US: Will Dems ”New Normal’ Kill The American Dream?

US: Will Dems ”New Normal’ Kill The American Dream? – by Gary Shapiro

There’s a burgeoning theme in Washington these days. Although not publicly stated before the cameras, the power brokers whisper it among themselves. But before too long — perhaps in the next six months as the presidential campaign heats up — we’ll all recognize it when we hear it.

It’s called the “new normal.”

This odious phrase characterizes a growing belief among politicians, economists and pundits that the United States is entering its twilight years of economic prosperity.

Gone are the days of 4% unemployment. Gone too are the days of 4% to 5% annual GDP growth. And with them will go the energy, passion and American grit that built the greatest, most innovative wealth-producing economy the world has ever seen.

In their place, we’ll be told to accept what the imperialists of yesteryear knew as “managed decline.” The strategy goes something like this:

Because the U.S. will no longer be a fast-growing economic superpower, then we must stop trying to act like one. Pro-growth policies, like low taxes and free trade, and a culture, founded on immigration and entrepreneurialism, that attracts the world’s best and brightest are dead ends, because they come at the expense of expanding the social safety net Americans truly want.

Instead, Washington’s job is to make life as comfortable and as risk-free for as many Americans as possible. In other words, we shift from a nation focused on creating equal opportunity to one “spreading the wealth around.”

This means more entitlements; easier unionization; government picking winners and losers in industries like energy; and massive government spending. If we can’t all be successful and rich, then none of us will be.

But the “new normal” also comes at a heavy price.

One sad element will be perpetual double-digit real unemployment. We will have fewer jobs as businesses invest elsewhere. A slow economy will hurt jobs, but so will easy unionization, an excess of laws and lawyers and higher taxes.

But that’s okay as the unemployed will be taken care of by the state in perpetuity (up from the two years of today’s jobless benefits supplemented another two years for those whose jobs are lost to trade with other countries).

For public services, like trains, busses, toll-booth operators and the like, the “new normal” will entail a lot more strikes. That’s because public-sector unions use their mandatory dues to “hire” their Democratic city mayors who then negotiate to save or increase massive union benefits. And we’ll pay, too, so that the trains run on time.

For GDP growth, the “new normal” will look something like the 2011 first-quarter growth of 1.8%. That’s because to pay for our expanded welfare state, taxes on “the rich” (or those making above $200,000 a year) will increase dramatically.

And with the government dictating more and more what companies can and cannot do — as in the case of Boeing’s South Carolina plant — our most productive industries will flee abroad.

Accepting the “new normal” is the backdrop to the budget and debt ceiling debates going on right now. Although trying to appear like the great compromiser, President Obama won’t commit to any long-term spending cuts right away. Even with expiration of the Bush tax cuts — which the GOP may accept — all real spending cuts that will actually reduce the deficit are put off years down the road.

Meantime, Obama and the Democrats oppose any effort to seriously cut the deficit with demagoguery. In the “new normal” all spending is sacred and any attempt to reduce it will leave someone out in the cold. House Minority Leader Nancy Pelosi epitomized this when she declared her caucus’s opposition to any cuts in Medicare or Social Security.

It’s not a question of whether the United States can survive the “new normal.” Europe has accepted chronically high unemployment and low GDP growth for decades. The question is whether we must accept it at all.

We should not.

That’s because the heart of the “new normal” means killing the American Dream.

The Dream weakens as we discourage investment, risk-taking and job-creation. The Dream suffers as we reverse the strategy that had us lead the world in innovation, initiative and ingenuity. The Dream dies when we replace equal opportunity with equal results.

The “new normal” is not inevitable. Economists were talking about American decline in the 1970s as well.

But overcoming our current decline requires demanding better from Washington. It requires that we let our elected leaders know that we have seen the “new normal” — and we do not accept it.

* Gary Shapiro is president and CEO of the Consumer Electronics Association and the author of “The Comeback: How Innovation Will Restore the American Dream.”