- - Tuesday, November 8, 2016

ANALYSIS/OPINION:

America emerges from a bizarre presidential election facing serious challenges abroad and at home that were not adequately discussed. Voters were too distracted by the misdeeds and character flaws of the major party nominees.

The Islamic State may be dislodged from territory, but state entropy in the Middle East will continue to incubate Islamic radicalism and terrorist attacks in Europe and America.

China is girding its loins — beefing up air and naval power and extending its tentacles through private investment and its regional infrastructure bank — to challenge American leadership in Asia and beyond.

Too few Americans can find decent-paying jobs or embrace optimism for their children’s future.

Underneath all of this is a sclerosis that limits economic growth and in turn, the resources available to government — whether led by liberals or conservatives — to sufficiently address these problems.

Both the Bush and Obama economic recoveries managed annual growth hardly better than 2 percent — decidedly less than the prosperous Reagan-Clinton era.

Nearly a decade of easy monetary policy — rock-bottom interest rates and the Federal Reserve printing hundreds of billions of dollars to purchase bonds — has failed to jump-start business investment and job creation.

Huge budget deficits have similarly failed. Uncle Sam is still borrowing $660 billion a year to finance spending and entitlements.

The growth problem is more structural than rooted in poor macroeconomic policies. It is deeply embedded in the unrealistic expectations of voters to whom politicians gladly pander.

Americans have been unwilling to accept we still live in a market economy. The failed history of socialism teaches we cannot accomplish prosperity without corporate wealth to build factories and invest in research and development, and without some inequality and adequate rewards for individuals who work hard and innovate.

Individually, that requires each of us to be accountable and cultivate self-discipline. If we want secure and prosperous lives, we must invest in skills so that we have something to offer our neighbors in exchange for the things we need and value.

As a nation, we must accept that markets have failed to deliver enough growth, because we have failed to prudently deal with their limitations. We have chosen to be gullible to the easy promises of politicians — who by their essential nature place vanity and personal status above the public purpose.

For example, citing other industrialized countries, many liberal politicians falsely tell us the only answer to rocketing health care costs is a single-payer system. Similarly, conservatives want to repeal Obamacare and provide subsidies — tax credits for health savings accounts and direct payments — to help citizens purchase health services directly.

The practical facts are the best-run health care systems are in countries like Germany, where providers are financed through private insurance. But those systems recognize markets for drugs, hospitals and other services tend to monopolize, hence governments regulate prices.

That hardly looks like anything American politicians currently advocate, but Germans enjoy high-quality health care at about one-third less than what Americans pay.

Our universities are better at delivering Saturday gridiron pageantry than skilled graduates who are agile with emerging technologies and well-grounded in rudimentary problem-solving. Nevertheless, politicians celebrate these decadent institutions and burden students with huge debt and empty futures to pay for the folly.

Big-city mayors deceive voters that adequate housing and job opportunities can be accomplished amid high taxes and rampant crime — read Chicago — and moribund and collapsing mass transit systems — read New York and Washington. And ever more complex building codes and restrictive zoning laws that make hopelessly expensive erecting anything but luxury housing for childless professionals.

All these things and others, like collapsing intercity transportation systems, internet monopolies and casino banks that trade but don’t lend, make the cost of investing and creating jobs too high in America nowadays.

Fixing these by taking on entrenched interests is much tougher than promising palliatives like plowing more money into health care and education. It takes little courage for politicians to deceive voters that it all can be financed by taxing the richest 1 percent or miraculously by gutting the federal income tax.

The one thing we didn’t see much of during the recent campaign is evidence that either candidate has the will and ideas to fix what’s broken or the courage to promise Americans hard work and the opportunity to pay for the things they want.

Peter Morici is an economist and business professor at the University of Maryland, and a national columnist.


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