Downsizing America's Expectations


The American Dream in the Age of Entitlement, 1945-1995

By Robert J. Samuelson -- Times Books 293pp $25

Although you wouldn't know it from headlines of debt defaults, Washington "train wrecks," and national paralysis, much of last fall's budget battle was a phony war. One who saw this early was Washington Post and Newsweek columnist Robert J. Samuelson, who wrote on Nov. 1 that Bill Clinton and House Speaker Newt Gingrich (R-Ga.) were in reality about a dime apart. Both knew Medicare and Medicaid had to grow more slowly. But Clinton, by resisting, saw a way to blame Republicans for heartless cuts.

Although there's no deal yet, Clinton has indeed agreed to spending cuts, while polls show the GOP got the shaft: So far, politics as usual. But as Samuelson argues in a book that richly foreshadows the budget showdown, this consensus to rein in costly programs represents a watershed for the nation.

In The Good Life and Its Discontents, he writes: "Something is now ending--the period in our history that began at the end of the Second World War and gave rise to a distinct vision of the American Dream." In the new era, the U.S. will begin limiting the growth of government and its promises of social improvement. Leadership, the author says, will be about lowering Americans' expectations from their government while encouraging them to shoulder more responsibilities.

This may sound suspiciously like a new Contract With America. But the compact Samuelson sees emerging is about economic choices, not dismantling Washington. Samuelson is a Big Government guy who sees today's radical conservatives, like liberal idealists of the 1970s, tugging the country back to its historic center. The problem, he argues, isn't the size of government but our exaggerated expectations of it. America is richer, stronger, more advanced, and more globally competitive than ever. But because Americans have promised themselves an unrealistic, even utopian future, they feel they're losing ground. There's mass disillusionment--at a time when the country should be congratulating itself, he maintains.

Samuelson blames a culture of government and private entitlement for this. The post-World War II generations of Americans have been taught that secure jobs, rising living standards, enlightened corporations, high-quality health care, generous government, racial harmony, a clean environment, safe cities, satisfying work, personal fulfillment, and a dominant political and economic role in the world are their birthright.

Well, maybe. But what about layoffs, low productivity, global competition, overworked and economically stretched families, guns, divorce, drugs, AIDS, racial strife, and other social ills? While these are partly to blame for a sense of things gone wrong, Samuelson sees them as misperceived.

For example, the author says that nearly the same percentage of Americans are employed in manufacturing today as in 1970, and that men 45 to 54 are actually employed with the same company longer, 12.8 years, than they were in the '60s and '70s. Layoffs do look huge, but historically they're affecting the same percentage of Americans as in the past. U.S. productivity, moreover, remains well ahead of levels in Germany and Japan.

Living standards have stagnated, he admits, and income inequality has grown. But Samuelson argues that this is due less to a decline in national prosperity than to the impact of low-paid immigrants and to the tendency of older workers, who are less likely to receive pay hikes, to keep working long past 65. Imports do destroy some manufacturing industries, but others replace them. Anyway, America's import share, 11% of gross national product, isn't big enough to reshape the overall economy.

All of these arguments are of course familiar, politically charged--and unresolvable. Samuelson, an admitted numbers addict, does his best to steer clear of ideology and partisanship and grounds his economic case with solid reporting and statistics.

But on social ills, he's much less sure. He views breakdown of the traditional family as a serious problem and sees the lack of work skills as the root cause of poverty. He doesn't view more government spending as a solution--but he doesn't have any good answers of his own, either.

Samuelson's innate caution can be frustrating. For instance, he argues that America's aging population is replacing national defense as the chief challenge facing government. But his solution for aging is to tinker. He would stretch out Social Security benefits, tax them for the wealthy, and push official retirement from 65 to 70.

Maybe that's enough. But nothing is said about whether faster growth from new technology could help pay for social problems. There's nothing on privatizing Social Security or nuking all tax loopholes with a single flat tax, or on restricting handguns, the fearsome symbol of a lawless America.

Samuelson, a Washington veteran, also reflects a common Beltway myopia: He assumes that Americans always get the government they deserve, from vast deficits to vicua subsidies. At a time when big lobbies have already rolled over the House freshmen "reformers" and when an angry independent-party movement is building against Washington, the assumption seems unwarranted. But that's a quibble for a subject this vast and controversial. This is a smart, balanced epitaph for an era--with a few clues for what's ahead.

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