Harvard Study Says Politics is the Reason Why the U.S. Economy Lags


The U.S. has made virtually no progress in a battle to reclaim its elite position in the global marketplace, a Harvard Business School study says, squarely placing the blame on a broken political system and coarse presidential campaign.

“We believe that the nation’s political system has now become America’s greatest competitive weakness, and that the situation continues to deteriorate,” Harvard professors Michael Porter, Jan Rivkin and Mihir Desai wrote in a report titled “Problems Unsolved and a Nation Divided.”

And the erosion of the nation’s ability to compete globally is the main reason for its sluggish economic performance during the seven-year-old recovery, the authors say.

This marks the fifth year that the school has assessed the USA’s dropoff in competitiveness compared with decades ago but the first time it has singled out the political divide in Washington as the chief culprit.

“The problem now is frankly that we can’t make progress,” Porter — widely considered the nation’s foremost expert on U.S. competitiveness — said in an interview. “And that we identify as a function of the political system. … It just really hit us.”

The 102-page report also castigates Republican presidential candidate Donald Trump and Democrat Hillary Clinton for widening the political chasm. “The 2016 presidential race has done little to improve the discourse and shed light on the future steps we need to embrace,” the study says. “Instead, too often, the candidates create greater confusion” and “propose small, partial steps on some policy areas, or espouse simple, almost-cartoonish slogans without a real plan of action.”

For the first time since the Harvard researchers began the study in 2012, the Harvard alumni they surveyed were more pessimistic about U.S. competitiveness than they were a year ago. Fifty percent of the business leaders expect it to decline, up from 42% in 2015, while just 30% foresee improvement, down from 39%.

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SOURCE: USA Today, Paul Davidson