Journalist David Leonhardt discusses various topics including his upbringing, the golden age of America's economy, the impact of economic growth on the middle and working class, and the unintended consequences of immigration.
Government investment in infrastructure, research and development, and support for labor unions played a crucial role in the rapid economic growth and income equality of post-war United States.
Political choices such as reducing top tax rates, deregulating finance, and shrinking labor unions have contributed to the rise in inequality in the United States, disproportionately benefiting the wealthy and widening the wealth gap.
Deep dives
The Importance of Investment and Labor Unions
During the post-war decades, the United States experienced rapid economic growth and greater income equality. This was attributed to policies such as increased investment in infrastructure and research and development, as well as the presence of strong labor unions. The government played a significant role in fostering a future-oriented approach, investing in education, building the highway system, and supporting technological advancements. However, in recent decades, there has been a shift away from these policies, resulting in slower income growth for the bottom 90% of Americans and increased inequality. The need for renewed investment and support for labor unions is crucial to restore a healthier economy for most people.
The Impact of Political Choices on Inequality
The rise in inequality in the United States cannot solely be attributed to natural market outcomes. Rather, it has been influenced by political choices, such as reducing top marginal tax rates, deregulating finance, and shrinking labor unions. These choices have disproportionately benefited the wealthy and contributed to the widening wealth gap. While the American economy has seen higher GDP rates compared to Europe, the benefits of this growth have not been evenly distributed. The bottom 90% of Americans have seen slower income growth, and the country now has the lowest life expectancy among rich nations. These trends highlight the need to reassess current policies and consider alternatives to reduce inequality.
The Shift Towards a Service Economy and the Role of Labor Unions
As the American economy evolves into a service industry, there is potential for labor unions to play a more significant role in counterbalancing corporate power. Unlike factories that can be moved to escape unions, service-based industries such as hospitals, retail, and warehouses are localized and cannot easily relocate. This shift could create opportunities for collective bargaining and organized labor to address the power imbalance between corporations and workers. Additionally, increasing investment in education and expanding access to education can contribute to growth and reduce inequality.
The Impact of Immigration on the American Economy
The 1965 Immigration Act, intended to make minimal changes to immigration trends, led to a historic rise in mass immigration and significantly altered the ethnic composition of the United States. While immigration has brought cultural diversity, it has also had economic consequences. The increased supply of foreign-born workers has put pressure on wages, particularly for low-skilled workers, contributing to income stagnation. Understanding the effects of immigration on the economy and addressing its impact on wages and inequality is crucial to shaping sustainable immigration policies in the future.
David is a journalist and columnist. He writes the NYT’s flagship daily newsletter, “The Morning,” contributes to the paper’s Sunday Review section, and co-hosts “The Argument,” a weekly opinion podcast with Ross Douthat and Michelle Goldberg. In 2011 he won a Pulitzer Prize for Commentary on economic questions. His new book is Ours Was the Shining Future: The Story of the American Dream.
The episode was taped on November 8th. For two clips of our convo — on African-American lefties against mass immigration, and black voters moving to the GOP over crime — pop over to our YouTube page. Other topics: David’s upbringing in NYC and Boston; “creating dorky fake newspapers in elementary school”; his mom was a copyeditor and his dad a high-school teacher; the debt that print journalists owed to the sports page; America’s economic golden age of the mid-20th century; how we used to have trust in institutions with more social cohesion; communism “just doesn’t work”; how the union movement was strong; how Eisenhower’s R&D was unprecedented but also had balanced budgets; how JFK was a “massively overrated president”; RFK’s conservatism and his deep popularity with black Americans; LBJ’s view that crime was just poverty; the immigration restrictions until the 1965 act; low crime before the 1960s; the much higher marriage rate before the 1960s, especially among blacks; the stagflation of the 1970s; OPEC after the Yom Kippur War; Milton Friedman; how the government created the computer industry; how the female workforce has been kicking ass; the anti-patriotism of the left; Obama’s love for America; how today’s government doesn’t invest as much in the future; IRA and CHIPS; the newfound bipartisan interest in unions; Covid relief; crime and disorder after the summer of 2020; effective altruism; the low price of clothing today; how our lower life expectancy is a sign of plenty; and how Millennials are not as far behind their parents as much as we’re told.
Browse the Dishcast archive for another convo you might enjoy (the first 102 episodes are free in their entirety — subscribe to get everything else). Coming up: Carole Hooven returns to talk about her tribulations at Harvard, McKay Coppins discusses Romney and the GOP, my old friend Joe Klein and I do a 2023 review, Jennifer Burns on her new biography of Milton Friedman, and Alexandra Hudson on civility. Please send any guest recs, dissent and other comments to dish@andrewsullivan.com.
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