The Agenda

Non-Washington Solutions

From an article in Atlantic Business:

“We’re seen more than a 40% drop,” said Gary Burtless of the Brookings Institution. “Prices fall, which hurts net wealth. The borrowing capacity of people who would move into new homes is questionable, so homes go unoccupied. With lots of unoccupied housing, nobody builds anything new.”

This isn’t a problem that can be “solved” with another $1,000 per family in payroll tax cuts (although it might help). It’s certainly not a problem that can be solved by cutting government and praying somebody else picks up the slack. The hardest thing for Washington to understand is that not every economic question can be solved in Washington. Taxing and spending policy is important. But America’s two-speed crisis is deeper.

These are all reasonable points, though I take exception to an earlier paragraph:

Between 1930 and 1970, workers thrived in an economy that looked after labor. Union laws protected hours and wages, and manufacturing, where workers could make high salaries for little to no post-high school education, accounted for one out of four jobs in the economy. But the era of labor is over. The era of productivity is here, and there’s no use trying to put the genie back in the bottle. 

I’d argue that organized labor and rigid labor market regulations and price controls played less of a role in midcentury prosperity than is commonly understood, but that’s a separate issue.

What I find interesting is pervasive American fatalism regarding non-government collective action. The United States is know for the richness and diversity of its voluntary sector, yet many of our largest philanthropic organizations are geared primarily towards influencing legislative outcomes and shaping government policy by funding “beta testing” for the public sector. We often hear talk of how foundations can leverage social resources to achieve change, yet the resources in question tend to be public resources. This strikes me as a failure that merits our attention, particularly as new technological tools emerge that, in theory at least, lower the barriers to collective action. 

Not surprisingly, I tend to think that this failure derives from the fact that as the democratic state expands its purview, it tends to shrink the imagination of citizens and neighborhoods regarding what they can and should do collaboratively. 


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