Over the last few days I hope I have cast at least a little doubt on the effectiveness of infrastructure spending and education spending in revitalizing the U. S. economy. That, at long last, brings me around to a recent op-ed by Mort Zuckerman.
The entire thing calls for a fisking but rather than doing that I’ll just summarize his solutions to our societal woes: more immigration, more infrastructure spending, and more spending on education.
Will more immigration really solve our problems? It depends but I don’t think that a recent Pew survey on immigrants supports the claim. Note, in particular, the tables by region of origin and educational attainment and by region of origin and income. Short form: at least 90% of Mexican immigrants are earning below median income and fewer than half have a high school education.
Living in an American city like New York, Los Angeles, or Chicago is expensive. Based on the proposed $70.1 billion dollar Chicago budget and its 2.7 million inhabitants, Chicago costs about $25,000 per resident. That actually understates it a bit. It doesn’t include, for example, the cost of maintaining emergency rooms in non-public hospitals. Since emergency rooms are primary care for a lot of people, however that increases the cost of healthcare should be included in the cost of maintaining Chicago.
Said another way, anybody in Chicago who earns less than $25,000 which includes more than half of all Mexican immigrants, in effect consumes more than he or she produces. Yes, that’s an over-simplification. We’re trying to formulate policy not produce a financial report.
The reality of immigration is that its benefits accrue preponderantly to the highest income earners in the U. S. (Mort Zuckerman) and its costs are borne by lower income earners in the form of lower wages, greater competition for scarce jobs, and higher costs, generally.
Education spending has skyrocketed over the last twenty years. In real terms we’re spending a multiple of what we did twenty years ago, much of the additional spending on increased administrative costs. I look forward to somebody making the case that increased educational administrative spending is just what our economy needs to grow and prosper. That’s the net effect. If you favor more educational spending that is in fact what you mean. Everybody’s in favor of better education. It’s a lot harder to make a case for paying more for the lousy educational system we have.
I’ve already dealt with infrastructure spending so I won’t repeat my argument here other than to say that I don’t believe that building a 222nd bridge across the Mississippi will create a sudden cornucopia of benefits.
In my view what we really need is to get much more value for our spending than we are. We need smarter immigration policy, smarter education spending, and smarter infrastructure spending. Based on the policies I’m seeing proposed in all three areas it looks to me more like doing the same thing over and over again and expecting different results.
Smarter policies require painful trade-offs and hardnosed decisions. Incumbent politicans are punished for making painful trade-offs and hardnosed decisions and rewarded for spending more and promising the moon. Which path do you think they’ll take?