The decline of the American Dream, with David Leonhardt – Niskanen Center
His new book starts with a mystery: why is US life expectancy dropping? It develops an argument for a major shift in the trajectory of American capitalism. Excerpts from the interview:
“In 1980, the United States had a fairly typical life expectancy for a high-income country: higher than some countries, lower than others. And by about 2005 or 2006, the United States had the lowest life expectancy of any high-income country in the world: lower than Japan, lower than South Korea, than Canada, than Western Europe, even lower than some European countries that are not quite as rich like Greece and Slovenia…
“…under democratic capitalism, the government acknowledges the market’s shortcomings. It acknowledges that, left to its own devices, the market tends to lead to a society with vastly rising inequality, where the rich attain enough political power to change the system to benefit themselves…to me, it’s very clear that a form of democratic capitalism delivers superior results to rough-and-tumble capitalism, the same way it’s clear that capitalism delivers superior results to socialism or communism…
“I think Piketty’s phrase and idea, ‘the Brahmin left,’ is very important. I sometimes describe it in the New York Times as the upscaling of the left. ‘Brahmin left’ is more eloquent than ‘upscaling, but it’s basically the idea that, starting in the 1960s — and this is a history I tell in some detail through a bunch of figures who I also try to be quite sympathetic to — basically the political left in this country becomes increasingly reflective of and catering to college graduates and white-collar professionals. And the Democratic Party and the political left still believes in much more redistributive taxes than the Republican Party, so I’m not saying the two parties are equal. But basically the Democratic Party has moved away from labor unions, and that has tangible effects…
“There’s something about the Democratic Party that is telling working-class people — and not just working-class white people — ‘We’re not for you.’ And I think that’s a huge problem in a society where the Republican Party doesn’t yet have an economic policy — or maybe doesn’t have an economic policy, I shouldn’t say ‘yet’ — that is going to lift working people’s living standards…
“We can argue about how it’s worked out for the top 10%, maybe 20%. But clearly for the bottom 80% or 90%, when you look at the pace of income growth, wealth growth, life expectancy, these other measures, the post-1980 period has been much darker than the pre-1980 period.”