I’m hoping that the conference I participated in last Thursday at the Henry George Birthplace in Philadelphia is available in webcast form soon. The breadth and novelty of many of the ideas unveiled and batted about at the session would have, I think, pleased George himself – a late 19th century analyst who is one of the great figures in American political economy, and who has much to teach us about our leading economic problems today.
Less edifying, however, was the discussion about where the economy actually does stand today. That’s worth exploring because, at least in my view, much of the handwringing that seemed to be the majority view in the room stems from serious misconceptions that paradoxically have been major obstacles to urgently needed reform, not spurs.
The issue was joined when talk turned to the question of why even the best ideas advanced in recent years for curing what ails the American economy have made so little headway. According to many of the participants and most of the small but articulate audience we attracted, the answer is obvious: powerful, moneyed interests control American politics and policy, and they’re determined to preserve a status quo working beautifully for them. Yours truly disagreed.
Not because I believe the economy is healthy and improving. Far from it. And not because I doubt the political power wielded by the wealthy. What I did object to was the claim that the nation’s oligarchs are blocking demands for change that are being voiced loudly by that huge majority of the public that’s been driven to the edge of desperation. In fact, I stated, the overwhelming share of the public is reasonably happy with their current circumstances, and displays no interest whatever in overturning the established order, or even in major overhaul, because this level of content is entirely understandable.
After all, the vast majority of Americans who are in the market for work are gainfully employed, their inflation-adjusted wages and broader earnings keep staying ahead of many living costs, and an even greater majority of the populace is consuming goods and services at historically respectable levels. They’re obviously not ecstatic about the state of the nation, but every major survey we have shows that their levels of confidence in the economy and in their own prospects are reasonably strong. And I’ve seen no evidence of historically strong support for the kinds of redistributionist policies clearly favored by our most of the Philadelphia attendees. Indeed, evidence has emerged that exactly the opposite is true – especially among black Americans.
Whatever anger the public in general is showing – as evidenced by support for “outsider” presidential candidates like Donald Trump and even for Vermont Democratic Senator Bernie Sanders – seems motivated largely by disgust with endless and ineffectual bickering, posturing, and double-talking in Washington and other levels of government that’s preventing institutions and networks they depend on in their daily lives (like schools and transportation infrastructure) from working acceptably – even as taxes seem to keep rising.
Unquestionably, many specific villains are targets of varying and fluctuating degrees of public ire – Wall Street, Big Business in general, and the broader “one percent,” government unions and bureaucrats, illegal immigrants. But none of this anger ever seems to coalesce into powerful and persistent calls to punish comprehensively or tightly shackle (or deport en masse) any of the culprits. If there’s anything close to a consensus response, it’s for better value for taxes paid, for less flagrant gaming of the political system by selfish interests, for more equitable enforcement of existing laws and regulations, for stronger incentives for economically productive and socially constructive behavior, and for less encouragement, deliberate or not, of their pathological evil twins.
None of these public attitudes, though, refutes the notion that the American economy is in deep trouble. But they are sending a powerful message that all reformers urgently need to hear and internalize thoroughly: These woes are anything but obvious in the sense of that “one-third of a nation ill-housed, ill-clad, ill-nourished” scale so movingly described by former President Franklin D. Roosevelt in his second inaugural address, during the worst economic catastrophe ever experienced by Americans. Instead, they’re insidious, churning deep beneath a surface kept tranquil by massive entitlement and other welfare state spending, as well as by the greatest flood of cheap credit unleashed in human history.
As a result, the main political barriers to reform are much more powerful than the policies and practices aimed expressly at protecting plutocrat privileges. They’re the measures that seek to calm those economic waters that can be seen, and to project an image of muddling through even as the currents of genuine wealth-creation continue weakening.
Reform forces can’t be legitimately blamed for feeling intense frustration at how well these can-kicking approaches have worked, and at how fiendishly they complicate the task of justifying wholly new economic strategies. But they also can’t keep crying wolf despite all the contrary evidence instead of pressing the more sophisticated case for an economic course correction that circumstances do justify. That’s a formula for squandering precious credibility – and for getting mired in illusions of their own.