The Right Kind of Growth Won’t Be Easy to Find

Is it growth or is it cancer? Whichever it may be, we want it, and elected officials and their would-be replacements are out in force promising us plenty of it. They talk as though there were a sure-fire formula for growth, which they know but their dumb-bunny opponents don’t.

Really, nobody knows for sure. What works one time may not work another. Even diagnosing what the trouble may be demands vast knowledge, experience and a very good Ouija board. This is Franklin Roosevelt talking to the San Francisco Commonwealth Club during the 1932 Presidential campaign: “Our industrial plant is built; the problem just now is whether under existing conditions it is not overbuilt. Our last frontier has long since been reached, and there is practically no more free land …. Clearly, all this calls for a reappraisal of values. Our task now is not the discovery or exploitation of natural resources, or necessarily producing more goods. It is the soberer, less dramatic business of administering resources already at hand … of adapting existing economic organizations to the service of the people.”

Seventy-one years later, not a few people would say that’s pretty much the American predicament now, and a lot of people would say it isn’t. No doubt about it, we have idle capacity everywhere, as was the case when Roosevelt made his speech, and for several years we have not been able to rev those engines up to maximum speed.

As it turned out, Roosevelt got himself elected, but he couldn’t get the silent factories up and running, then or for years afterward. Indeed, industrial America remained in a zombie-like state until the United States mobilized to go war. War brought prosperity, but did it do the bringing? Was it the gigantic jumps in deficit spending? Or was it taking 13 million men out of the labor force in a population less than half of what ours is now which ended unemployment? The lesson here is that George W. Bush should immediately put 10 million people on the government payroll doing anything or nothing. Soldiering is not a productive activity and, taken by itself, doesn’t induce growth. So the lesson is to directly create jobs, no matter how economically useless. Just put people on a payroll so they have something to spend and the rest follows.

The World War II boom was also accompanied by tax increases so large they would make George Bush vomit, not to mention wage and price controls plus food and fuel rationing. Well, we’re not going to go that way, but before we turn our backs on the World War II lesson, there was another element which economists always miss but novelists and social historians often catch. That element is a change in mood. The morale, the spirit, the emotional content of the country shifted from Depression and/or depression to excitement, businesses, unity and even a little idealism.

The Eisenhower era’s prosperity was built on tight money, a balanced budget and low taxes plus, of course, the fact that the rest of world was pretty much a smoking ruin and thus offered little economic competition. It was the apogee moment for the great, vertically integrated corporations of yore and concomitant bursts of productivity. The country was growing faster than a zucchini in August. Where there had been hay fields on Monday there were suburbs on Tuesday. Everywhere, suddenly there were superhighways for super-consumers. It was all unplanned and looked it, as people began to notice that the garbage was encroaching on nature and phrases like the “disposable society” came into vogue. Still and all, most people happily wallowed in it.

The Cold War spirit ruled, and with it the need to demonstrate to peoples everywhere that America was a land of equal rights and prosperity. Hence the power elite’s support of civil rights and a surge in growth which made for not merely full employment, but over-employment. In major organizations and institutions, public or private, for profit and not, there were two people being paid to do one job. Nobody was running a tight ship as organizations got bigger and slower and their work product got sloppier and cheesier. Growth all but stopped and the economy slid into the 1970′s, a period of high inflation, low morale and aimlessness. The nation, it was said, was suffering from malaise, a French word of uncertain definition.

Next came Ronald Reagan and an abrupt volte-face. Huge deficits, large tax cuts, tight money and high interest rates brought first one helluva recession, and then a great growth spurt as prosperity returned. As a recipe for prosperity, the Reagan prescription, his “supply-side economics,” falls short of being the automatic formula which guarantees that the good times will roll as the merchandise rolls out of the Wal-Marts and the Sam’s Clubs. Mr. Reagan’s great contribution was igniting a change in spirit.

Some of the change was ugly, particularly the union-busting, and some of it elevated a certain kind of heartless attitude into a virtue. At the same time, Mr. Reagan got the nation to tighten up, brighten up and stop moping. The term “work ethic,” coined by a German social thinker nobody in America except his fellow professors had ever heard of, took its place in everyday language. America went from malaise to mean-and-lean in the space of five or six years. All the pros and cons of what was called Reaganomics aside, the turnaround and its attendant growth could not have happened without the reanimation of spirit injected into the country by its President.

Nothing lasts, and by the end of the first George Bush’s term the nation’s ass was dragging again and recession was upon us once more. Then comes Bill Clinton with his formula: don’t spend and balance the budget and raise the taxes when necessary. Like other formulas before it, the Clinton formula, although plausible, is hardly a sure-shot recipe for pulling economies out of the doldrums. However, it was enormously successful as the country took off on a prosperity jag the likes of which it may never have enjoyed before. There was a point there in the Clinton years at which unemployment came as close to zero as you’re going to get. As it was, the demand to fill jobs was so strong that it seemed even the flood tide of immigrants, legal and illegal, wouldn’t be able to satisfy it.

But again, there was something more than pure, pedestrian economics at work. The mood changed. It not only bucked up, the national spirit took off in happy, fanciful flight born of the hopeful intoxication induced by the electronics delirium. In a strictly utilitarian sense, the electronics have proven to be invaluable tools, but during the 1990′s people turned them into something approaching a cult religion. The country, needless to say, flew too near the sun, which melted its wings, and the result was the big plop-so big a plop we forget that, even now, millions still continue to enjoy a day-to-day standard of living which has no parallel in our past.

Now we’re back in the doldrums, treading water and worried lest we begin to lose ground. George Bush the younger has come up with his formula, which doesn’t look promising, but which will do if it acquires an animating national spirit. That’s not there. There is no enthusiasm in the land. The mood is grim and gray, a condition which doesn’t show up in the regression coefficients economists love, but which, though unquantifiable, is as determinative as tax rates.

The watchword from the administration and its opponents is growth. What kind of growth? More jobs growth. That kind of growth. Growth that cranks out more stuff, that gives us what we have too much of already, and too little of what we want and need. We need growth that will finally attack our chronically disastrous child-care non-system and our permanently impaired educational systems. We need growth to shore up and revamp a retirement/pension system which is dissolving before our eyes. We need growth to address the medical-care miasma, but what is being promised is the same-old same-old, jobs to gin up more of the consumer products we’re already choking on. This is old growth, cancerous growth, scarcely the growth that will inspire a new rush of fresh spirit.

The next big thing can’t be the last old thing.