Presidential Election

Reawakening the American Dream

  • Why it matters

    Why it matters

    One of the most divisive presidential campaigns in modern U.S. history ends November 8, but the political fight between Republican Donald Trump and Democrat Hillary Clinton will have lasting implications for Germany, Europe and the world.

  • Facts

    Facts

    • Oliver Bäte, 51, has been chief executive of Allianz, a Munich-based insurance and financial-services company, since May 2015.
    • Allianz has 85 million customers and about 150,000 employees in 70 countries and manages €1.5 trillion for insured customers and investors.
    • Mr. Bäte is a German native and a former McKinsey consultant who studied at the Leonard Stern School of Business in New York.
  • Audio

    Audio

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Republican U.S. presidential nominee Trump listens as Democratic nominee Clinton answers a question from the audience during their presidential town hall debate in St. Louis
Without self-critical analysis and reforms, the polarization and paralysis in many sectors of U.S. society will not be overcome. Source: Reuters

The world followed the United States in the 20th century primarily because it was the world’s leading democracy, not so much because of its economic and military might. Only a return to this democratic strength will assure America’s success in the future.

At the heart of this democratic leadership was always the “American Dream:” the proverbial possibility for all citizens and immigrants to work their way up from dishwasher to millionaire. It involved basic democratic elements of an entrepreneurial and fair society: equality of opportunity with social mobility, free markets and entrepreneurial spirit, personal liberty and security.

The attractiveness of the American way of life is evident in its high level of immigration from throughout the world.

In just the quarter century since the fall of the Berlin Wall – which gave rise to a new wave of globalization – some 25 million persons immigrated legally into the United States. Even those who didn’t become millionaires could, with sufficient effort, lead a fulfilling, socially and economically attractive life, with each generation doing better than the one before.

But for a couple of years now, that is over. Even with last year’s vigorous rise in personal wealth, the average real income of U.S. households is still significantly less than its peak in 1999. The shrinking middle class and poorer sectors of society experienced a disproportionate decline. During the last 30 years, only families with high incomes enjoyed significant growth in real income.

Today, 15 percent of Americans live in poverty. That figure is higher than in almost any other industrial country.

Educational opportunities also are unfairly distributed. According to an Organization for Economic Co-operation and Development study from 2015, about 37 percent of the world’s engineers and natural scientists will be Chinese by the year 2030, while only about 4 percent will be Americans.

Simply put, too many children leave U.S. public schools with woeful gaps in knowledge. On the other hand, an education at a top U.S. university still is the gold standard for every knowledge-driven society, but it is increasingly a privilege of the elites.

Undeniable strengths, however, must not be allowed to blind America to a self-critical analysis of its shortcomings and the implementation of reforms.

And inequality is rising in the corporate world: Since the banking and economic crisis, large firms have maintained a relatively good position, while small companies have struggled mightily. Entities have arisen that are close to monopolistic, for example in the credit sector.

Structural problems, not cyclical ones, are undermining the U.S. economy’s competitiveness and widening the distance between rich and poor. The pensions gap is growing. In spite of reforms, only the rich can afford high-quality health care, even though eight years after financial crisis, average annual U.S. GDP growth is 2 percent, unemployment has fallen by half to 5 percent, and real wages have begun to rise.

But a more visible sign of standstill is the U.S. infrastructure, which sometimes resembles that of a developing country. A special cause for alarm is the almost stagnating productivity of labor.

Recently, even President Barack Obama made this point in The Economist. The average rise in worker productivity of 2.5 percent between 1949 and 2005 has fallen in the last three quarters to just 0.5 percent. The last year with such weak productivity gains? It was 1979.

The American people sense that these developments threaten their prosperity. The claim to be the world’s leading democracy has stood on wobbly legs ever since the failed wars in the Middle East and the global financial crisis, which began on Wall Street.

Nevertheless, many overlook the structural problems because of the strength of private American companies and the country’s military dominance. Without the United States, Europe would scarcely be able to defend itself. And of the 10 most valuable companies in the world, nine are American.

Undeniable strengths, however, must not be allowed to blind America to a self-critical analysis of its shortcomings and the implementation of reforms. Otherwise, the polarization and paralysis in many sectors of U.S. society will not be overcome: a partisan cold war in Congress, degrading behavior in the presidential campaign and conditions resembling civil war in large cities with large minority populations.

After Election Day, U.S. politics must make a concerted effort to put the country’s interests over special interests. Opportunities that are so limited for broad parts of the population must be reopened – with the same optimism and pragmatism that are typical for the United States.

There needs to be much more investment, innovation and efforts to spread the wealth wider. It’s time for a growth policy that doesn’t exclude extensive parts of society but strengthens American small and medium-sized businesses above all.

Among the tasks awaiting the new government are: equality of opportunity in education and social mobility, modernization of the public and social infrastructure, and support of personal freedom and security. If a social consensus isn’t restored, there is reason to fear that the fissures in U.S. society will continue to widen, despite all the internet millionaires.

I wish to see the United States restore its social and economic unity under the great notion of the American Dream so the country once again becomes the land of unlimited opportunity.

We as friends and partners should do all we can to help America return to its democratic strengths and implement suitable reforms. That would also be good for Germany and Europe.

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