NEW YORK (Reuters) - Americans have surrendered a lot of hustle since the Reagan presidency, launching fewer businesses, innovating at a slower rate and sticking longer to homes in a trend that has taken the edge off U.S. economic growth, according to economist Tyler Cowen.
Cowen, a prominent blogger, professor at George Mason University and author of “The Complacent Class,” on Wednesday told the Reuters Global Markets Forum that government statistics and other data showed that a preference for stability and familiarity was shared by Americans rich and poor. An exception was the 13 percent of U.S. residents born elsewhere.
The following are edited excerpts from the conversation:
Question: What shows that Americans are less dynamic and more self-satisfied than their parents and grandparents?
Answer: Since 1948-1971, U.S. cross-state mobility has gone down by about 50 percent. Mobility is also down, after we adjust for age. We don’t let our children play outside nearly as much as we used to, we medicate ourselves at a much higher rate, and rates of productivity and innovation are, in fact, down. A lot of our best innovations - Netflix (NFLX.O) and Amazon (AMZN.O) - are all about staying at home more easily. I say something has gone wrong.
Q: How else is that affecting the economy?
A: Start-ups as a percentage of overall business formation are down each decade since the 1980s. People switch jobs less often than they used to (no, not everyone is an Uber driver). And worst of all, productivity growth often runs in the range of 1 percent when it used to range from 2-3 percent. That is a looming disaster and, of course, we have a lot of debt too.
Q: How long can this last?
A: I don’t think the stasis is sustainable. At least two things will happen. First, the fixed pie mentality will cause the quality of governance in this country to erode. Many would suggest we already are seeing that happen. Second, without faster growth, we don’t have a way to pay off all of our public sector debt.
Q: Are immigrants less mobile?
A: Immigrants are typically the least complacent class in American society. From the beginning, they have accepted that their lives will be stressful, whether they are well educated or lower earners. They know they are in for some big shocks. In a sense, they are becoming the true Americans and carrying our past back to us.
This interview was conducted in the Reuters Global Markets Forum, a chat room hosted on the Eikon platform, For details, follow this link: but.ly/reutersGMF.
Editing by Leslie Adler