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Obama’s ‘Investment’ Non-Strategy: Spending more on education won’t drive economic growth.
National Review ^ | 02/06/2013 | Jonah Goldberg

Posted on 02/06/2013 7:15:05 AM PST by SeekAndFind

Not long after President Obama proclaimed in his second inaugural that “an economic recovery has begun,” we learned that the U.S. economy actually shrank in the last quarter. Many economists believe this is a temporary setback. This recovery may be the weakest in American history, but the economy isn’t cratering either.

Still, you can bet that if the economy continues to contract, Obama will propose the same remedy he always has: more “investments” in education, infrastructure, and various industries of the future. It seems that whatever the ailment, Dr. Obama always writes the same prescription.

This is hardly shocking: Building roads and schools is a big reason why God created Democrats in the first place. And identifying the Next Big Thing — and taking credit for it — is something of a vocation for many liberal policymakers.

But are these really the drivers of economic growth?

Higher education in particular is almost universally championed as the key to “winning the future” — a buzz phrase the president borrowed from Newt Gingrich a while back. New York Times economics columnist David Leonhardt calls education the “lifeblood of economic growth.”

Often channeling such writers as Thomas Friedman, whose fondness for the Chinese economic model borders on the perverse, Obama routinely elevates education to a national-security issue. “There’s an educational arms race taking place around the world right now — from China to Germany to India to South Korea,” Obama said in 2010. “Cutting back on education would amount to unilateral disarmament. We can’t afford to do that.”

Now, obviously, education is important and necessary for a host of reasons (and nobody is calling for “disarmament,” whatever that means). But there’s little evidence it drives growth.

British scholar Alison Wolf writes in Does Education Matter?: “The simple one-way relationship . . . education spending in, economic growth out — simply does not exist. Moreover, the larger and more complex the education sector, the less obvious any links to productivity.”

Nassim Nicholas Taleb, author of Antifragile: Things that Gain from Disorder, argues that education pays real benefits at a micro level because it allows families to lock in their economic status. An entrepreneurial father can ensure his kids will do okay by paying for them to become doctors and lawyers. But what is true at the micro level is not always true at the macro level.

Think about it this way: Growing economies spend a lot on education, but that doesn’t necessarily mean that spending makes them grow. During the so-called Gilded Age, the U.S. economy roared faster and longer than ever before or since, while the illiteracy rate went down. But the rising literacy didn’t cause the growth. Similarly, in the 20th century, in places like China, South Korea, and India, the economic boom — and the policies that create it — always comes first while the investments in education come later.

There are similar problems with claims that infrastructure spending will pay off. When I was in college, prominent experts and journalists — Lester Thurow, Robert Reich, James Fallows, Kevin Phillips, et al. — were insisting Japan would be the next world economic superpower. In the late 1980s, Jacques Attali, the first head of the European Bank for Reconstruction and Development, claimed that “America has become Japan’s granary, like Poland was for Flanders in the 17th century.” Attali did allow for the possibility that the U.S.’s West Coast might do okay, but only because it was “in the gravitational pull of Japanese financial power and geographic proximity.”

Japan is now well into its third “lost decade.” Over the years, it has poured money into “stimulative” infrastructure projects that have yet to stimulate and protected industries that have steadily lost their competitive edge. Economic growth has averaged less than 1 percent since 2000, while government debt is now more than twice its GDP. If a highly educated work force, support for allegedly cutting-edge industries, and lavish spending on infrastructure was the recipe for economic growth (and if debt didn’t matter), Japan would be doing great.

Obama surely wants to see some real economic growth. Perhaps the problem is that he thinks investing in a much bigger cart to put before the horse will get him where he wants to go.

— Jonah Goldberg is editor-at-large of National Review Online and a visiting fellow at the American Enterprise Institute.

TOPICS: Business/Economy; Culture/Society; Government; News/Current Events
KEYWORDS: education; infrastructure; investment; obama

1 posted on 02/06/2013 7:15:13 AM PST by SeekAndFind
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To: SeekAndFind
Obama’s ‘Investment’ Non-Strategy: Spending more on education won’t drive economic growth.

It will if you're a member of the union.
2 posted on 02/06/2013 7:29:20 AM PST by sasquatch
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To: SeekAndFind

“Spending more on education won’t drive economic growth”

• Lower the bar on college entrance
• Hand out degrees like popcorn, in bogus, meaningless disciplines
• Throw billions into bull s^%$ programs that are proven failures
• Coddle young people to let them assume they are educated when they are not
• Cultivate a society where mediocrity is preferred to and superior to excellence
• Demonize wealth attainment through individual success

All this will mass produce graduates!

They will come out of school like widgets off a conveyor belt… BUT there will not be any jobs waiting for them.

NOW-The same tax payers who where robbed in order to send these half wits to ‘college’, will have to support them through life because they will NOT be able to support themselves.

Can you say ‘social discord’?

3 posted on 02/06/2013 7:33:39 AM PST by SMARTY ("The man who has no inner-life is a slave to his surroundings. "Henri Frederic Amiel)
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To: sasquatch

If we all stayed in college forever, imagine how rich we would be.

4 posted on 02/06/2013 7:34:41 AM PST by St_Thomas_Aquinas
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To: SeekAndFind

“an economic recovery has begun”


5 posted on 02/06/2013 10:09:00 AM PST by Vaduz
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