Charlie Stross, a rather more articulate fellow than me, has written the following post (thanks for the heads up, Diapadion) theorizing on why US and UK (he's from the UK) political systems, as well as others, seem not to be functioning to the best benefit of their constituents:
http://www.antipope.org/charlie/blog-static/2013/02/political-failure-modes-and-th.html
I don't entirely agree with his diagnosis of capitalist democracy's failures, but he raises some interesting issues. Still, if he's wrong that careerism, conservative (small c) political party dynamics, and influence from business interests are at the root of the fact that major democracies seem trapped in an era without creative and effective governance, where has he gone wrong?
I would suggest that part of the problem is simply that ideological options which used to exist, i.e. in the Labor party during its first sole government, and in the US before 1980, have been pushed off the Overton Window, so that necessary economic remedies just aren't on your average policy-maker's political radar, since they appear to have stopped learning about Keynesian economics and liquidity traps some time in the1980s or 1990s.
I would add, however,, that FINALLY someone's going full-bore Keynesian with the Japanese economy, which has had a few up points, but has, in general, been stuck in a cycle of inadequate demand, started by the collapse of a massive bubble in 1989 or so and perhaps, as Paul Krugman argues, reinforced by the massive demographic challenges the community faces now (i.e. a huge portion of the population is nearing and passing the age of 65, and so wishes to save for retirement, rather than consume, leading to a long-term deficit of consumption compared to the desire to invest). All I'm saying is that, since Japan has been in a damaging cycle of slight deflation (CPI very slightly down over the past five to ten years), Shinzo Abe's decision to commit the central bank to buying enough assets to FORCE the inflation rate up to 2% will not only increase Japanese competitiveness by devaluing their currency, but may motivate people previously holding their money in safe places (why invest in production if no one's buying and the money will be worth more in a year if you just sit on it!) to invest in production. It's pretty close to exactly what Professor Krugman has been calling for for the last couple of years, and constitutes a real-world test of modern Keynesian economic remedies for the real-world economic slump, especially as compared with the contrasting, and unpleasant, austerity economics which seems so inadequate all over the rest of the first world (I would consider the US something of a middle-way, at least compared with Europe and the UK).
So we may get to see who is right, and who is wrong, and, at the very least, it seems unlikely Abe can do much worse than his predecessors :}
Oh, and also: the White House has ruled out raising the age of Medicare eligibility in present negotiations. Yipee! Because that was a horrible idea that would cause much human suffering and cost Americans a lot of money. Good on Obama and his press secretary for knowing where to hold the line to maintain a coalition:http://tpmdc.talkingpointsmemo.com/2013/02/white-house-medicare-eligibility-age.php?ref=fpb
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