August 18, 2013
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In a recent interview, I was asked about the growing gap between “the American dream and the American reality." It was a great way to frame a conversation that too many families are having at their dinner table … and not to whine but, rather, for a better future.
For too many, the traditionally-vaunted components of the American dream are proving frustratingly elusive to achieve: home ownership, well-paid employment, job security, and adequate access to public services.
There’s another element in play. Given the turmoil of the 2008 global financial crisis, and for the first time in a very long time, too many Americans worry that their children’s generation could well end up worse off than theirs.
These concerns are both understandable and valid.
It is already five years since the global crisis yet economic growth is still stuck in low gear. Too many people are unemployed, with alarmingly high long-term and youth joblessness. Excessive income and wealth inequalities persist.
This is not to say that the economy has not been healing. It has. Indeed, it has outperformed many other advanced economies, including in Europe and Japan. But this healing remains frustratingly gradual, especially for the most vulnerable segments of society.
What renders this situation particularly frustrating is that America’s dynamic economy is being held back not by complex engineering problems but, instead, by highly-polarized Congress politics. Consequently, initiatives that promise significant economic improvements have faltered in a Congress that now has few admirers among the general public.
So, at the risk of sounding like a broken record, let us remember that there nothing preordained about the sluggish recovery.
With political will, America has the ability to promote high and inclusive economic growth, create sustainable jobs, enhance productive opportunities for its citizens, improve public services, and arrest the type of inequality that silently eats away at social integrity and cohesion.
There are no intrinsic reasons for America to lag its economic potential. Congress can and should be a catalyst for more rapid progress on both macro and micro issues.
At the macro level, it is about coordinated measures to promote aggregate demand, improve the economy’s supply responsiveness and overcome residual debt overhangs.
At the micro level, it involves broadening opportunities, including by facilitating labor training and retooling as well as accelerating efforts to enhance educational attainment.
If Congress continues to lag on these issues, our economy would nevertheless continue to heal and grow … but the recovery will stay tepid while disproportionately benefiting the better-off segments of society. As such, too many would face historically wide (yet – critically – avoidable) gaps between the American dream and reality; and too many of our children could end up (again, unnecessarily) worse off than their parents.
Photo: Brand New Images
Featured on:EconomyEditor’s Picks
Posted by:Mohamed El-Erian
via We Can Close the Gap between the American Dream and Reality | LinkedIn.
