More Clarity on Uncertainty

By / 8.18.2010

I wrote last week about the political rhetoric of “uncertainty,” both real and imagined.  My thinking was that Republicans should be called out for their recent talking points that attribute our continued economic woes to fears and uncertainties created by the Democrats’  agenda, but that we should be careful not to dismiss legitimate problems of uncertainty that actually do exist in the economy.

In the Times today, Tom Friedman makes a more eloquent case for the need to recognize the real uncertainties we face.  His analysis is from a higher altitude, as one might expect, and it is dead right.  Friedman attributes broad economic uncertainties to three structural problems: (1) a decade of U.S. growth fueled by deficits and borrowing rather than investment and innovation, (2) a wave of new technology that is destroying lower-skilled jobs in favor of those requiring more education and training, and (3) the “existential crisis” of the European Union as German discipline is exported to Greece and elsewhere.   But these real uncertainties are not on anyone’s political agenda:

America’s two big parties still cling to their core religious beliefs as if nothing has changed. Republicans try to undermine the president at every turn and offer their nostrum of tax-cuts-will-solve-everything — without ever specifying what services they’ll give up to pay for them. Mr. Obama gave us expanded health care before expanding the economic pie to sustain it.

Friedman does not get very deep into specifics for structural solutions, but he doesn’t need to.  As is often true of Friedman’s perspective, the real value of today’s piece lies in the diagnosis.  We are facing real economic uncertainties, and the fact that Republicans are mischaracterizing them so shamelessly does not relieve the president and Democrats from the obligation to show more leadership.  As I wrote last week, Democrats need to stop sticking their fingers in the dike and come up with a more comprehensive plan built on a long-term vision of investment and sustainable growth.  Or as Friedman puts it:

The president needs to take America’s labor, business and Congressional leadership up to Camp David and not come back without a grand bargain for taxes, trade promotion, energy, stimulus and budget cutting that offers the market some certainty that we are moving together — not just on a bailout but on an economic rebirth for the 21st century.

I couldn’t agree more.