One good thing about this recession: it’s pulled back the curtain to reveal that we Americans for years have accepted an economy that’s fundamentally insecure, unsustainable and skewed to the wealthy. About the only redeeming feature of our runaway capitalism is the way it creates excitement in the form of new things to buy and consume, like iPhones, Twitter and Snuggies—those goofy, cozy blankets with sleeves.
But overall, we’ve been living for the last decade with a debilitating economy. Call it Weakenomics—it’s led to financially fragile families and firms, a fraying social fabric, and a dangerously damaged environment.
We can do much better. We can forge an economy that strengthens us yet stays full of surprises. Call it We-can-omics.
This name takes its cue from Barack Obama’s “Yes we can” slogan. And We-can-omics looks a lot like what Obama has proposed and done so far in office—but goes further and has some twists.
We-can-omics means:
* A stronger, springier safety net for those falling off the tightrope that American jobs have become. Improvements to the safety net would go beyond those included in the recent stimulus bill to provide for more generous, longer-lasting unemployment benefits.
* Universal health care.
* A major tax shift that eliminates payroll taxes—thereby promoting the creation of jobs—in favor of taxes on things we want to avoid, such as foreign oil, pollution and heavy use of natural resources.
* “Green economy” investments and policies, ranging from spending on lower-tech building weatherization to promoting what New York Times columnist Thomas Friedman dubs “E.T.”—energy technology.
* Steps to improve innovation, ranging from a national system of entrepreneurial grants to greater investment in basic scientific research and a push to make teaching careers more attractive through higher salaries and merit pay.
The place that comes closest to putting We-can-omics into practice is Denmark. The Nordic country’s “flexicurity” system give businesses flexibility to fire workers, in contrast to the job protections found elsewhere in Europe. But Danish workers get security in the form of generous unemployment benefits –averaging about 70 percent of their previous wages in 2006—for several years if need be. And to prevent people from wallowing on the dole, Denmark provides substantial aid in landing new jobs and has strict rules to make sure the unemployed are available for new work.
In recent years, Denmark’s “flexicurity” system helped fuel strong growth even as it underpinned an egalitarian society. The Danish economy grew faster than the economies of both the United States and Europe as a whole during the three-year period 2005 to 2007. Denmark’s system also has the backing of a major industry association, the Confederation of Danish Industry, and its unemployment rate in February was 4.8 percent compared to 8.1 percent in United States, 7.4 percent in Germany and 8.6 percent in France.
The rub in Denmark is higher taxes, especially on high earners. But as Denmark shows, it’s quite possible for a healthy economy to combine market forces, relatively high taxes and a substantial social safety net. In fact, Denmark suggests those things go best together.
So does my own story. I am partly the product of capitalists. My great-great-great grandfather, also named Edward Frauenheim, founded Iron City Brewing Company in Pittsburgh. Later, my grandfather and great-uncle owned a malting company in Buffalo, and my father has started up businesses in fields ranging from video security to financial services to clothing design software. At the same time, my great-grandmother and great aunt were staunch New Dealers, and most of my mother’s family has been in “helping” fields such as psychology and education.
As a journalist, I’ve documented the way low-wage Americans put up with considerable hardships, exposed the myth of a level playing field for “little guy” start-ups in Silicon Valley, and called attention to holes in the U.S. safety net. And I personally experienced the way America leaves something to be desired when it comes to promoting entrepreneurship. Several years ago, I decided against devoting myself to a freelance writing business because the apparent dangers –like losing health insurance for my pregnant wife—were too high.
That choice came after losing a magazine job in the dot-com bust. My brush with unemployment fits into a broader pattern of what author Jacob Hacker calls “The Great Risk Shift” from businesses and government to individual families over a generation. And now it is apparent that America’s economy isn’t just rife with insecurity for average families, but overly unstable for companies whose revenues are cratering in the recession.
We need to move away from our legacy of market-worshipping Weakenomics. But to do so, we must strike a better balance on three fundamental issues:
* The individual vs. the collective. The Horatio Alger sensibility that that individual can pull himself up by his bootstraps runs deep in the American psyche. We all think we can get rich on our own. But we’re largely deluded. Sociological research shows America to be less than stellar when it comes to upward mobility, while the psychological evidence indicates people are much more social creatures than we care to admit. The Ayn Rand-ers are right that we all die alone. But we live together. And unless your idea of earning a living is complete self sufficiency on a farm, modern economic existence fundamentally involves other people.
* Competition vs. cooperation. America has been competitive to a fault. Despite--or perhaps because of--our largely Christian culture, we are fanatics about beating others. There’s a place for competition in bringing out something of the best in us, in creating moments of intensity and childlike euphoria. But we take things to an extreme, leading to childish petulance in our athletics, cheating in our schools and sub-optimal performance on the job. We are missing opportunities to be better sports and more creative collaborators.
* Consumption vs. conservation. The United States and most of the world’s nations have acted as if a rising standard of living—measured by consumption of stuff and services—trumps the environmental impact of our economy. Just as Americans have lived beyond their means financially in recent years, so too has our society overdrawn our ecological resources to the point of potential climate catastrophe. We need to reexamine our notions of progress to account for both the way conventional economic growth imperils the planet and the way human happiness ought to be measured by more than money alone.
These are not new questions. And for decades people have sought a middle ground between the stultifying central planning of socialism, the excesses of capitalism and the limits of strict conservationism. But there’s a now-ness about the principles of We-can-onomics.
They correspond with a shift in attitude that has accompanied the economic crisis. What might be called a “Three Musketeers moment” is at hand—a sense of all-for-one and one-for-all. Signs of it include both Obama’s election in November and a December survey of employees by consulting firm Towers Perrin that found 76 percent of workers were personally motivated to help their company succeed, up from 69 percent four months earlier.
Then there’s the populist outrage at obscene bonuses going to the same bankers who helped land us in this mess. People are demanding a sense of decency.
This spirit isn’t entirely a short-term response to the housing market implosion and broader economic collapse. A change toward more collective thinking has been under way in America for some time. A 2007 study by the Pew Research Center for the People & the Press found signs of growing public concern about income inequality and a pattern of rising support since the mid-1990s for government action to help disadvantaged Americans.
Even culturally, trends suggest a pendulum swing to a more communal mentality. Popular TV programming isn’t just about celebrities but the reality of troubled parents and people struggling to lose weight. Social networking technologies like Facebook and Twitter highlight the importance of connections and communication. Many of the professional sports teams that have succeeded in recent years emphasize teamwork over the contributions of a star or two.
The reining National Basketball Association champion Boston Celtics embraced an African philosophy along these lines last year. Their motto, “Ubuntu,” translates roughly to: “I am because we are.”
Mounting evidence of a looming environmental disaster—seen in scientific reports and images of stranded polar bears—adds to the realization that our economic system has been out-of-whack and threatens our future.
But a newfound focus on solidarity and sustainability in the economic arena does not preclude surprises. In fact, we need them. Constant economic tumult results in a spirit-sapping anxiety, but too much stability leaves us restless.
This is old wisdom understood by parents. Ongoing chaos is not good for kids, nor is unbroken routine. You blend the two to delight and develop children.
Think of We-can-omics as the Snuggie of economic systems. The fleece blankets with built in sleeves—which have hit a cultural nerve and inspired scores of Facebook pages--keep people comfortable while allowing them to cut heating costs and do things like read more easily while covered up. We-can-omics also is about sustainable, sometimes-fascinating progress while people enjoy a measure of security.
Peace of mind and a piece of the market.
Too much of the free market has left us frail as a society and planet. But it’s not too late to shape up. To shape our economy in a way that strengthens us all. We-can-omics is that way.
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