The Disconnect Between the Decline of Optimism in the U.S. and the Facts

Source: Gregg Easterbrook in The New York Times, May 12, 2016

…Optimism has stopped being respectable. Pessimism is now the mainstream, with optimists viewed as Pollyannas. If you don’t think everything is awful, you don’t understand the situation!

Objectively, the glass looks significantly more than half full. Job growth has been strong for five years, with unemployment now below where it was for most of the 1990s, a period some extol as the “good old days.” The American economy is No. 1 by a huge margin, larger than Nos. 2 and 3 (China and Japan) combined. Americans are seven times as productive, per capita, as Chinese citizens. The dollar is the currency the world craves – which means other countries perceive America’s long-term prospects as very good.

Pollution, discrimination, crime and most diseases are in an extended decline; living standards, longevity and education levels continue to rise. The American military is not only the world’s strongest, it is the strongest ever. The United States leads the world in science and engineering, in business innovation, in every aspect of creativity, including the arts. Terrorism is a serious concern, but in the last 15 years, even taking into account September 11, an American is five times more likely to be hit by lightning than to be killed by a terrorist.

Is the middle class in dire straits, as Mr. Sanders contends? Yes, inflation-adjusted middle-class household income peaked in 1998 and has dropped slightly since. But during the same period, federal income taxes on the middle class went down, while benefits went up….

Is American manufacturing in free fall, as Mr. Sanders and Mr. Trump assert? Figures from the Federal Reserve Bank of St. Louis show industrial output a tad below an all-time record level, while nearly double the output of the Reagan presidency, another supposed golden age. It’s just that advancing technology allows more manufacturing with fewer workers – a change unrelated to foreign competition….

The lack of optimism in contemporary liberal and centrist thinking opens the door to Trump-style demagogy, since if the country really is going to hell, we do indeed need walls. And because optimism has lost its standing in American public opinion, past reforms – among them environmental protection, anti-discrimination initiatives, income security for seniors, auto and aviation safety, interconnected global economics, improved policing and yes, Obamacare – don’t get credit for the good they have accomplished.

In almost every case, reform has made America a better place, with fewer unintended consequences and lower transaction costs than expected. This is the strongest argument for the next round of reforms. The argument is better made in positive terms – which is why we need a revival of optimism.

Recently, Warren Buffett said that because of the “negative drumbeat” of politics, “many Americans now believe their children will not live as well as they themselves do. That view is dead wrong: The babies being born in America today are the luckiest crop in history.” This was not Nebraska folk wisdom; rather, it’s sophisticated analysis. The optimistic view is that it’s still morning in America, and if we fix what’s wrong, the best is yet to come. Such can-do, better-future thinking needs to make an appearance in the 2016 presidential campaign.


2 responses to “The Disconnect Between the Decline of Optimism in the U.S. and the Facts

  1. David Schatzky

    Statistics may say things are good now but the people are not experiencing their lives as satisfying or secure. Their pessimism arises out of an existential yearning for meaning and a deep dissatisfaction with the emptiness inherent in many kinds of work, and the economic uncertainty as the new economy and disruptive enterprises take over.

    Dissatisfaction and unrest are exacerbated by the digital age’s emphasis on instant gratification and glamour, and its focus on the lives of the self-indulgent rich and famous. Trump is an example of what too many Americans aspire to. He is rich and he’s famous. He has it all, and his message is “you can have this, too”.

    Sadly, he is over-promising. Underemployed graduates, minorities working in service jobs, families with unpaid mortgages will not be rescued from their treadmill existences so easily.

    It’s easy for optimists with a good income and security to look to a rosier future. Not so easy for a laid-off worker or someone struggling to pay for luxury goods which they don’t really need in the first place, but which give them a sense of being valuable.

    Magical thinking and projecting transformative powers onto a mythical figure seems to give people hope.

  2. David Schatzky

    Today, in the Globe and Mail, Margaret Wente says it well.