HONG KONG, June 8, 2011 - "The economic scene in our country is anemic at best," declared former US Senator Evan Bayh (Democrat, Indiana), in a talk here at the Asia Society Hong Kong Center.
Bayh's speech looked at the state of the American economy, and the critical role it plays in the lead-up to the November 2012 presidential election.
The onetime politician sketched a largely grim scenario, one in which America is still recovering from the economic crisis with an unemployment hovering above 9 percent, real incomes that have been stagnant for the past 20 years and food, energy, health care and higher education costs continuing to rise faster than the rate of inflation.
According to Bayh, the current situation has exacerbated the so-called "middle-class squeeze" where increases in wages have failed to keep up with inflation. He pointed out that a family's most valuable asset — its home — had declined in value by over a third in the past few years.
"If you add all of this together," Bayh concluded, "it is a very difficult political scene right now in the United States."
Americans, he said, became extremely over-levered during the height of the boom, with the debt to family ratio topping 132 percent. Although this has since declined to 122 percent, he stressed that the debt and deficit problems would be factors driving American politics, and acknowledged that there was no "politically popular way to deal with a deficit the size of the one we now have."
Bayh left office in January 2011 and is a vocal critic of the rise of strident partisanship and dwindling social interaction between senators of opposing parties. He pointed out that the current political system promoted party unity at the expense of bipartisan consensus. This, Bayh contested, had resulted in increasingly low public confidence in the government.
The former senator predicted that unless there is some kind of wide-scale, international economic catastrophe forces these parties to collaborate, partisanship was likely to continue. However, Bayh — who spearheaded the creation of the Third Way, an organization focused on common-sense legislative solutions to issues that might otherwise remain bogged down in political turf wars — said that despite leaving the Senate, he would continue to serve his country, without elaborating further.
Reported by Rachita Mehrotra, Asia Society Hong Kong Center