Making America Competitive Again

Guest post by Robert Gore at Straight Line Logic

“Make America Competitive Again” outlined the problems confronting Donald Trump’s administration as he tries to make the American economy competitive, with more and better paying jobs. This article recommends ways to achieve those goals.

If you want to make America competitive again in today’s global economy, start with education. It stinks. There is no assurance that a high school graduate can construct a sentence, much less a paragraph, read anything more challenging than a text message, or perform simple algebra. Robotics, computers, and automation are wiping out jobs and creating new ones. It remains to be seen whether the former will outweigh the latter. Historically, innovation has been decried but predictions of net job losses have not been borne out. Bet the ranch, however, that the desirable jobs of the future will require workers who can construct paragraphs, read complex material, and possess mathematical proficiency beyond simple algebra.

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Compulsory education is an oxymoronic euphemism for indoctrination. Not only are students not being educated, they’re being brainwashed. After over a century of government-provided (and mandated) education, a substantial portion of the public believes that sustenance flows from the government—which owes it to them—rather than their own efforts. When the government becomes responsible for everything, nobody is responsible for anything. As statist dogma replaces true education—curiosity, questioning, research, experimentation, learning, thinking for one’s self—intellectual ossification sets in. The brainwashed cannot handle challenges to that dogma, want to forbid them, and retreat with fellow zombies to their execrable safe spaces.

People see the results of markets, incentives, choice, competition, and exchange every time they go to a grocery store. It’s quite a contrast to the government. To convince the populace that the forces which produce supermarket abundance have no applicability to the provision of education has indeed required long-term brainwashing. Minds are infinitely more important than mayonnaise and detergent, far too important to leave to the government.

For the US to have any chance of reaching its full potential, education must be 100 percent privatized. Parents and students have to be able to freely choose from a myriad of educational providers and philosophies. The education market must be free to organically adapt to new knowledge and society’s constantly changing requirements. Only a free market will be able to adjust to the continuing education needs of the workforce as new technologies replace old ones. There were no government retraining programs when America made the transition from an agricultural to an industrial economy. Companies trained workers in the skills they needed and both sides had obvious incentives to make that arrangement work. Command and control in the current government-dominated system guarantees perpetual stagnation and regress.

The government is turning health into a disaster similar to education. The current public-private bastardization gives the US the worst features of both: overarching governmental command and control, destruction of competition and the enshrinement of cartels in pharmaceuticals, medical devices, and insurance, and restriction of supply through professional licensing and government determinations on the “need” for hospitals and other facilities. Consequently the US spends a higher percentage of its GDP on medical care than most of the nations with which it competes, for more expensive service that is of no better quality and is often worse.

Many pine for nationalized health care, although such systems bear a large share of the responsibility for bankrupting Europe’s high-tax, no-growth welfare states. Donald Trump is on to something, advocating the abolition of Obamacare and allowing insurance to be sold across state lines. He at least recognizes that government is the problem. However, tinkering at the margins of the current system is like pulling 20 percent of the weeds from a garden. There may some superficial improvement, but the remaining weeds quickly overrun the garden. Health, like education, must be the beneficiary of free markets, competition, and choice, or the US will continue to waste trillions on medical care.

Speaking of wasting trillions, look at the loss represented by much of the US’s military and intelligence spending. Here too Trump is on to something when he talks of withdrawing from nation building and making our allies pay more of the bill for defending themselves. Here too, however, tinkering at the margins amounts to pulling 20 percent of the weeds. Hacking spending down to size requires a wholesale reevaluation of policy, which would begin by putting the defense back into defense policy. Global intervention since World War II has been an unmitigated disaster. The US is the most defensible country on the planet: it has the Atlantic and Pacific moats; varied, hard-to-conquer terrain; a well-armed population; friendly bordering countries; and the world’s largest nuclear arsenal to annihilate anyone who invades or launches a nuclear attack. Spending could be cut by at least half if the sole charge of the military and intelligence agencies was to defend the US proper, and not dubious “interests” in far-flung corners of the world.

Trump, as a businessman, is well aware of onerous taxes, wasteful spending, mounting debt, and the deadweight losses imposed by regulation. With the arguable exception of debt, he has vowed to address them. Absent an actual revolution, eliminating them would be like trying to eradicate kudzu. If he manages to whack 20 percent he’ll have done well. Spending, taxes, and regulations are Washington’s stock in trade. The bureaucrats Trump instructs to economize and to review existing laws and regulations will nod, say “Yes, sir!” and then go back to business as usual. It’s why Trump must be Feared, Not Loved.

Washington’s stock in trade has powerful beneficiaries, too. They will counterattack with all their lobbying and public relations might. If Trump is to have any long-term impact, he’s going to have to link his attacks with the idea that Washington doesn’t owe anybody anything. This, of course, runs counter to decades of indoctrination and practice. The idea that individuals are “entitled” only to what they’ve earned, put into practice, would completely upend the existing order. Trump can make the case now, or ballooning debt, unfunded entitlements, an aging population, rising interest rates, and the credit markets will make it for him. That is the fate meted out by compound interest and a long spell of debt growth in excess of economic growth.

The chances of all or even some of the above happening are slim. However, the issue is American competitiveness, and we’ve gone downhill so long, that’s what it’s going to take. America elected a man who has successfully competed all his life and among his many victories just won the biggest political prize. None of the apparatchiks, cronies, and time-servers he defeated has the brains, guts, or fortitude to tackle these monumental challenges, but Trump, who knows? He certainly has the moxie. The legions who have underestimated him so far have only the egg on their faces to show for it.