Shared values, shared benefits

Americans once agreed broadly about how to grow the economy

March 13, 2011|By Andrew L. Yarrow

The fierce debates prompted by President Barack Obama's 2012 proposed budget, House Republican spending-cut proposals, and deficit commissions are all ultimately fights about how we achieve a growing economy and what successful growth looks like.

During the mid-20th century, the quest for economic growth and broad-based abundance to benefit all Americans united the country. Republicans and Democrats, business leaders and workers, liberals and conservatives agreed that it was in the nation's interest for business, government and labor to work together to achieve rapid economic growth that would boost production and profits and increase incomes for all Americans, making hardship and economic fears a thing of the past.

This consensus — that a mighty economy should provide better lives for all and be the responsibility of all — has gotten lost. We all still loosely believe in the virtues of economic growth. Both sides of the aisle call for higher growth. But we agree on neither how nor why we should pursue it. At a time of dyspeptic, dysfunctional partisanship, one might say: No surprise. We're bitterly divided about everything, so why should we agree on even fundamental economic goals?

One of the main questions dividing us is: Do we cut spending, period, or increase it for things like education to expand opportunity? In the 1950s and 1960s, pundits talked about "classless abundance for all." Reducing poverty, ensuring rising wages and expanding access to education were not contentious issues. The rich could get richer, but the poor and middle classes also could get richer. National economic success meant both.

Now, we are much more focused on squeezing the fruit hard for any drops of rising gross domestic product, even if they only fall into the mouths of the well-to-do. Implicitly, growth and abundance are not for "all" but rather for select niche populations such as shareholders and star performers.

Fifty years ago, most of the political spectrum also agreed on the ingredients to achieve growth: free, lightly regulated markets; sufficient savings together with high consumption; balanced budgets across the economic cycle; education and labor-market systems that provided pathways to opportunity; and enough government spending to provide necessary public goods such as education, research, and roads; maintain a basic safety net; and help accelerate growth.

Today, each of these ingredients has its passionate advocates and foes. "Regulation" is as toxic to some as freewheeling "casino capitalism" is to others. Consumption has become a moral issue. Debt is a four-letter word. Public investment is derided as wasteful spending. We all want our piece of the "safety net" when we need it, but many think that other people's benefits are ripe for cutting. And, since 2009, government "stimulus" has for many become a dirty word.

The mid-20th century recipe for growth has been discarded. If we go into the kitchen of economic policymaking these days, we're more likely to get into a food fight than to produce a satisfying meal.

We don't have to agree on every detail about the economy, economic policy or anything else. No one did in the mid-20th century, and life would be pretty dull if we did today. But we once were able to agree on some broad principles and believe that all players on team America had roles to play and deserved to share in the glory. If we really want growth and prosperity, we can't sideline some players and view the economy as an individual rather than team sport. Responsible government, business, investors and individuals all need to work together, and success means that everyone can share in the benefits.

As the conservative National Association of Manufacturers said in 1954, business, government and labor cooperation would allow Americans to "march arm-in-arm down the familiar American road which leads to greater abundance." It would serve us well to once again find broad, common ground over economic goals.

Andrew L. Yarrow, a public-policy professional, historian, and journalist, explores these issues in his new book, "Measuring America: How Economic Growth Came to Define American Greatness in the Late 20th Century." His e-mail is andrewyarrowcolumns@gmail.com.

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