High-School Knowledge

06.12.12

An Article That Made Me Sad, and a Little Response to Readers

Bill Galston is one of the great intellects around, and this week he wrote an especially bracing short piece at TNR after he read a quote from Mitch Daniels that obviously put a bee in Bill's bonnet.

The quote from Daniels was this: “He [Obama] does not understand where wealth and jobs come from. It comes from a successful private sector or not at all … Government does not create wealth or income. It just shuffles it around and charges a price, a cost for that service or disservice.”

Galston unloads and is worth quoting at some length:

Daniels is obviously right that a vigorous private sector is and must be the principal locus of wealth and employment. But he is dead wrong to suggest that government is simply redistributive or worse, a dead-weight drag on the economy. Throughout American history, government has made investments that have fueled economic growth. Is it really necessary to remind the governor of facts that young people used to learn in high school? Is he not familiar with the historic role of the public sector in catalyzing the construction of canals, railroads, bridges, and roads—indeed, every aspect of the infrastructure that ensures the mobility of raw materials and finished goods? What about human capital—public schools, land-grant colleges, student grants, and loans? Surely the governor understands that individuals’ ability to earn a decent living, and America’s ability to compete in the global economy, depends more and more on the education and training of our workforce. And what about basic research, which helps replenish the well of ideas from which so many commercially viable products and processes are drawn?

The concept of “public goods” is hardly the creation of liberal ideologues. Standard economics tells us that market mechanisms tend to undersupply investments that benefit those other than the investors. Although we would all be better off with a better-trained workforce, each business has reason to believe that others could end up enjoying the fruits of its own training expenditures. The aggregate of individual decisions, each of which is rational, yields an inadequately trained workforce. When government acts to fill the gap, it is neither redistributing income nor charging for a service. It is playing its appropriate role in helping to create income, wealth, and jobs.

I like that second graf especially, because it is an entirely market-based, unsentimental case for government. Markets send benefits to investors. Since many citizens are not investors, a mechanism is needed to send benefits their way.

This is an argument that applies very specifically, by the way, to health care. We don't have much in the way of preventive medicine in the US, at least compared to Europe and Canada. And the reason we don't is expressed in Galston's second paragraph. It's because health care is largely provided by employers. To paraphrase Galston somewhat, while it is in society's interest to have more preventive medicine, it isn't in any single employer's interest to provide it, because that business has good reason to think that a different employer will someday enjoy the fruits of its having done so (i.e., a worker encouraged to quit smoking at 26 will cost less to insure when she's 46, but by that time will probably be working at a different company).

And Galston's first graf is just depressing and made me sad. Really. It's high-school-level knowledge of the world, and Republicans deny it. Daniels is not that dumb. But there's only one other thing he can be, which is a liar, so he's that. When even these allegedly "reasonable" Republicans spout such fantasy propaganda, what on earth are we to do?

Now, a quick response to the comment threads. It's hilarious to me when conservatives think they've "uncovered" the scandal that...I'm for Obama! Yes. I am. My whole world view is a lot more complicated than that, and in fact I believe right now that what this country needs more than anything is more moderate Republicans, about which I've written and will continue to write. But yes, I am for Obama. This is a real stop-the-presses revelation, folks.

But if you have any interest in being fair-minded, you will note that I calls 'em as I sees 'em. Last week, I wrote three pieces in a row, three in a row, laying into Obama. Go off and have a look and tell me how many conservative columnists ever write three in a row attacking Romney. And wingers, as a general principle, just get ahold of yourselves, would you?