Henry Dubroff and John J. Huggins, in “From Great Recession to Great Reset” in today’s Perspective in The Denver Post (http://www.denverpost.com/opinion/ci_16039375), described the restructuring of the American economy that is occurring as a result of our recent financial sector meltdown. The authors view the loss of home ownership as a reliable investment whose growth in value can be depended on to finance future costs such as children’s college tuition and retirement, the decreased mobility due to a significant portion of homeowners owing more on their homes than they are worth, and the increased structural unemployment rate due to a long-term (or at least medium-term) downturn in new home and commercial construction, all conspire to create an enduring new economic context of slower GDP growth, increased savings, decreased spending-as-percentage-of-GDP, and decreased mobility.
Few would argue that some of these changes are not necessary and desirable in the long-run (e.g., increased savings and decreased reliance on consumer spending for economic vitality), and few would argue that increased structural unemployment is not undesirable (unless it was only the unemployment of people in a relatively smooth transition to new employment, which the authors argue is not likely to be the case in this scenario, in which the construction sector has around 25% unemployment, involving workers not easily positioned to retrain for the more robust communications technologies and health care jobs on the horizon). But what about decreased job-driven mobility and a slower growing GDP, two conditions that most economists would probably identify as undesirable? Are they really?
There are at least two silver-linings to those two interrelated clouds: 1) We need to transition into a more sustainable, eco-friendly, and, for both moral and pragmatic reasons, distributionally just global economy, which is going to have to place a higher value on ensuring that everyone has access to a modest means of sustenance than on the ability of some to achieve extraordinary heights of wealth and consumption; and 2) this country is in desperate need of a renewed sense of community, a renewed recognition that we are not just a collectiion of mutually irrelevant individuals, but are in fact a society of neighbors and fellow citizens, with a shared fate, shared challenges, and in a shared enterprise. The slower GDP growth in what is by far and away the most consumptive nation on Earth contributes to the former necessary global economic adjustment, while the decreased job-related mobility contributes to the latter necessary cultural adjustment in our own country.
The challenge we face is to transition into ever more sustainable and fair political economic systems, without compromising economic vitality to the point that we are only achieving a sustainable and fair condition of universal destitution. We need to create an economy robust enough to feed and shelter and educate and, in general, nourish the bodies, minds, and souls of the human population, but fair enough that it does not acomplish this for some by denying it to others, and sustainable enough that it does so in a symbiotic coexistance with rather than parasitic destruction of the natural context upon which our very existence depends.