American Dreams (3 page)

And while Republicans have been guilty of the sin of omission, Democrats are guilty of the sin of commission. To ease the pain of the new normal, they simply offer Americans more government programs in an attempt to compensate for lost wages and missed opportunity. This approach implies that a lack of work, high unemployment and low economic growth are here to stay. Under the Democrats' plan, Americans should sit back and accept diminished lives and diminished freedom in exchange for government-granted security.

Such has been the story of the Obama presidency. In 2008, Barack Obama ran as a committed centrist—a twenty-first-century leader who would unite our country to confront and solve the new problems of a new era. But almost immediately upon taking office, he was unmasked as an old-fashioned big-government liberal. Tellingly, he and other Democratic leaders chose to put at the center of their agenda the income inequality between the rich and the nonrich. The message to working- and middle-class Americans was unmistakable: The reason for your lack of mobility somehow lies in the fortunes of others. The success of the wealthy, they told us, accounts for the lack of good jobs, the stagnant wages and the growing cost of living for everyone else. The result is that, for over six years now, the president and his ideological allies have pursued policies—from health care to energy—to redistribute wealth rather than grow it for all.

But government, which has been expanded in the name of the poor and the middle class—Americans like Jose—has only diminished their opportunity to get ahead. For example, government regulations and mandates in the Affordable Care Act have created too much uncertainty to risk starting a new business. Both the legislation and the rhetoric coming out of Washington are making Jose and millions like him feel that going into business today is only for those who can afford to hire the army of lawyers and accountants it now takes to simply follow all the laws. That is why he has concluded that the smartest thing he can do now, he says, is “just wait and see.”

“Nancy Pelosi said it,” Jose says. “‘We have to pass the bill to find out what's in it.' If she's going to take that attitude—if our leaders are going to take that attitude—why would they expect the citizens to do any different?”

Government doesn't have to be the enemy, but too much government has produced a new kind of inequality in America: opportunity inequality. This is the inequality between those who can afford to influence government and those, like Jose, who can't. Income inequality—so much the focus of liberals these days—is a by-product of opportunity inequality. After six years in which those most hurt by the economic downturn have fallen further behind, it is time we acknowledge how government overreach is reducing opportunity and threatening the American Dream.

Big government has always been an impediment to upward mobility, and this is truer than ever in the new economy of the twenty-first century. We no longer have simply a national economy; we are all participants in a global economy. Things happening on the other side of the world can have a larger impact on our lives than things happening on the other side of town. In a global economy, it's become easier and more cost effective for the jobs in manufacturing, customer service and computer support that used to be done by Americans to be done in India or the Philippines.

Whether we like it or not, globalization is real and it is here to stay. Our challenge now is to position ourselves to take advantage of the opportunities it presents us, not simply suffer from the disruptions it creates. We hear a lot about global competitiveness, but the challenge we face is much more than just a race for power or national bragging rights. We are in competition with other nations for the investment, innovation and talent that will create good, well-paying jobs. The health of the middle class is at stake.

The reason big government fails now more than ever is that it makes it harder for us to win this competition. If we want to restore the American Dream, we need tax policies, regulatory policies and spending policies that make America the best place in the world to invest, and the easiest place in the world to create new businesses and new jobs through innovation. Instead, big government gives us tax policies, regulatory policies and spending policies that are making America a more expensive and burdensome place to invest and innovate.

Another culprit economists increasingly point to for the changing economy is technology. For most of the years after World War II—including when I was growing up—new technologies
added
to the productivity of American workers, helping us produce more and faster. But today's advances in artificial intelligence and robotics aren't always helping American workers. In many cases they're
replacing
them. I don't buy into the dystopian scenarios of self-aware robots enslaving mankind, but you don't have to be a sci-fi conspiracy theorist to acknowledge that plenty of good, well-paying jobs are being taken over by machines. All you have to do is go through the self-checkout line at the supermarket, or ask UPS workers nervously eyeing Amazon's plans to replace them with delivery drones.

Just like globalization, technology is here to stay, and our challenge is to find the opportunities it presents and to take advantage of them. These technological breakthroughs aren't all bad news for the middle class. Even as machines take over more functions in our modern economy, we will still need humans to build them, fix them and work alongside them.

The key to using new technology to our advantage is having educational and vocational training systems that produce workers capable of working with it. In his book
Average Is Over
, economist Tyler Cowen sees a future in which high earners are those who “get” computers and information technology. Low earners, he argues, will be those who don't—the less technologically adept who will be forced to work in jobs attending to the needs and wants of the high earners.

Cowen concedes that you won't have to be a future Steve Jobs or even a computer programmer to be among the high earners, just someone prepared to work with technology to solve real-world problems or fill real-world needs. He points to the fact, for example, that Facebook founder and zillionaire Mark Zuckerberg was a psychology major, not a computer science major. Zuckerberg didn't know how computers work, but he understood how they could be used to fill a human need.

Cowen's vision of the future is very interesting but ultimately, I think, pessimistic. He puts the split between the high-earning winners and the low-earning losers in the coming high-tech economy at 15 to 85. There's no question that technology is changing and will continue to change American jobs. But I am certain we can do better than a future in which only 15 percent of us adapt to working with that technology.

Here, again, big government is making it harder for Americans to acquire the skills they need to benefit from the opportunities created by technology. Our current system of education, from kindergarten through graduate school, was designed in the middle of the twentieth century. That is, it was designed for an era in which we had plenty of low-skill jobs that paid middle-class incomes, a time when higher education was an option, and our higher education students were primarily recent high school graduates.

In the twenty-first century, there is a rapidly shrinking pool of middle-income jobs for low-skill workers. Education is no longer an option—it is a necessity—but our system is failing to prepare Americans for the jobs of the new economy. A recent international study showed the United States falling dangerously far behind other countries—such as Japan, Sweden and Chile—when it comes to promoting the skills needed to compete in the modern workforce. We're only average in literacy and problem-solving skills compared with most of the countries we compete with. And when it comes to math skills—the skill most prized in today's new economy—we're bringing up the rear. Only Italy's and Spain's workers performed worse than ours in math. And worse yet, while other countries seem to be racing to catch up, our skills gap is deepening. While younger workers in other countries consistently scored higher on skills tests than the generations that came before them, our thirty-year-olds actually scored lower on literacy in 2012 than thirty-year-olds in 1994 did.
7

Big government is failing Americans because, instead of promoting transformational reforms to our education system, our leaders just want to spend more money on the status quo. This is true in higher education, where instead of creating the space for innovative and affordable higher education programs, the system seeks to shield itself from competition and innovation.

It's especially true in primary and secondary education. When Democratic politicians at all levels of government actively oppose strengthening our schools through competition and parental choice, they are hurting the very people they claim to care about most—and at a time when education is more important to achieving the American Dream than ever before.

In New York City, for example, Mayor Bill de Blasio has declared open season on publicly funded charter schools. Rich families can afford to send their children to virtually any school they choose. But by forcing poor families to send their children to failing and stagnant schools, Mayor De Blasio is making those who need the most help less able to compete for the middle-class jobs of the future. The fact that these are the very same politicians who spend their time decrying income inequality only adds insult to the injury they are inflicting on Americans.

There is one more reason why the American Dream is slipping out of the reach of so many families. It is perhaps the hardest one for us to solve through government and yet one that we simply cannot ignore. And that is the decline of the family itself.

The American economy isn't the only thing that has changed since my parents came to this country. Since the 1950s, marriage has declined and the number of babies born to single mothers has soared. We can no longer afford to ignore the connection between the health of families and the health of the American Dream.

It's not even controversial: Social scientists, economists, think tanks from the left-leaning Brookings Institution to the right-leaning Heritage Foundation—everyone except too many politicians—agree that the health of the family is key to upward mobility. Brad Wilcox of the University of Virginia studies marriage and its effects on income and well-being. He has found that young people are 44 percent more likely to graduate from college if they are raised by their married parents. Children from intact families are also about 40 percent less likely to have a child outside of marriage.
8

These are the two things—getting an education and avoiding having children until marriage—that are increasingly key to achieving the American Dream. They are two critical parts of what social scientists call the “success sequence”: First get an education, then get a job, and don't have children until you are married. Studies of census data show that if all Americans first finished high school, worked full-time at whatever job their education qualified them for, and then married at the same rate that Americans got married in 1970, the poverty rate would fall by an astonishing 70 percent.
9
Young Americans who follow the success sequence have only a 2 percent chance of falling into poverty and a 75 percent chance of making it to the middle class.
10

Big government fails now more than ever because it ignores the importance of the success sequence and the family unit. It views the breakdown of families as a product of poverty—not as the cause of poverty. As a result it promotes antipoverty programs to support families instead of pro-family programs to eradicate poverty.

The fact remains that there is no government program—no matter how well intentioned or how generously funded—that has ever or could ever hope to achieve for American families what they can achieve by following the success sequence. It works regardless of whether you're Hispanic, black or white, female or male, college or high school educated. It is, in short, proof of the proposition that in America you can still achieve success no matter who you are. So why isn't the health of the family a bigger part of our conversation on saving the American Dream? Why aren't politicians and Hollywood celebrities and everyone who claims to care about helping people get ahead in America shouting this from the rooftops?