Is the US having a crisis of confidence? Four years after the Great Recession knocked it out, the country remains groggy and unable to figure out if it is still “morning in America” or if it’s in the middle of a steep economic decline.
Edward Luce, The Financial Times chief Washington correspondent, is a concerned but firm believer that the US is experiencing a socio-economic decline. That belief is what motivated his latest book, Time to Start Thinking, which he says he wrote gripped by “a great sense of foreboding.”
The decline of American competitiveness, Luce argues, is a complex phenomenon, which he blames on a number of now well-known issues: a struggling education system, immigration policies that choke off talented researchers and entrepreneurs, and of course the country’s hyper-polarized politics. Luce argues that the divisions in Washington discourage the sort of bold, Marshall Plan-like reforms the country needs to reverse this slippage.
Interestingly, Luce does not single out the 2008 recession as the reason for this contraction. The 2002-2007 business cycle, he points out, was the first in modern American history where the average US household was poorer at the end of it than at the beginning. This is a sobering reality given that, for decades, the American middle class has been a critical engine of domestic and global growth. The prospect of the US economic engine getting a little bit weaker with each fresh business cycle, Luce argues, is “profoundly worrying” and a reality that’s been years in the making.
Luce, despite his UK origins, has an insider’s knowledge of the US. He’s a long-time and well-connected Washington journalist and has also worked as a speechwriter for the US Treasury Department. But, as a foreigner, Luce is able to maintain some intrinsic distance from his subject (the US decline), which encourages a sober, data-driven analysis of America and its issues.
Time to Start Thinking joins a growing body of work chronicling America’s so-called decline. According to Amazon, the online retailer, buyers of Luce’s book also purchased titles such as The Great Divergence: America’s Growing Inequality Crisis and What We Can Do About It or White House Burning: The Founding Fathers, Our National Debt, and Why it Matters to You. Amazon also lists Daniel Gross’s Better, Stronger, Faster, which The Financialist reviewed last week. Unlike Luce, though, Gross derides any notion of an American decline. He argues that amid the wreckage of the 2008 recession lies great opportunity for renewal, which is itself a quintessential American trait.
Gross’s optimism starkly differs from Luce’s more sober assessment. However, both authors agree on one thing: America is in the midst a crisis of confidence. While Gross believes that crises are fertile grounds for ingenuity and prosperity, Luce fears that, in the absence of deep structural reform, this crisis could drive the US into an irreversible downward spiral.