As I constantly remind the readers of this blog, America has huge fiscal and economic problems which need to be addressed right away. In a recent post, “America’s Fourth Revolution,” I described the pessimistic view of the political scientist, James Piereson, that our polarized and dysfunctional political system will not be able to successfully confront our stagnant economy and massive debt and establish a pathway to recovery. The president of the American Enterprise Institute, Arthur Brooks, does see a way for this to happen as explained in his new book, “The Conservative Heart: how to build a fairer, happier and more prosperous America.” It is the Tea Party which could do this! Its “future relevance depends on whether it can shift from being a protest movement to becoming a social movement.”
According to Mr. Brooks there are four steps to making the transition from minority to majority and turning a protest movement into a broad-based social movement. They are:
Launch a rebellion
Declare majoritarian values
Claim the moral high ground
Unite the country behind an agenda
These were the steps taken by our own founding fathers over two hundred years ago and by the civil rights movement some fifty years ago. The Tea Party has already launched a rebellion against big government, taxes, spending, etc. Now it needs to take the second step of declaring its support for the majoritarian values of work, mobility and opportunity. The third step is to seize the moral high ground:
Too many Americans have been marginalized and left behind in recent years.
It is neither fair nor compassionate to content ourselves with an economic recovery that only accrues to top earners.
Obamacare is hurting too many people by forcing them out of full-time work and into part-time work.
Huge debt may require spending cuts that fall the hardest on the poor.
We need education reform, especially in big cities, because the welfare of poor kids is more important than job security for poor teachers.
The Tea Party should spend less time protesting big government and more time showing how conservative principles help the most vulnerable members of society!
Capitalism is under attack around the world as Greek socialists complain about their hard- hearted EU creditors, American liberals such as Bernie Sanders and Elizabeth Warren push the Democratic Party to the left, and Pope Francis compares the excesses of global capitalism to the “dung of the devil.” One of my favorite economic commentators is Arthur Brooks, President of the American Enterprise Institute. One of his books is “The Road to Freedom: How to Win the Fight for Free Enterprise,” which examines the most important economic issues facing the United States from a moral point of view. For example:
Getting the U.S. Economy Growing Again. Weak economic growth means the end of opportunity in America. Furthermore, weak growth disproportionately hurts those who most need new economic opportunities: the poor. One strategy says that the key to restarting economic growth is the state: more stimulus, more taxes, more borrowing. A second strategy says the source of economic growth is free enterprise: tax reform, less government regulation, policies that make it easier for entrepreneurs to succeed, and a smarter immigration policy.
Putting America Back to Work. Jobs are not just a source of money for Americans; they are a ticket to earned success. High unemployment is unfair because it robs people of their potential fulfillment. It is especially harmful to the poor and the young. The key to job creation is to get the economy growing faster.
Getting the United States Out of Debt. Unless the U.S. reduces deficits, it will have just three choices: steal from future generations, inflate the currency to lower the value of the debt or refuse to pay those to whom it owes the money. All of these options are immoral because they are unfair: they harm others who have done no harm to America. Three points here: 1) we have out-of-control entitlement spending, 2) debt crises are more successfully dealt with through spending reductions than with tax increases and 3) there are no quick fixes.
Considering basic economic and fiscal issues from a moral perspective adds an important new dimension to the discussion. We might disagree on the details of how to proceed but it is imperative to take effective action of some kind!
One of my favorite writer’s on current affairs is Arthur Brooks from the American Enterprise Institute. His article in yesterday’s New York Times, “An Aging Europe in Decline” gives a good explanation for the current malaise in Europe. “The optimists see the region’s economy growing by just 1% in 2015: many fear that a triple-dip recession is in the offing. … Predictions of decade-long deflation, low productivity and high unemployment are becoming conventional wisdom.” But Mr. Brooks makes a strong case that Europe’s core problems are as much demographic as economic:
In 2014, the average number of children per woman in the European Union was 1.6, well below the replacement rate of 2.1.
The labor participation rate in the EU in 2013 was just 57.5%, much lower than the 62.7% in the U.S..
In 2012 the median age of the national population in the EU was 41.9 while the average age of foreigners living in the EU was 34.7. But “anti-immigration sentiment is surging across the continent.”
In other words, Europe is “rejecting the culture of family, turning its back on work and closing itself off to strivers from the outside.” This is a powerful indictment of contemporary European culture. To a certain extent these same trends are evident in the U.S. although to a somewhat lesser degree:
Our own fertility rate (see the above chart) is down to 1.9 children per woman in 2012, and is dropping among all racial groups.
Our labor participation rate is better than Europe’s but is our own lowest in 36 years.
We admit over a million legal immigrants per year who lower the average age of our population. However we fail to accept many highly educated and skilled workers who would be able to give our economy a huge boost.
Demographics are a problem for the U.S. just as they are for Europe. The only way to counteract strong demographic trends is with smarter economic policies.