Wednesday, December 28, 2011

The Need for Efficient Public Institutions

I'll score this column by David Brooks, "Midlife Crisis Economics" as a win.  His thesis:
In the progressive era, the economy was in its adolescence and the task was to control it. Today the economy is middle-aged; the task is to rejuvenate it. 

He offers three pieces of evidence, which I'll summarize as:
  1. Our economy is not prone to creating jobs as much as it is to boosting productivity to grow without rapid job creation.
  2. Our government today has the tools to confront social challenges, but it lacks the institutional effectiveness to make progress against them.
  3. Our moral culture has deteriorated, requiring government institutions to carry a larger burden than in prior eras.
I think he is correct on all three.  You can read and judge for yourself.  The one that offers the most straightforward opportunities for better public policy is #2.  He mentions specifically:
The United States spends far more on education than any other nation, with paltry results. It spends far more on health care, again, with paltry results. It spends so much on poverty programs that if we just took that money and handed poor people checks, we would virtually eliminate poverty overnight.
Spending a lot to achieve paltry results is inefficiency on a large scale.  These three issues (and one other) -- health, education, the environment, and poverty -- are the big issues in domestic public policy.  More and more, they appear to be ones that our political system is incapable of handling.

There will always be an element of each one that remains in the public realm.  Our political system is set up for a split-the-difference approach among two factions that share a common belief that the policy outcomes should be improved.  That approach has broken down (and, in prior posts, I have laid the blame on the political right's connectedness problem.)  In its absence, the quality of the public institutions that are invariably tasked with addressing them has declined, leading to the inefficiency that Brooks is observing.

4 comments:

Anonymous said...

Andrew - You quoted the sentence "It spends so much on poverty programs that if we just took that money and handed poor people checks, we would virtually eliminate poverty overnight." without comment, suggesting that you agree with it. But don't most of the poverty programs - SSI, EITC, TANF - just hand out checks? And most of the housing and food dollars go to cash-like vouchers. So where does Brooks get this?

Andrew Samwick said...

I don't know where Brooks gets this. I wrote it off as journalistic license.

Anonymous said...

Stan kicked you off his site? Keep up the good posting.

I have to disagree with #3. Progress requires change and change is moving faster than the culture. The failure of culture to change rapidly enough is not a moral issue, it is an education issue. Not all education takes place in schools. Some education takes place on the job. Allowing high unemployment to prevent too many people from developing skills and networks that make them employable has a high social cost. Denying teens the opportunity to experience the workplace and develop jobs skills is a social failure.

If there is a moral failing, it is allowing the 1 percent to accumulate vast resources that should be instead going to improve eduction and health care for the 99 percent. The moral failing is promoting personal aggrandizement at the expense of society.

The big moral question of our time is living wage versus cheap labor. The proponents of cheap labor actively undermine efficient public institutions.

-jonny bakho

Justafed said...

Andrew Samwick said:

I don't know where Brooks gets this. I wrote it off as journalistic license.

What you call "journalistic license" I just call "making stuff up". And, he, like many columnists, does this a lot, which is why I try not to spend much time reading op-ed columns.