Opinion: Daily Journal

Seeking protection, rather than competition

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Americans are upset. Some are just mildly unhappy, others seem miserable, many are plain mad. A NBC News/Wall Street Journal poll reports that more than half have believed the country is “on the wrong track” in every month since February 2005. A Pew survey reveals most of us have been “dissatisfied” with the way things are going ever since January 2004. Several polls show that large majorities of Americans are currently “angry” at the federal government, the political parties, and just the way things are in general.

But why? This clearly isn’t episodic, caused merely by the election of Donald Trump or concern about war breaking out on the Korean peninsula. It is deep and enduring, the result of two prominent features of American life today.

The first is the lack of economic growth. For a record 10th consecutive year, in 2016 the United States experienced an increase of less than 3 percent in gross domestic product. In the 1950s and 1960s, 6 percent growth was not unusual; during the second half of the 1990s, 4 percent was normal. Now policymakers and economists seem satisfied with 2 percent.

Growth is critical because it will stop us from squabbling. If the pie isn’t expanding, we often fight with each other over the size of our slices. Americans always will engage in philosophical debates over fiscal policy, but the distribution of economic resources must be positive-sum to prevent deeper conflict. We will be happier if we, or at least most of us, are better off than we were in the past.

Readers of this publication undoubtedly understand the policies needed to generate this level of growth. They include low taxes, few regulations, a skilled labor force, and a culture of innovation. Unfortunately, that list seems very different from the country’s recent economic strategy. Tax rates have stabilized, but for corporations, especially, they remain too high, companies and workers are tied in red tape, our education system is losing ground to global competitors, and few Americans feel comfortable starting their own businesses.

Many of these policies would help alleviate the second source of our anger: the feeling that we have lost control of our personal destinies. As recently as a decade or so ago, Americans believed that if they worked hard, made smart decisions, and persevered through life’s inevitable mishaps, they would be psychologically happy and financially prosperous. Today, there are growing doubts. According to Pew, around the turn of the millennium two-thirds of us disagreed with the statement “success in life is pretty much determined by forces outside our control.” By 2014 only 57 percent of us did. Gallup reports that in 2002, 77 percent of respondents were “satisfied” that Americans can “get ahead by working hard.” By 2014 the proportion had dropped to 54 percent.

Americans used to believe compensation largely was related to talent and work. You were rewarded for the value you added, not who you knew, what you looked like, or what you might have done in the distant past. We don’t seem to think any of that is true now.

As a result, Americans are eschewing risk and effort. We are led to believe the Internet economy is incredibly fluid and that anybody can be the next Steve Jobs or Jeff Bezos, but in 2016 the number of U.S. businesses started hit a 40-year low. Social mobility has slowed dramatically as well. The odds of children at 30 and 40 years old making more than their parents have decreased greatly from levels in the 1970s and 1980s. Regulation gives pause to those who wish to hire. We now seek protection rather than competition, leading those who are best suited to take advantage of an economy that rewards talent and industry to become what economist Tyler Cowen calls “the complacent class.”

Americans remain inherently optimistic. The proportion of us who believe the future will be better is greater than in most other rich countries. But we’ve lost much of our buoyancy. That should be a warning to whoever has political power. Voters in a sour mood will turn on you unless matters are reversed. The president pushed expectations into the stratosphere during the campaign. Formulating and implementing policies to reverse the underlying causes of our discontent will take time. The presidential election of 2020 is only 3 ½ years away. The 2018 midterms are even closer. It’s time to get to work.

Andy Taylor is a professor of political science at the School of International and Public Affairs at N.C. State University. He does not speak for the university.