THE BLOG
12/11/2013 11:54 am ET Updated Feb 10, 2014

Saving Grace: Renewing the Promise of the American Dream

On December 4, Sotheby's sold "Saying Grace" -- one of Norman Rockwell's more famous paintings and "best loved scenes" -- at auction to an unidentified acquirer for $46 million.

It is a sad sign of our times that this painting of "average" Americans bowing their heads in prayer before eating a meal in a restaurant can sell for such a stunning amount, while -- if the House gets its way on food stamp cuts -- there will be less food on the table for millions of our fellow citizens.

We might have missed it. But, it seems to us that during 2013, the 113th Congress has been unable to agree upon or do little that benefits average Americans. We hope that in 2014 Congress will improve its performance.

In our opinion, it can do so by focusing on the real needs of the American people rather than contrived controversies and tailored talking points. It can do this by taking actions directed at saving grace and renewing the promise of the American Dream for "We the People."

This course is essential because over the past several years things have gotten tremendously off kilter in the economic arena. Both Pope Francis and President Obama called attention to this fact recently.

In his first major papal pronouncement, the pope stated, "We... have to say 'thou shalt not' to an economy of exclusion and inequality." Where the pope took a global perspective, President Obama concentrated on the United States, calling income inequality "the defining challenge of our times" and a "fundamental threat" to the United States.

How have things gotten so out of balance and what are the consequences? Professor Angus Deaton from Princeton University provides an explanation in his article for the December issue of the Harvard Business Review.

He notes:

"Whether international or domestic, inequality becomes intolerable when individuals who have gotten ahead for whatever reason use their power to pull further ahead - and even to render others worse off in absolute terms....When they push for what they see as important without perceiving that others have different priorities - the rich have little need of public health care or public education, for example - they undermine the provision of public goods on which the rest of us depend."

In other words, it is not just income inequality that matters. It is also influence inequality and opportunity inequality. When the card deck gets stacked, the social contract is frayed and our democracy suffers. Professor Deaton makes this point in his article by quoting Justice Louis Brandeis who said, "We may have democracy, or we may have wealth concentrated in the hands of a few, but we can't have both."

So, the pope gets it. The president gets it. And, a professor gets it. Most importantly, recent research shows that people get it as well -- and what they are not getting is having an impact on their perceptions of the American economy and each other.

In September of this year, five years after the market crash that precipitated the Great Recession, the Pew Research Center released a report including the following findings:

  • 63 percent of Americans felt the economy was no more secure than before the crash
  • More than 50 percent indicated that their household incomes had "hardly recovered" and their job situation "has barely recovered"
  • Broad majorities said government policies had "done not much" or "nothing at all" to help poor people (72 percent), middle-class people (71 percent) and small businesses (67 percent)
  • In contrast, broad majorities said government policies had "done a great deal" or "a fair amount" to help large banks and financial institutions (69 percent), large corporations (67 percent) and wealthy people (59 percent)

Not only have we as Americans lost confidence in the economy, we have also lost confidence in each other. Connie Cass, of the Associated Press, highlights this in an article, reporting, "These days only one-third of Americans say most Americans can be trusted. Half felt that way in 1972 when the General Social Survey first asked that question."

In listening to the voice of the people, these are disturbing results. Even more disturbing is the unaddressed dilemma of inequality on all fronts. The diminution of confidence and trust is attributable to diminished conditions for far too many and for far too long.

We have discussed these problems in many of our prior blogs dating back to an early one posted for Huffington in December of 2010. We address them at length in our book, Renewing the American Dream, published in 2010, and in our new book, Working the Pivot Points: To Make America Work Again, which has just been released.

Let us review a few of the general dimensions of these problems here. They include: the unemployment rate, long-term unemployment, substandard minimum wages, the economic circumstances of major central cities, and suburban poverty.

  • The unemployment rate has declined to 7 percent. But in large part that is attributable to people giving up looking for work and therefore not being counted in this rate.
  • The long-term unemployment rate for those out of work for more than 15 weeks remained high in October at 3.8 percent.
  • As of 2011 (the last year for which data is available), only nine of the central cities in our 30 largest metropolitan areas had "bounced back to their pre-recession levels of government revenue."
  • The recent book Confronting Suburban Poverty in America disclosed that "major metropolitan suburbs have become home to the largest and fastest growing poor population in America." Three hundred sixty-eight of the nation's 435 congressional districts contain at least some portion of these suburbs.

This is just the tip of the iceberg for the story of inequality. It is a multi-dimensional story which has many facets including racial issues, generational issues, sexual issues, educational issues, and personal issues.

In total, it is a story that puts the promise of the American dream at risk. It is a story that needs a new and different narrative that should be provided by a responsive Congress.

For the past three years, Congress has been consumed with the debt and deficit. In 2014, Congress needs to add a third "D" to its vocabulary. That "D" is for demand.

We need a "3-D" effect. Reducing the debt and deficit is certainly necessary. There is little evidence that we have seen, however, that this reduction will do any thing to resuscitate a recalcitrant economy in a manner that will make a difference for the majority of Americans in either the short or mid-term.

For that to occur, we need to stimulate demand through economic growth. Laura D'Andrea Tyson, former chairwoman of the Council of Economic Advisers, under Bill Clinton made the case for this in an economix blog for the New York Times at the end of 2012. Larry Summers, economic adviser to President Obama, made this case again during the government shutdown in October of this year.

There are two actions that are pivotal and must be central to a demand agenda. They are implementing an "audacious" jobs program as we recommended in an earlier blog posting and increasing the minimum wage as we recommended in another blog.

In combination, these actions would move the economic needle for America and many Americans. In a recent New York Times article, Arindrajit Dube, professor of economics at the University of Massachusetts, Amherst, projected that "A 10 percent increase in the minimum wage would reduce poverty by 2 percent."

That's a start to moving away from what some have described as "two Americas" -- one for the rich and the other for all the rest. Frankly, we think the two America's characterization is not accurate.

Many of the rich, or the 1 percent as they have been labeled, live in a parallel universe of excessive access and undue influence and work constantly to tilt the odds only in their favor. They fail to recognize that in a democracy in the long run the success of the individual and community are interdependent.

The remainder of America is a patchwork quilt. It is a quilt that has been knit and held together over the centuries by the citizens' beliefs and a national ideal of equal opportunity. In a recent op-ed for the Washington Post, Robert Samuelson quotes the late historian Richard Hofstadter in this regard as follows, it "It has been our fate as a nation not to have ideologies, but to be one."

The fate of that nation and the future of that ideology are being called into question today. The fabric of our quilt is being stretched and strained. But, it has not yet been completely torn nor rent asunder.

In 2014, Congress can prevent any further damage to that cloth which unites us, by working together in order to save grace and renew the promise of the American dream. It can accomplish that by crafting and passing bipartisan legislation that demonstrates the United States stands as a "government of the people, by the people and for the people" rather than an exclusive province for the rich and powerful.

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