It is often said that “Washington is broken.” But this widely held belief reflects a common misunderstanding of the problem. In fact, Washington is delivering exactly what it is currently designed to deliver.* The real problem is that our political system is no longer designed to serve the public interest. Rather, with little public awareness or oversight, the system has been slowly reconfigured to benefit the private interests of gain-seeking organizations—our major political parties and their industry allies.

By nearly every measure, the industry of politics, itself, is thriving. Campaigns are now seemingly endless and put to work an immense roster of canvassers, pollsters, and staff; top consultants are in high demand; media interest is endless. And when it comes to elections, overall spending (a normal proxy for an industry’s success) continues to rise.1

There’s just one problem. The people whom the politics industry is supposed to serve have never been more dissatisfied. Public trust in the federal government is hovering at a near 60-year low (see Figure 1). In 1958, three out of four Americans trusted the government. In 2017, this had fallen to one in five. There are many other signs of citizen dissatisfaction and disillusionment (see Appendix A).

What’s going on? Competition in politics appears intense, which is usually good for customers. But competition in America’s political system is failing. It is delivering gridlock and growing division, not practical solutions to the nation’s problems (see the sidebar “Politics Fails to Solve Problems: Simpson-Bowles”). The parties compete on ideology and unrealistic promises, not on action and results. The parties compete to divide voters and serve special interests, rather than weighing and balancing the
interests of all citizens and finding common ground to move the country forward.

It wasn’t always that way. America’s political system was long the envy of the world. It advanced the public interest and gave rise to a grand history of policy innovations that fostered both economic and social progress. Today, however, our political system has become the major barrier to solving nearly every important challenge our nation needs to address. This was the unexpected conclusion of the multiyear Project on U.S. Competitiveness at Harvard Business School, established in 2011 to understand the causes of America’s weak economic performance and rising inequality that predated the Great Recession. As shown in Figure 2, the research revealed that the U.S. business environment has seriously eroded, especially in those areas that are primarily the responsibility of government, while other nations have progressed.

The Project identified a consensus set of essential economic policy steps needed to restore U.S. economic growth and shared prosperity. Our research found, however, that Washington has made virtually no progress in decades in addressing any of them, while other countries have enhanced their policies. Instead, surveys of both Harvard Business School alumni and the general public identified the political system as America’s greatest competitive weakness. (For more detail on the findings of the U.S. Competitiveness Project, see Appendix B.)

A similar failure to progress has also afflicted the nation’s social agenda. In areas such as public education, health and wellness, personal safety, water and sanitation, environmental quality, and tolerance and inclusion, among others, U.S. progress has stalled or gone in reverse. In these areas, where America was often a pioneer and leader, the U.S. has fallen well down the list compared to other advanced countries. Tolerance, inclusion, and personal freedom are registering troubling
declines, a sign of growing divisions in our society. (For international comparative data on key areas of U.S. social performance, see the findings from the Social Progress Index in Appendix C.)

In public education, of particular significance for citizen opportunity, in math the U.S. was ranked 31st out of 35 OECD countries (the other advanced economies using the respected PISA process) in 2015, down from 25 in 2009, 20th in reading (down from 14) and 19th in science (down from 17).5 Instead of progress, then, our government is mired in gridlock and inaction. Increasingly over the decades, Congress has been unable to get things done, especially on important issues (see Figure 3). As political divisions have kept increasing, the ability of the parties to come together on landmark legislation has become a thing of the past (see Figure 4). A broken political system has become the greatest threat to our nation’s future. (See Appendix D for more detail on the distortion of competition in politics.)


Simpson-Bowles, an effort to create a sustainable federal budget, provides a telling example of the failure to deliver solutions. A substantial majority of Americans agree that our unsustainable federal debt and deficits must be addressed.2 In 2010, President Obama established the National Commission on Fiscal Responsibility and Reform—most often referred to by the last names of its co-chairs, Alan Simpson and Erskine Bowles. 

The product of their work was a sound report with a well-crafted compromise solution. The preamble to the report says: “The President and the leaders of both parties in both chambers of Congress asked us to address the nation’s fiscal challenges in this decade and beyond. We have worked to offer an aggressive, fair, balanced, and bipartisan proposal—a  proposal as serious as the problems we face. None of us likes every element of our plan, and each of us had to tolerate provisions we previously or presently oppose in order to reach a principled ompromise. We were willing to put our differences aside to forge a plan because our nation will certainly be lost without one.”3
(Emphasis added.)

The Simpson-Bowles report provided an actual, comprehensive solution. Why did it go nowhere? While there was bipartisan support from numerous legislators, this wasn’t enough. In practice, neither party was willing to go against its party orthodoxy, or to give up or even compromise on any of its special interests. Instead, Simpson-Bowles died a bipartisan death.

Representative Paul Ryan, who served on the Commission, voted against it. President Obama, who created the Commission, declined to forcefully support it. No other legislators jumped in to save it (though some from both parties were courageous enough to voice public support). Most legislators were unwilling to go against their party line and risk a primary challenge from their right or their left.

Simpson-Bowles also demonstrates another important reality: The duopoly controlling today’s political competition has no accountability for results. Neither Representative Ryan nor President Obama nor Congress paid a political price for failing to deliver a solution to this pressing national problem. President Obama won a second term, Representative Ryan became Speaker of the House, and the re-election rate in Congress was 90%.4