Robert J. Samuelson

Washington, D.C.

Robert J. Samuelson writes a twice-weekly economics column. Both appear online, and one usually runs in The Washington Post in print on Mondays. He was a columnist for Newsweek magazine from 1984 to 2011. He began his journalism career as a reporter on The Post business desk, from 1969 to 1973. From 1973 to 1976, he was a freelance writer. He was an economics reporter and columnist for National Journal magazine from 1976 to 1984 — when he joined Newsweek. He grew up in White Plains, N.Y., and attended Harvard College. He lives in Bethesda with his wife, Judith Herr. They have three grown children. Honors & Awards:
  • Finalist, Pulitzer Prize for commentary, 1998
Books by Robert J. Samuelson:  

The Good Life and Its Discontents: The American Dream in the Age of Entitlement, 1945-1995

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Untruth: Why the Conventional Wisdom is (Almost Always) Wrong

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The Great Inflation and Its Aftermath: The Past and Future of American Affluence

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Recent Articles

ROBERT J. SAMUELSON COLUMN

(Advance for Monday, Feb. 24, 2020, and thereafter.)

(For Samuelson clients and FOR PRINT USE ONLY)

By ROBERT J. SAMUELSON

EDITORS: Please insert the attached table between the 4th and 5th grafs.

WASHINGTON -- We are going to have this argument repeatedly between now and Election Day: Who gave us this lengthy economic expansion, which is now in its 11th year and is the longest in American history? Is it President Trump and his economists, who claim that their policies -- tax cuts, deregulation, trade agreements -- have restored dynamic growth? Or is it mostly a stroke of good luck, reflecting a gradual revival of confidence after the crushing Great Recession of 2007-2009?

Politically, the answer may not matter all that much. As long as the economy continues to advance, Trump will probably receive the lion's share of credit. For better or worse, incumbents usually get rewarded or blamed for the state of the economy when they're in office. Still, the administration, through the White House's Council of Economic Advisers (CEA), has mounted an aggressive campaign to show that good policies -- not good luck -- are the main reason the economy is faring so well.

The gist of the CEA's case is to compare the economy's actual performance with what was predicted before Trump's election. If the actual performance substantially exceeds the predicted performance, then something must account for the difference. The "something," the CEA says, is better policies. Since the 2016 election, the economy has added more than 7 million jobs, far more than the 1.9 million jobs forecast by the Congressional Budget Office. Similarly, says the CEA, growth of the economy's output (gross domestic product) has exceeded earlier forecasts.

The result, it's argued, has been a huge drop in unemployment across virtually all major ethnic, educational and racial groups, as the adjoining table shows. For example, among African Americans, the peak monthly unemployment rate fell from 16.8% in March 2010 to 6% in January of this year. Other groups also enjoyed large declines.

[INSERT TABLE HERE]

The administration argues that the poor and the near-poor were among the biggest beneficiaries. "The labor market experiences that people are gaining today will change the trajectories of their lives -- and those of their children -- for years to come," wrote Trump in the "Economic Report of the President," a shorter version of the CEA report.

All this seems impressive. So what's all the fuss about? Just this: There's an alternative explanation of what actually happened. In this telling, the sustained economic expansion doesn't result mainly from Trump's lower tax rates, deregulation and trade agreements. Indeed, it's widely acknowledged that Trump's trade wars with China depressed economic growth because they created greater uncertainty.

Trump's theory is that by lowering tax rates the government can stimulate investment and raise living standards. The reason: investments become more profitable. In 2017, Congress dutifully passed legislation that cut the top corporate tax rate from 35% to 21%.

But it didn't work out as planned. There was a spurt of investment after the rate cut, but it rapidly declined. For the first nine quarters after passage of the tax bill, growth of private nonresidential business investment grew at an average rate of 3.4%, with faster growth (6.8%) in the first four quarters and much slower in the next five quarters (0.8%), according to the CEA report.

The implication is that lower tax rates may be much less powerful in stimulating investment than has been assumed. The economy may be more influenced by outside events (Boeing's 737 Max jet crisis or the coronavirus) that affect the confidence of corporate executives and their willingness -- or unwillingness -- to invest.

Trump's policy has been straightforward: Keep pressure on the Federal Reserve for low interest rates; and expand budget deficits. The extra spending endorsed by the White House and Congress, along with the 2017 tax cut, has added $4.7 trillion to deficits over a decade, estimates the Committee for a Responsible Federal Budget. The extra spending and tax cuts put more money in the pockets of businesses and consumers, including through higher dividends and stock repurchases. Some of this extra money was spent boosting the economy.

It's important to acknowledge what we know, what we don't know and what's up for grabs. Based on a reasonable reading of the record, the economy's growth reflects continued reliance on large deficits. How long this can last is one of the unknowns up for grabs.

(c) 2020, The Washington Post Writers Group

ROBERT SAMUELSON COLUMN

(FOR IMMEDIATE PRINT RELEASE)

(For Robert Samuelson clients and FOR PRINT USE ONLY)

By Robert J. Samuelson

WASHINGTON - The latest Post-ABC News poll, which shows Sen. Bernie Sanders, I-Vt., with a 16-percentage-point lead over his nearest Democratic rival, former vice president Joe Biden, should settle at least one important question. It refutes the notion that most Democrats are focused single-mindedly on defeating President Trump - and that everything else is secondary.

It turns out that everything else isn't secondary, because whatever else is true of Sanders, he isn't focused single-mindedly on dumping Trump. From the outset, he has championed a host of proposals, most prominently Medicare-for-all, that would implement his vision of a democratic-socialist America. He assumes that his agenda would be so popular that it would automatically defeat Trump.

This is, at best, questionable. In the Post-ABC News poll, Sanders led all candidates with 32% of Democrats and Democratic-leaning independent registered voters, followed by Biden with 16%. Biden's total was down sharply from 32% support in January. After Biden, former New York mayor Mike Bloomberg polled 14%. Support for other candidates was 12% for Sen. Elizabeth Warren, D-Mass.; 8% for former South Bend, Indiana, mayor Pete Buttigieg; and 7% for Sen. Amy Klobuchar, D-Minn.

By a 58%-38% margin, likely Democratic voters said they would prefer a candidate who can defeat Trump over someone who agrees with them on substantive issues. A month ago, 38% said Biden had the best chance of defeating Trump. Now that's 19%.

Previous polling has shown that many Sanders supporters would not necessarily vote for the Democratic nominee if it isn't Sanders. A recent Quinnipiac poll showed that Sanders wins a large plurality (35%) of Democrats who prefer a candidate who shares their views over one who is judged most electable.

Sanders's agenda would, if implemented, involve a vast increase in the centralization of power in Washington.

His Medicare-for-all proposal would effectively nationalize most of the health-care system that is not already under government control - Medicare (insurance for those 65 and older), Medicaid (a federal-state program providing insurance for the poor) and the Affordable Care Act (insurance subsidies for the near-poor).

In addition to covering the entire population, Sanders's plan would also expand coverage by including benefits for dental care, eye care and hearing loss. His plan would also dispense with co-payments and deductibles. This would reduce patients' out-of-pocket expenses.

Just how much all this would cost is a matter of guesswork. Sanders has suggested a wealth tax and possible payroll taxes to finance his program. Eliminating the profits of the private insurance industry would provide another source of funds. Still, these policies might be insufficient. Even after new taxes and savings, Sanders's plan could add $13 trillion to the deficit over a decade, estimates the Committee for a Responsible Federal Budget, a nonpartisan advocacy group.

There are other important pieces to the Sanders agenda, including "free" college at state schools, guaranteed jobs for able-bodied adults and a pledge that teachers should earn at least $60,000 a year. These proposals, if adopted, would also centralize power in Washington. They, too, would raise government spending.

How do voters react to all this centralized power? Do they agree with Sanders that it lays the foundation for a fairer America by reducing the power of major corporations? Or does the prospect of Sanders's "socialism" scare people into voting for Trump?

(c) 2020, The Washington Post Writers Group

ROBERT J. SAMUELSON COLUMN

(Advance for Monday, Feb. 17, 2020, and thereafter.)

(For Samuelson clients and FOR PRINT USE ONLY)

By ROBERT J. SAMUELSON

WASHINGTON -- When the history of our era is written, scholars will search for larger causes to explain its bitterness and contradictions, despite so much wealth. Was it globalization? Populism? Economic inequality? Polarization? Greed? To this list you can now add an unlikely candidate: the nuclear family.

In a powerful essay for The Atlantic -- "The Nuclear Family Was a Mistake" -- New York Times columnist David Brooks argues that "the family structure we've held up as the cultural ideal for the past half-century has been a catastrophe for many."

By "nuclear family," he means a married mother and father and some kids. The alternative arrangement was "the extended family," which included not only Mom, Dad and the children but also close relatives -- cousins, aunts, uncles and grandparents -- as well as family friends.

The great defect of the nuclear family, Brooks asserts, is that if there's a crisis -- a death, divorce, job loss, poor school grades -- there's no backup team. Children are most vulnerable to these disruptions and often are left to fend for themselves. There's a downward spiral. "In many sectors of society," Brooks writes, "nuclear families fragmented into single-parent families, [and] single-parent families into chaotic families or no families."

People could increasingly go their own way. The advent of the birth-control pill encouraged people to have sex out of marriage. Women's entrance into the labor market made it easier for them to support themselves. Modern appliances (washing machines, dryers) made housework simpler.

As Brooks sees it, almost everyone loses under this system. The affluent can best cope with it, because they can usually afford what's needed (day care, tutors) to support their children. Otherwise, the picture is bleak.

Children have it worst. Brooks cites an avalanche of statistics. In 1960, about 5% of children were born to unmarried women. Now that's about 40%. In 1960, about 11% of children lived apart from their father; in 2010, the figure was 27%.

But adult men and women also have their share of troubles. There's a vicious circle at work, notes Brooks: "People who grow up in disrupted families have more trouble getting the education they need to have prosperous careers. People who don't have prosperous careers have trouble building stable families. ... The children in those families become more isolated and more traumatized."

Brooks says he wrote the article to stimulate experiments that aim to stabilize family life using the "extended family" -- not the nuclear family -- as the model. The problem may not be as big as Brooks imagines. Estimates by the Census Bureau and others indicate that about 60% of Americans live in the state where they were born. Presumably, many of these people stayed put because they valued nearby family ties.

Whatever the actual figures, there's little doubt that reversing the breakdown of families, and its consequences, is one of the urgent tasks of social policy in the 21st century. We have been struggling unsuccessfully with it since the so-called "Moynihan Report" in 1965. (Daniel Patrick Moynihan, who later became a senator, warned that the breakdown of black marriage rates would have a devastating effect on African Americans' well-being.) The report proved highly controversial, and some branded Moynihan a racist.

But even if we could magically eliminate all considerations of class and race, it's not clear that a workable model would emerge. The conditions needed to broach a debate over family policies strike at the heart of Americans political and cultural conflicts. Brooks put it this way:

"We value privacy and individual freedom too much. Our culture is oddly stuck. We want stability and rootedness, but also mobility, dynamic capitalism, and the liberty to adopt the lifestyle we choose."

Brooks finds both liberals and conservatives unequal to the task of dealing candidly with family breakdown. "Social conservatives insist that we can bring the nuclear family back. But the conditions that made for stable nuclear families in the 1950s are never returning. Conservatives have nothing to say to the kid whose dad has split, whose mom has had three other kids with different dads; 'go live in a nuclear family' is really not relevant advice. … the majority [of households] are something else: single parents, never-married parents, blended families, grandparent-headed families." He's just as tough on progressives. They "still talk like self-expressive individualists of the 1970s: (BEG ITAL)People should have the freedom to pick whatever family form works for them.(END ITAL) … But many of the new family forms do not work well for most people."

The larger issue is how we judge our times. We are constantly deluged with economic studies and statistics, implying that economic outcomes are the only ones that matter. The reality is that any national scorecard of well-being must take a much broader view. How well families do in preparing children for adulthood and how well they transmit important values is a much higher standard for success.

(c) 2020, The Washington Post Writers Group

About
Robert J. Samuelson writes a twice-weekly economics column. Both appear online, and one usually runs in The Washington Post in print on Mondays. He was a columnist for Newsweek magazine from 1984 to 2011. He began his journalism career as a reporter on The Post business desk, from 1969 to 1973. From 1973 to 1976, he was a freelance writer. He was an economics reporter and columnist for National Journal magazine from 1976 to 1984 — when he joined Newsweek. He grew up in White Plains, N.Y., and attended Harvard College. He lives in Bethesda with his wife, Judith Herr. They have three grown children.
Books
  • The Good Life and Its Discontents: The American Dream in the Age of Entitlement, 1945-1995
  • Untruth: Why the Conventional Wisdom is (Almost Always) Wrong
  • The Great Inflation and Its Aftermath: The Past and Future of American Affluence
Awards
  • Finalist, Pulitzer Prize for commentary, 1998
Links