"Gordon’s chart demonstrates that there was a sustained lack of productivity growth from 1300 to 1700, which supports his argument that economic expansion is a relatively recent phenomenon and by no means inevitable."
Intellectually, both the Obama and Romney campaigns are undoubtedly aware of the general line of thinking that lies behind Gordon’s analysis, and of related findings in books like “The Great Stagnation” by Tyler Cowen of George Mason University. Cowen argues that innovation has reached a “technological plateau” that rules out a return to the growth of the 20th century.
For Obama, the argument that America has run out of string is politically untouchable. In the case of Romney and the Republican Party, something very different appears to be taking place.
There are two parallel realizations driving policy thinking on the right. The first is the growing consciousness of the threat to the conservative coalition as its core constituency – white voters, and particularly married white Protestants — decreases as a share of the electorate. Similarly, the conservative political class recognizes that the halcyon days of shared growth, with the United States leading the world economy, may be over.
While Gordon projects a future of exacerbating inequality (as an ever-increasing share of declining productivity growth goes to the top), the wealthy are acutely aware that the political threat to their status and comfort would come from rising popular demand for policies of income redistribution.
It is for this reason that the Republican Party is determined to protect the Bush tax cuts; to prevent tax hikes; to further cut domestic social spending; and, more broadly, to take a machete to the welfare state.
Insofar as Republicans prevail in their twin aims of cutting – or even eliminating – social spending, and maintaining or lowering tax rates, they will have succeeded in obstructing the restoration of social insurance programs in the future.
Affluent Republicans – the donor and policy base of the conservative movement — are on red alert. They want to protect and enhance their position in a future of diminished resources. What really provokes the ferocity with which the right currently fights for regressive tax and spending policies is a deeply pessimistic vision premised on a future of hard times. This vision has prompted the Republican Party to adopt a preemptive strategy that anticipates the end of growth and the onset of sustained austerity – a strategy to make sure that the size of their slice of the pie doesn’t get smaller as the pie shrinks.
This is the underlying and inadequately explored theme of the 2012 election.