Harvard study: Crippled political system hurts U.S. competitiveness
| FlashRatings | Thursday, September 15, 2016 3:50 PM EDT
The U.S. economy’s long but stubbornly slow recovery in the years since the 2008 financial crisis reflects paralysis in the nation’s capital, where President Obama and Republican leaders in Congress have long butted heads on how to address myriad weak links in the American fiscal framework, from the health system to education to transportation, a new study finds.
These and other areas of the economy are underperforming relative to American counterparts elsewhere in the world, hurting competitiveness and explaining why the U.S. economy cannot seem to gather and maintain substantial momentum, the Harvard Business School study of its alumni, students and the public concludes. The findings were compiled in a report released Sept. 15.
The report’s authors define a competitive economy as one in which companies “compete successfully in domestic and international markets while also lifting the living standards of the average citizen.” This, they added, “must lead to shared prosperity, in which all Americans have the opportunity to advance economically.”
But while U.S. corporate profits have collectively advanced in recent years, living standards have not. Wages for the average American worker have only inched up since the crisis, while health care and higher education costs have soared. Public infrastructure, the report says, has languished, minimizing access to public transportation and reliable roads.
The result: Wealth further concentrates among fewer people. And this, the report continues, is not likely to change without federal policymakers finding middle ground on new legislation aimed at fixing America’s problems.
“Our failure to make progress reflects an unrealistic and ineffective national discourse on the reality of the challenges facing the U.S. economy and the steps needed to restore shared prosperity,” the authors wrote. “Business has too often failed to play its part in recent decades, and a flawed U.S. political system has led to an absence of progress in government, especially in Washington.”