Roger Altman: America’s Revival Defies Washington’s Sclerosis

BACK

 

 

It is hard to find someone who is not pessimistic about America. Two-thirds of our citizens see the country on the wrong track, particularly because they hate Congress and do not much like the president. Internationally, there is much hand-wringing over American decline.


Such gloom mistakes Washington for the country as a whole – an error that has often been made during the periods of federal dysfunction that are a recurrent theme of US history. We are again hearing that because Washington is stuck, the country is too.
 

It is not. The US is actually making a comeback. Stunningly positive social and economic changes, unthinkable even a decade ago, are taking place, driven by traditional American strengths of local leadership, private enterprise and individualism, which always dwarf Washington’s impact.
 

Look at crime. Twenty-five years ago, this was the top public concern. But better local policing and lower hard drug usage have halved America’s crime rate. Violent crime fell 32 per cent during the past 25 years, and a remarkable 64 per cent in big cities. Property crimes have fallen 75 per cent in New York City.
 

Second, years of grassroots efforts at school reform are paying off. High- school graduation rates have reached a record 80 per cent level and could hit 90 per cent by 2020. This progress is all local – including improved teacher recruitment and training, stronger curriculum materials and better use of data in evaluating students. Parental groups, non-profits, businesses and educators have led the way.
 

Third, we are seeing healthier practices regarding sex education and contraception. As a result, teenage pregnancy and abortion rates have fallen to the lowest recorded levels, down 51 and 70 per cent respectively over 25 years.
 
Fourth, private enterprise has produced a momentous turnround in energy production. Only six years ago, oil output was half its 1970 peak, but technology breakthroughs reversed that. Now, the US is again the world’s largest producer of oil and natural gas, and we have decades of low-cost supply. This surge is boosting output and manufacturing competitiveness, creating millions of jobs and reducing our reliance on the Gulf.
 

Yet a huge swath of American society is not participating in this progress. These are families that own no financial assets, and so have not benefited from the Federal Reserve’s monetary largesse. Indeed, almost 40 per cent of Americans face falling annual incomes of $40,000 or less. The great challenge is to improve their economic security as a matter of fairness and improved purchasing power. Fortunately, the same combination of enterprise and local initiative can make progress.
 

Stunningly positive social and economic changes, unthinkable even a decade ago, are taking place.
 

Take infrastructure investment, which creates jobs and improves competitiveness. States and localities are relying on user fees to finance new initiatives. Chicago, for example, raised water rates to pay for a $4.5bn water system upgrade. Five states raised gas taxes to fund road improvements. Denver tapped private capital to help build a new light rail system. Private investment triggered the much-discussed redevelopment of Brooklyn.
 
States and cities have also expanded pre-kindergarten education, which can help raise lifetime earnings. Non-profit organisations have worked with 43 states to adopt detailed achievement standards for school-age students. The goal is to raise proficiency and, ultimately, college readiness.
 

Many believe that when Washington is paralysed, the country is too. But, this overstates the role of the federal government in America’s evolution. Other than in wartime or the Great Depression, the nation has never been as dependent on Washington as many think. The progress even now being made is proof of that.
 

The writer is executive chairman of Evercore and a former deputy US Treasury secretary. He contributed this article to the Financial Times.

 

TOP