to concentrate labour and financial capital into promoting domestic growth in industry. The chaotic and disordered political environment is certainly a detriment for businesses seeking internationalisation as there is little or no certainty about the potentiality of governmental actors to provide economic or legislative support to promote strategic growth. This is highly relevant for businesses in a national environment where public support seems to be waning for governmental involvement in corporate and consumer finance due to multitudes of fiscal failures that have been proven legislative catastrophes. The social environment The political environment in a state of disarray is highly relevant to what is driving social attitudes about the sanctity of government and the long-term opportunities for business development and expansion. Grieves (2010, p.8) indicates that change is “a negotiated order”, where consensus should be considered a critical dimension in a democracy in order to gain public support for legislation creation designed to support business growth. Fournier (1998) clearly iterates that it is the consumer that is the ultimate gatekeeper that will determine whether a business achieves positive brand reputation on the market and the level of control in the market that will be held by the corporate product producer. This is one of the most important fundamentals impacting the social environment in the United States. Businesses in this country consistently reinforce and publicise the importance of establishing customer satisfaction as a means of maintaining competitive edge and meeting profit expectations (Buttle 2008; Ferris et al. 2010). None of these communications are obscured from public view due to the multitude of real-time, instant media coverage of all activities occurring in business and government. Consumers in the United States appear to understand fully that they have considerable buying power in the market as it relates to Michael Porter’s Five Forces Model, thus brand defection is a routine and commonplace consumer action in the United States. Consumers are only motivated to remain loyal to a particular marketed brand when it provides opportunities for self-expansion and excels in providing superior customer satisfaction and service (Aron et al. 1992; Muniz and O’Guinn 2001). Thus, there are psychological dimensions of consumer behaviour that greatly impacts the stability of businesses and the ability of corporate leaders to predict profit margins at a time period in history where consumers are becoming cognizant of their buyer power and using this gain to their benefit. Consumers are exerting enormous pressures on businesses and government in the United States to promote ethical and moral business behaviour under models of corporate social responsibility. Political actors in the country are operating under the conception of meta-ethical relativism, believing that citizens in society should tolerate the behaviour of others even when there is stark disagreement over the behaviour’s moral and ethical constructs (Swoyer 2003; Blackford 2010). Governmental actors carry the belief that when it comes to legislation and risk management in government, citizens should embrace a level of power distance, the most noticeable element of social inequality occurring in the United States today. However, empowerment literature and media coverage on social autonomy continues to strengthen the consumer belief that they are integral components to the legislative process and should not be segregated from political decision-making related to business investment and support. Traditionally, the United States is not a culture that tolerates considerable power distance and does not tolerate inequality (Leng and Bothelo 2010). This new evolution in consumer power growth and knowledge of this reality actually seems to increase the intolerance for power distance stemming from corporations and political actors, thus enhancing the noticeable division occurring at multiple levels within the United States. Recommendations for economic growth in the United States Initially, analysis of the different economic, political and social factors in the United States was expected to be congruent in an environment where, ideologically, unison and civil consensus has been the driving force behind legislation creation designed to foster success in domestic and international business. Much of the analysis of identified factors impacting business and governmental longevity had to be conducted observationally, qualitatively, to determine the legitimacy of the relationship between consumers, businesses and the executive and legislative branches of U.S. government. Theoretically and ideologically, the United States promotes itself as a free market economy, one with balanced priorities for economic stability, that moves against the foundations of pro-democratic strategy. However, the underlying confliction between social values and the shrouded intentions of an elitist government pertaining to business and fiscal policy formation is quite noticeable and it strongly impacts the potentiality of business development and growth related to internationalisation intentions. Because of this confliction and division, it makes it increasingly difficult to make sufficient recommendations regarding how to strengthen the economy of the United States to make it more favourable for domestic and international business growth. When consumers witness or perceive immoral or unethical behaviours stemming from corporate leaders or a variety of political actors, their brand loyalty and commitment to an organisation is diminished. With saturated competition in this country from a multitude of different product producers, it only exacerbates the problem of establishing revenue growth in vital consumer markets. At the same time, political actors throughout the different branches of government continue to create new fiscal policies that do not meet with long-term economic growth or national fiscal security. Compile this problem with diminishing consumer incomes and higher unemployment rates, and it becomes clear that the United States is currently a topsy-turvy nation related to fiscal stability for business and gaining consensus from citizens associated with corporate and fiscal policy formation. Critics of the current business legislation being constructed by the U.S. government believe that the policies that support international (and domestic) business is ineffective, based on a proven track record of fiscal policy failures in the U.S. The main criticism is that trade and investment occurring between the United States and less fiscally-responsible nations will compromise domestic economic growth (Ahearn and Fergusson 2010). Why is this? The foreign nations benefitting from questionable fiscal bailouts of international organisations are gaining taxpayer funds that could be better allocated to promote domestic business development and expansion. Instead, these funds are short-term bandages to a struggling international economic system. Furthermore, corporations that benefit from short-term financial bailouts gain opportunities to improve their own investment holdings during this brief period of stabilisation, thus increasing human capital advantage over domestic U.S. companies that must compete with these entities under principles of the World Trade Organisation. In order to improve economic stability, there needs to be more legitimized consensus between civic culture, political actors and corporate leadership; something not easily achieved in a very divided nation regarding moral relativism principles and acceptability of power distance. Business leaders are fearful at this particular time in making risky foreign direct investment strategies with concerns over fluctuating and unpredictable international currency exchange rates and lack of successful support strategies stemming from the U.S. legislative and executive branches. At the same time, these businesses have legitimate concerns over brand defection by disgruntled, morally-driven consumers that fully understand the level of control they logically and legitimately hold in the consumer sales marketplaces that dramatically impacts the ability to procure needed revenues for business expansion domestically and internationally. It is recommended that corporate leaders begin exerting more pressure on government to remove their compounded investments in the stock market and corporate affairs in order to regain control over internationalisation strategy development. Under this newly-developed consociationalism with strong ties to corporatism, businesses will be hard-pressed to guarantee their groups’ representation by political actors without publicising their concerns over impractical and unsuccessful fiscal stimulus development. There seems to be a growing mistrust with consumers over the viability of business leadership that is compounded by the publicised media reports of inter-dependency between government and corporate actors. It was previously identified by Barrett (2011) that in order for there to be a stable democracy, there must be trust, accountability and fairness promoted by political actors. Corporate leaders maintain considerable power resources not held by consumers as it pertains to exerting influence on government officials in multiple branches of the U.S. government. Corporate leaders that are being negatively impacted by irresponsible domestic and international fiscal policy should begin publicly demanding more transparency in government in order to rally support from consumers. By illustrating legitimate corporate social responsibility in favour of sustaining the needs of consumers and business, it will remove some of the growing, thick layers of power distance currently maintained between political actors and the civic culture in the country. If business leaders approach this growing problem with elitist mentality that serves, first and foremost, the interests of the fiscal stability of the U.S. government by publicising corporate concerns over multiple multi-media channels, it will re-instil trust in the corporate sector that is currently diminished through consumer ethical assessment and awareness of consumer power to control revenue production in the corporate sector. Since political actors in government are not clearly identifying a priority goal of establishing consumer security, corporate actors can appeal to the psycho-social attributes of consumers by taking a more visible and active role in pressuring and coercing government policy regarding business and international fiscal policies. Corporate leaders taking a role as advocates for improving legislative development would seem to maintain the most viable strategies in a highly divided nation and one that continues to add risk every time the government intervenes to stabilize individual businesses or bailout international organisations. Power sharing between government, business and the people of the United States must be a priority in order to regain economic stability in the nation. The problem is too widespread to micro-analyse and seems to actually stem from much broader social disparity in the nation where consensus is next to impossible to achieve successfully. 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