The US needs to reform its economic and political system

The U.S. is going through a very tough time, now referred to as the second "Gilded Age" by American scholars, with the characteristics of an extremely unfair distribution of social wealth. The average American is dissatisfied by the widening income gap between the rich and the poor.

During the George W. Bush years, we can see that due to the implementation of deregulatory measures introduced by the government, the then major corporations uniting with the conservatives occupied a large amount of public resources. The then U.S. government was unable to deal with public issues because the so-called welfare state had become an institution that catered to the wealthy one percent.

The other major problem was the rapid increase of Hispanics, African-Americans, Asian Americans and other racial minorities, which brought about great challenges to the nation's cultural identity. Statistics show that the population of Hispanics increased by 15.2 million, accounting for almost half of the nation's population growth between 2000 and 2010. It is predicted that racial minorities may become the majority of the U.S. population by 2050, making up 54.2 percent of the total population.

Since taking office in 2008, Barack Obama has taken a series of measures to develop the country's high-end manufacturing industry and abolish preferential tax policies for the rich, which is useful for America, but fundamental problems remain.

To truly lead the United States out of crisis, the Obama administration must work out practical strategies to reform the current economic and political system.

Looking back through history, the United States experienced five reform practices in over 200 years, which made the nation become a so called "Beautiful Country" (the Chinese translation for America is 美国, meaning beautiful country): the Civil Service reform movement from 1865 to 1883; Progressive Movement from 1890 to 1920; Roosevelt's New Deal in the 1930s which accelerated improvements in the social security system; the Civil Rights Movement and The Great Society Construction in 1960s, aiming at promoting social equality and eradicating poverty; and reforms to punish corruption in U.S. President Jimmy Carter's tenure.

However, these reforms didn't address the core problem. Democracy and capitalism are the two main characteristics of the United States. The marriage between them had gradually evolved into a spoiled system, which needs to be reformed.

"We have to find a way to make the aspects of capitalism that serve wealthier people serve poorer people as well," Microsoft's Chairman Bill Gates told a session of the World Economic Forum annual meeting in the aftermath of the financial crisis.

We don't know whether such a new notion of "creative capitalism," will solve America's problems, however it can indeed open up a new direction of thinking for the U.S. government.

The author is a researcher at Shanghai Jiao Tong University.

The article was translated by Ma Yujia. The original unabridged version was published in Chinese.

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