The President's Nostalgianomics

I was on Stossel's State of the Union special last night, so I watched the speech in the company of David Boaz, Matt Welch, and Governor Gary Johnson.  I had a lot to say about it on television, which you can watch here.  


I thought the speech was better-written and better-delivered than many of the critics I read this morning; it had a lot of good applause lines (along with, yes, the groaner about spilled milk), and the president is stylistically a very good speaker.

But I also thought that, three years in, I'd like to see a little more from his speeches than base-pleasing applause lines and pleasing delivery.  The content of the speech was sorely disappointing. 

The harsh way to put it is that the speech was an extended whine about how all the rich bankers and George Bush have screwed everything up.  That was fine campaign rhetoric when he was a Senator.  But it's pretty weak when he's been in charge for most of a full term--two years of that with a majority in congress.

Of course, one can argue--correctly--that Obama actually doesn't have the power to fix the economy; the recession was deeper than he thought it would be.  I'm entirely sympathetic to this argument except for one thing, which is that Barack Obama got himself elected by claiming that "the Republicans have driven the economy into a ditch" and he could drive it out again.  It doesn't seem unfair to judge him on his failure to actually deliver what he promised:

Lauer: "At some point will you say, `Wait a minute. We've spent this amount of money, we're not seeing the results. We've got to change course dramatically.' "

Obama: "Yeah, look, I'm at the start of my administration. One nice thing about the situation I find myself in is that I will be held accountable. You know, I've got four years and...

Lauer: "You're going to know quickly how people feel about what's happened."

Obama: "That's exactly right. And you know, a year from now I think people are going to see that we're starting to make some progress. But there's still going to be some pain out there. If I don't have this done in three years, then there's going to be a one-term proposition."
If Obama didn't want to be judged on the basis of the economy's performance, he shouldn't have let his mouth write checks that he couldn't cash.  If it turned out to maybe be a little harder to steer the economy where you want it than he thought it was, then maybe he should lay off claiming that the Republicans drove the thing into a ditch.  

But he hasn't.  Instead he's complaining that the GOP won't let him steer--pretty rich considering that he started out with a 60-seat majority in Congress, and chose to ignore the economy in favor of passing a health care bill that has gotten even less popular since we passed it to find out what was in it.



That's the harsh version.  The slightly kinder version is that Obama, stymied by an economy that's still pretty weak, and an opposition that has no more interest in cooperating with him than Republicans did with Hoover, has turned to a laundry list of weak proposals that sound pleasing to interest groups, but wouldn't achieve much.  Of those, the best was allowing students who study here to stay here; the stupidest was probably adding yet another investigation of bank fraud (what have you been doing for the last three years, Mr. President?)  And the worst was the bizarre proposal for states to force students to stay in school until graduation or the age of 18.  Beyond the obvious enforcement questions, by the time people drop out of high school, they're normally already badly lagging their classmates, with low grades and test scores, and high rates of truancy.  Commanding them to physically stay in the building for another two years is not going to fix those problems; presumably, it's a sop to any teachers he pissed off by proposing that we might fire those whose students aren't learning.

There's no real common thread holding all of these proposals together except what you might call "nostalgianomics".  

Think about the America within our reach: a country that leads the world in educating its people; an America that attracts a new generation of high-tech manufacturing and high-paying jobs; a future where we're in control of our own energy; and our security and prosperity aren't so tied to unstable parts of the world. An economy built to last, where hard work pays off and responsibility is rewarded.

We can do this. I know we can, because we've done it before. At the end of World War II, when another generation of heroes returned home from combat, they built the strongest economy and middle class the world has ever known.
What a strange thing to say. "We know how to do this?" Do what? Have World War III?

Surely Obama's economic advisors have not told him that they know how to replicate the growth of the 1950s--and if they did, surely the last three years have given the lie to this belief.

I think the speech made it even clearer that other speeches have that the president's vision of the world is a lightly updated 1950s technocracy without the social conservatism, and with solar panels instead of rocket ships.  Government and labor and business working in tightly controlled concert, with nice people like Obama at the reins--all the inventions coming out of massive government or corporate labs, and all the resulting products built by a heavily unionized workforce that knows no worry about the future.

There are obviously a lot of problems with this vision.  The first is that this is not what the fifties and sixties were actually like--the government and corporate labs sat on a lot of inventions until upstart companies developed them, and the union goodies that we now think of as typical were actually won pretty late in the game (the contracts that eventually killed GM were written in the early 1970s).

And to the extent that the fifties and sixties were actually like this, we should remember, as Max Boot points out, that this was not actually the day of the little guy.  Big institutions actually had a great deal more power than they do now; it was just distributed somewhat differently--you had to worry less about big developers slapping a high-rise next to your single-family neighborhood, and a whole lot more about Robert Moses deciding he wanted to run a freeway through the spot where your house happened to be.  

The military model of society--employed by both Obama, and a whole lot of 1950s good government types--was actually a kind of creepy way to live.  As Boot says, "America today is far more individualistic and far more meritocratic with far less tolerance for rank prejudice and far less willingness to blindly follow the orders of rigid bureaucracies."  If you want the 1950s except without the rigid conformity and the McCarthyism, then you fundamentally misunderstand what made the 1950s tick.

Finally, there's the fact that the 1950s ended in the 1970s.  In the 1950s, American products were envied all over the world; by 1980, they were a joke.  This is not some radical disconnect; it is the beginning and end of the same process.  The technocratic American institutions became sclerotic agents of inertia.  Bosses whose pay was capped poured their energy into building personal empires instead of personal fortunes.  Unions like the UAW began making demands on their companies so heavy that even the UAW president who had negotiated these amazing pay increases began to fear that his members had lost their minds.

As David Boaz said last night, Obama's talk of blueprints was telling.  A blueprint is a simple plan that an architect imposes on an inanimate object.  Obama really does seem to think that he can manage the economy in the same way.  No, I don't think that he is a socialist.  Rather, I think that he really believes there are technocratic levers that can make the income distribution flatter, the rate of innovation faster, and the banking system safer, without undesireable side effects.

The problem with all nostalgia isn't even that it's necessarily wrong--by many standards, the 1950s was a great time to live.  Rather, the problem is that it almost always wants to turn a transient moment into a steady state--or worse, only "the good parts" of those transient moments.

I had hoped that the last three years had taught Obama the limits of this sort of thinking.  But if they have, he certainly hasn't chosen to share that hard-won knowledge with the rest of us.
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Megan McArdle is a columnist at Bloomberg View and a former senior editor at The Atlantic. Her new book is The Up Side of Down.

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