In the first quarter of 2014, GDP in the U.S. plunged at a 2.9% annual rate, and productivity—the inflation-adjusted business output per hour worked—declined at a 3.5% annual rate. This is the worst productivity statistic since 1990. And productivity since 2005 has declined by more than 8% relative to its long-run trend. This means that business output is nearly $1 trillion less today than what it would be had productivity continued to grow at its average rate of about 2.5% per year.
Lagging productivity growth is an enormous problem because virtually all of the increase in Americans’ standard of living is made possible by rising worker productivity.
They go on to cite a lack of new business formation as the largest single contributor to this trend. They also mention some policy choices that could help reverse it. Fair enough, but I look at those stats and I see a problem that cannot be fixed by simply changing a few policies. When Ronald Reagan reversed a similar downward spiral in the 1980′s he did so leading a nation that acted constrained by the bad policy of his predecessor. Numerous people wanted to start businesses or make other changes that would result in enormous productivity increases, all they needed was a little boost by reversing some policy obstacles.
I see a very different picture today. I do not see a nation chomping at the bit waiting for some sort of “go” signal. I see a nation that honestly does not know if there is anything better. Note that the trend cited started not with the Obama administration or even the financial disaster of 2008, but way back in 2005. The nation started losing hope before it elected a government that piled policy disaster on the hopelessness. Where did the hope go? (New business start up is practically a function of ideas, the availability of capital, etc. But fundamentally it is a reflection of hope in the risk taker.)
Government cannot instill hope in people. It acts upon it, and it amplifies its presence, but it does not create it. Part of the genius of America is that it relies on non-governmental forces to create the hope that is absolutely necessary for democracy, and capitalism, to succeed. The primary non-governmental hope creating force in America is religion. Government can destroy hope because it can limit religion. This is the root of the much cited “separation of church and state.” The separation is designed not to keep religion out of the public square to to permit it to flourish and generate the hope that makes the nation work well. The founders had seen Europe and its state sanctioned religion and had seen how ties too close to government tended to turn religion into an instrument of government rather than allow it to be religion – to be a hope creator.
The concerns of the WSJ are far more profound that just the downturn in productivity and causal slowness in business formation. (Something that, by the way, if not reversed will mire the nation in the debt this administration has buried us under forever.) It is a reflection of the secularization of the nation – it is not a business problem, it is a soul-sickness. Elections can change politicians that can change policies. That’s a good thing and it should happen. But if the hope does not exist to take advantage of those policy changes, the nation will remain on this downward trend economically.
Political victory that is not accompanied by religious reform and revival will at best be fleeting. If our hope is only in that political victory it can be taken from us as easily as it was won. Real and lasting hope comes from something far larger and far more eternal that our politics. Our churches, synagogues, and other houses of prayer and worship need to step up here. Some churches today are becoming hope stealers and breakers. They are failing to be at least one important part of what the church should be. Some churches simply sound the bell of judgement and doom, which also does not create hope. The wall of separation has fallen in ways far more subtle than the coercive forces of law and courtroom.
It is time for the religious folk of America to stand up and be counted. Not so much on issues and policy, but on the three things that abide – faith, hope, and love. If we of deep and heartfelt religious conviction can stand up for these things, I think the issues and policies will right themselves in good order.