In Their Opinion...

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Colin Read is a professor of economics and finance and former dean of the School of Business and Economics at SUNY Plattsburgh. His fifth book, "The Rise and Fall of an Economic Empire," will be published by MacMillan Palgrave in September. He also runs an economic and business consulting company, and can be reached through his website www.economicinsights.net.

Colin Read: Nations offer lessons in unity

Washington recently went through one of their routine heart-wrenching political meltdowns. This time, we rolled our eyes and the stock market shrugged.

People have become cynical and frustrated with our leaders. Cynicism seems to stem from a suspicion that those in leadership positions are self-serving at best, and above the law at worst. I understand the prevailing frustration, but I remain optimistic nonetheless.

We once viewed ourselves as the United States. We have since become groups divided based on our personal self-interests. This schism has been widened by the global financial meltdown. Job and income loss was not evenly dispersed, but instead was concentrated on working-class families with lower levels of education, on the young and on those nearing retirement. Many others suffered, too, except perhaps those with the resources and ability to ride out an epic financial storm. These 1 percent actually managed to do quite well.

This lack of a shared experience is at the root of our division. It need not be that way. We seemed to have made a choice. We point a finger and sometimes a fist at others without having much of a dialog about how we can work together.

I marvel at a few countries that made it through the Great Recession without the same level of displacement and division we faced here.

Australia fared well. They have the advantage of a strong and proud national identity, united around a rugged, self-reliant spirit. One can imagine how these ingredients would allow them to avoid some of the trappings we suffered here.

Canada, too, did reasonably well, even though their population is not as homogeneous as that of Australia. Canada’s parliamentary system allows them to execute fiscal policy much more effectively than our Congress can muster here even under the best of circumstances.

In fact, I would go so far as to say that, rhetoric aside, there has been precious little fiscal policy here. There was some infrastructure investment, not much job retraining and almost no efforts to better align our education system with national needs. As a consequence, while Canada is moving toward renewing their federal budget surplus, our fiscal pit is getting unimaginably deeper each year.

The Germans may have the most interesting economic recovery experience. Over generations, they have forged a unique compact between capital and labor. Capitalists and management do their best to create profitable and sustainable commerce. Meanwhile, unions have taken the responsibility of both training and managing their workforce.

Unions consider themselves partners in the success of the German private sector, and are willing to invest in its future, even if they must adapt to changing realities. Management embraces this compact, and both sides work with a much greater degree of cooperation, trust and economic evolution than we ever see here.

Germany’s innovation recognizes they (we?) are all in the same boat. For instance, when export demand fell precipitously at the onset of the Great Recession, German labor and capital demand also fell dramatically. Instead of laying off workers, unions and management were determined to share the pain equally. All workers, junior and senior, agreed to a cut in hours so some would not have to lose their entire jobs. Because they then avoided the household-wrecking loss of livelihood and self-respect, the nation remained relatively united, despite significant global economic challenges.

We don’t need to be a divided nation. In fact, I think we want to be inspired and led in a direction that will allow us to become more fiscally solvent and responsible, more affordable, more productive and more optimistic. We won’t get there if we don’t work much harder at bridging gaps instead of fanning flames. I hope past patterns of adversarial mistrust and unbridled self-interest among our economic institutions can melt away and we can renew hope.

While it may not seem so, most of us define ourselves not by our self interests, our political parties or union versus management, but by our nationhood. We all share an essential and defining commonality. We are citizens of the United States, and we seek to leave a nation at least as good as we inherited. I think we are up to it.

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