America’s Birthday

by Alex Friedman| July 5th, 2022

“…What makes America great is not the fact of our perfection but our act of becoming more perfect. What makes the American people exceptional is that we have the strength to acknowledge our failings — moral, structural, personal — and the courage to make wrong into right.”

Darren Walker, President Ford Foundation

Birthdays are a funny concept. When we are young and the world feels all about us, they seem a celebration of all that lies ahead. When we are middle aged, they often become sources of angst as we grapple with our mortality. And when we are old, they starkly contrast us — for some a mark of bitterness in a life that has disappointed, for others a moment to reflect on hard-earned peace and wisdom.

So, what to make of the United States’ birthday, this July 4th, 2022?

The top indicators of Maslow’s hierarchy appear to be met. We are wealthy and safe, with a GDP near double that of our nearest competitor and a still unrivalled military. While analysts have long predicted that China’s economy would overtake the US by 2030, China’s slowing growth (from 5% annualized to closer to 2.5%) has undermined that trajectory and now presents a China whose average citizen, by 2050, will be only 40% as wealthy and half as productive as his or her American counterpart. Meanwhile, Russia’s war in the Ukraine has exposed its dramatic military weakness relative to NATO and the US.

The US labor market is robust with over 11 million job vacancies (though there are fewer jobs than before the pandemic), and unemployment is low at around 3.6% (admittedly, partly because some employees have not returned to the workforce), making for an ideal time for those looking for a new role to find it. And balance sheets, whether for a family or a company, are strong due to reduced spending and fiscal relief. Personal bankruptcies and debt collection proceedings are the lowest they have ever been.

Fine, but what about soaring inflation, rising gas prices, and falling stock markets?

While we are experiencing the highest inflation since the early 1980’s, signs point to its cooling. Fed actions to slow the economy may already be moderating demand, as commodity prices in key inputs like corn, wheat, soybean and copper fall. As painful as it feels to fill up your tank today, gas in the US is still cheaper than most other developed economies. And while the S&P 500 just posted its worst first half in over fifty years, by historical measure (as the chart below underscores) we are still flying high.

And yet on this collective birthday, our nation’s glass does not appear half full.

We are not united, and we are not thriving. Most of us identify as red or blue, and deeply sure those like us are right and the others are wrong. Last week’s Supreme Court decision to strike down Roe v. Wade threatens to turn this divide — which has been calcifying for a generation — into a state of petrifaction, where the workable nature of wood becomes unbendable stone, organic material a fossil.

Data can be made subjective by cherry-picking extracts to support any argument. Yet, some dimensions defy expedient manipulation. Life expectancy is a good example. For all our expanding technology and wealth, Americans are living shorter, not longer, lives. We are dying far younger than our G-7 peers. Take a moment to look at this startling chart of life expectancy, and then consider that the end point is pre-pandemic.

It is tempting to decry the state of our nation and join the chorus of commentators worrying that our trajectory will lead to the end of our democracy. But, to do so belies the reality of our history.

The US has always been both an imperfect union and an imperfect democracy. While today those imperfections are far more visible and have become larger in the past decade, they are not new. Crucially, they have proven surmountable before.

Our founders — the very ones who declared that all men are created equal while enslaving human beings — recognized this fundamental paradox at our nation’s beginning and implored future generations to build a more perfect union. The core of being American is the conviction that hope and hard work will better ourselves individually, and in turn our country and democracy.

Democracy is not an outcome. It is an ambition. But for an ambition to be effectively pursued, its participants must share enough values to be willing to find compromise when inevitable differences arise.

The crux of our anguish today is whether Americans genuinely share enough in common to work through our problems. We may acknowledge the right to bear arms, but we struggle to acknowledge a right to live without fear of guns. Yet that latter right should be consistent with the ‘pursuit of happiness’, which implies a reasonable absence of fear. Or, in the geeky words of economists, what Americans have always struggled to recognize is the presence of externalities — rights are not unlimited when they infringe upon others’ rights.

As much as the foundation of US democracy resides in constitutional rights, our democracy will not endure if we do not share basic values. Perhaps the most vital one is respect for the validity of different opinions.

Let’s take the most polarizing issue of our time. Abortion is not a subject that can be ‘resolved’ via rights. Rather, we must navigate to a destination that allows for a mutual understanding of the issues and a respect for different values. A destination where both sides can live in the same country — this is the only state that is sustainable.

The desire to perfect democracy and permit the greatest amount of liberty is enshrined in Constitutional rights, but it is only realized in shared values. So, the fundamental challenge in preserving our democracy, and in turn, our union, is not about defending rights but about identifying our common values.

The Enlightenment presupposed that liberating the mind through education would liberate the soul, revealing the essential goodness in all of us. We would like to believe that some combination of education, faith, family, and community would lead to a convergence of values in the direction of tolerance, acceptance, and the reduction of bias, racism, and misogyny. Yet, on our nation’s birthday, that remains our largest incomplete task. It is our calling if we want a more perfect union and a more complete democracy.

On this July 4th, we are either young and optimistic, middle-aged and mortal, or old and worried about the end. But wherever we fall, we can still choose our future. And the arc of that journey must rest on the ‘we’, not the ‘I’.

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