False Doctrine

Tom Rosshirt
Thu, 14 Feb 2013 21:00:00 -0800
Opinion

One year, perhaps soon, a president of the United States will enter the House chamber to address a joint session of Congress and crack the old mold of the State of the Union address.

Instead of saluting guests in the gallery and reading a legislative wish list, the president will take a full hour to offer an in-depth analysis of one subject.

He could start by saying: "The state of our union is in decline."
Updated: Mon Jan 26, 2015

One year, perhaps soon, a president of the United States will enter the House chamber to address a joint session of Congress and crack the old mold of the State of the Union address.

Instead of saluting guests in the gallery and reading a legislative wish list, the president will take a full hour to offer an in-depth analysis of one subject.

He could start by saying: "The state of our union is in decline."

The president then could tell us that the link between economic growth and job and wage growth is broken. He could say:

"As we were coming out of the recession, a Wall Street Journal headline said, 'No Rush to Hire Even as Profits Soar.'

"The head of the temp agency Manpower told analysts that his biggest clients want 15 to 25 percent of their staff to be temp workers, and some want even more.

"A financial newspaper article started with this lead in 2011: 'The income of the typical American family — long the envy of much of the world — has dropped for the third year in a row and is now roughly where it was in 1996 when adjusted for inflation.'

"Meanwhile, corporations are enjoying record profits and have many hundreds of billions of dollars in cash.

"Why are businesses doing better and workers doing worse?

"In the 28 years after World War II, worker productivity rose 96 percent, and average hourly compensation rose 94 percent. In the 38 years after that, worker productivity rose 80 percent, and hourly compensation rose 10 percent.

"Corporations are taking a share of the gains that used to go to workers.

"So income inequality has grown. The U.S. now ranks fourth among 34 advanced countries in income inequality. That news is made worse by this news: The chances are dropping for a poor kid born in the U.S. to do better than his parents. Among advanced nations, the United States is now a low-mobility country.

"We are not who we were.

"What's happening?

"For years, economic policymaking in America has been dominated by one powerful belief: If rich people and corporations have more money, they will invest more money, and that investment will create more jobs and higher wages. This belief has been the justification for decades of tax cuts.

"But as it turned out, this did not induce corporations to create jobs or increase wages. Instead, companies began to cut jobs, hire temps, freeze wages, close plants, bust unions, shift costs onto workers and move operations offshore.

"After decades of cutting taxes and seeing corporations cut wages and workers, it's becoming clear that we've been in the grip of a false doctrine.

"Businesses do not create jobs because their taxes are lower. They create jobs when there is consumer demand they can't meet without more workers. If we want to create jobs, we should create demand. And if we want to create demand, we should try to get more money in the hands of people who will spend it. That means the middle class and working class.

"That is the Henry Ford model. Pay your workers high wages and they'll have the income to buy expensive products and fuel a strong economy. Instead, we're in a Wal-Mart model. You pay your workers the least you can so the most they can buy is low-price merchandise made in low-wage factories in foreign countries.

"Wages aren't low because the economy is weak; the economy is weak because wages are low."

That's what I'd like to hear the president talk about to Congress for an hour — citing stories, studies and statistics that he could release to the press, with footnotes. And the day after his speech, he could take that message on the road with one big chart — one brilliant, data-rich masterpiece that would show the public all at once the recent economic story of America: Taxes have dropped. Corporate profits have risen. The rich have grown richer. Wages have stayed flat. Working people have done worse. Inequality has increased. Social mobility has dropped. The economy has weakened. Job growth has slowed.

The political reaction would be exquisite. We'd hear hideous shrieks from the pseudo-intellectual sector — the right-wing think tanks desperate to scare us away from the truth that could expose and destroy them. They know that when we strip away their theory, there's nothing beneath it but greed.

Many great countries have fallen into the grip of false doctrines. We need to fight our way out of this one, or we face decline.

But before we go down, I want to see the president of the United States make a strong, sustained case against the economic ideology that is leading our decline. I want to see him summon the passion, energy and urgency of George Bailey from "It's a Wonderful Life" as he tries to save his town by appealing to his neighbors: "Can't you understand what's happening here?! Don't you see what's happening?!"