Economist Todd Buchholz rails against what America has become: a people who want everything but aren’t willing to pay for it. In “The Price of Prosperity,” he suggests that wealthy nations such as the U.S. inflict harm on themselves, even cause their own demise, by racking up debt, having fewer children and increasing governmental regulations. Economics correspondent Paul Solman reports.
JUDY WOODRUFF: But first: Much of this election campaign has focused on worries over stagnation and whether the country is heading in the right direction.
Tonight, a conversation that takes a much longer view about the price, and paradox of the country’s historical prosperity.
Our economics correspondent, Paul Solman has our look. It’s part of his weekly series, Making Sense.
TODD BUCHHOLZ, Author, “The Price of Prosperity: Why Rich Nations Fail and How to Renew Them”: Washington, D.C., is a beautiful city, Greek, Roman architecture. Our society is based on those empires, but they’re gone. So, why do we think that our country is going to defy all of human history?
PAUL SOLMAN: Because empires, asserts Republican economist Todd Buchholz, are so often forced to pay the price of prosperity.
TODD BUCHHOLZ: They undermine themselves, and they do that by racking up more debt, by having fewer babies born, by more regulation. And it’s difficult to keep up patriotism as time goes by.
PAUL SOLMAN: “The Price of Prosperity” is Buchholz’s downbeat new book, a dissonant contrast to its upbeat author.
Buchholz was an original investor in the musical mega-hit “Jersey Boys,” author of the bestselling “New Ideas From Dead Economists,” director of economic policy under President George H.W. Bush, pushing economic growth optimistically.
But he rails at what we have become, a people that want everything, but won’t pay for it themselves, and, thus, in the first of his symptoms of prosperity malaise, have run up a $19 trillion national debt. And how exactly?
TODD BUCHHOLZ: Because people will lend to us. Because the U.S. is a rich country, we don’t seem to have the need yet to discipline ourselves.
PAUL SOLMAN: But in the future, there will be fewer Americans to cough up the taxes to pay the debt, our fertility having fallen below the replacement rate for the first time in our history. Low fertility is Buchholz’s symptom number two.
TODD BUCHHOLZ: This was a hospital. This is where my kids were born. Lots of D.C. kids were born here, but it’s not a hospital anymore. It’s condos.
You know, throughout the world, throughout history, when countries get rich, they stop having kids.
PAUL SOLMAN: Because Who needs them?
TODD BUCHHOLZ: Rich countries don’t need as many children. We used to need kids to work in the fields as farm hands, to crawl on their bellies into coal mines. Well, kids are more like luxury objects now.
PAUL SOLMAN: So, the richer we get, the fewer kids we have, but is that a bad thing?
TODD BUCHHOLZ: You need somebody to support the retirees. You need to pay into the pension plans. You need people to work at the hospitals, at the nursing homes. If you haven’t produced enough babies to do that…
PAUL SOLMAN: You need immigration, supposed symptom number three.
TODD BUCHHOLZ: It was a tremendous advantage for the United States for most of the 20th century. But if you have waves of immigration, you better figure out a way to turn those immigrants into red-blooded Americans, or else you end up splintering the society.
PAUL SOLMAN: Look at today’s anti-immigrant backlash, says Buchholz, against those who learn very little English, practice a different religion, come here illegally, like, we were told, some of these day laborers from Mexico and Central America.
They shape up at the parking lot next to our “NewsHour” headquarters in Arlington, Virginia, hoping for the most basic work.
Luis Hernandez gets hired two to three days a week, he says, at $15 an hour and up.
LUIS HERNANDEZ, Day Laborer: Renovation.
PAUL SOLMAN: Renovation.
LUIS HERNANDEZ: Renovation. Renovation, yes, kitchen, bathroom, the floors.
PAUL SOLMAN: Hernandez sends money back to his family in Guatemala.
Jose Reyes sends money back to Honduras to support his wife and three kids. How much do you send back?
JOSE REYES, Day Laborer: Maybe $500 or $600.
TODD BUCHHOLZ: I admire these men for working so hard on behalf of their wives and their children. But when they’re doing the work and then sending the money back home, we do have to ask, does that really contribute as much to the American economy as if they were devoted to actually being here and staying here?
PAUL SOLMAN: But there are immigrants serving as doctors in hospitals, professors at universities. They come, they stay, they contribute, no?
TODD BUCHHOLZ: It’s a good thing we have immigrant doctors and immigrant engineers, because if you or I get sick this afternoon, we’re going to go to the hospital, and we’re going to hope someone serves us.
PAUL SOLMAN: But these workers are doing work almost anyone could do, illustrating a fourth price of prosperity: As a country gets richer, claims Buchholz, its work ethic tends to erode.
Tony Barajas is the site’s coordinator.
Why wouldn’t Americans, many of whom are still out of work, not take jobs like this, where you can show up and make, what, 700 bucks a week, something like that?
TONY BARAJAS, Shirlington Education and Employment Center: It’s — nobody wants to do those jobs. And I know it’s kind of cliche to even say that, but that is the fact.
JOSE REYES: Maybe for pay is too cheap. You know, it may be the job is too hard, too, you know?
PAUL SOLMAN: And while these guys wait for work, many legal Americans their age can afford to do otherwise.
TODD BUCHHOLZ: We’re prosperous enough that we can afford to have one in six able-bodied men of working age sitting at home playing video games.
PAUL SOLMAN: Last stop on “Price of Prosperity” tour: Theodore Roosevelt Island, splitting the Potomac between Virginia and D.C., and a backdrop for Buchholz’s conclusion.
TODD BUCHHOLZ: When Teddy Roosevelt was around, there was an Ottoman Empire. There was a Habsburg empire. They controlled millions of people across Africa, the Middle East and Europe. And they’re gone.
Prosperity killed them, because they didn’t have a way to hold the people together. They didn’t have the rituals and the holidays and the pride in their country. And that’s what we need if we’re going to hold ourselves together during periods of prosperity.
PAUL SOLMAN: So, Buchholz has remedies, big tax credits for having more kids, bonuses for starting to work young and for getting off unemployment insurance, making immigrants and students applying for federal loans visit patriotic sites like this one.
TODD BUCHHOLZ: I would require them to get their passport stamped, not just at JFK or whatever airport they arrive at. I would require them to go to at least five national monuments or museums, maybe here at Teddy Roosevelt Island, or the Smithsonian, or the Museum of Tolerance, to demonstrate that they are trying to learn something about American history.
And you know what? I would require the same thing of American students.
PAUL SOLMAN: I had one final question.
Do you think the rancor of this election is symptomatic of the kind of dissolution of America you’re talking about?
TODD BUCHHOLZ: I think this is a corrosive election. And I think it does reflect deep divisions and distrust of our fellow countrymen.
Half of Americans look at the other half and say, they’re too lazy or they’re not willing to get up and go to school. And the other half looks and sees a bunch of fat cats and talks about income inequality.
PAUL SOLMAN: Hardly a new theme in often contentious America, but it sure seems at odds with hopeful sanctuaries of the past, like Teddy Roosevelt Island.
For the “PBS NewsHour,” this is economics correspondent Paul Solman, reporting from Washington, D.C.
