Memo to Congress: Read David Brooks's column today for an excellent rundown on sensible domestic policy thinking. Key quote:
Let's not get carried away with the malaise. The U.S. remains the world's most competitive economy, the leader in information technology, biotechnology and nearly every cutting-edge sector.
The American model remains an impressive growth engine, even allowing for the debt-fueled bubble. The U.S. economy grew by 63 percent between 1991 and 2009, compared with 35 percent for France, 22 percent for Germany and 16 percent for Japan over the same period. In 1975, the U.S. accounted for 26.3 percent of world G.D.P. Today, after the rise of the Asian tigers, the U.S. actually accounts for a slightly higher share of world output: 26.7 percent.
The U.S. has its problems, but Americans would be crazy to trade their problems with those of any other large nation.
Brooks supports education reform, funding for research and development, infrastructure spending, fiscal tightening, Chinese currency evaluation, high-skilled immigration, regional innovation (which requires Congress to be hands off), and corporate tax reform (lowering the rate while closing loopholes). Makes sense to me!
Parting shot: "Don't be stupid. Don't make labor markets rigid. Don't pick trade fights with the Chinese. Don't get infatuated with research tax credits and other gimmicks, which don't increase overall research-and-development spending but just increase the salaries of the people who would be doing it anyway."
Brooks's program is simple. It doesn't require huge new programs or further centralization of power in Washington. It lets the market, not the government, choose winners and losers. It trusts in the spirit of decentralized innovation and small-business creation that built the American jobs machine. Of course, under such a program, it would be difficult for politicians to trade favors and aggregate power. Which is why, sadly, Congress will probably ignore it.
