“Americans want government to protect their current jobs and tell them where their next job, and their children’s jobs, will come from. But government is not good at that.”—Gene Sperling, former economic advisor to Bill Clinton.
Rich Karlgaard writes in Forbes Magazine that, for all the angst about the war in Iraq reflected in the election results last November, at the margin—the margin that gave the Democrats control of Congress—the winners were slow-growth independent populists. This view is gaining in currency. It’s a feeling that people want to slow things down and sort things out.
The above quote from Gene Sperling is a reflection on this sentiment, particularly as it applies to Schumpeter’s “creative destruction”, the concept that the dynamics of capitalism require a certain faith that the job destruction of today plants the seeds for the economic vitality and job creation of tomorrow. I heard these concerns at almost every stop around the state on our recent road show on education reform. People want to know where the jobs will be for these kids we are attempting to help graduate from high school with 21st century skills—skills for what? Sperling is correct—government is not good at giving people the comfort they want, and when it tries to be protective, it always causes distortions that make the situation worse.
Now enter what some have called the “Lou Dobbs wing of the Democratic Party” and the “new populism” of roll backs of the tax cuts for the rich, limits on executive compensation, various elements of intervention to diminish inequality in wealth creation, and the various “fair trade” proposals to limit the globalized impact of creative destruction. In addition to Congressional leadership on these themes by such as Barney Frank, they will be carried by Presidential hopefuls, most prominently John Edwards with his “two Americas” message. We’ll see if these messages truly resonate with the American people.
My sense is that they won’t, and that there is yet no real policy coherence to this demagoguery. But the noise will persist all the way through November 2008, and it would be nice if President Bush would get back on offense with his “ownership society” message to counter it. In a perceptive article in the Wall Street Journal, “Economics Is Not for Actuaries”, George Gilder suggests we remember Peter Drucker’s advice: “Don’t solve problems, pursue opportunities.” He further suggests that the key to future economic viability for our people is keeping the U. S. economy open to outside investors as our population ages and as the productive center of the global economy shifts toward Asia, and that “the only thing that matters is pursuing the opportunities of global economic growth”.