Friday, October 19, 2012

The End of American Affluence?


Americans maintain a tremendous optimism about their economic futures – most likely a product of the cultural and political emphases on equal opportunity and the rewards of hard work under our system. This optimism, most would agree, is a positive component of our “national viewpoint.” Some, however, argue that this optimism needs to adjust to the more dismal reality of our economic future. One prominent journalist who would be in this group is Robert J. Samuelson, who recently published “The Withering of the Affluent Society” in the Summer 2012 edition of The Wilson Quarterly. Samuelson’s article, although by no means the most cheerful piece of writing, raises important questions about how Americans should adjust to a future that might not deliver the levels of economic mobility that we are inclined to anticipate.

Samuelson shows that the mid-twentieth century bolstered our confidence in bright economic futures. The “Affluent Society” that arose during the 1950s saw the expansion of a strong middle class. There are two primary types of income mobility: “relative mobility,” which refers to an individual’s change in economic position relative to their parents’, and “national mobility,” which refers to a change in standard of living of an entire nation. In the mid-twentieth century, we grew accustomed to increases in both forms of income mobility.

Recently, however, promises that the future will be brighter and that we will have more than our parents has become more and more hollow. Vice-President Joe Biden infamously remarked recently that middle-class Americans have “been buried” recently (even, as Republicans point out, during Mr. Biden’s party’s time in office). Since 2007, median household income has declined. It was also declining from 2000-2004. America’s characteristic economic optimism must confront this reality, and it may already be doing so. According to Gallup, in 1996, 34% of Americans who did not already consider themselves “rich” believed they would become rich someday. In 2003, that number fell to 31%, and in 2012, it is at 28%. Thus, as time continues, more Americans are realizing that their future and, importantly, their children’s futures, might not bring more affluence. This has led to movements like Occupy Wall Street, which reflect a frustration and pessimism about the economic future.

Samuelson recently produced another article that relates his concern about the withering of affluence to the current election. In Samuelson’s opinion (and I checked, he opts not to vote in elections in order to maintain a level of journalistic neutrality), both candidates are avoiding informing the American people about the reality of times ahead: Obama is neglecting to answer serious questions about the future of Medicare and Social Security while Romney is refusing to provide details as to how his plan to reduce tax rates will affect programs and the budget.

I don’t find this situation surprising. Americans are used to optimistic times. They prefer to hear that it is “Morning in America,” as Reagan framed it, than to hear that difficult economic times are inevitable. This American optimism is a valuable characteristic when it fuels drive and advancement. It is not valuable, however, when it prevents us from confronting the real challenges before us. Candor about future difficulties is the first step necessary in order to confront and overcome problems. And then we can enjoy dreaming about future progress while simultaneously experiencing prosperity in the present-day.


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