Uneasy Days for the Economy

What happens when a nation with a “bootstrap” self-image settles into a state of uncertainty?

11-1-1977 Carter, Jimmy - Colorado Visits Credit: Denver Post
Charlie Cook
Feb. 27, 2014, 4 p.m.

Listen­ing the oth­er day to dis­cour­aging eco­nom­ic fore­casts from Alan Green­span and Larry Sum­mers, I was re­minded of the many polls show­ing that Amer­ic­ans worry their chil­dren won’t have the same op­por­tun­it­ies they did. To be clear, neither the former Fed chair­man nor the former Treas­ury sec­ret­ary was pre­dict­ing re­ces­sions or even down­turns. But there was little in their words to the Na­tion­al As­so­ci­ation for Busi­ness Eco­nom­ics to sug­gest that bright­er days are on the im­me­di­ate ho­ri­zon.

Their dia­gnoses and sug­ges­ted treat­ments of the eco­nomy wer­en’t ex­actly the same, but both non­ethe­less left the listen­er deeply un­settled. Sum­mers ar­gues that it’s been a long time since the United States had “healthy, strong eco­nom­ic growth in a full-ca­pa­city eco­nomy.” He ar­gues against cur­rent gov­ern­ment aus­ter­ity meas­ures, par­tic­u­larly at a time when the coun­try — he as­serts — des­per­ately needs an in­crease in con­sumer de­mand. He also com­plains that reg­u­lat­ory and policy re­straints have re­strained eco­nom­ic growth, spe­cific­ally point­ing to the fact that no new oil re­finer­ies have been built in the United States in dec­ades. Mean­while, aus­ter­ity has led us to a lack of pub­lic in­vest­ment; Sum­mers gives the ex­ample of the cur­rently dilap­id­ated Kennedy air­port in New York, at a time when bor­row­ing rates are un­der 3 per­cent, which would nor­mally be the per­fect situ­ation for gov­ern­ment to re­build in­fra­struc­ture.

Green­span ar­gued for the need for im­mig­ra­tion re­form, say­ing that de­port­ing il­leg­al im­mig­rants would lead to our eco­nomy “fall­ing apart.” On the oth­er end of the im­mig­ra­tion spec­trum, he said, the H-1B pro­gram for ad­mis­sion of highly skilled work­ers is im­port­ant be­cause “we can’t staff the high-tech needs of our coun­try with the kids com­ing out of our high schools.” Yet, the pro­spects for im­mig­ra­tion re­form in the House, des­pite the back­ing of lead­ing Re­pub­lic­ans, are prob­lem­at­ic at best, due to en­trenched op­pos­i­tion with­in the GOP base.

At the same time, and more broadly, Amer­ic­ans are wor­ried about where our coun­try is — and seems to be — headed. A Wall Street Journ­al/NBC News poll in May 2012 asked, “Do you feel con­fid­ent or not con­fid­ent that life for our chil­dren’s gen­er­a­tion will be bet­ter than it has been for us?” Only 30 per­cent of re­spond­ents felt con­fid­ent, while 63 per­cent in­dic­ated they were not. A New York Times/CBS News poll taken in Janu­ary of this year asked, “Do you think the fu­ture of the next gen­er­a­tion of Amer­ic­ans will be bet­ter, worse, or about the same as life today?” Only 20 per­cent said bet­ter, 53 per­cent in­dic­ated worse, and 25 per­cent said about the same. In late 2012, a USA Today/Gal­lup poll asked, “In Amer­ica, each gen­er­a­tion has tried to have a bet­ter life than their par­ents, with a bet­ter liv­ing stand­ard, bet­ter homes, a bet­ter edu­ca­tion, and so on. How likely do you think it is that today’s youth will have a bet­ter life than their par­ents?” At the time of the poll, the pub­lic was evenly split, with 49 per­cent say­ing likely, and 50 per­cent in­dic­at­ing that im­prove­ment was un­likely. Res­ults differed widely based on ex­actly how the ques­tion was framed, but at best, in what has his­tor­ic­ally been one of the most in­her­ently op­tim­ist­ic na­tions, at least (roughly) half of the pop­u­la­tion is doubt­ful that things will be bet­ter for suc­ceed­ing gen­er­a­tions.

Put­ting the deep con­cerns of two of Amer­ica’s bright­est eco­nom­ists to­geth­er with a troubled, even ap­pre­hens­ive pub­lic, par­tic­u­larly one that is wor­ried about the op­por­tun­it­ies of fu­ture gen­er­a­tions, brings to mind the word com­monly at­tached to Jimmy Carter’s pres­id­ency — “mal­aise.” Al­though he didn’t ac­tu­ally use the term, the sen­ti­ment from that time seems rel­ev­ant today: A coun­try that fash­ions it­self as a “boot­strap” na­tion with bound­less op­por­tun­it­ies is now settled in­to an un­cer­tainty about the fu­ture and about our role in the world.

A Gal­lup Poll re­cently asked Amer­ic­ans, “Do you think lead­ers of oth­er coun­tries around the world have re­spect for Barack Obama or do you think they don’t have much re­spect for him?” Just 41 per­cent thought that for­eign lead­ers re­spec­ted Obama; 53 per­cent said they did not. Ob­vi­ously, re­spond­ents’ party af­fil­i­ation mattered; among Demo­crats, 69 per­cent said Obama was re­spec­ted by the in­ter­na­tion­al com­munity, while 28 per­cent thought he was not. Among Re­pub­lic­an re­spond­ents, only 19 per­cent thought he was re­spec­ted, while 77 per­cent re­spon­ded in the neg­at­ive. Most im­port­ant, among in­de­pend­ents, only 34 per­cent said they be­lieved Obama was re­spec­ted, while 57 per­cent thought he was not — a pretty tough in­dict­ment.

With a pres­id­en­tial cam­paign to be­gin a year from now, one must con­sider how these fears and ap­pre­hen­sions may mani­fest them­selves as Demo­crats and Re­pub­lic­ans be­gin the pro­cess of se­lect­ing their nom­in­ees. While the cur­rent polit­ic­al en­vir­on­ment is not ex­actly like what the coun­try faced in 2008 — after Leh­man Broth­ers fell, the stock mar­ket crashed, and the re­ces­sion be­came evid­ent — 2016, it seems, is shap­ing up to look more like 2008 than any oth­er re­cent elec­tion year. This is likely to have a pro­found ef­fect on the de­cision-mak­ing pro­cess for voters on each side, but it is im­possible to tell now what those ef­fects will be.