SalemNews.com, Salem, MA

November 21, 2013

Watson: We can design the economy we need

Brian T. Watson
The Salem News

---- — Whether you are a Republican or a Democrat, a liberal or a conservative, employed or unemployed, wealthy or poor, or fit into no neat category — but are simply American — I’ll bet you are feeling the lack of solid ground under the structures and relationships and dynamics that we call “the economy” today.

Regardless of how any one of us is doing personally, we are fully aware of and affected by the changes and disruptions to many of the features of our economy that once were stable, reliable and effective.

Between 1945 and 1980, not all was right with American life — for example, there were major civil rights problems, homophobia, sexism, political strife and less openness generally — but there were certain important economic relationships and constants that could be counted on.

Among those constants were: domestic manufacturing and industry occupied a large percentage of the economy; a great proportion of jobs paid satisfactory wages and benefits; families could be raised on one income; mostly, economic growth and expansion of economic opportunity, and therefore upward mobility, were reliable; income and wealth inequality were not dramatic; and lastly, consumer activity propelled roughly 70 percent of the economy year after year.

Politically, there were important constants, too, that are quite different from today’s practices. In the 35-year postwar period, there weren’t the supersized roles now played by lobbyists, PACs, cable TV, visual media, the many on-line social and communications platforms, computer data capabilities generally and, lastly, staggering amounts of money.

Whether we applaud or lament the changes, the point is that they are real, and they have had enormous consequences.

Much of the anxiety that Americans are feeling regarding both our economics and our politics stems from our recognition that — more than in the past — we may have less ability to control and shape repairs to those arenas.

Politically, the playing field is whipsawed by special interests with huge money. And the never-ending Web and multimedia-driven drama mill — which we used to call “news” — appealing to and feeding the ever-shorter attention spans of too many Americans, crowds out the kind of serious, detailed, careful politics that we need. Finally, too much of politics has become war, characterized by fundamentalisms, lack of honor, a constant search for single-group advantage and an inability to compromise.

Economically, we are contending with new realities — 40 years in the making — that are mostly global and disruptive and that may (I think will) require responses from us that are new in fundamental ways. For example, advanced technologies, computer power, greater efficiencies and robotics are continually eliminating more jobs than they create. Perhaps jobs need to be 20 or 30 hours per week, as a way to spread the available work around.

Although wages should be increased, worker pay may never reach levels sufficient to underwrite the sort of upward mobility and acquisition of lifestyles of the past.

Here, it is also appropriate to note that, ultimately, executive salaries of $2 million or $10 million (or more) annually may not be wise or sustainable. With dangerous and growing wealth inequalities, resource scarcities, and global poverty and unemployment, issues of wealth distribution and worker exploitation will come increasingly under scrutiny.

The price of material goods has been too low, maintained there by the factors of globalization. That has seduced all of us into a standard of living that is unsustainable — both financially and environmentally.

Nonetheless, we can no longer purchase enough stuff to generate 70 percent of the economy’s business. This is the biggest challenge. Who is designing an economy that can operate sustainably with consumers propelling, say, 30 percent of it?

Now, all is not bleak. With a more aggressive, foresighted, public-private partnership, I think that we could organize and plan adjustments to how our economy works, what goods it produces, how it becomes more ecologically sustainable, and how it meshes with necessarily more modest lifestyles.

Of course, the economy is now global, and America’s efforts will have to bear relationships to other nations of the world.

I believe that it is possible for the bipartisan Murray-Ryan budget committee to make a start at addressing these issues. We can shift government expenditures from areas where they are wasted or under-utilized to areas where they can better stimulate new enterprises and employment. That will entail some cuts, but there are also many areas where new revenue can and should fairly be raised. Although we want to achieve debt reduction long-term, we should understand that some investment spending now is required to begin to alter the economy and also to generate revenue later. We should focus less on the size of government and more on where its spending is aimed, and how the economy can be helped and transformed with new government-private sector initiatives.

If we can understand the long-developing trends that characterize today’s economy and today’s politics, we will be empowered to respond to them and to take the steps that make both the economy and our politics serve us better.

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Brian T. Watson is a Salem News columnist. Contact him at btwatson20@gmail.com.