StanCollender'sCapitalGainsandGames Washington, Wall Street and Everything in Between

Public Investment in the Melting Pot

31 Mar 2008
Posted by Andrew Samwick

I thought that Eduardo Porter's editorial in The New York Times today was relevant to our discussion of education finance. His thesis:

[R]acial and ethnic diversity undermine support for public investment in social welfare. For all the appeal of America’s melting pot, the country’s diverse ethnic mix is one main reason for entrenched opposition to public spending on the public good.

He cites a number of studies to support this thesis.  His conclusion is of the form that we should overcome the challenge:

Globalization presents the United States with an enormous challenge. Rising to the test will require big investments in the public good — from infrastructure to education to a safety net protecting those most vulnerable to change. Americans must once again show their ability to transcend group interests for a common national cause.

What if we could work smarter rather than harder?  Why do all differences (here, group interests) need to be transcended?  Why can't the easiest ones be acknowledged and accommodated, saving this rather difficult process of "transcending" for the few places where it is most critical?

Question for you: what are those issues where you support more individual choice, and what are those issues where you think we need to do this sort of "transcending?"

More public investment in social welfare is a bad idea.

"Globalization presents the United States with an enormous challenge." Why? This statement has been made in one form or another without any proof of its truthfulness. We have the greatest productivity of any nation. We have a wealth of natural resources. We have an economic system that can take advantage of globalization (if the government doesn't screw things up with tariffs and favoritism) by purchasing inexpensive goods and resources from other nations while selling them our resources and value-added goods. So, once the quoted premise is shown to be false, the rest of the arguments in favor of greatly increased government spending on "social welfare" fall apart. We should be moving towards a smaller, more libertarian, and more federal government. That will provide a better economic climate and more opportunities for citizens and immigrants.

Transcendening prejudice or our values?

Andrew, I'm not sure I get the drift of your question and how it relates to his argument. Mr. Porter seems to be saying that we will invest in those that are like us but are less willing to do so if they are not. This seems natural, but is also a mild form of prejudice. I believe that the problem Mr. Porter is calling for us to solve is Globalism's creative destruction. The implied suppostion being that minorities are bearing the brunt of the dislocation, and that the rest of us need to rise above our prejudice/differences to help. To restate my interpretation, I see it as a mild form of the Frankenstein moral, where we all fear the unknown. It is that fear that he is calling upon us to transcend (by breaking out our pocket books). I am interested in your take on his argument and how it relates to transcending group interests. Perhaps I missed something? Your question, however, seems to conflate the need for trancendence with communal regulation. Poviding a displaced autoworker with free training and temporary welfare (studyfare?) strikes me as the kind of transcendence that would fit Mr. Porter's bill, but would not abrogate individual choice.

Have I Transcended Enough?

Your example is a good one--you can have public support while out of work, but only if you get retraining and do it for a limited period. Here are two others that come to mind: Would you be willing to make deals, like pairing more support for public education with English-only rules about instruction? Would you be willing to make deals, like pairing higher funding for Social Security with the requirement that all new funds must go into a system of personal accounts? If we are not willing to make deals like this, then it is hard to see how we will get reform unless one party gets enough control of the government and imposes its views without input from the other party. (This is a reasonable description of some things the Bush administration has done. It worked on some things but not on others.) Since this sort of control is a rare thing in our government, we need to conserve our political capital and focus it on the places that are real priorities. Yours and mine might differ--my question was a (perhaps poorly worded) attempt to elicit those differences.

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