SILENT DEPRESSION

A proficient analysis of what ails the American economy- -which, according to economist Peterson, has been in a ``silent depression'' since 1973. Peterson describes how, for many Americans, this 20-year slump has meant the unraveling of the American Dream, as the high expectations created by the post-WW II boom have given way to disappointment and discontent. Using both anecdotal evidence and plenty of statistics, he paints a grim picture of a shrinking middle class, increasing downward mobility, a growing black urban underclass, and greater polarization between haves and have-nots. How did this happen? Peterson argues that a nation's real wealth and power depend on its ability to produce the goods that people need, and he sees the decline since 1973 in the rate of productivity growth as key to our economic woes. According to the author, the main causes of this decline are excessive military spending and too little investment in the nation's infrastructure, in the tools and equipment workers need to do their jobs, and—last but not least—in the nation's human capital. In addition to cutting military spending, Peterson would establish a National Development Bank to oversee and implement investment policy, and he prescribes a system of universal health insurance plus a one- or two-year national-service program for 18-year-olds—similar to the Civilian Conservation Corps of the Great Depression—that would provide cash credits toward college or vocational training. He also offers a tax-reform plan: a flat- rate system for all but the top three percent of taxpayers, who would be taxed at a sharply graduated rate. Peterson's solutions aren't as revolutionary as he claims, but he presents them—and his telling analysis—with clarity and force.