After the war in the 50’s and 60’s and up until about 2000 the US economy was strong. The GDP growth rate was, on average, close to 4%. In addition the growth was broadly experienced throughout the economy. Most people felt a bit better off each year. Wages grew. Young people felt that they had a good chance to do better than their parents.
In the last decade the GDP growth rate has averaged closer to 2%. Even more noteworthy is a look at who benefitted from this slower growth rate. Most of the benefit went to big corporations and the “1%”. Incomes have stagnated or worse, for large segments of the population, mostly middle class and low income. In addition there is a geographic component to beneficiaries.
There is an apparent consequence to decades of a situation where GDP growth is cut in half and also very unequally felt in the population. A person who experiences zero or negative personal economic growth over a decade or more, while recalling memories of earlier times of individual growth and generational growth, looks for reason and assigns blame. It is understandable that people in these circumstances look at the world around them, government, other parts of the economy, global events, and rationalize their condition. Tribal instincts surface. There is a loss of faith in government’s ability to address the issue. Immigrants are seen as taking jobs away. Social unrest increases.
It seems logical that if we could return to the era of 4% growth, and growth that is fairly experienced by all segments of the economy, then our tendency to assign blame and create demons, will dissipate. Major impediments to the healthy functioning of the democracy can thereby be removed.
So fairly realized economic growth is a worthy goal. This is a real challenge however. Past growth was fueled in large part by abundant and cheap natural resources. That advantage no longer exists. Slower, but fair, and sustained growth seems to be the objective. How do we achieve and learn to live with this outcome?