This is the third in a series of posts (first here, second here) that looks at how our burdensome public, health care, and educational sectors are weighing down our economy - and our future. Reading them together will take a few minutes longer than reading the usual blog post, but (hopefully) worth it. I welcome any thoughts you have.
On Tuesday, I wrote that reform in our three big domestic challenges – government spending, health care, and government’s role in education as it pertains especially to the union situation in Wisconsin and elsewhere – are something of a moral calling to the present generation. Radical reform in each sphere is necessary to reorient the American economy in the right direction again, or we could be in for a long, uncomfortable, un-American period of sluggish growth and dashed hopes.
Drawing on Tyler Cowen’s e-book, The Great Stagnation, which I used as the springboard Tuesday, I raise a related question: have we now elevated the place of comfort and security in our society to the point that it’s stripping us of the aspirational edge we have always valued? This is me extrapolating out the book, not a question that Cowen raises or tries to answer. The reason it’s an important question to ask is because tackling the deficit and taking on big reforms may require the present generation to get a little uncomfortable.
As an aspirational society, America has been built through weathering risk, taking chances in pursuit of big goals, moving around to follow opportunity, and so on. Capital seems to follow “aspirational types,” which creates more aspirational activity, which all combines to create new firms, jobs, opportunity.
We frequently enjoy taking cracks at Europeans’ preoccupation with avoiding risk and discomfort through excessive benefits and worker protections, however much we enjoy visiting Europe. But are we moving more in that direction ourselves?
As I read Cowen’s analysis of rising government spending, health care costs, and education spending, one theme that emerges is the role that comfort and security play in these growing threats to our future economic vitality.
Health care: Comparing the U.S. to other countries, Cowen writes, “[America’s] hospitals are nicer, we have more and better specialized treatments and more abundant pharmaceuticals, you receive more of a feeling of hope, and the chance of a cutting-edge cure is higher. Still, we’re not living longer lives.” Our health care spending is skyrocketing, and much of it is aimed at making us more comfortable, especially when we’re old. But the spending has little or nothing to do with making us healthier.
Education: Without improving student outcomes, we’ve doubled education spending in the past generation. The Wisconsin protests provide a powerful answer to the question, “Why?” Because we have needed more money to pay for income security for teachers and a bureaucracy aimed at making schools nicer and more comfortable, not better.
Government spending: As we know, entitlements – income and health security – are driving a massive proportion of federal spending in coming years. The reason these issues are lightning rods is precisely because they are all about security.
Technology: Contrary to expectations 15 years ago, the internet did not bring about a new kind of industrial revolution. It has produced immense gains to our personal and professional lives without being much of an economic boon. This is the thesis in Cowen’s book that immediately attracted the most attention when it came out. Unlike electricity, for instance, which benefitted everyone and set the stage for all kinds of economic gains, the internet facilitates transactions and makes information available more quickly, but economic impact and job growth are small. The primary benefit of most of impressive innovation in this area has been the quality of our lives, not the jobs it has created or the extra economic thrust it has given our economy.
You could say that, in a sense, we have succeeded in our pursuit of happiness. We have used a couple centuries of growth and expansion to allow us to spend more now on the kinds of things that allow us to do what we want freed of discomforts and inconveniences that were commonplace not long ago. But it’s now coming at a big cost.
The forward march of technology has indeed continued, but it’s giving us Twitter and better painkillers and some life extension when we are old and sick. And I love Twitter and I’ll probably value those painkillers, too, once I need them. We’re living the age-old wish of getting away from money, money, money and finding some of our biggest innovative successes in sectors that are good for us but not revenue intensive…The funny thing is, getting away from materialism on such a large scale – whatever the virtues of that switch – really, really hurts. It is the hurt that we in America are living right now.
It’s impossible to say to what degree our pursuit of pleasure, comfort, and security has affected us as a society. And even if we were able to, there wouldn’t be much policy and politics could do.
That said, self-reflection as a society on this point can help, and public leaders can help in this regard.
Our aging population and the ongoing low-level crisis of poor educational outcomes for too many children, taken together, paint a desperate picture of our future. Who will support the aged if too many cannot work in, or create, high-growth jobs? The problem stares us in the face, but reform comes so slowly. Why? Just remember how the government workers in Wisconsin reacted to the idea that their compensation and benefits should be in line with the private economy? Just look at the opinion polls on the appetite for losing entitlement benefits. Security, once gained, is hard to give up.
The only thing worth giving it up for are those close to you, those you care about. Today, that equates to our children, born and unborn, who will be the victims of complaisance on our part. Or, if not complaisance, our slow-footedness.
Just as climate change as an issue became especially powerful as activists convinced a sizeable proportion of the population that “future generations” needed us to act now, our current economic and fiscal situation requires something similar.
We’re living in an era in which intergenerational justice is at stake in a big way, whether we like it or not. We’ll have to take the plunge on market-based healthcare reforms without knowing exactly how they’ll work, anti-establishment education reforms without being able to predetermine outcomes, and serious deficit reduction that alters our understanding of “social insurance” in a big way. And we might be a little uncomfortable along the way.