THE END OF AFFLUENCE: The Causes and Consequences of America's Economic Dilemma

Madrick looks into the vast vessel that is the US economy and pronounces it half empty--and draining. In reiterating the declinist view of America's future, the veteran financial journalist zeroes in on the problems presumably caused by the sluggish pace of domestic economic growth (2.3% per annum) and stagnant state of productivity improvements (about 1%) since 1973. Prior to that year, annual gains in GDP averaged 3.4% and productivity forged ahead at a 2% rate. This more measured pace of economic advance has curtailed the nation's capacity to meet its social/welfare commitments, to remain competitive in key commercial/industrial markets throughout the world, and to keep personal income and living standards on an upward track. Further, he points out, inflation-adjusted losses in the domestic output of goods and services from 1973 to 1993 aggregated $12 trillion. To put the impact of contemporary shortfalls in clearer perspective, Madrick offers a brisk overview of the post--Civil War era, when US business and wages were expanding at a healthy clip, thanks in large measure to the economies of scale achieved by mass production and mass merchandising. These, he asserts, not only helped fragment once-homogeneous outlets but also intensified mercantile rivalries and made it appreciably easier for start-up enterprises to enter hitherto closed markets. Despite the convulsive shift in its fortunes, the author warns, the American populace remains unwarrantedly optimistic about the shape of things to come. Brief allusions to higher taxes, shared sacrifice, income maintenance, and deficit reduction apart, Madrick makes no attempt to consider ways out of the socioeconomic fix in which he perceives the US. Withal, the author insists, the citizenry had best put paid to any comforting notion that self-reliance, rugged individualism, and other classic virtues guarantee ever brighter tomorrows. A credible worst-case evaluation of what slower economic growth has and could cost the American polity if the nation fails to regain its historic momentum.