Comments on The Party of No, a NYT Op-Ed Column

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It will be useful to quickly read The Party of No op-ed column in today’s New York Times written by Ross Douthat

Douthat argues that Democrats do not have a working plan for balancing the Federal budget.  He is critical of Democrat attacks on the Bowles-Simpson fiscal commission recommendations for balancing the budget in part because the Democrats have no working plan of their own.  The article is persuasive and I cannot find much about it to argue against.  I find myself agreeing with Douthat this time.

What I want to do instead is add a comment, one that won’t be popular and likely has the shelf life of fresh herring.  Specifically, Douthat points out that liberal faith in the economic success of the post-WW II years doesn’t quite fit in the global economy.  The United States was the last major economic power standing after the war.  We had uninhibited economic growth because of it.  He’s right.  The United States could sustain high taxes because our high wages and high standard of living were being earned off of exports to redeveloping economies around the world.

I am also reading a book I picked up this afternoon.  It is a novel by John Dos Passos.  Mid-Century (1960).  The protagonist is back from service in the pacific and attending a lecture about Postwar Problems and Prospects at a night school in New England.  Let me quote what Dos Passos writes about the subject at length:

His story was that we weren’t to believe all this crapehanging about how a depression must follow the end of a war.  He talked about a built-in boom.  There was need for housing.  People hadn’t been able to buy new cars or refrigerators or washing machines or electric irons during the war and now they had the money saved up from wartime wages and a big crop of babies demanding an even higher standard of living.  Babies were great consumers, the man said.  He talked about the coming of television and airconditioning and increased airplane transport.  He seemed to feel very good about everything.  America was entering the most marvelous era in the history of the human race.

Dos Passos was correct, wasn’t he?  This is exactly how things panned out after the war and lasted for three decades at least.  What struck me when reading this passage, however, was the line “a big crop of babies demanding and even higher standard of living.”  Then tonight reading Douthat’s op-ed I started to think of our budget problem in a different way.  Have we created a standard of living bubble?

 What if our standard of living is incompatible with the global economy?  What if it is unsustainable?  I’m sure these questions are being asked, right?  How does a worker in the United States compete with a worker in Beijing?

Of course I think there are answers and positive ones, too.  We can innovate and lead new economies, but so far I am not seeing much of that.  Investing in things like biofuels, for example, feels like what the 8-track cartridge was to cassette tapes.  We have too much of that kind of “innovation.”

We living in an era of increasing consumption without the means to support economic growth that will support the wages and salaries necessary to sustain that consumption.  Today’s “babies” are expecting more and more.  And more often these babies are the very baby boomers that Dos Passos anticipates in his 1960 novel.  We have become to expect more and even to expect more for less.

The solution in recent decades hasn’t been finding ways to be more competitive and increase wages — real wages for all but the wealthiest Americans have been flat or declining over the last 20-30 years — but instead ways to make existing wages go further.  That has been accomplished through debt and cuts to government. 

The problems with long term debt are obvious.  People are pretty much in agreement about that.  But what about cuts to government?  If we are going to be competitive as a nation, don’t we have to invest together?   I’ll argue that we do, but let me get back to the comment that comes from a reading of both Dos Passos and Douthat tonight.

It seems like a valid question to ask if our consumption hasn’t been outrunning our economic means.  I don’t mean whether or not we have been over extended as consumers, but rather whether or not our expectations of what a middle class lifestyle should be is unsustainable.  With billions of other people now demanding consumer goods we have taken for granted, do we really think we can maintain the kind of consumption that has been a part of our American lifestyle?

It strikes me as a simple supply and demand situation.  Will there be demand for our goods and services on the global market at a level that will support our ever-increasing standard of living?  Or do we have to tone it down a bit?  And what would toning it down mean?  Perhaps it would mean quality over quantity.  And perhaps it does not have to come with a decreased standard of living, but a more stabilized one.  Right now we don’t seem to be moving in the right direction for either of those more positive possibilities. 

Just a thought.

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