The Forgotten Americans: An Economic Agenda for a Divided Nation, by Isabel Sawhill (Yale University Press, 255 pp., $28.00)
Isabell Sawhill was one of the architects of Bill Clinton’s 1996 welfare-reform legislation, which tied receipt of benefits to work requirements. Writing from a center-left perspective in The Forgotten Americans: An Economic Agenda for a Divided Nation, Sawhill, now with the Brookings Institution, insists on the centrality of work for developing civic-minded individuals. She argues, with considerable evidence, that producers—not consumers—are central to our long-term economic well-being.
Sawhill echoes themes of former Federal Reserve Chair Ben Bernanke’s 2017 speech, “When Growth is Not Enough,” in which Bernanke remarked that Americans “seem exceptionally dissatisfied with the economy, and indeed have been for some time.” As Sawhill explains, “stagnant wages, declining mobility, social dysfunction and political alienation” have bedeviled the country for decades. But these afflictions have been overshadowed by a focus on the Gross Domestic Product as the key measure of our economic health. GDP can mislead us about the underlying health of the economy. Throwing rocks through windows, for instance, is technically more “productive” than leaving them as they are because of the business it provides to glaziers. “The GDP numbers obscured the suffering of the white working class in middle America,” Sawhill contends. In 2016, after eight years of President Obama, rising GDP masked a stagnant average wage which, in real terms, hadn’t increased in 40 years.
The anti-poverty reforms that emerged out of Lyndon Johnson’s Great Society of the 1960s have largely played themselves out. After 40 years in which we’ve quadrupled spending on the social safety net, the poverty rate is virtually unchanged. In roughly the same period, spending on education has more than doubled, also to little effect. What remains, though Sawhill treats it only in passing, is the rhetoric of perpetual racism and the proliferation of government-funded community organizations dedicated to rounding up votes on Election Day. The upshot, explains Sawhill, is that America suffers “lower labor force participation rates than Europe” while wasting a great deal of money trying to push people into higher education. Sawhill is harshly critical of President Trump’s tax cuts, but she has virtually nothing to say about the economic incompetence of the slow-growth Obama years. She bemoans the decline in labor-force participation without acknowledging Democrats’ role in creating welfare as an alternative to low-paid work.
One must turn to Peter Cove’s Poor No More: Rethinking Dependency and the War on Poverty to understand how we reached this impasse. Cove observed the War on Poverty first hand, as respect for work was supplanted by social programs that paid nearly as well for inactivity as for effort. Poverty in terms of consumption was alleviated, but communities collapsed. Recipients of welfare tend to be inactive, both in the lives of their children and in society generally.
Sawhill sees automation as devastating for the future of male employment. She considers “misguided” the idea that we can bring back manufacturing jobs in large numbers. In a dystopian vein, she forecasts a future economy largely based on women providing home health care to elderly people and cleaning the houses of the wealthy. Nevertheless, Sawhill rejects the Universal Basic Income, the brainchild of Silicon Valley billionaires, which would institutionalize mass indolence. Instead, she looks to a revival of vocational education as a way of advancing the interests of the three-fifths of Americans who will never obtain four-year degrees.
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