Popular Economics Weekly
What a strange question to ask Americans! We are the wealthiest country in the world, right? But a recent survey claims to show that wealth accumulation is not the first priority for most of the world. In fact, the 2017 United Nation’s World Happiness Report compiled by Gallup says that Americans’ pre-occupation with wealth gets in the way of being happy.
This conclusion results from a survey of 155 countries, and shows USA is now ranked 19th in being happy, due to our national preoccupation with what money buys now, rather than in the future.
Norway is ranked number one; no surprise with its oil wealth. But, “by choosing to produce its oil slowly,” says the survey, “and investing the proceeds for the future rather than spending them in the present, Norway has insulated itself from the boom and bust cycle of many other resource-rich economies. To do this successfully requires high levels of mutual trust, shared purpose, generosity and good governance, all factors that help to keep Norway and other top countries where they are in the happiness rankings.
The USA, however, hasn’t shielded itself from boom and bust cycles. The Great Recession is just the latest in a string of recessions since 1980—two under R Reagan, one during Bush I, and two under son GW Bush. And that has led to the greatest income equality since 1929 that was the beginning of the Great Depression, and also the cause of just-ended Great Recession.
We have not been good at investing in our future, and that has led to a very low savings rate and very little put aside for retirement. This is in part because our social safety net is profoundly inadequate. We have no universal healthcare, for starters, and Republicans are threatening to repeal Obamacare, and maybe even Medicare.
This is while we have a huge public debt because Congress has refused to raise enough taxes to pay for all the spending that has supported the ongoing wars as well as tax loopholes afforded corporations, and high net-worth individuals.
Why has such record income inequality led to recessions? As Marriner Eccles, FDR’s renown Federal Reserve Chairman once said about the Great Depression: “…a giant suction pump had by 1929-30 drawn into a few hands an increasing portion of currently produced wealth. ... The other fellows could stay in the game only by borrowing. When their credit ran out, the game stopped."
Credit had again run out for most Americans in 2007 due to a failed financial system and busted housing bubble. And it is just that uncertainty that is in the way of happiness. For how can anyone be happy, unless they can count on a predictable future?
“The USA is a story of reduced happiness,” said the Gallup study. “In 2007 the USA ranked 3rd among the OECD countries; in 2016 it became 19th. The reasons are declining social support and increased corruption and it is these same factors that explain why the Nordic countries do so much better.”And the lack of such social support has resulted in poorer health outcomes for all Americans—such as declining longevities, significantly higher disease rates, and higher infant mortality. The study lists the main factors that support happiness: caring, freedom, generosity, honesty, health, income and good governance.”
In sum, the United States offers a vivid portrait of a country that is looking for happiness “in all the wrong places,” says the study. “The country is mired in a roiling social crisis that is getting worse. Yet the dominant political discourse is all about raising the rate of economic growth. And the prescriptions for faster growth—mainly deregulation and tax cuts—are likely to exacerbate, not reduce social tensions. Almost surely, further tax cuts will increase inequality, social tensions, and the social and economic divide between those with a college degree and those without.”America has become a less caring and generous country because of its single-minded pursuit of wealth, in other words. How to re-develop those traits that Americans have historically been noted for?
Creating a quality educational system available to all, would be a start. The share of Americans receiving a college Bachelor’s Degree or better is stuck at 36 percent when a more technically savvy workforce is needed more than ever. And the educational divide between Haves and Have-nots has been increasing, which increases the political polarization.
“Clinton won 17 of the top 18 states, while Trump won 29 of the bottom 32 states,” said Gallup. And, “The deep social and economic divisions according to educational attainment seem to be similar to the dynamics of the Brexit vote and other anti-migrant parties in Europe, which find their base among voters with lower educational attainment.”Why is greater equality, and the concept of a safety net for all Americans taking so long to achieve when it has already been achieved in all other advanced countries and economies?
One hint: Why haven’t we elected a female president when every other major western economy has? And women, because they are used to nurturing and caring for children, are much better at planning for the future
Harlan Green © 2017
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