It’s always nice to welcome a new conservative to the fold. And, although this column has frequently criticized Tom Friedman of The New York Times, it seems he may finally be coming around -- whether he realizes it or not.
Friedman’s column on March 2 opened with an observation.
Passing through Los Angeles International Airport, he noticed that it’s showing its age. “We are the United States of Deferred Maintenance,” Friedman wrote. “China is the People’s Republic of Deferred Gratification. They save, invest and build. We spend, borrow and patch.”
Fair enough. So why aren’t Americans building big things such as new airports and infrastructure? A big part of the answer is that laws and regulations block the way.
It’s much easier to expand and update an existing structure such as LAX than to build a new facility. After all, imagine what would happen if the city fathers decided to build an airport from scratch. It would require a dizzying number of environmental impact statements. Residents would form NIMBY groups. A decade’s worth of lawsuits would be filed.
Then, assuming the airport authority managed to slice through all the red tape, it would still be far from finished. Federal law would require high pay for all laborers. Cost overruns and time delays would be unavoidable. Remember Boston’s “Big Dig?” It was originally pitched to lawmakers as a $4 billion project. It ended up costing $14.6 billion (both figures are in 2003 dollars).
As for airports, the most recent major one to open was Denver’s. It was supposed to cost $1.7 billion, but ended up costing $4.8 billion. Over-lawyering is a big reason we aren’t getting things done.
Meanwhile, China’s government pretty much does what it wants, when it wants.
When Chinese leaders decided to build the Three Gorges Dam, they simply went ahead and did so. Hundreds of villages were destroyed. If the folks who lived there wanted to yell, “not in my backyard” they were free to do so. But in fact their backyards simply ended up underwater.
As Friedman wrote in September, in one of his many worshipful pieces about China, “One-party autocracy certainly has its drawbacks,” yet in China “one party can just impose the politically difficult but critically important policies needed to move a society forward in the 21st century.” Indeed.
In any event, Friedman goes on to explain that our economic future is at risk. He quotes the CEO of Intel, Paul Otellini: “The things that are not conducive to investments here are [corporate] taxes and capital equipment credits. He says he opened a plant in China because, “the cost of operating when you look at it after tax was substantially lower.”
The U.S. has the second-highest corporate tax rate among developed nations. That drives business overseas and makes domestic firms less competitive. Let’s slash that rate especially since corporations don’t pay taxes -- their customers (that’s all of us) do.
Friedman also adds that our education system isn’t turning out the skilled labor we’ll need to be competitive in the future. Otellini cites a study that measured, “16 different metrics of human capital -- I.T. infrastructure, economic performance and so on.” It ranked the U.S. last out of 40 nations.
We could improve education. A good first step would be reforming the public education system so that, instead of favoring teacher unions, it empowers students and parents. If students could pick their own schools, schools would need to compete with each other. That competition would end up making them better.
Here’s the rub: the Obama administration and liberals in Congress aren’t dealing with the problems Friedman has so ably highlighted.
Instead of slashing tax rates to create jobs and improve competitiveness, the president has spent more than a year trying to hammer through a big-government health care plan that would increase regulation, decrease innovation and cost more than a trillion dollars.
For its part, the House passed a massive cap-and-trade bill which also would have hurt American competitiveness and made it more difficult to build anything. And members of both branches of government are serial stimulators. The $787 billion one passed last year didn’t work; in fact, it will make things worse because it doubled spending on the ineffective Department of Education instead of encouraging true reform.
Over-regulation and over-spending are dragging our economy down. It’s nice that Tom Friedman has recognized that. Let’s hope he’ll start to use his column to press for real solutions.