Sunday, November 16, 2014

Bobby Jindal and the Lie of the American Dream

Watching Louisiana’s unpopular Governor Bobby Jindal on NBC’s Meet the Press this morning an old idea popped back into my head – is it possible that some of these Republican politicians are simply automatons programmed by Corporate America to spew the same tired arguments no matter what. In case you missed the interview, here was the gist of the argument: 1. Government is bad: and he was proud he has cut gov’t spending by 28 percent and government jobs by 34 percent, 2. I have lowered taxes, 3. I have balanced the budget (a constitutional requirement in LA) even though the deficit is at 1 billion dollars, 4. Obamacare is “government control of healthcare” (simply not true), 5. Government is bad, 6. Privatizing the LA schools was a good thing (open to serious debate), 7. I have created jobs and economic growth (partially true, though unemployment rate went up in September: NOLA), and 8. The private sector is better at restoring the American Dream than government intervention.

I have covered the first seven arguments consistently on this blog. What I’d like to do briefly today is explore the eighth claim. Let’s start with the foundation of the American Dream in general. It is argued that America is unique in the ability of an average citizen to rise up the economic ladder through hard work, talent and, maybe, a little bit of luck. Many Americans still believe in the American dream, or at least its spirit, with 71 percent responding positively to the claim that “hard work and personal skills are the main ingredient for success.” (Verisi) On top of this, only 19 percent in a study by the Brookings Institute believed that coming from a wealthy family was the key to success. While the 2008 financial crisis and its aftermath have quelled some of that optimism, the Monomyth of the American Dream continues to orient so much of our lofty political discourse. Yet is that American uniqueness still true?

The answer is, of course, no. The U.S. is not the worst in the world in income mobility, but it is middle of the road among advanced industrial economies. For example, the results of a 2010 study from the OECD shows us that American is only slightly better than Italy and Great Britain when it comes to a father’s income being a strong predictor of a son’s income, with Denmark, Austria, Norway, Finland and Canada substantially lower, Sweden, Germany and Spain about 40 percent lower and Frances about 10 percent lower. When we move on to the parental background influence on student achievement, the U.S. becomes the worst in the OECD.

Looking overall at the prosperity and well being of the United States, beyond our GDP, many different approaches find us as at or below average. For example, the aforementioned Legatum Prosperity Index (which combines wealth and well being), only ranks the U.S. economy 17th in the world (Switzerland is #1, Singapore #2, Norway #3, Sweden #4 and Canada #5 – all countries with relatively active government intervention in the economy), with our entrepreneurial and opportunity ranking at 11, governance at 12, education at 11, heath at 1 (I don’t really understand this one), safety and security at 31 and personal freedom, ironically, at 21. If we look at the Happy Planet Index, which does put a huge premium on our human footprint, we rank 131st. The GINI Coefficient is a final useful measure, as it tells us how far a country is away from perfect equality. The U.S.’s coefficient in 2010 was 41.1 (0 is perfect equality, 100 is perfectly unequal), putting us on par with England (38), Argentina (44.5) and behind Armenia (31.1), Cambodia (33.6) and Denmark (26.9). China is still worse (42.2), but barely, as is Mexico (47.2). Among the best rating are Denmark, the Netherlands (28.9) and Norway (26.8) – again reinforcing the notion that an active government not only ensures a better quality of life but increases mobility and decreases inequality.

Yet for all the statistics, all one really needs to do is look at the facts on inequality (for example, here, here, here, here and here – though here is the most comprehensive) to recognize that it has grown dramatically since the conservative revolution of Reagan starting in 1981. Sure studies like this one argue mobility is about the same as it was in the 70s, but a more accurate picture would emerge if we go back to the 60s, when the American Dream was still in its ascendancy and the Golden Economic Age was at its peak. The 70s started the very decline that the average American has never recovered from. What has changed? Progressive taxation has been flattened, government services have been cut, retirement and healthcare have moved from corporations to the individual and wages for the average worker have been relatively stagnant for over 30 years, while the majority of the benefits of a growing economy have gone to the top 10 percent. Yet the GOP continues to sell the American people the lie that government is the problem and the private sector and market the solution. Will the American people ever wake up to this less-than-noble-lie? I wouldn’t hold my breath without an oxygen tank in wait …

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