An Economic Shift Away From Consumerism

SUSIE GHARIB: Tonight’s commentator has an idea for fixing the economy, but it involves a real change in mindset. Here’s Michael Mandel, senior fellow at the Progressive Policy Institute.

MICHAEL MANDEL, CHIEF ECONOMIST STRATEGIST, PROGRESSIVE POLICY INSTITUTE: The presidential campaign season has started. Here’s what I’d like to hear from President Obama and the Republican candidates: the need to shift the U.S. from a consumption economy to a production economy.

For the past 20 years, we’ve put most of our resources into consumption and distribution. We’ve built shopping malls rather than factories. We’ve cared about low prices rather than good jobs. We’ve borrowed trillions of dollars from the rest of the world.

It seemed like a good idea at the time, but it hasn’t been working for us. Real incomes are down, job growth is weak, the future seems troubled. The U.S. must change course to a production economy.

We need to take up our fair share of the global productive burden. We need to focus more on good jobs and less on low prices. We have to emphasize investment in physical, human, and knowledge capital, and pay less attention to consumption as the yardstick of success.

I’m talking about a cultural shift as well as a change in economic policies. A big step, for sure, but we have to start somewhere.

I’m Mike Mandel.

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