Late afternoon in America: The gloom has gathered in on Reagan's 'morning in America' and voters are angry, says Godfrey Hodgson

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The Independent Online
'Productivity growth is minimal. Wages are stagnant. Opportunities for advancement more limited. The problems we confront are more difficult than the problems we confronted in the Fifties and Sixties.'

The speaker could have been almost any politician, sage or commentator in Britain. But it wasn't. This was American gloom. As it happens, the speaker was Thomas Mann, the director of governmental studies at the Brookings Institution in Washington. But he is far from alone.

On a recent visit to the United States I interviewed a couple of dozen experts in Washington and New York and at Yale and Harvard - Republicans and Democrats, academics and businessmen, senators and congressmen. What is unmistakable is that a new deeply troubled consensus has replaced the upbeat mood of the Reagan years. Eight years ago, Ronald Reagan was re-elected in a landslide with the slogan, 'It's morning in America]' Suddenly, it feels like late afternoon, and late winter afternoon at that.

The immediate problem, as in Britain, is the economy. Unemployment is lower than in Britain, but it is still uncomfortably high. In a state such as California, which has enjoyed decades of boom, people find it hard to accept that the peace dividend means lay-offs for aerospace workers. The not- so-hidden agenda of this year's presidential election has been 'jobs, jobs, jobs'.

It is not just the recession, which is a cyclical phenomenon. Thoughtful Americans are aware of alarming trends that have continued for a generation, through peaks and troughs on the economic indicator graphs. Average weekly earnings are lower in real terms, taking account of tax and inflation, than they were when President John F Kennedy took office more than 30 years ago, making the present generation of Americans the first in history not to be decisively better off than its predecessor. And there is a fear that the next generation will be still worse off.

The cause of this relative economic decline is a long-term failure of productivity in the US to keep pace with the growth of productivity in Europe and the Far East. The struggle for higher international competitiveness has destroyed Americans' job security and, behind the economic worries, there is widespread concern about a whole range of social problems.

The rising cost of health care and health insurance, the need to modernise and improve infrastructure, urban decay and the danger of riots, like those in Los Angeles recently, have been around for a long time. But what is new is the fear that government can do little about them.

One immediate reason is the huge budget deficit. This has defied all attempts to control it since the Reagan administration in the early Eighties increased defence expenditure but failed to cut domestic spending.

The difficulty of meeting social needs and of stimulating growth as long as the budget is so deeply in deficit is the number one issue confronting Bill Clinton's team of economic advisers. Interest on the national debt, which diverts resources from average and needy Americans to foreigners and the rich, amounts to a significant share of the budget - and it is about to shoot up as higher interest bearing bonds replace older instruments.

Economic and fiscal problems, in turn, are increasingly seen as the consequences of a crisis of government. Many people blame 'divided government': the White House controlled by one political party and Congress by the other.

For most of the years since Richard Nixon's victory in 1968 - and particularly since Ronald Reagan's in 1980 - there has been a strongly conservative Republican in the White House, while Congress has been controlled by more or less strongly liberal Democrats. This was not an accident. It was the consequence of voters deliberately 'splitting their tickets' and electing a conservative to defend national security in the White House and Democrats to deliver economic benefits at home.

Indeed, the budget deficit itself is the unwanted child of divided government. Between conservative Republicans who wanted high defence spending and cuts in welfare, and liberals who wanted high spending on entitlements and cuts in defence, the natural compromise was higher spending at home and abroad, and its inevitable consequence was the deficit.

There is scepticism, even among politicians, about the ability of politicians to confront the voters frankly with the reality of the choices that have to be made. Some of them blame the people, pointing out that whenever a politician does speak frankly the voters promptly punish him, as they punished Walter Mondale, the Democratic presidential candidate in 1984, when he spoke of the need to raise taxes.

But surely if Mr Clinton is elected next month (as the polls still suggest in spite of President George Bush's narrowing of the gap), the problem of divided government will disappear. Ah, I was told, it is not as simple as that.

For one thing, even if Mr Clinton's fellow Democrats on Capitol Hill do help him pass a sweeping programme of political change and economic reform, no one believes that the problems that have been growing like ivy round the roots of American society for a generation can be set right at once.

For another, it is not certain that he will be able to put himself at the head of a great Democratic coalition for change. Congress is the President's institutional rival, for the chairmen and individual senators and congressmen are responsive to different pressures from those of the national interest seen from the White House.

The transformation of parties in the US robs a modern president of the ability which Franklin Roosevelt and Harry Truman had to accommodate rival interests and forge national coalitions. Senators and congressmen now win office without owing much to the party, and if they take more notice of party alignments once they reach the Capitol, still they are essentially individualistic, entrepreneurial politicians.

Congressman Leon Panetta of California, the chairman of the House of Representatives budget committee, is blunt. This generation of voters, he says, have been told they could have a free lunch: they could have welfare, benefits, entitlements, better education and better health care, without paying for them. But they cannot.

One of the few clear things about this year's confused election campaign is that the voters are beginning to agree with him. They are angry with the Democrats in Congress just as much as with the Republicans in the White House. More of them will vote this year, and they will vote to throw out those they consider the rascals.

The US is in a very different situation from Britain: in many ways, it is a far stronger position. But if for years people in Britain have assumed that the US - economically at least - was the envy of the world, Americans now are not complacent. The noises coming from the huddle of Bill Clinton's advisory team reflects the alarm of those I spoke to.

They are preparing a dramatic change of direction, reversing many of the policy assumptions of 12 Republican years. If Mr Clinton wins, they will have to raise taxes. They will push for greater public investment, the question is: how much? They may well flirt with industrial policy. And they will certainly want to project an image of active government, the exact opposite of the Republican promise to 'get the government off the necks of the people'.

This is where the new mood of self-criticism in Washington is relevant to those under the even darker cloud hanging over London. For 12 years, Conservative governments in London have taken the beat from conservatives in Washington. Now the music there is likely to change. Will London find itself out of step?

(Photograph omitted)

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