America the Anxious

Article excerpt

Byline: David Frum

The recession is over. But not for you.

Corporate profits are setting records. Companies hold mountains of cash. Private-sector output is growing 3 percent per year, in line with historic norms.

But jobs? The middling July numbers warn that it's likely another half decade before the U.S. returns to full employment. How about prospects for a raise? Make us laugh. The future? Scary. The panic of 2008 has subsided, replaced by an ambient anxiety.

Crushed by debt, American households can't afford to buy enough to put everyone to work. Even when households can afford to buy more, they are often buying products made by Chinese and Indian workers who work very nearly as well as Americans for a lot less pay. All of us are left to wonder: What happens to me in this new world? When can I retire? Where do I put what's left of my savings? Will Medicare still exist when I need it?

In this election year, both presidential candidates are competing to offer a response to the anxious mood. President Obama urges Americans to put their trust in more and bigger government. In an important speech in Kansas last year, the president defined his vision for the American middle class: more government employment, more government contracting to stabilize employment in the private sector, and higher taxes on wealthier Americans to pay for it all.

Challenger Mitt Romney has not been so explicit, but his message is equally clear: don't fight anxiety--embrace it. Medicare will become a voucher for Americans under 55. Medicaid and other social programs will radically shrink. Restrictions on the financial industry will be rolled back. Even less will be guaranteed than today--in the hope of unleashing pent-up dynamism.

About 46 percent of the country rejects the Obama approach. Another 46 percent rejects the Romney proposal. There's not much enthusiasm anywhere for either. Four years ago, Americans looked to politics for "hope" and "change." Today's mood is bleaker. The incumbent seems defeated by the nation's worries. The challenger seems indifferent to them. Altogether, the political system seems overwhelmed.

Fewer than one third of Americans believe the country is on the right track. Suicides are up; birth rates are down. Business leaders say they can't hire because they feel so uncertain about future government regulation; consumers won't buy because they feel so uncertain about their future incomes.

In past periods of economic distress--the 1890s and 1930s--Americans protested in the streets. Not this time. Occupy Wall Street has gone home. The Tea Party has been absorbed into the Republican Party. Today, Americans have been left to face their worries alone.

Perpetually Deferred Retirement

Rich or poor, we all get old-and then older still. If an American lives to age 65, he or she can expect to live nearly 20 years more. Which is great, provided the money lasts.

Yet even as Americans have lived longer, they have become less zealous about saving for the future. They counted instead on gains from stocks and houses to top up their Social Security benefits. Those gains have vanished-or turned into losses. Nearly half of workers say they have less than $25,000 in savings. Two thirds of workers worry that they won't be able to pay their bills on time.

No wonder, then, that people in their 60s are postponing retirement when they can. "Sixty-eight is becoming the new 65," according to one financial planner in New York City. The human-resources consulting firm Towers Watson has found that 39 percent of workers near retirement intend to delay it by at least three years.

Unfortunately, postponement is easier said than done in the weakest job market since the 1930s. Even Walmart is getting rid of its famous retiree greeters (typically by assigning them new and more physically demanding duties). The companies most hospitable to older workers, meanwhile, tend to be the weakest companies: Eastman Kodak, American Airlines. …