U.S. moderates aren’t in the middle

By Chrystia Freeland
July 6, 2012

Go to the Aspen Ideas Festival – or to any similar confab of affluent elites gathered to solve the problems of the world in luxurious, remote hamlets – and you can be sure that a dominant theme will be a lament for the vanishing political center.

Where, panel after panel will ask, are the wise moderates, able to seek compromise and rise above partisanship in pursuit of the public good? America’s biggest problems, and its inability to tackle them head-on, will usually be cited as the consequence of this lack of a sensible middle.

Most of the wealthy and well-positioned people in the rooms where these sorts of discussions are conducted see themselves as members of that sadly disempowered middle, so reflections along these lines are generally well received.

But the problem with this approach is its implicit assumption that politics, or at least policy, is a win-win game. Policies that serve the collective good are out there to be found, if only we publicly minded moderates were in charge.

But what if it isn’t just the political battle at the voting booth that is partisan, but the policies themselves, and their outcomes, too?

Take healthcare. The fierce battle over the U.S. healthcare overhaul is framed by both sides as an argument over which type of system would work better “for America.”

But what you think “works” depends very much on who you are. If you are uninsured, or fear you could be, expanding coverage is obviously a very good thing. But if you already have Cadillac coverage through your employer, and are confident you will keep it, then paying for more people to get on board might not seem like such a good idea.

A favorite issue for believers in the moderate middle is the budget deficit. It is held up as an example of the rabid partisanship and short-termism that threatens to destroy the U.S. economy. The usual consensus on how to avert impending doom is to put the wise moderates in charge and let them hammer out a compromise deal to both raise taxes and cut spending. That’s fair enough – and is almost certainly the eventual path the United States must take.

But what’s really striking about discussions of the budget deficit by the moderate middle is how overwhelmingly the issue itself has come to dominate the public debate about the economy, especially when those wise, nonpartisan people get together. A study last year by the National Journal found that the number of articles in five major American newspapers about the budget deficit eclipsed the number of articles about unemployment.

What’s especially remarkable about that imbalance is that while the deficit is certainly an issue the United States needs to tackle in the medium term, at the moment interest rates for 10-year bonds are near historical lows. The markets may not be wise, but they are nonpartisan, and as far as they are concerned there is no urgent fiscal crisis in the United States.

Meanwhile, unemployment remains above 8 percent and is having a dire and long-term impact on the people without jobs and on their families. That’s why Alan B. Krueger, an economist at Princeton who is the head of President Barack Obama’s Council of Economic Advisers, focused his talk at Aspen (which I moderated) on “the middle-class jobs deficit.”

“What I wanted to do in using that term is to highlight that this is a deficit, just like our fiscal deficit,” Krueger said. “We need to raise the jobs deficit to the same level as the fiscal deficit, if not above it.”

The U.S. jobs problem is even worse than the headline unemployment numbers suggest.

Heidi Ewing, a filmmaker whose documentary about Detroit was aired at Aspen and who was in the audience for Krueger’s talk, identified what is going on: “What we’ve noticed, from workers who got rehired recently, is they took a 50 percent wage cut during the bailout. So they’re coming back at $11 to $14 an hour. Do we really have to accept that this group of people is no longer the middle class we had in our minds before, but just the working poor?”

Thanks to what economists call the “polarization” of the labor market, if you are lucky enough to have a job in the United States you probably fall in either the top or the bottom of income distribution, but not in the middle.

Krueger touched on one of the most worrying consequences of this economically divided country: It will get worse over time.

Americans still imagine their country to be the land of opportunity, but the numbers tell a different story. Your parents’ income correlates more closely with your chance of finishing college than your SAT scores do – class matters more than how you do in class.

Which brings us back to the affluent moderates who congregate at conferences like the Aspen Ideas Festival. Whether they realize it or not, these sensible centrists are guided by their own self-interests, too. It just so happens that deficits are dangerous for them – they could bring higher taxes – while the jobs deficit has little impact on them or their families.

Today, the U.S. political center lives at the top. We shouldn’t be surprised by the shrieks of those who have been forced to the economic bottom and have chosen to move to the political fringes.

44 comments

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Great article.

And the affluent moderates are blind to something else: American kids cannot be expected to study hard for careers, like science and engineering, whose pay levels are plummeting. Yes, the pay rates for American engineers and scientists are plummeting. Surprised?

The H1B visa program has destroyed the American middle class.

It’s really a simple case of supply and demand. Consider an analogy. Consider, for example, what would happen if H1B were applied to plumbers instead of engineers.

Pick any city, let’s say, Denver, Colorado. Now, bring in 100 busloads of freshly graduated plumbers (4,000 new plumbers), who want to enter into the plumbing business in Denver, and make a living.

The result? Wage rates for plumbers will become depressed. The existing 960 plumbers in Denver, once busy every day, and making a good living, will now have much less work, or no work at all.

Who can compete with improverished hordes of plumbers from India who will work for any price? India has 1.17 BILLION people, and many of them are coming here, flooding our labor markets.

The H1B visa law was created, written and lobbied for by large American corporations as a means for decreasing their engineering labor costs. Indeed their corporate profits have zoomed up, up, up — while the wage rates paid to their American engineers have gone down, down, down.

This is what the H1B visa has done to the American engineering profession. H1B has already brought in over one million foreign engineers to America, thus driving down wages, closing American engineering schools, and discouraging American kids from majoring in engineering.

Posted by AdamSmith | Report as abusive

The divisive issue of the U.S. budget deficit may find its solution in the so-called “fiscal cliff” — which may turn out to be more of a friendly Labrador retriever than a bete noir. Taxes are due to go up, and spending is due to go down, automatically in January 2013 unless Congress takes action to extend tax cuts and forestall automatic spending cuts. Given the various foreseeable scenarios for a balance of U.S. political power after the November elections, it may not be possible to avoid the so-called “fiscal cliff.” At most, it may be possible (and “politics is the art of the possible”) to have a series of ad hoc, short-term actions on matters that are not controversial. That might not be a worst-case scenario. Worse cases would be fiscal policy dictated by either the far right or the far left, because both groups want to give their constituents free money obtained from sale of U.S. Treasury bonds. (The far right wants to give borrowed money away through unfunded tax cuts, while the far left wants to give borrowed money away through unfunded spending programs.) Neither approach is sustainable.

Posted by Bob9999 | Report as abusive

It’s stating the obvious, but it needed to be said and it was said well. Now, if we can only get people to buy into that obvious truth. Don’t hold your breath.

Posted by breezinthru | Report as abusive

Kudos on the “Cadillac” comment.

Posted by KyuuAL | Report as abusive

Seems to me there is no middle represented because, well, we only have two parties. Being an independant really doesn’t count for anything. Create a third party, give it a decade and see where we are. Of course, to many praties can spoil the fun too.

Posted by tmc | Report as abusive

Normally I would ignore people like AdamSmith but then people like him will scare young people away from STEM career.

Engineering and science careers still give you very high salary. Low 90k is the norm
Have a look at this:
http://www.bls.gov/oes/current/oes_nat.h tm#15-0000

The problem with cognitively demanding careers like these is that when people get old enough, their ability goes down hill. They get replaced by younger people (if not foreign, then younger domestic will replace them anyway).
Similar to professional athletes.

Does H-1B increase competition a lot? Yes
Does H-1B decrease wage a lot? Likely no

Don’t get scared from engineering and science. Salary is still very high.

Posted by trevorh | Report as abusive

The problem is that, at the policy level, both parties are captive to the same interests. They push the same policies. Those interests since Reagan have pushed to de-tax extreme wealth, suppress wages, and de-regulate business.

These are reasonable policies, in theory, but thirty years on it’s clear these policies have led to the destruction of the middle class, a weak economy, massive budget deficits, and amazing income inequality. Stagnant wages for everyone but the top 1% and really the top .01%, many of who it sounds like attend the Aspen Festival. It’s also led to profound levels of corruption on Wall Street.

There is no discussion in the media about reforming the economy to go back to what clearly worked 1945 to 1980. In that era, incomes for everybody doubled, among other benefits. Was it a perfect era? Absolutely not. But it’s imperfections are vastly superior to what we face today. And that era is more like how European and other successful societies have organized themselves.

When both parties push the status quo, nothing will change except more misery for all but the elites and more discussion about the disappearance of a putative middle. In truth, there is and always will be the aristocrats versus everyone else. Today we have policies that benefit only aristocrats. In a perfect world, we should have an economy like 1945 to 1980 that mostly balances the interests of both groups. We should have an economy that makes the most of what the public and private sector can offer, with living wages for all.

Posted by FredFlintstone | Report as abusive

@”Smith”

I could not agree more with your point. The problem is not so much a “supply issue” with an uneducated workforce…as much as a demand unwilling to pay for the local supply. Corporations are not looking for a highly skilled workforce- they are looking for a moderately skilled workforce at a bargain! I have seen technical jobs that could have been filled with highly experienced in-house talent go overseas to less capable individuals. The ultimate result ends with a lower quality product, unhappy customers, and corrective revisions made locally.

Posted by JayJay1855 | Report as abusive

There are no moderate Republicans; Grover dragged them all to the bathtub and drowned them.

http://www.washingtonpost.com/opinions/l ets-just-say-it-the-republicans-are-the- problem/2012/04/27/gIQAxCVUlT_story.html

Posted by borisjimbo | Report as abusive

Ms. Freeland,

If you are talking about the political region between the Democrats and the Republicans, that is no middle at all. There is very little difference between the goals of the two parties. They are both sold out to the corporate world. They do put on a good show of fighting with each other, and it keeps the populace distracted from their real loss of power.

The political middle, between left and Demo/Repubs is mostly gone. There is simply nobody to represent the interests of the 99 percent. This is not going to be easy to fix. I expect the elite in charge of us to take it to the bloody limit.

Anybody out there believe that the domestic anti-terrorist program is just aimed at foreigners? Obviously the security forces building up in the US represent the elite and are a good buffer against the increasingly disenfranchised middle and lower classes.

As one can gather from your article, the sensible people at these meetings are in the middle of the elite.

Thanks for your thoughts on the issues.

Posted by xcanada2 | Report as abusive

The fact is that the poor are, by far, the fastest growing and now largest segment of American society. And they are mostly not immigrants but native born.

No matter how you present it, the only allowed political forces in this country are strictly controlled by the upper class, by the top 0.1% by income. There is no political group out there that represents the interests of the majority of Americans. It is all about the rich.

There is a potential conflagration here that could sweep away the entire class of the American rich, together with their wealth. Ignoring problems and disrespecting and suppressing voices from the common people is the path to great trouble, not to preservation of privilege and wealth. Try reading some history.

Posted by usagadfly | Report as abusive

H1B visas are an obscenity and an act of treason, especially when fraudulent, as the majority of them are.

The perpetrators both in industry and among Government “winkers” should be put to hard physical labor for a minimum of 20 years. That should simultaneously take care of the engineering and scientific employment disaster and of the pothole problem on American streets and highways. There must easily be 100,000 criminals that could be convicted with 8 hours investigation on each of all the H1B visas granted or renewed in the past 12 years.

If you really want to know, visit ieee.org, the website of the Institute of Electrical and Electronics Engineers, which is the preeminent professional organization for electrical and computer engineers in the USA. Support for H1B visas is almost entirely made up of corporate criminals too powerful to be made to follow the law. But then if you buy the prosecutors, you need not fear.

Only a fool would study either science or engineering if he or she was born here. You can find a job much easier and make more money if you become a plumber. Most likely your employer would not care if you were born here, which would give you an advantage you will not get in engineering.

Posted by usagadfly | Report as abusive

trevorh wrote “The problem with cognitively demanding careers like these is that when people get old enough, their ability goes down hill.”

Apparently, this disparaging comment is motivated by anti-middle age bias.

Anyway, how old is “old enough”? 95? That’s 30 years older than 65, so don’t confuse the two.

Sadly, misinformed prejudice like this is what prevents perfectly capable middle aged people from finding new employment when they lose their jobs.

Yet I for one have only gotten sharper with age. And there are plenty of examples of middle aged people and seniors who are very active and successful, including scientists, politicians, and business leaders.

Posted by DifferentOne | Report as abusive

trevorh wrote “The problem with cognitively demanding careers like these is that when people get old enough, their ability goes down hill.”

Apparently, this disparaging comment is motivated by anti-middle age bias.

Anyway, how old is “old enough”? 95? That’s 30 years older than 65, so don’t confuse the two.

Sadly, misinformed prejudice like this is what prevents perfectly capable middle aged people from finding new employment when they lose their jobs.

Yet I for one have only gotten sharper with age. And there are plenty of middle aged people and seniors who are very active and successful, including scientists, politicians, and business leaders.

Posted by DifferentOne | Report as abusive

What’s happening today was predicted well over a decade ago. Technology has made a small minority of the workforce redundant for reasons too obvious to bear repetition. This isn’t a happy state of affairs for the “redundants”. I wish I had a good answer for them, but I suspect that we will muddle through regardless.

So I have my money where my mouth is and am 85% invested in the U.S. markets. Thank goodness I learned to save when it was so unfashionable.

Posted by nikacat | Report as abusive

That’s putting the hay down where the goats can get it . . . this is a good article because it’s been well articulated. Kudos.

Posted by jbeech | Report as abusive

A lot of business opportunity was created by the introduction of disruptive technologies into commerce. The disruptions have refactored the business landscape with a general decline of those pursuits bound up in frameworks that take longer to change than the competitive field is willing to grant. This concept has been embraced in the discussion of economics.

The longer cycle of opportunity recognition/education/training and career building was disrupted when the pool of skilled competitors was increased quickly in some areas via the H1B pools of talent. H1B pools are a shortcut through the job fulfillment cycle that locally resident workers must follow. Employers who use this mechanism are appreciative of the ability to quickly satisfy skills demands for lower overall cost and without being encumbered by the long cycle that the resident labor force is bound up in.

Posted by spinStop | Report as abusive

This also reminds me of the “the moderate middle” view of budget and entitlements as personified by Maya McGuiness and the Peterson Institute, as well as the super committee, which is to say cuts to social security and medicare, maybe modest cuts to defense, and perhaps a further flattening of the top rates. And maybe needs testing for “entitlements.” In other words, a pretty right wing economic agenda that’s softened a little around the edges and then presented as the reasonable alternative to the “far left” view that social security is sacrosanct, and the “far right” view that entitlements should be privatized right now.

Posted by Calfri | Report as abusive

@Adam Smith:

Excellent and sound reasoning. Foreign labor is indeed used to bring wages down and it displaces American workers. Another example is teenage labor. CIS has shown that immigrant labor is mostly responsible for the drop in American teenage employment over the past several years, and it’s also been shown that foreign PhDs in the American university system drive down wages for post-doctoral workers.

Posted by Calfri | Report as abusive

AdamSmith raises an important point – the H1B program as currently structured does significantly depress salaries for those in science, technology, engineering, and mathematics (STEM) careers. This in turn does discourage the already small numbers of US native born completing degrees in these areas. trevorh is partially correct, salaries are somewhat high relative to some other careers requiring less education, but is very wrong in asserting that those wages are not depressed. The reason is that the required STEM degrees and the careers themselves require more intelligence and a whole, whole lot more hard work! STEM salaries, when compared on an effort basis, are quite low and significantly depressed by the H1B program.

I do have a solution. A fee on each company with an H1B visa worker equal to a full room and board scholarship for a US student. That is every worker year a company utilizes H1B labor, they fund a full year, full room and board scholarship for a US citizen STEM student at the junior, senior, or graduate student level. This would do several things:
1) companies would no longer find the H1B visa as a source of cheap labor but would still find it useful for genuine needs. Salaries would no longer be depressed for US STEM graduates.
2) more students would be attracted to STEM majors.
3) limiting to junior and above would avoid funding the many students who quit STEM majors during freshman and sophomore years because “It’s just too hard.” and encourage some of those to stick with the STEM major.
4) eliminate the need for advanced STEM majors to work part time jobs as a part of their financial aid package. Yes, it is easy enough for a business or liberal arts major to work part time, but a huge burden on those with STEM majors, especially where significant lab time is required.
Sorry that we are off the topic of the article above, but this discussion is also important.

Posted by QuietThinker | Report as abusive

Defining the center depends on your perspective. Individually most people view themselves as centrists and others as off base. The polarization in our country is coming more from centralized control than anything else. We are a very diverse nation, and the more that we try to define the center at a national level, the more divided we will be, because that means one group of ideas will be enforced by law. The “center” in Nebraska is different than the “center” in New Jersey or Mississipi, or Texas, or Utah, or Alaska! That is the beauty of regional govnernments they reflect the local “center” and allow the people to be regulated as they want, not to a mythical national “center”.

Ms. Freeland illustrates this point by attempting to explain the only reason anyone would oppose AFA is beacause they are selfish and already have theirs. Really! You see no other reasons?

Posted by nerdherder | Report as abusive

@trevorh –

The statistics you cite are from a dream-world. The clear fact is that American wage rates in all technical fields, and even in most non-technical fields, have been going downward for the past decade.

Coincidentally, have you read the article by Jack Shafer right here in Reuters today? It’s entitled “How the byline beast was born.”

Here, I’ll quote from Shafer’s article:
“No well-paid staff reporter wants to be replaced by one of Journatic’s $10-an-hour wage slaves living in the Philippines, Eastern Europe, the former Soviet republics, Brazil or Africa.”

Yes, even American journalists are seeing decreasing wage rates. And they weren’t being paid all that much to begin with.

But those tech careers that require a long, hard college curriculum of science and math — for example mechanical, electrical or chemical engineering, or computer programming — those professions for Americans once had a history of paying well. Very well.

But those very same high-paying American technical professions were targeted by corporate America as most urgently in need of reduction, or, to say it differently, most easily reduced by importing foreign educated tech workers, coming from impoverished lands, who would be grateful for even a low salary. Thus the H1B visa program was born.

And thus American wage rates for tech workers began their 10-year decline, downward and downward, your dream-world statistics notwithstanding.

As long as the H1B program remains in effect, any American kid who studies and works hard to get a good engineering education should realize he or she will be earning a wage rate much less than was possible 10 years ago, and will instead earn an amount approaching what will satisfy a graduating student from a school in some giant impoverished city in India.

That is why we have seen a sharp decline in American kids choosing engineering or sciences. It is no longer a path to a bright future, but rather a path to India-level wage rates.

Even many of the India H1B visa workers already here in America want to see the flow of new H1B workers stopped. They realize that nature’s rule of supply and demand does matter, and that the more new H1B visa workers come, the more it drives down even the low rates of the H1B visa holders already here.

On April 1, the current Administration issued 85,000 new H1B visas for the fiscal year starting October 1, 2012.

STEM workers (science technology engineering mathematics), they will be taking your jobs and reducing your wage rates. I wish I could report better news.

Posted by AdamSmith | Report as abusive

The problem as highlighted in the healthcare example, is not that there are no moderates. Our problem is that our culture has stooped to positional bargaining. The person with the cadillac health plan doesn’t want to share. They really can see that sharing would be the right thing for the country. That’s not extreme politics. That’s selfishness. Selfishness and self serving is endemic in this country.

Posted by SeaWa | Report as abusive

H-1B, what a piece of crock if ever there was one. There are 350, or so, million people in this country. This should be enough of a pool for the workforce.

Posted by SeaWa | Report as abusive

Immigration isn’t the problem. If it was a driving problem with regards to salary and employment, then a country like the US would be in a perpetual state of high unemployment and falling salaries (since the US is based on immigrants). The driving problem is 3-fold:

A. Changing demographic structure
B. Response to and management of global economy
C. Political uncertainty

Immigration can help solve the first issue. The other 2 issues will haunt the country until everyone becomes politically active and politicians decide to work together.

Posted by ProfMagyar | Report as abusive

Moderates? That presumes the existance of a left wing…
US has no left… no one in the world would call the democrats “left”. US did a good job killing the left wing during the cold war…maybe too good… even today we hear Michele Bachmann using the “socialism” word to scare dumb voters… it is not more funny than when she give the answer “this is United States of America” when asked about how she would solve the crisis…lol

US has right (Democrats), far right(Republicans) and the extreme far right(Republican conservatives)…all carring the capitalism flag (dont worry, even the socialists and comunists are capitalists today as they always were) but conservative minds appear to parasite even the democrat ranks… many defenders of the economic policies i see in reuters comments are obviously former republicans or republicans that vote for Obama and present themselves as democrats since they were hit by the crisis and lost job, foreclosure or something like that…

So it is very obvious and clear why there is so much division when it comes to reforms that will affect the interests of bankers, corporations, the rich… The US “moderates” are in the far right… they will create discord every time anything will affect the wealthy… and since all are in the right wing… you dont need a lot of discord to paralize any progress in congress…of only what they want…

This “division”… Jimmy Carter used to complain a lot about it 30 yeas ago… and nothing changed…
Division is the trademark of US politics… divide, distract and conquer the 99% cent by cent…

Posted by VonHell | Report as abusive

The Right wing has taken over the Republican party. ideologically it is now lead by the like of Limbaugh. That has pulled the democrats into what used to be the center. Most of their proposals are far from leftist – merely moderat – in spite protestations by the rabid-right. By today’s standards Eisenhower would be a left-wing “socialist” and Ronald Reagan a liberal.

Posted by jmmx | Report as abusive

The fact that the 10 year treasury is at record lows should be no comfort to anyone with an interst in the fate of our economy. The truth is that no matter what we do with taxes and spending, there is little chance that we will even “bend the cost curve” – decrease the rate of deficit spending in the near of medium term. Thirty plus years of financial mismanagement have put us in a situation similar to that of Greece. There is simply no way we will ever be able to repay our debt which now exceeds one times GDP. The American Dream is fast becoming a nightmare for many of us. It will take a generation or more of economic pain to begin to fix this mess. In the mean time, we will continue to “print” money until the rest of the world figures out the dollar isn’t worth the paper it’s printed on. Then things will get very interesting. This won’t be a gradual thing. One day everything will be status quo and the next day it won’t. That’s how economic disasters work.

Posted by gordo53 | Report as abusive

Trevor doesn’t understand a career includes working until retirement, not until some boss, immigrant, or ‘young person’ makes them unemployable.
H1B is a threat to computer jobs, too.

“Salary is still very high” and “people like him will scare young people away from STEM career” indicate Trevor H. is either has poor grammer or doesn’t speak English as his native language.

Posted by 111Dave111 | Report as abusive

The healthcare debate has never asked (much) whether a central bill-payer can increase the efficiency of the system. Much of it concerns getting employed people to pay into the system who would otherwise freeload off of the emergency-care system. And if done right, it will improve job mobility that will increase average incomes also. Furthermore, it can establish liability limits and standards of care to reduce unnecessary tests and procedures just to avoid malpractice claims. So it may not be entirely a win/lose situation depending on your income and present insurance. (Those of us who served in the military usually have no complaints about that government healthcare system. It is surprising that it is such a vitriolic topic among people who know nothing about it.)

The deficit is probably necessary for the moment, as we struggle to get back on our feet after the financial melt-down. But long-term, it risks the credibility of our financial system. That will be far worse for people than taking a pay cut. In fact, the pay cuts are just a belated recognition that the U.S. has not been paying its way in the world for years due to our large trade deficits. The worst thing is to elect politicians who claim they can boost pay up to the previous unsustainable levels. But we don’t have to “accept” anything about the pay levels, which comment in itself is an obvious attempt to politicize the situation. All we have to do is recognize economic reality.

Posted by Jim1648 | Report as abusive

There is no contiguency for the deficit, only the bond market. However, once it decides to start voting, it wins.

Posted by BigBlueFan | Report as abusive

The public moral of working for the good of the nation as a whole is lost some where. Also the need to only accept things that have been observed to work as good policy not ideology. If nothing worked in the past one needs to experiment on a small scale first.

When if come to nations the numbers are real things and people. When there is a real-estate bubble is allowed to happen it involves most of the money most of the people saved for years. It obviously too big to fix, but does not stop politicians for talking fixes. The number of unemployed or uneducated of sick without health care are millions of real people. They are not abstract marks on paper.

Posted by SamuelReich | Report as abusive

People bailed out at GM were being paid to sit in break rooms “in case they were needed” while machines did the actual vehicle construction. That defies common sense, inflates the cost of vehicles without reason, and is the sole purpose of unions “for the middle class”. They take unskilled labor and artificially manipulate the supply with work rules. The USPS is becoming financially insolvent yet they cannot lay off ANY career employees and have severely restricted areas of local excessing. These set ups need to fail. A job paying $14/hr which is occupied means that is what it is worth to the company and the employee. Why not simply print a million dollars and give it to every family in America? Then it can be the 100% having millions of dollars.

Posted by Robocop5626 | Report as abusive

The article misses the point. This is shown by the comment that the markets indicate everything is okay, as our interest rates on borrowing are low. Markets are mostly reactive for the near term. And, interest rates for one country are affected by those in other countries, meaning at the moment we are considered a safe haven. The author makes the same mistake most of us do about government: there isn’t a problem till the problem is here. Well, considering the problems we’ve gone through since 2007, I’m curious why we still have this head in the sand philosophy. The government can’t create an economy, it can’t eradicate poverty. Only we can, as private individuals. The government can assist or it can hinder. Regardless, the process of maintaining a well ordered society is a slow one. There are no instant fixes. That necessitates we be aware, and respond to, issues that are in the future. Not wait until our government borrowing rate is at 8%. Clearly, if we don’t take action on the debt soon, the present unemployment rate will look pretty good. Government spending needs to be radically slashed, and tax incentives to businesses to create jobs need to be given. Remember, our present government structure and method is a result of the wealth we generated in the last 100 years. We had a lot of money to do lots of different things. The structure and function of government needs to reflect the present environment.

Posted by aeci | Report as abusive

I fear the day that @AdamSmith and the other H1B enthusiast find out about the L1 visa. H1B is for chump consulting firms.

In the grander scheme of things, the US is not going to be able to maintain its high living standards. All of the problems discussed above by commenter’s are probably true to varying degrees, but they are all just symptoms of larger changes. The United State is only 5% of the population, and consumes 25% of the resources. Yes, it is 25% of the global GDP too. The problem is the rest of the world is not going to let this continue. Society will smooth out this rather large bump in the global economic road called the American middle class. We can (and should) fight it as long as we can, but we cannot win. Other countries will not play by our rules anymore. They don’t have to. For America to keep this up, we need “growth”. All politicians and corporate types repeat this constantly. Well, the American markets have been “mature” for a long time. As far back as the Nixon administration we’ve know this. The growth potential in the US compared to the rest of the world is miniscule. Besides, American capitalism is based on 20th century ideas and will not work for a global economy. All countries can’t export more than they import and maintain “growth” forever. It is a flawed plan. Americans cannot stop time. As to this article specifically, of course no one is representing the masses. No one ever does. As long as we have a two party system no one ever will.

Posted by tmc | Report as abusive

@DifferentOne
The down hill is based on my own experience about myself and a few (albeit small) number of researches on cognitive ability. Btw, I’m not talking about cognitively demanding but routine tasks. Actually for routine tasks and tasks with a lot of unknown factors the more experience (older), the better.

@AdamSmith
From your comments and many others I come to conclude that they need to have a requirement for H-1B salary to exceed whatever median “dream” numbers from the department of labor stats (according to the job of course, so would be 90k+).

It would solve the low wage problem that scare many people away and reduce the psychological impact.

Hopefully, that would make people happier.
I always think making sure as many people feel the system is reasonably fair and just is important. Anyway hopefully, they’ll have more over sight on H-1B and make people happier.

Posted by trevorh | Report as abusive

I think over all this is a kind of poorly written article. It makes a few valid points, pointing out relatively obvious things, that have nothing to do with the subject of the article. Half of the article is random statistical information that does nothing to strengthen or weaken the point being made. It kind of rambles a bit… so I will too!! ——————
There is one issue addressed as a primary point of the article (though you wouldn’t guess it at first), and that is the job deficit vs the fiscal deficit. IMO the primary reason focus has shifted so much to the fiscal deficit rather than the job deficit is because way back when, four score and seven years ago, there was huge market crash caused by a cascading of events that led to many companies going under. Lots of companies went under because of that crash, leading to LOTS of job losses. The crash led to the government and fed deciding that what the market needed was a cash influx to help banks write off more of the debts and losses so that the banks could once again loan money to the companies. And it worked, kind of… Since then, most companies have indeed gotten things under control and there is small amounts of optimism, work and success helping companies grow. Indeed there is a need for new hires in many companies in the US currently. ——————– Policy makers saw this and realized it, but unexpectedly there was still resistance to growth and therefore job number increases. They (policy makers) realized that companies were hedging their bets, increasing safety nets, etc, and not hiring new employees for fear that there would be another crash and that the current goodness is only a short term thing. ———————————————————One of the primary reasons this fear is exists is because of the alarming governmental fiscal deficit growth; partially created by the influx of cash used to soften the blow of the market crash and partially create by ongoing wars. This view point is not unwarranted, because even as of a month ago, the fed is still practicing quantitative easing and the fiscal debt is still climbing at alarming rates, and the US is still involved in very costly overseas wars. It is not a sustainable situation. These situations create very poor market confidence.
————————————————
Ultimately, the primary debate caused by the fiscal deficit (which does need to be solved to increase market confidence, and thus allow companies to feel safe to grow again and create more jobs) is the classic question: “is it the government’s job to create jobs or is it the private industy’s job?” If it’s for private industry, then its the government’s job to create an atmosphere friendly to private companies (lower taxes, higher incentives etc). If it’s the governemnt’s job to create jobs, then higher taxes, more government programs would be the path. —————————————————– The fundamental difference is not one that can be easily mixed. Because of this there is not necessarily ‘middle’ ground. So yes, with regards to ‘US moderates’ stand on US deficits, they are not in the middle; they stand either left or right of the situation.
Mixing in class-ism or views on healthcare muddies the argument (not to say any of the other issues point out in the article are not valid).

Posted by Byron5 | Report as abusive

@111Dave111
Most employers will replace you if they get a better deal. It’s always like that everywhere not just in STEM.

That’s why I think sooner or later people should get self-employed in one way or another.

After reading your posts, I actually think they should scrap H-1B all together. It makes more people happy, too much hostility now.

Posted by trevorh | Report as abusive

Europe dug its own grave in like fashion over 100 years ago. Our nation, society, and institutions are all collapsing in real time. The election of Obama – a man with virtually no qualifications to be president, is a clear reflection of that. What’s more, his ideology is ironically aligned to the same socialist construct which is now collapsing in real time in Europe.

Defeat America, re-elect Barak Obama.

Posted by Thucydides | Report as abusive

Increasing jobs and GDP is a matter of making money move around the circular flow. Currently all the gains are going to the top 1% and to corporations, both of which are saving lots of cash. It’s 1929 all over again with our federally insured banks playing the part of the naive investors and the Fed feeding the bubble (again). Unless money starts flowing in the real sector — instead of spinning around in the financial sector — collapse is inevitable.

Posted by JackRS | Report as abusive

nonsense, all of it.

Posted by JohnSmith1978 | Report as abusive

Since treasury markets are about, strike that, more reflective of central banks desire to manage things than Libor the attempt to equate “market” pricing with a crowd sourced opinion rooted in perfect information and pricing seems disingenuous at best.

You are capable of better Crystia.

Posted by zhmileskendig | Report as abusive

Another fine piece by Chrystia Freeland and a good explanation why the fiscal debt has taken center stage from the jobs deficit among “moderates”.

The commenters here who fear work visas should focus more on the real problem that underlies the job deficit and not this symptom. The fact is that employers can’t find good home grown employees. Americans can’t do math or find Washington on a global map. We’re uneducated and yet feel entitled because we’re constantly told we’re great when really it was our fathers and grandfathers who were so great. THIS is why our middle class is being shipped overseas and our high paying jobs given to visa holders. The fix is a proper public school system- not a “no child left behind” band aid.

This is another problem with Chrystia Freeland’s “moderates”. THEY’VE all got good educations and their children do, too. They think the poor education system is relegated to the Urban poor. But standards have dropped everywhere but the best schools. The average American student gets less capable of competing on the World stage every year. But the wealthy political moderates are blind to this, too, it seems.

Posted by LEEDAP | Report as abusive

“Affluent elites”

The “1%” no more represent moderates than any of the rest of this nation’s non-wealthy population.

Posted by LBK2 | Report as abusive