The Price of Civilization: Reawakening American Virtue and Prosperity (25 page)

Across the gulfs and barriers that now divide us, we must remember that there are no permanent enemies. Hostility today
is a fact, but it is not a ruling law. The supreme reality of our time is our indivisibility as children of God and our common vulnerability on this planet.
¹⁵

How, then, to find the path to peace? Kennedy was ever pragmatic and idealistic at the same time:

So, let us not be blind to our differences—but let us also direct attention to our common interests and to means by which those differences can be resolved. And if we cannot end now our differences, at least we can help make the world safe for diversity. For, in the final analysis, our most basic common link is that we all inhabit this small planet. We all breathe the same air. We all cherish our children’s future. And we are all mortal.
¹⁶

Those words, and the powerful vision behind them, led to the signing of the Limited Nuclear Test Ban Treaty in the summer of 1963, which helped to pull the world from the nuclear abyss. Today’s sources of tension—terrorism, instability, extreme poverty, climate change, hunger, and shifting global power—may be different from before, but the path to peace through mindfulness of the world, built on common interests and mutual respect, remains the same as in Kennedy’s time.

Personal and Civic Virtue as an Approach to Life

The mindful society is not a specific plan but rather an approach to life and the economy. It calls on each of us to strive to be virtuous, both in our personal behavior (regarding saving, thrift, and control of our self-destructive cravings) and in our social behavior as citizens and members of powerful organizations, whether universities or businesses. Our current hyperconsumerism on a personal level and corporatocracy on a social level have carried us into a danger
zone. We have become like the rats that press a lever for instant pleasure, courting exhaustion and ultimately starvation. We have created a nation of remarkable wealth and productivity, yet one that leaves its impoverished citizens in degrading life conditions and almost completely ignores the suffering of the world’s poorest people. We have created a kind of mass addiction to consumerism, relentless advertising, insidious lobbying, and national politics gutted of serious public deliberation.

The mindful society, with its eight areas of mindfulness—toward self, work, knowledge, others, nature, the future, politics, and the world—aims to help us refashion our personal priorities as well as our social institutions, so that the economy can once again serve the ultimate purpose of human happiness. By itself, mindfulness will not end our self-destructive consumer addictions or the political bind of corporatocracy. But it will open the way to a reenergized, virtuous citizenry, one that is ready to rebuild American democracy and put it back into the hands of the people.

CHAPTER 10.
Prosperity Regained

The aim of this chapter and the next is to chart a path from here to 2020, one that restores hope, direction, and decency to American society. We are on the wrong track, Americans shout in unison. Then let us steer back to the right track and show clearly how we can restore prosperity and purpose. The starting point should be clearer goals for society and pragmatic ways to achieve them.

Setting Goals

In
Table 10.1
, I suggest a set of economic goals and timelines. The first goal addresses the current jobs crisis. Today’s 9 percent unemployment rate should be 5 percent by mid-decade and sustained at that lower level until 2020. There will be many policies to help get us there, involving labor market reforms, greater leisure time, and a long-term boost to worker skills. We’ll look at those alternatives in a moment.

The second goal, which is closely related, is to address the education crisis. By 2020, at least 50 percent of those aged twenty-five to twenty-nine should hold a bachelor’s degree or higher, up from 31 percent in 2009.
¹
That is the sine qua non for competing successfully in the twenty-first-century global economy. To get there, today’s students will have to perform better in the key subjects of math, science, and reading. Here, too, we should set goals, based on global benchmarks. America needs to end its long slide in school performance. It should certainly be able to score within the top ten countries in those three subjects by the year 2015 and the top five by the year 2020.

Table 10.1: Goals and Targets, 2011–2020

Goal 1. Raise Employment and the Quality of Work Life

• Reduce unemployment to 5 percent by 2015.
  
• Improve governance of CEO compensation.
  
• Guarantee paid maternity and paternity leave in all firms of a hundred employees or above.
  

Goal 2. Improve the Quality of and Access to Education

• Raise the share of twenty-five- to twenty-nine-year-olds with a bachelor’s degree to 50 percent by 2020.
  
• Raise the U.S. ranking in global test scores to within the top five in all categories: reading, science, and mathematics.
  

Goal 3. Reduce Poverty

• Cut the national poverty rate to 7 percent by 2020, half of the 2010 rate.
  
• Reduce the share of America’s children growing up in poverty to below 10 percent by 2020.
  

Goal 4. Avoid Environmental Catastrophe

• Reduce America’s greenhouse gas emissions from 2005 to 2020 by at least 17 percent.
  
• Ensure that low-carbon energy supplies account for at least 30 percent of U.S. power generation by 2020 and 40 percent by 2030.
  
• Have 5 million electric vehicles on the road by 2020.
  

Goal 5. Balance the Federal Budget

• Reduce the budget deficit to below 2 percent of GDP by 2015.
  
• Eliminate the budget deficit by 2020.
  
• Stabilize government health care outlays at 10 percent of GDP.
  

Goal 6. Improve Governance

• Provide public financing for all federal elections.
  
• Limit corporate financing of campaigns and lobbyists.
  
• End the revolving door.
  
• Consider constitutional amendments on term length and limits.
  

Goal 7. National Security

• End the military occupations of Iraq and Afghanistan.
  
• Rebalance the outlays on defense, diplomacy, and development.
  
• Create by 2012 a national security strategy in line with the National Intelligence Council’s
  Global Trends 2025
  .
  

Goal 8. Raise America’s Happiness and Life Satisfaction

• Establish national metrics for life satisfaction.
  
• Raise life expectancy to at least eighty years.
  
• Move from twenty-second to top five in least corrupt countries (Transparency International Corruption Perceptions Index).
  

Third, we need an honest approach to poverty, not one that blames the poor and leaves them to their fate. We know that the single most important key to ending the cycle of poverty is to enable today’s children growing up in poverty to reach their full human potential. That in turn requires that America as a society invest in the human capital—meaning the health, nutrition, cognitive skill, and education—of every child in the nation, whether born to wealth or poverty. By 2015, every child in the country should be enrolled in comprehensive early childhood development programs, ensuring the access of poor and working-class parents to quality child care, nutritional monitoring, safe day care, and quality preschool. As I describe below, no investment in our children will be more important for the long-term health of the nation.

Poverty rates stagnated for three decades and then began to increase after 2008. One-fifth of today’s children are growing up in poverty. By 2020, let us make that no more than 10 percent. Overall, more than 14 percent of Americans were living below the poverty line in 2010. By 2020, let’s cut that rate in half. There will be no single key to success: education, training, high employment, and health care must all play their role.

Fourth, none of these gains will last long if we continue to hurl headlong into an environmental and natural resource catastrophe. America has cause to overhaul its infrastructure in any event: the roads, bridges, levees, water and sewerage systems, and power grid are antiquated and dilapidated. But we have further reason to reinvest in the core infrastructure: it needs to be overhauled decisively to introduce smart and sustainable energy use and transport for
the twenty-first century, to achieve three interlocking goals: efficiency, reduced dependence on imported oil, and the transition to a low-carbon economy. Obama has set an emissions target for 2020: a cut of 17 percent relative to 2005. I will add another goal: a revamped power grid and transport infrastructure to ensure at least 5 million electric vehicles on the road by the end of the decade, on the way to a “tipping point” at which electric vehicles become a commercially viable proposition without special government support because of the services that they deliver.
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Fifth, we must get the soaring public debt under control. The budget deficit in 2010 was around 10 percent of GDP. Part of that was cyclical, caused by unusually low tax collections and unusually high unemployment insurance and other transfers due to the weak economy. Yet even with some recovery, the medium-term budget deficit is stuck at around 6 percent of GDP, enough to cause a devastating accumulation of debt and the potential for a budget crisis within a few years. Taxes will need to rise, especially on the top income earners, who have enjoyed an unprecedented bonanza in the past thirty years.

Sixth, we need to make government function effectively once again. Not only is our government in the hands of corporate lobbies, but its basic administrative machinery has collapsed. Policy making is relentlessly short term; there is little planning; and America’s vast expertise is not properly tapped. Without effective public administration, even a well-financed government is doomed to failure.

Seventh, a key to success will be much smarter foreign policy, especially a shift from “hard” power (military) approaches to “soft” power (diplomatic and assistance) strategies. We are squandering trillions of dollars in useless wars, breaking the budget and the national morale in the process. By ending these futile wars and redirecting our energies to the core reasons for conflict—widespread insecurity, extreme poverty, a scramble for resources, and rising environmental stresses—we will enhance our security at a tiny fraction of today’s military outlays. By 2015, we should be able to slash
the military budget by at least half, from 5 percent of GDP to between 2 and 3 percent of GDP, and redirect a part of those savings to better investments in global stability.

Eighth and finally, these goals should be seen as society’s ultimate objective: greater life satisfaction, both today and in future generations. For that we need better measurements of what underpins life satisfaction, going beyond mere market income to include leisure, good health, a safe environment, and fairness and trust within society. With better guideposts and indicators of happiness, we should be able to answer seriously, not as a matter of hype, the famous question that Reagan posed in his election campaign against Jimmy Carter in 1980: “Are you better off today than you were four years ago?”

New Approaches to Medium-Term Economic Policy

To achieve these core objectives, we will need to adopt a new approach to economic policy. We will need a mixed economy approach, relying on the two pillars of government and markets; we will need a commitment not only to efficiency but also to fairness and sustainability; we will need a longer-term vision based on investments and structural change; and we will need to act holistically, with policy innovations introduced simultaneously across several sectors of the society. Here is a brief sketch of some of the most important policy initiatives.

A New Labor Market Framework

America’s jobs crisis reflects mainly a failure in the labor market itself, not a failure of the macroeconomy. By that I mean that lasting solutions to jobs will be found not by turning the dials of Federal Reserve credits or boosting aggregate demand through budget
“stimulus” but rather by improving the skills of the workforce, the quality of working life, and the proper functioning of the labor market. Several countries in Europe, including the Scandinavian economies, Germany, and the Netherlands, have achieved great success through a range of “active labor market policies” targeted at building skills, creating flexible and satisfying work conditions, and matching workers with appropriate jobs. It is time the United States turned to an active labor market policy of its own.

America’s job challenge begins with the skills deficit. Consider the December 2010 unemployment rate: 9.4 percent of the labor force, with a total of 17.5 percent of the labor force either unemployed or on involuntary part-time work. Yet the unemployment rate varies considerably by age and education levels. Among those sixteen to twenty-four, it was a staggering 19.3 percent, while for those twenty-five years and older, the overall unemployment rate was less than half that, 8.3 percent.

As I’ve repeatedly noted, we now have a starkly divided labor force for those with a college education and those without. With construction jobs lost following the housing bubble, and with lower-skilled manufacturing jobs long gone to China, Mexico, and other emerging economies, lower-skilled workers face very low wages, weak job attachment, and diminished chances of landing a stable job. We saw earlier that median earnings for workers without a high school diploma are a meager $20,000 per year and for those with a high school diploma $27,400. College graduates average $47,800 and holders of advanced degrees $63,200. The education/earnings gradient is steeper than ever, as the bottom has fallen out of the labor market for low-skilled workers.