David Horsey / Los Angeles Times
A political campaign is about the worst time to have a discussion about economic realities. The party that is out will speak of nothing but looming disaster while the party that is in will be singing nothing but “Happy Days Are Here Again.” And, since our current political system is in a permanent campaign mode, economics never escapes the warp of politics.
The truth is, it is easy for politicians to pick and choose among the facts to support whatever best serves their campaigns because economic news can be good and bad at the same time. I was reminded of this by two stories I read yesterday.
The first was a report by my Los Angeles Times colleague, Mark Z. Barabak. Writing from Mingo Junction, Ohio, Barabak describes a bleak scene of American decline: “Idle steel mills run the length of several city blocks, empty and rusting on the thickly wooded banks of the Ohio River, like hulking tombstones for a past that died and the promise that died along with it.”
Barabak interviewed dozens of people who have seen jobs in the coal mines and steel mills disappear with few employment opportunities springing up to replace them. These voters are despairing, cynical and uninspired by either presidential candidate. Their testimony reinforces the view that this is a nation in decline with pervasive joblessness, a dormant manufacturing sector and little hope for revival.
The second story paints a starkly different picture. It is touted on the cover of the current Newsweek with an illustration of America as an economic Superman. The article is excerpted from a new book by the economics editor of Yahoo Finance, Daniel Gross, titled, “Better, Stronger, Faster: The Myth of American Decline ... and the Rise of the New Economy.”
Gross insists that the doomsayers are wrong. Since the economic meltdown of 2008-09, he says, the American economy has made a dramatic turnaround. Corporate profits, exports and the stock market have skyrocketed to record levels. The private sector has created more than 4 million new jobs. Tourism has boomed. The U.S. auto industry has come back with a vengeance, and GM is selling even more cars in China than it does at home. American farmers are shipping rice to Japan, soybeans to China and beef to Brazil. Apple, Google and Facebook are setting the standard and the pace of innovation for the world.
Far from being broken, Gross says, the numbers show the U.S. remains the planet’s “indispensable economic nation” and retains its capacity to grow and innovate faster than any other country.
The message of capitalist dynamism in the Newsweek story supports Mitt Romney’s belief in the wonders of the market, yet it is not the story he will tell on the campaign trail. He will be talking about those jobless working stiffs in Ohio and blaming their plight on Barack Obama. Obama, of course, will be playing up the economic success stories, especially the revival of the auto industry for which he will take credit, and he will insist more jobs are on the way.
Reality is a more complicated thing. The nimble, productive, high-profit dynamo that Daniel Gross describes as America’s new economic model is making plenty of people rich. Nevertheless, it is different from the old economy. It requires fewer workers. Those who are lucky enough to have jobs often do not have the benefits, job security and solid middle-class salaries that were more plentiful in the old economy. Older workers may never find a place in this new system. Young people with only a high school education can expect a life of underemployment. Those who have gone deep into debt borrowing to pay for a college education may spend years after graduation waiting tables or making lattes before they find a job that matches their skills.
Meanwhile, most politicians, including the two presidential contenders, pretend we can return to something akin to the old system because they know that is what voters want to believe.
Yes, there is good news and there is bad news. And the predictable news is that the complicated realities in between will not be addressed by the shrill attacks and simple-minded platitudes that will pass as serious debate in this campaign year.