U.S. Best--or Worst?
By Arnold Kling
In the Atlantic Monthly’s “State of the Union” issue, Ted Halstead says that for the American economy it is the best of times and the worst of times.
We boast more patent applications than the entire European Union; almost three times as many Nobel laureates as Britain, our closest competitor; and more business start-ups per capita than almost every other advanced democracy. One in twelve Americans will start his or her own business, evincing another outstanding American trait—our great tolerance for risk…
Despite being the richest nation on the planet, we suffer from higher rates of poverty, infant mortality, homicide, and HIV infection, and from greater economic inequality, than other advanced democracies. We have far more uninsured citizens, and a lower life expectancy. On a per capita basis the United States emits considerably more greenhouse gases and produces more solid waste. We spend more per student on K-12 education than almost all other modern democracies, yet our students perform near the bottom on international tests. We have the highest rates of teen pregnancy and among the highest proportions of single parents, and American parents have the least amount of free time to spend with their children
Halstead argues that we need to focus on the common good, without abandoning the flexibility of the market system. The other articles on this topic present a number of proposals. My guess is that economists will find them a mixed bag.
–Michael Lind is worried that the coasts are too crowded and the midwest too empty. He wants a federal subsidy program to encourage a shift of population. He makes no mention of the supply and demand for labor.
–Ray Boshara advocates giving every newborn child a $6000 endowment. He writes, “If invested in a relatively safe portfolio that yielded a seven percent annual return…” Considering that the returns on inflation-indexed Treasuries are less than 3.5 percent, only an unscrupulous broker would promise a safe seven percent annual return on a portfolio.
— New America Foundation Fellow David Friedman (not this David Friedman) says that we need industrial policy, because we have “lost” 11 percent of our manufacturing jobs. In case you are worried about the implications of enlarging the manufacturing sector for pollution and energy usage, Ricardo Bayon says that we need to subsidize hydrogen fuel cells in order to “wean” our economy off of oil.