Fareed Zakaria: Restoring The American Dream

Time:

Some experts say that in every recession Americans get gloomy and then recover with the economy. This slump is worse than most; so is the mood. Once demand returns, they say, jobs will come back and, with them, optimism. But Americans are far more apprehensive than usual, and their worries seem to go beyond the short-term debate over stimulus vs. deficit reduction. They fear that we are in the midst of not a cyclical downturn but a structural shift, one that poses huge new challenges to the average American job, pressures the average American wage and endangers the average American Dream. The middle class, many Americans have come to believe, is being hollowed out. I think they are right

Read the whole story: Time

Comments

[da raphael]

02:55 AM on 11/01/2010

The US is experiencing the growing pains of becoming a post industrial society. A lot of people just have not gotten in line and obtained sufficient preparation for the modern jobs available, which are information/services based, tend to be focused on mental rather than manual labour.
Besides The US is so rich that if half the population stopped working completely they'd still have the same standard of living (with the requisite wealth redistribution). A lot of Its economy is only functional due to purposefully engineered throwaway mentality (Las Vegas demolition, and new car purchases (cars last decades) and over consumption( food)
The future for US composites:
agriculture..tiny growth (organic, niche markets)
manufacturing (including building construction) :inevitable and massive decline due to technology and overseas labour
energy: low growth due mostly to renewables
retail(including delivery systems and ads): low growth due to internet
entertainment (from movies to sports to tourism and gambling): medium growth due to increased efficiency in other areas of economy
service and maintenance (including health services and government) a lot of growth
and last is ownership of means and production (of money, information and intellectual property ) low growth in terms of amounts of people but a lot of growth in terms of wealth.
maybe all the other sectors will be able to absorb the dying manufacturing sector but increasing services and maintenance will only be counter-weighted by taxing the ownership base, limiting power of influence, reducing patent terms, and having fair wage system.

[KapyoChe]

11:51 AM on 10/25/2010

Companies can outsource jobs to become profitable. Why can't the government do the same to reduce costs? This is what's creating big gap between private sector and public sector. Companies are very profitable for two reasons: cost arbitrage and technology. We have the technology but not low cost of emerging economies. No one has solution to this.

On another note, I was watching 60 minutes last night and one report looked at 99ers laid off in Silicon Valley. All of them had good education, yet out of luck. Let's get off this education mantra. US has very good education system. US is just too expensive to create jobs. It has very little to do with our education system. Kids today are doing lot more in school today than kids did 20 years ago, yet today's kid will be worse off than their parents.

[nothingchanges]

10:16 AM on 10/23/2010

It's not the recession that's making me gloomy. It's the realization that our representative government sold us out.

Wealth disparity in the US is at record levels, and it's still growing. For the wealthy the recession really did end 18 months ago.

It's hard to play the game, when you are forced to recognize that the game is rigged for the benefit of the fortunate few.

The single most valuable thing that Congress could do to restore the economy, is to restore the people's faith in their government.

Take the CON out of Congress. Pass real campaign finance reform. Level the playing field so that hard work is rewarded with commensurate compensation. Show the people that honesty can be a good thing. Make money the old fashioned way............earn it.

[Inkeesgirl]

12:20 PM on 10/23/2010

I am concerned that we are paralleling the waning days of the Roman Republic. The middle class and working class were pushed out by cheap slave labor. The wealthy kept their positions by providing the grain dole, lots of chariot races, and entertainment at the Coliseum. Today, the new ruling class will rely on food stamps, and reality tv.

[xilduq]

09:55 PM on 10/22/2010

Fareed, the dream was just that, even worse it was a pipe dream.

after all, it's all a ponzi scam.

[David01]

01:25 PM on 10/22/2010

I'm a big fan of Fareed Zakaria, however:
"...Going Global
For a picture of the global economy, look at America's great corporations, which are thriving. IBM, Coca-Cola, PepsiCo, Google, Microsoft, Apple, Intel and Caterpillar are all doing well. And they share a strategy that is becoming standard for success. First, technology has produced massive efficiencies over the past decade. Jack Welch explained the process succinctly on CNBC last September. "Technology has changed the game in jobs," he said. "We had technology bumping around for years in the '80s and '90s, and [we were] trying to make it work. And now it's working ... You couple the habits [of efficiency] from a deep recession [with] an exponential increase in technology, and you're not going to see jobs for a long, long time." Welch gave as an example a company owned by the private-equity firm with which he is affiliated. In 2007 the business had 26,000 employees and generated $12 billion in revenue. It will return to those revenue numbers by 2013 but with only 14,000 employees. "Companies have learned to do more with less," Welch said..."

Mr. Zakaria, Mr. Welch with all due respects. ..The AMERICAN PEOPLE WANT AND NEED SOME GOD-DAMN JOBS!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Thank you

[opposingthumb]

02:20 PM on 10/25/2010

Right you are. America needs jobs here. Zakaria's solution is to just to dream about them. What does he think will happen after the R&D expenditures by AMERICA is used to create new industries? What will happen after American taxpayers foot the bill, is that our 'American' corporations will outsource the fruits of our research to manufacturers in other lands. And we will continue our downward spiral. And as for more education, only the best and the brightest will benefit. Those with lower or without academic abilities also need jobs. A perpetual dole is no answer in a democracy.

So what do do? The answer is to institute a system of tariffs so that world labor and environmental costs can be equalized. Let competition flourish with international ideas and innovation but not success based on reducing our standard of living.

Zakaria is to be commended for raising the topic ignored by both parties but this topic needs to see further than R&D, education and tax rates. The future is now. The long range ends on pay day.

[TruelyFedUp]

10:46 AM on 10/22/2010

"Every community, whatever its political name and extent — village, city, state or province or nation — has its own normal, unfailing income, growing with the growth of the community and always adequate to meet necessary governmental expenditure.

To explain: Every community has an indefeasible original right to the land on which it exists, and to all the natural, unmodified properties and advantages of that particular area of the earth's surface. To this land in its natural state, undrained, unfenced, unfertilized, unplanted and unoccupied, including its waters, its contents and its location, every individual in the community (which may consist of any political unit selected) has an equal right, while all the individuals together have a joint right to the value for use which society has conferred upon these natural advantages."

Continued below...

[TruelyFedUp]

10:45 AM on 10/22/2010

"This value for use is known as "Land Value," or by the not particularly descriptive but generally adopted name of "Economic Rent."

Briefly defined the land value or economic rent of any piece of ground is the largest annual amount voluntarily offered for the exclusive use of that ground, or of an equivalent parcel, independent of improvements thereon. Every holder or user of land pays economic rent, but he now pays most of it to the wrong party. The aggregate economic rent of the territory occupied by any political unit is, as has been stated above, always sufficient, usually more than sufficient, for the legitimate expenses of the government of that unit. As also stated above, the economic rent belongs to the community, and not to individual landowners.

On the other hand, the result of every utilization or enhancement of the natural advantages of land (such as farm profits, the rent and selling value of buildings and other improvements), when accomplished by an individual, belongs wholly to that individual, and should never, and need never, be taken from him by taxation.

One must be careful not to confuse land-value with the price of land. The price of land is the sum demanded for the transference from one individual to another of the privilege to collect and retain land-value and thus to divert public earnings to private pockets." http://www.wealthandwant.com/docs/Root_NaST.html

Truly

[GetAbike]

09:35 AM on 10/22/2010

Its over.
Those of us that are still here need to figure out what's next?
Our standard of living is going down following the decline of our empire.
Can we, and how do we transition to a higher QUALITY of life?
Can we have a shift in values that compensates for the loss of a false belief in our exceptionalism?
Our middle class, "non-negotiable" lifestyle has separated and isolated us into our own little cages, in our commutes, our entertainments, and personal goals. It has also made it easier to be managed by the elites.
We are citizens- not consumers! Why should we be responsible for making the rich richer?

Community, public arts and music, shared food, shared work, and family may be an old-world kind of living, but there is a reason for that- it survives the test of time and may be the very thing needed to weather the changes we are experiencing.
Good luck to all of us.

[grouseless54]

01:51 PM on 10/22/2010

Dear GetAbike:
Very nice post. You're on point with the "old-world" comment. Several of my European cousins used to insist on tours of the grand and gated neighborhoods of McMansions in these parts. For years they've been saying, "Who can afford these houses?" They would say things like: "Americans have put too much money into their houses." "If anything goes wrong, people are going to be wiped out." The sagacity of their points and yours is that if (especially here in NV) people had saved more and settled for less house, our situation would not be so dire. We still have three "shares" (evicted families taking up residence with elderly households) working well, but most people are leaving because there is no work. Imagine, stranded out here in the middle of the NV desert with no work - but it was the only place some people could afford to buy houses. Crazy.

[GetAbike]

02:43 PM on 10/22/2010

Hi GL54- thank you for the response, friend- hope all is well with you.
You make a good point- along with so much else, we have lost our collective common sense.
Take care,
GAB

[SingingGuy]

09:20 AM on 10/22/2010

These large corporations want it both ways. They want to be able to charge those nice, fat prices for everything while pressuring the American worker to accept $10.00 dollars an hour as a reasonable wage. They want to make things for pennies while they charge hundreds of dollars for the end result. We've already reached the point where financial people are asking , "Why aren't they buying?" The simple answer is that too many goods and services are too expensive when even those who are employed are making third world wages.

[contrariandy]

06:34 AM on 10/22/2010

The American people are desperately in need of cost-efficient, reliable Health Insurance plans and Retirement plans, and it will only get worse in the future as employer-based Health Insurance and Pension plans are further reduced and eliminated. The worst possible situation for most Americans will be to have to fill these needs as individuals on the open market.

No matter where and how it's done, Americans will have to come up with a lot of money to pay for Health Insurance and safely prepare for Retirement. Reducing the availability of Medicare and Social Security benefits will only make the situation worse for most Americans.

As Medicare and Social Security are the safest, most cost-efficient, most reliable plans available to Americans, we should consider enlarging and strengthening them as options to further enriching the unreliable, bonus-laden, profit-first Private Health Insurers and privatized Wall Street-enriching Retirement schemes and scams. Americans should be allowed a government option of buying into Medicare and a government option to increase their Social Security benefits by saving additional amounts in Social Security above their Social Security tax requirements.

[contrariandy]

06:55 AM on 10/22/2010

Republicans talk about putting "a portion of" Social Security contributions into investment accounts, but they never explain how we can afford to siphon off "a portion of" contributions when they are at the same time talking about how SS funding is inadequate, how they don't want to make good on the promised paybacks of the money loaned from the SS surplus to pay general expenses, and how we must cut SS benefits and increase the retirement age.

We simply can't afford to siphon off a portion of current SS taxes, but we could offer Americans an Early Retirement Option in which they would contribute additional individual funds to the safe, efficient and reliable Social Security system rather than only having the option of risking those additional amounts on Wall Street.

If they want a chance at earlier than 70 retirement, Americans need to come up with additional Retirement funds one way or the other. The American people need a safe, reliable and efficient government Early Retirement Option just as they need a safe, reliable and efficient Medicare Buy-in Option .

[cyclone70]

09:16 AM on 10/22/2010

privatization of SS is all about giving even more funds to wall street to gamble with

they already got their hands on peoples retirements with 401ks and they have been licking theeir chops to get ahold of SS for decades

look who is behind it - Peterson and other wall streeters - as they say - follow the money

[PhilipTaylor]

03:59 AM on 10/22/2010

Sorry you are just a VOICE of the RICHEST 0.1% and should not be listened to!

It shows as you advocate low taxes on the RICH!

[jeffrey678]

01:39 AM on 10/22/2010

Pure Corporate Propaganda. Cut Corporate tax, increase immigration, national consumption tax, and cut Social Security medicare.
How about a pure Corporate and Social Security Flat Tax. No Caps. No deductions. Conservative like flat taxes.

[cyclone70]

09:17 AM on 10/22/2010

yep - don't forget about offshoring jobs too

conservatives like flat taxes because they are regressive

[ThePeoplesKey]

12:56 AM on 10/22/2010

If you pay your workers enough so they can afford to buy the products they make what does that mean really? Doesn't it mean that for each employee who uses money you paid them to purchase your products at a profit = lower labor costs? Think about it . . .

[cyclone70]

09:18 AM on 10/22/2010

Henry Ford figured it out 100 years ago

shouldn't be too tough

[ThePeoplesKey]

12:52 AM on 10/22/2010

Henry Ford didn't need to outsource for labor to become very successful in the USA. In fact, he RAISED the rate of pay for his workers above what other manufacturers were paying at the time so they could afford to buy the products they produced. Henry didn't go wanting by taking a little less so his workers could have a little more. Until or unless this country's corporations get back to that line of thinking, we'll soon be joining India and others at the bottom of the food chain . . .

[weekendpartier]

12:00 PM on 10/22/2010

Well, Ford couldn't have outsourced back then because the shipping costs alone would have been very expensive.

Next, India is actually on the rise. They have nowhere to go but up. It's the US that risks a serious decline in our over-all wealth and well being.

[ThePeoplesKey]

05:11 PM on 10/22/2010

I doubt if shipping was any more expensive. Rather, it's more likely that either the infrastructure requirements couldn't be met (other than Europe where, likely, labor wasn't any cheaper anyway) or speed of getting anything that could be made overseas was a hindrance. However, it should be noted that when Ford first began making motor cars, it's estimated that he was competing with over 600 other entrepreneurs also attempting to make motor cars. And I believe that was in the US alone. In the face of that competition he RAISED the pay of his workers so they could afford to purchase the cars they made, thereby crushing his competition in the process and making Ford the world leader in manufacturing. A gutsy and brilliant move on his part. Would that we had such innovative titans of industry in the US today, I hardly think we'd be in the situation we find ourselves in now . . .

[cyclone70]

12:46 PM on 10/22/2010

Ford was complex man with many faults, but creating living wages for his employees, setting up detroits hospital system, giving huges some of money to eductaional, arts and humanities and historical preservation causes were his enduring legacy, not to mention the tremendous contribution to manufacturing technology

Ford at times gave over half his income to charitable causes - and that was time you didn't get any tax breaks for doing so.

[plumnelly]

12:27 AM on 10/22/2010

Catch-22, educated american workers are being slaughtered with outsourcing and H1-B Visa's, , not better or more educated, cheaper. Cheaper, so ceo's can keep skimming off more from companies, like Carly Firorina or Mark Hurd, OUTSOURCING is what keeps their pockets stuffed with untold millions. OUTSOURCING AND H1-B VISA'S have and are destroying America and it's citizens. The middle class is the infrastructure for a healthy democracy, SO WHY, would any american be in collusion with destroying America. ALL FOR GREED! We are fighting two wars while the ceo's are dstroying american families back home. This so egregious, and Jack Welch should just shut up, it was told he was even getting his toilet paper paid for by GE ,even after he was retired. These disconneted greed mongers have absolutely no loyalty to any country, it's about their own self promotion and enrichment. Why else would they think it's okay to be destroying lives in america while using slave labor and working against environmental laws and going to countries with poison air and water. This is the new business model plunder and pillage. I think Zareed is naive.

[cyclone70]

12:47 PM on 10/22/2010

we are already become a highly educated country of cab drivers, hamburger flippers and bed linen changers