Stop Me Before I Vote Again

In a speech some weeks ago, read before the pro-union Economic Policy Institute, Larry the porcine Merlin gave us an exit sum-up. It's all too obvious that reality is wildly different from his twice-told tale. But don't think doc Summers doesn't know the score; don't think he doesn't know what he's done and not done.

Here's Larry's introductory evaluative criteria, the yardstick and scale he uses to vindicate WH policy:

"It is by what happens to the middle class that our economic policies have to be judged."

"A better life for our citizens [and] Upholding the 250 year American tradition of children whose lives are better than their parents'"

He calls this long haul objective "Keeping our Economy the Envy of the World" and he warns "We need to renew the American economy for a century that will be very different from its predecessor."

Here's the pivot:

"the key lesson that management strategists have distilled for businesses is this: you don't succeed by producing exactly the same thing that other people are producing in the same way just at a lower cost. You succeed, by establishing your own uniqueness and excellence... The United States has led the global economy by building on its unique capacities.

By building on our distinctive strengths, we can continue to lead in the next century.

There is no going back to the past. Technology is accelerating productivity in mass production to the point where even China has seen manufacturing employment decline by more than ten million jobs over the most recent decade for which data is available.

We are moving towards a knowledge and service economy... the world is shrinking... It is a different, a smaller world. What does it mean to adapt to this?"

Now Larry sez it's possible 'cause, 'cause, well, well we done it before so now we just gotta do it some more, only now on a national scale.

Do what exactly? Something he calls "the American North " did in the last century: namely, to prosper

".. even as the southern part of the United States caught up, even as we drew strength in the generation after World War II as Europe and Japan's economies converged towards our own"

Here's the homework for America as assigned by Professor Summers:

"Find ways to prosper as the emerging markets of the world take their place on the global stage."

But the past is just prologue, as the man said. What now should "our" approach be?

Not "to compete with the world on price even if it means striving to win races to the bottom." Nope, that's not for us, not if we want our "middle class" to "prosper". Better yet, no "workers" sacrificing "wages, benefits, and bargaining rights to hold onto their jobs." No slashing of "taxes on businesses even as their profits rise in order to lure them to stay in the United States." No shredding the "social safety nets in the name of self-reliance." Larry thinks "such Social Darwinism was bad morality and bad economics in the 19th century, and it is no better in the 21st."

Nice to see that you've caught up with Charlie Dickens, Larry. Maybe now that you're out of office, and no longer run Harvard, you've had a chance to do some reading?

Okay, Larry, now take us to this better place. Larry is like, so there:

"Consider this: The flatness of the world notwithstanding, by far the largest part of the activities Americans engage in and the goods they buy remain quite local. It is health care and retail services, recreation and education, haircuts and insurance policies, hotels and houses and I could go on."

"Moreover, where we compete with other countries, our strength is collective. Few of us can hope to succeed as individuals in a global economy where any particular task or skill can be purchased at very low prices in much of Asia and beyond. Rather, our strength must come from establishing uniqueness, establishing that which is difficult to replicate, that which comes from more collective action."

"Any idea or machine or even individual capacity can be transplanted. Far harder to transplant, imitate, or emulate are our great institutions – the national laboratories and the national parks and the national highway system, great universities and great cities and great technology clusters, a diverse culture, deep capital markets, and a tremendous ethic.

Where competition is concerned, the lesson for us as a nation is the same as the lesson for business: far better to compete by innovating, leading, and competing on strength, than by standing still, and reducing prices. Let me highlight what I see in this regard as the three essential priorities for the years ahead. "

"President Clinton used to say that in a world where ideas can move, capital can move, a nation's distinctive strength lay in its people. Our biggest failing as a nation over the last 50 years has been with respect to education. We were once the envy of the world; now we struggle to get into the top half of OECD nations.

The Duke of Wellington famously observed that the Battle of Waterloo had been won on the playing fields of Eton, and I would suggest that in this less elitist age, the battle for America's future will be won or lost in its public schools. For too long we have been caught in a sterile debate between those who believe in more accountability and those who see the need for more resources. In truth, no one who has seen the conditions in our urban schools can deny the need for more resources, and no one who believes in incentives can deny the need for more accountability.

Through Race to the Top the Administration has sought to reform elementary and secondary education both by providing resources and by increasing accountability. These kinds of efforts will need to be magnified in the future.

Even as we strengthen elementary and secondary education, we must also expand higher education opportunities. The US used to lead the world in the share of young people who became college graduates. It is no longer in the top ten..."

*Thrusts fingers down throat and vomits*

Onward the chariot rumbles, last seen poring over the high side, screaming "more means tested scholarships, more means tested scholarships"!

Now, however, comes the real Larry hobby-horse stuff. "Unique institutions"! I.e.

"the link between education and... innovation, the other central pillar of economic growth... "

"We have had for a very long time in the United States a distinctive ecology which is the reason we are the leading economy in the world."

Watch as Larry makes myth run uphill:

"On the one hand, we have recognized, venerated, and acted on the observation that it is individualists – the Edisons, the Fords, the Gates and Zuckerbergs – who, with a uniquely anti-bureaucratic temperament, who would not dream of a filing a grant application, who drive an enormous amount of the economy's progress. We have maintained a culture where it is still true today that with all our financial system's failings, and they are many, we are the only country in the world where you can raise your first hundred million without owning a tie if you have a sufficiently good idea. And that is a great strength of our economy."

"At the same time as maintaining a culture that supports the entrepreneur, that salutes the rebel, that allows people to establish themselves as major figures in business without even bothering to complete a college degree – at the same time as having support for the individual, we also recognize that fundamental innovation and progress will not happen without the public sector playing its essential role.

There would be no internet without DARPA. No car industry without highways. No pharmaceutical revolution with the NIH.

Maintaining and increasing our American capacity for innovation thus requires both fundamental support for entrepreneurial innovation and for the key foundations of science and technology.

That's why we have to make it easier to patent a new idea or innovation; make it easier for entrepreneurs and small businesses to raise capital; make it easier for the most promising minds and the most promising entrepreneurs to come to this country from around the world."

Between that and Wall Street's paper towers we will...let's see... insure a broadly prosperous ever materially advanced middle class? Recall Larry's yardstick here?

By devoting our public dollars and might to the support of IP, Inc. outfits we'll raise the golden mean?

This is amazing. How can he expect anyone to fall for this shit, even if conflated with cries for more higher ed. The man knows these world-leading institutions have already internationalized their sources for top earners. From Hollywood to Harvard, it's third-world brains a-go-go. The Zuckerbergs are just the thin end of the wedge.

From fashion to fusion, it's only the globe's best for these top outfits. So how does that trickle down, Larry?

It's a rich text. There's so much more:

"Budget deficits are a tax on our future, unless used to finance productive investments... it is essential that we establish long-run parity between revenues and expenditures."

"Baumol's Disease... In certain areas, rapid productivity growth is possible... but it always has and always will take 8 teachers to teach 96 students for one hour in classes of twelve."

To infuriate MJS, Larry adds "Moynihan's Corollary to Baumol's Disease: there is a tendency in activities in which Baumol's disease is most pronounced to migrate to or be located in the public sector..."

Moral: "That's why Bowles-Simpson so important."

Lovely. Bowles-Simpson! That fucker was DOA. Wonderful to consider how a text delivered in mid-Decemeber, even a text from a world-historical mind like El Puerco's, will pass its sell-by date long before mid-January.