Excerpt
SUMMARY: In recent decades, American productivity growth has slowed. Yale University's Jacob Hacker has a possible explanation: the country's outdated and deteriorating infrastructure. Hacker, co-author of “American Amnesia,” argues the U.S. has forgotten the role government plays in engineering prosperity, and that public investment got us where we are today. Economics correspondent Paul Solman reports.
ANNOUNCER: Attention, please, this is the last call.
PAUL SOLMAN (NewsHour): Mid-morning at New York's Penn Station. Throngs rush to the 10:00 a.m. Acela to Washington, D.C. ridership is up and these highish-speed trains are at or near capacity as business travelers chug up and down the Northeast Corridor.
WOMAN: Amtrak conductor 2153 to the heading. All stations are cleared.
PAUL SOLMAN: But they're hurrying up in an America of slowed-down productivity, the amount of output per hour of work rising at just 1.3 percent a year since 2007, compared to more than double that rate from 1947 to 1973.
One cause, America's crumbling infrastructure, like our passenger rail system, some of which dates to the Civil War, causing delays that hamstring the economy.
Wick Moorman worked his way to the top of the Norfolk Southern Freight Railroad, before retiring last year, returning to work recently, at a dollar a year, to steer and revive Amtrak. Riding the Acela back to New York, he insisted it's not just our railroads that need work.
WICK MOORMAN, CEO, Amtrak: When you look at the state of our highway system today, which we all get out and drive on every day, in terms of congestion, in terms of the surface conditions, in terms of the fact that we're seeing that more and more bridges have to be closed to rehabilitate, it has to be an economic drag, right? Highway congestion alone costs this country an enormous amount of productivity.
PAUL SOLMAN: So, why aren't we investing in infrastructure of the kind that made America great in the '40s, '50s, '60s, government investments that hiked our economy to unheard-of heights of productivity?
So asks Yale's Jacob Hacker. His answer?
JACOB HACKER, Co-Author, American Amnesia: We have forgotten the incredibly important role that government plays in our prosperity.
PAUL SOLMAN: And thus the term “American Amnesia,” Hacker's new book, subtitled “How the War on Government Led Us to Forget What Made America Prosper,” because, in the 19th and 20th centuries, prosper, we did.
JACOB HACKER: We went from being from a relatively poor, relatively under-educated and relatively unhealthy society, to being the richest, the most well-educated and the healthiest society that the world had ever seen.
After World War II, we see the blossoming of this really active investing state that's investing on both non-defense and defense technology and really sowing the seeds for the productivity revolution that occurs during this period.
PAUL SOLMAN: Government outlays of land for railroads, say, subsidies for airports and waterways that helped make the country one market, speed goods and labor from coast to coast. Think of Republican President Eisenhower's interstate highway system.
JACOB HACKER: The estimates are that it accounted for something like a third of productivity growth in the U.S. economy in the late 1950s, and around a quarter in the 1960s.
PAUL SOLMAN: And what's true of hard infrastructure is true of what were once America's greatest soft productivity advantages: health and education.
JACOB HACKER: If you look at older Americans in the United States, they're the most educated older citizens in the world. But if you look at younger Americans, we have fallen to the high teens in terms of college completion rates.
So, in a new economy that's based much more on knowledge and technology, we're not investing adequately or correctly to get kids through college the way other countries are.
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