I’ve said it before and I’ll say it again—America’s best days are yet to come.
I believe that the continued expansion of mass investing through workplace savings plans is the single best way to give all Americans a stake in a growing economy. And I believe that this kind of inclusion is essential if we want to forge a broad consensus for policy action aimed at restoring the 3-percent-plus economic growth this country achieved during most of my lifetime.
Many Americans today doubt the ability of politicians, government, and our financial markets to secure their future. This is understandable given that the deep market crisis of 2008–2009 hammered home values and 401(k) balances alike. Perhaps more importantly, but more difficult to measure, the crisis damaged Americans’ sense of stability, fair play, and trust in our institutions.
In the years since the crisis, our financial markets have delivered robust returns and home prices have recovered—especially in select zip codes. Yet, there is no getting around the fact that the recovery has benefited some individuals and regions far more than others. Wages have decoupled from financial returns, and we are still struggling with middle-class income stagnation that has been with us for a generation.
America’s economic growth rate has been falling for decades, from 4.5 percent a year in the 1960s, to 3.5 percent in the 1980s, to less than 2 percent a year since the turn of the century. As with returns on investment or interest paid on bank deposits, economic growth compounds. A difference of 1 percent up or down can make a huge difference over the course of a lifetime—and not just in economic terms, but politically, socially, and psychologically.
Our long, unpleasant bout of slow growth and stagnant incomes has fueled an ugly, rancorous political environment in America and led many to believe that we have become a zero-sum society in which anyone’s gain is someone else’s loss. That’s the strange political fruit of what former Treasury Secretary Larry Summers calls “secular stagnation.”
For decades after World War II, robust economic growth made it easy for the United States to integrate women, minorities, and other groups into the workforce, and to take in millions of immigrants. But for the past 20+ years, sluggish growth has given our public discourse an embittered tone, with many seeking scapegoats for economic dislocation—illegal immigrants, overseas trading partners, “coastal elites,” or simply “the one percent.”
This subpar growth has dampened Americans’ can-do spirit and spilled over into raw-toned populist politics. As has happened in many other nations, a deep recession’s impact on growth makes everything worse: household balance sheets, business expansion, government deficits, and national morale. Along the way, we’ve lost the sense of bipartisan cooperation and compromise that once prevailed on incentives for growth, international trade, immigration, and entitlement reform.
It is my hope that our political leaders at the federal and local levels will soon find a way to transcend partisan politics and find common ground. Whatever our party affiliation, we need to reboot America’s spirit and come together across party lines to deal with the big-picture issues of national infrastructure, energy, science and medical research, education, and promotion of U.S. manufacturing.
These are the kinds of massive long-term investments that can generate a road map for our economy and lift Americans’ standards of living for decades into the future. And I very much want all Americans to benefit from them, not only as workers but also as investors and owners.
Let’s remind ourselves what it means to be an American. We are the country that invested in big ideas in one industry after another—transportation, telecommunications, aviation and aerospace, information technology, medicine and biotech, the Internet, and mobile computing. We are the nation that taught the rest of the world to dream big. We inspired millions to want to invest in America, get an education in America, come to live here, and become American citizens themselves.
I believe that if we bring the tens of millions of American workers with no retirement savings into workplace plans—including those who work in small businesses, at lower wages, or in the “gig economy” as contract labor, we will give them a real stake in free enterprise and economic growth. At the same time, we can also advance social justice by helping millions of Americans who have literally no financial assets today plant the seeds of future wealth.
But the most important gains from tackling the retirement challenge would be psychological, political, and cultural. By demonstrating that we can take on a huge and complex challenge—and showing that a government of the people can actually benefit all the people—we would rekindle the American spirit that has inspired hardworking, self-reliant people all over the world for the past 250 years.
That’s a goal worth fighting for.
I hope you will join me.