Not long after President Obama proclaimed in his second inaugural that "an economic recovery has begun," we learned that the U.S. economy actually shrank in the last quarter. Many economists believe this is a temporary setback. This recovery may be the weakest in American history, but the economy isn't cratering either.
Still, you can bet that if the economy continues to contract, Obama will propose the same remedy he always has: more "investments" in education, infrastructure and various industries of the future. It seems that whatever the ailment, Dr. Obama always writes the same prescription.
This is hardly shocking: Building roads and schools is a big reason why God created Democrats in the first place. And identifying the Next Big Thing -- and taking credit for it -- is something of a vocation for many liberal policymakers.
But are these really the drivers of economic growth?
Higher education in particular is almost universally championed as the key to "winning the future" -- a buzz phrase the president borrowed from Newt Gingrich a while back. New York Times economics columnist David Leonhardt calls education the "lifeblood of economic growth."
Often channeling such writers as Thomas Friedman, whose fondness for the Chinese economic model borders on the perverse, Obama routinely elevates education to a national security issue. "There's an educational arms race taking place around the world right now -- from China to Germany, to India to South Korea," Obama said in 2010. "Cutting back on education would amount to unilateral disarmament. We can't afford to do that."
Now, obviously, education is important and necessary for a host of reasons (and nobody is calling for "disarmament," whatever that means). But there's little evidence it drives growth.
British scholar Alison Wolf writes in "Does Education Matter?": "The simple one-way relationship ... -- education spending in, economic growth out -- simply does not exist. Moreover, the larger and more complex the education sector, the less obvious any links to productivity."
Nassim Nicholas Taleb, author of "Antifragile: Things That Gain From Disorder," argues that education pays real benefits at a micro level because it allows families to lock in their economic status. An entrepreneurial father can ensure his kids will do OK by paying for them to become doctors and lawyers. But what is true at the micro level is not always true at the macro level.
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