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It Looks Like Michigan

By: kowalski (Diary)  |  August 25th, 2010 at 11:41 AM  | 

RESIZE: AAA

Almost two years ago, just after Obama won the 2008 Presidential election, I posted a short blurb here at Redstate referencing an article written by someone who I think is among the brightest bulbs in the marquee – Philip Greenspun of MIT.  I’d like to briefly reprise that article here. With the benefit of almost two years of hindsight, it stands as one of the most clear-headed descriptions of the problems America is currently facing. Imagine, someone actually attempting to treat the moribund economy as a problem to be solved instead of a disaster to be pushed down the road, onto the backs of our children and grandchildren.

It’s also a prescriptive essay, but precious few of the prescriptions have been followed by our current government.  I think it’s time they were. 

Here is the essay:  “Economy Recovery Plan For The United States”

When I read it back in 2008, I understood two things right away. The first was that Greenspun had accurately described the situation, as well as the steps we needed to take to ameliorate it and turn it around. The second was that he published it just after Obama was elected because he had a hunch that none of those steps would be taken. As a result, the essay stands as one of the most prescient observations on the American economy I’ve read in my lifetime. I invite you all to read it again now, while thinking about it in the context of the decisions made at the Federal level in the past two years.

With the midterm elections coming up, I don’t think there’s a more important time or a more important subject. If the United States doesn’t begin to heed this advice – and there is no sign that anyone in the Obama Administration is capable of doing so – the future of America for the next ten years does indeed Look Like Michigan.

Respectfully submitted for your review and comment.

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  • Death_of_the_Donkey

    prescriptions and want to add that he is an engineering prof at MIT and not an economist. Some of his general ideas make some sense (keeping spending to GDP low for instance), however, note that the only two examples he can give of “industrialized” (the quotes are for calling Thailand industrialized) with lower total government spending to GDP are Thailand and South Korea. And while keeping government spending to GDP as low as possible should be a goal, it is going to be much harder for a spread out and large (geographically) country like ours than a small country like South Korea.

    Most of his other suggestions are either major steps backwards in terms of quality of life improvements (I half expected him to be promoting child labor by the end) or have potentially bad economic consequences of their own. For instance, raising the social security age may be “good” from an actuarial view for that program, it will have major consequences on overall employment, as those older workers will be taking jobs away from the young who “need them more”. Medicare age raises have a similar cost, as someone we are going to be paying for the health care in one form or another (either we do it through medicare or we do it through higher insurance premiums). The elimination of punitive damages is a silly proposition that would lead to vastly less safe products and work environments (see the famous Ford Pinto example). As for eliminating public employee unions, I think that parts of this are wise, but not all. The idea that we should be paying higher salaries to public employees than comparable private workers is obscene, but public employees should be able to organize in some manner to prevent politics from interfering with the operation of services (ie hiring/firing/dscipline of employees on political grounds), which is where unions (or some similar construct) should play a role.

    The rest I agree with more or less: we need to scale back on defense expenditures, the war on drugs is a huge waste and fosters crime, and farm (and other businesses) subsidies are a waste of taxpayer dollars (and are a case of government picking winners),

    • http://www.laborunionreport.com LaborUnionReport

      If public employee unions were to be disbanded, the constructs for dealing with unwarranted terminations (or discipline) could easily be put in place through mediation/arbitration provisions in a union-free public-sector workplace.

  • pilgrim

    1. Eliminate public employee unions; the average American doesn’t get a union paycheck and can’t afford to pay union labor rates; the government is not supposed to be such an abusive employer that a union is necessary for worker safety
    2. Eliminate the requirement to use union labor on public works projects; it shouldn’t cost the taxpayers more to build a structure than it would cost Microsoft or Google
    3. Eliminate farm subsidies, which raise prices to consumers, distort the market by encouraging monoculture and overproduction of crops such as corn, and have staggering direct costs to taxpayers (the 2007 farm bill was budgeted at $300 billion

    • pilgrim

      Should we spend more on mass transit? If we can take the funds out of congestion fees, if we can have the systems built and operated by private companies using non-union labor… maybe.

      • http://www.examiner.com/x-1597-Charlotte-Law--Politics-Examiner Mike gamecock DeVine