By Tom KandoNew York Times columnist David Brooks recently published an article titled “Rift Opens Between Two Economies and Two Political Parties,” (Sacramento Bee, April 11).
Some of his points are exciting: In recent years, the US economy has become vastly more productive. These efficiency gains are boosting our exports. “Two years ago, President Obama promised to double exports over the next five years...and the US might actually meet that target.” Our exports are surging in areas like smart machines, robots, shale oil and gas, and the rest of the world’s growing middle class is importing more and more American pharmaceuticals, semiconductors, planes and entertainment - all US fortes.
Indeed, exports from both California and the country as a whole are reaching record highs, and our trade deficit, while still over $40 billion a month, is lower than in a long time.
At the same time, Brooks notes that there is a second sector within the US economy which BARELY becomes more productive as time goes, because it does not face global competition: This is the health care, education and government sector.
The first sector of the economy is globalized and it is producing great gains in productivity and profits, but not many new jobs. The second sector is more protected, it is not becoming as productive, but this is where most Americans live and work.
Brooks avers that a rift is opening up between those who live in Economy I and Economy II, and he associates Economy I with the Republican Party and Economy II with the Democrats.
This is where he goes astray (“vliegt uit de bocht,” as my friend Paul Ten Have would say).
There is no doubt that Republicans oppose big government and subscribe to economic freedom more than do Democrats. But Brooks suggests that this position represents progress. Conversely, according to this view, the Democrats and the trade unions represent a brake on progress, as in “featherbedding” and luddism.
To be fair, Brooks does recognize the need for the two sectors of the economy to cooperate, i.e. to use some of the profits of Economy I to improve the lot of the majority of Americans who operate outside of Economy I.
But what Brooks does not understand is that the Republican Party is a coalition of Wall Street and the “ Little People.” Corporate America may, in a Schumpeterian, Social Darwinistic way, represent some form of inevitable future. High Tech, Steven Jobs and all that.
But the Republican Party’s voting booth strength is in the retrograde “populism” of little old ladies in tennis shoes in Iowa, the Tea Party, the evangelicals, the Obama-haters, the anti-feminist, anti-gay, anti-ethnic, gun-toting male chauvinists. How on earth can one think of this vast Republican army as representing the vanguard of progress? These are Rush Limbaugh’s infantry in the Culture wars.
Do these people stand for globalism? To the contrary, they are ignorant of and hostile (xenophobic) to anything that’s foreign. Do they stand for progressive values? To the contrary, they long for a return to the 19th century, opposing secularism, the separation of church and state, gay marriage, contraception, public transportation and public health care. Do they stand for science and technology? To the contrary, they reject Darwinian science, the science of global warming, funding for research and for “elitist” universities (Paul Ryan’s disastrous budget!).
Doesn’t the very word “conservative,” - synonymous with “Republican” - mean holding on to the past?
The distinction between the two economies is meaningful. But it is hogwash to associate Economy I and progress with the GOP, and regression with the Democrats. And I haven’t even touched upon the two sides’ attitudes towards equity - Republicans utterly indifferent to it, Obama fighting for it.
Granted, I stereotype. With Santorum out of the way, the best we can hope for is that a Romney presidency would be technocratic (Economy One) rather than culturally ideological. But let’s face it: most Republicans live in an ideological past, not future. leave comment here
5 comments:
David Brooks, a conservative commentator, has always had fairly simplistic (and self-serving) views on things. Clinton already talked about tradable and non-tradable sectors in an economy. These two sectors are intricately intertwined and you cannot separate the two.
In countries where education and healthcare are totally non-tradable and fully subsidized by government (i.e. where there is no competition) those same sectors are of better quality. How does Brooks explain that?
Healthcare is indeed one of the largest employers in the US. That is a problem because it actually does not 'produce' anything. So in that sense it makes sense for economy 1 to make healthcare more efficient. They should be viewed as trading partners of Economy 1.
And lastly, why does Brooks assign the success of this 'new economy' to Conservative values? It is Obama, a President with Liberal values who has managed to reduce the trade deficit and if Paul Ryan, with his conservative values, has his way funding for science and education will be gutted.
Who will create the software and the science for this more efficient, cut-throat, tradable economy then?
There is a great deal of contradiction in Brooks' article. The boom in exports by the US is fueled by the growth of the middle class in developing countries like China and India, and they reject the exact values that Brooks admires.
I thank Madeleine for adding depth to my critique of Brooks's flawed analysis
Brooks analysis is not as flawed as you imply. The rate of economic growth in states is inverse to the level of government. Thus, California has had significantly slower growth than less directive states in the country. While this is not an absolute, the numbers that Brooks suggests are directionally correct.
I do not buy that government managed health care is always better. The WHO stats suggest that things like Cancer and Heart disease are better treated in non-managed systems. Part of our low ratings in health care are there because our population is so heterogeneous.ca
An interesting column and interesting thoughts. I wish Obama would play up just how robust one part of the economy is.
Thank you for your comments:
Dr. Tax makes two familiar arguments - one about
The relationship between the size of government and economic growth, the other about the quality of managed vs. non-managed health care.
His web site is good, as are his credentials. I disagree with his arguments. But far be it from me to claim expertise in these areas. My positions are based on the best information available to me.
Scott touches upon something I wanted to mention in my original post: It is, indeed, Obama who champions a high-tech, high-productivity future for our country, much more so than his opponents.
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