Liberal columnist Samuelson on Obama's 'Post Material' economy

Rick Moran
The Washington Post columnist Robert Samuelson may be a liberal but what Obama is doing to the economy is even too radical for him:

President Obama has made no secret of his vision for America's 21st-century economy. We will lead the world in "green" technologies to stop global warming. Advancing medical breakthroughs will improve our well-being, control health spending and enable us to expand insurance coverage. These investments in energy and health care, as well as education, will revive the economy and create millions of well-paying new jobs for middle-class Americans.
It's a dazzling rhetorical vista that excites the young and fits the country's mood, which blames "capitalist greed" for the economic crisis. Obama promises communal goals and a more widely shared prosperity. The trouble is that it may not work as well in practice as it does in Obama's speeches. Still, congressional Democrats press ahead to curb global warming and achieve near-universal health insurance. We should not be stampeded into far-reaching changes that have little to do with today's crisis.

What Obama proposes is a "post-material economy." He would de-emphasize the production of ever-more private goods and services, harnessing the economy to achieve broad social goals. In the process, he sets aside the standard logic of economic progress.

Since the dawn of the Industrial Age, this has been simple: produce more with less. ("Productivity," in economic jargon.) Mass markets developed for clothes, cars, computers and much more because declining costs expanded production. Living standards rose. By contrast, the logic of the "post-material economy" is just the opposite: Spend more and get less. 

Samuelson then gives us a brief glimpse at what a "post material" economy is:

What defines the "post-material economy" is a growing willingness to sacrifice money income for psychic income -- "feeling good." Some people may gladly pay higher energy prices if they think they're "saving the planet" from global warming. Some may accept higher taxes if they think they're improving the health or education of the poor. Unfortunately, these psychic benefits may be based on fantasies. What if U.S. cuts in greenhouse gases are offset by Chinese increases? What if more health insurance produces only modest gains in people's health?

Obama and his allies have glossed over these questions. They've left the impression that somehow magical technological breakthroughs will produce clean energy that is also cheap. Perhaps that will happen; it hasn't yet. They've talked so often about the need to control wasteful health spending that they've implied they've actually found a way of doing so. Perhaps they will, but they haven't yet.

While it may be a good thing to build an economy not so heavily based on consumer spending as we were in the past, what Obama is proposing will spread scarcity and call it "fairness." Hence, the middle class will get poorer but they will have health insurance. Their choices on many products will be dictated by the government. And because productivity will suffer, they will be paid less and be able to afford less in material goods.

Of course, this scenario is predicated on the idea that we all won't lose everything as a result of a meltdown or, more likely, devastating inflation - no guarantees that we will emerge from this recession little better than a third world economy.

Obama should be worried when one of his Keynesian disciples raises red flags. Read the whole thing.

 



The Washington Post columnist Robert Samuelson may be a liberal but what Obama is doing to the economy is even too radical for him:

President Obama has made no secret of his vision for America's 21st-century economy. We will lead the world in "green" technologies to stop global warming. Advancing medical breakthroughs will improve our well-being, control health spending and enable us to expand insurance coverage. These investments in energy and health care, as well as education, will revive the economy and create millions of well-paying new jobs for middle-class Americans.

It's a dazzling rhetorical vista that excites the young and fits the country's mood, which blames "capitalist greed" for the economic crisis. Obama promises communal goals and a more widely shared prosperity. The trouble is that it may not work as well in practice as it does in Obama's speeches. Still, congressional Democrats press ahead to curb global warming and achieve near-universal health insurance. We should not be stampeded into far-reaching changes that have little to do with today's crisis.

What Obama proposes is a "post-material economy." He would de-emphasize the production of ever-more private goods and services, harnessing the economy to achieve broad social goals. In the process, he sets aside the standard logic of economic progress.

Since the dawn of the Industrial Age, this has been simple: produce more with less. ("Productivity," in economic jargon.) Mass markets developed for clothes, cars, computers and much more because declining costs expanded production. Living standards rose. By contrast, the logic of the "post-material economy" is just the opposite: Spend more and get less. 

Samuelson then gives us a brief glimpse at what a "post material" economy is:

What defines the "post-material economy" is a growing willingness to sacrifice money income for psychic income -- "feeling good." Some people may gladly pay higher energy prices if they think they're "saving the planet" from global warming. Some may accept higher taxes if they think they're improving the health or education of the poor. Unfortunately, these psychic benefits may be based on fantasies. What if U.S. cuts in greenhouse gases are offset by Chinese increases? What if more health insurance produces only modest gains in people's health?

Obama and his allies have glossed over these questions. They've left the impression that somehow magical technological breakthroughs will produce clean energy that is also cheap. Perhaps that will happen; it hasn't yet. They've talked so often about the need to control wasteful health spending that they've implied they've actually found a way of doing so. Perhaps they will, but they haven't yet.

While it may be a good thing to build an economy not so heavily based on consumer spending as we were in the past, what Obama is proposing will spread scarcity and call it "fairness." Hence, the middle class will get poorer but they will have health insurance. Their choices on many products will be dictated by the government. And because productivity will suffer, they will be paid less and be able to afford less in material goods.

Of course, this scenario is predicated on the idea that we all won't lose everything as a result of a meltdown or, more likely, devastating inflation - no guarantees that we will emerge from this recession little better than a third world economy.

Obama should be worried when one of his Keynesian disciples raises red flags. Read the whole thing.