W ith the economy, as with many other subjects, sometimes the wrong choice of words can obscure important facts. Former U.S. Sen. Phil Gramm certainly chose the wrong words when he said that people are “whiners” to complain about the economy. Today’s headlines tell the tale: Inflation starting to run rampant, banking and mortgage giants struggling, small but steady job losses for most of this year.
Elected officials haven’t helped: A spendthrift Congress that threatens to raise taxes, while putting costly mandates and/or restraints on fuel and food, has exacerbated the problems of a weak dollar, boosted inflation and slowed economic growth. In short, Americans’ immediate concerns are valid.
But some longer-term perspective is in order here, as provided by the July/August issue of The American magazine (published by the American Enterprise Institute.) The simple fact is that creature comforts once considered luxuries are now taken for granted throughout society. The average household classified by government aspoor today actually has higher living standards — air conditioning, washer-dryers, automobile ownership and the like — than did middle-income Americans as recently as the 1970s.
Also, “when it comes to how hard [how many hours] we have to work [to pay] for food and fuel, we still face far lower burdens than our grandparents did,” The American says. And “real total compensation … has been rising steadily for several generations. Our workweeks are shorter, the number of years we work has declined,” and “all told, only about a quarter of our waking hours are consumed with work, down from 45 percent in 1950 and 35 percent in 1973.” Not only that, but “workplaces are getting safer, too,” and “life expectancy has risen.”
The point is that even in the current difficulties, the U.S. economy starts from a position of strength. We can endure a tough stretch — even one as severe as the present — without it turning into disaster. To get past the present hardships, corporate taxes must come down in order to bring jobs home to America, and available energy sources must be drilled and produced. Congress must show fiscal discipline to help strengthen the dollar, and regulatory burdens should be eased.
Still, the current unemployment rate of 5.5 percent is well within the 4-6 percent rate that economists once considered “full employment.” When our “bad” today is better than the best we hoped for just a quarter-century ago, that’s reason for calm and resolute action rather than panic.
