Arnold Kling  

Washington Ideas Forum

Two Replies to Two Things... Rational Optimist Review...

You can watch the main event here, still going on this afternoon and tomorrow. I participated in a side show, not video streamed, about the future of the middle class. This was a large-group discussion, which was recorded, and at some point it may be posted. If it is, and if you listen, you will hear how out of place I was. The session lasted 3 hours, and I probably spoke for a total of five minutes, in what I would describe as staccato bursts of anger.

Listening to the other people speak, I was fuming at the hubris, the special pleading in the name of the "public good," and at the totally unquestioned assumption that the plight of the middle class can and must be solved in Washington. I was so opposed to nearly everyone else at the table (about 20 altogether) that I could hardly compose myself, or even begin to express all of my points of disagreement.

Don Boudreaux' favorite Senator, Sherrod Brown, made his plea for keeping manufacturing jobs at home. Senator Byron Dorgan supported him, and several Democratic Congressmen chimed in with similar viewpoints. No Republicans showed up. Three university administrators talked their book, unless you think they were being totally objective when they said what an outstanding job their institutions were doing and expressed outrage at people who compare the change in college tuition with the growth in the Consumer Price Index.

So, folks, I have to admit that I more or less lost it. On the topic of the middle class, I said that from a global perspective, the middle class has been experiencing tremendous growth. I said that there are probably U.S. policies that could retard that growth, but I expressed doubt that it is worth attempting to redirect that growth away from other countries and toward the United States.

On the whole manufacturing-jobs meme, I raised the issue of long-term income elasticity. I said that economic historian Robert Fogel has shown that the income elasticity of food and manufactured goods is far less than one, and the income elasticity of education, health care, and leisure/entertainment is far greater than one. What this means is that the decline in the share of employment in agriculture and manufacturing is not going to be reversed. At this point, the Democratic Congressman seated nearest me threw down his pen in disgust at my impertinence. Later, Rebecca Blank of the Commerce Department (I think of her as an academic by trade) pointed out that we are unlikely to go back to the 1950's, when ours was the only manufacturing infrastructure still standing after the war. Much later, after all the politicians had left the room, Michael Lind of the center-left New America Foundation discreetly agreed with me about the trends in sectoral employment, but he pointedly distanced himself from my libertarian views, saying that we "need to rig the labor market" in education, health care, and entertainment in order to ensure that the jobs pay well.

In my final comments, I took aim at the university administrators. I said that "Education is no longer a public good." I said that education is dominated by special interests, such as teachers' unions. I did not add "and rent-seeking university administrators." Before you give me kudos for courtesy and discretion, you should know that I think what actually happened is that I was working on my next train of thought and dropped the thread. I then did a 30-second rant about credentials cartels, during which I suggested that some of the college wage premium was due to artificial requirements to enter various professions. I said that government should remove the subsidies, regulations, and accreditation barriers that stifle competition in health care and education.

Basically, I played the role of nutty, right-wing extremist to the max. John Berlau, of the Competitive Enterprise Institute, put in a plug for entrepreneurship and the ill effects of Sarbox, but he did not come across as out of control as I did.

[UPDATE: Brief, sanitized coverage here.]

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COMMENTS (17 to date)
Brent writes:

Sometimes a healthy display of anger is a good thing, even if it "looks bad". I'm not sure how much undisguised real anger the elites ever get to see...

Art Carden writes:

Well-timed, as I've just told two classes (and will now tell a third) that elasticities are what they are and that they can't be changed by wishing otherwise.

David R. Henderson writes:

Good on ya, mate. You got a lot of content in in a few minutes.

Jeff writes:

Shoot, now I'm going to be really disappointed if its not posted online.

N. writes:

Listening to you describe yourself in this anecdote makes me think of the mad scientist addressing the academy: 'YOU ALL MUST THINK I'M MAD, DON'T YOU?!? WELL, I'LL SHOW YOU! I'LL SHOW YOU ALL!'

You can't see me beaming as I type this, but if nothing else, this entry gives me the warm glow of empathy. I have been the crazy-eyed nutjob at more dinner parties than my wife cares to remember (we live in NYC -- it's a wonder we still get invited anywhere). I don't like it, either; I don't like ranting and I always flush with embarassment afterwards. I wish I could be more witty and less emotional.

It's endlessly frustrating though -- if that senator held views in physics analogous to those he holds in economics he would have long since fallen off a cliff believing he would fly. Of course, 'it is difficult to get a man to understand something when his job depends on not understanding it.' That's Upton Sinclair. He may have been socialist but he had at least one thing right.

hsearles writes:

I think we can all empathize with being seen as the crazy, right-wing loon. Alas, sometimes the talk can be so hubristic exercises in intellectual sophistry that anyone remotely aware of the truth cannot avoid anger.

Keep up the good fight for us all.

Gary Rogers writes:

Way to go! I find myself losing my temper increasingly often and wish I had both the verbal skills and the audience to do what you just did. You speak for all of us.

Mercer writes:

"a global perspective, the middle class has been experiencing tremendous growth. I said that there are probably U.S. policies that could retard that growth, but I expressed doubt that it is worth attempting to redirect that growth away from other countries and toward the United States.'"

I don't this sentiment is one a typical right winger would share. It indicates someone with cosmopolitan rather then nationalist values. The left wing blogger Matthew Yglesias, for example, writes posts expressing similar cosmopolitan values. Pat Buchanan and most Tea Party members, on the other hand, are nationalist.

Rebecca Burlingame writes:

Meanwhile in my hidey hole I think of all the persuasive arguments that some among that crowd might one day respond to. Such as, the fact that so many of them assume our government will always be able to take care of them. What if government became insolvent and one day could not? What if a bunch of liberals were (gasp) one day reliant upon their own family for survival? After all, a lot of progressives over these past decades have implied that we should never be dependent upon family but - that's right - the very economic structures which they do not realize have become so fragile.

I don't know if I'll ever have the nerve to stand up and give a speech as you can, but if I can at least get the nerve to pull up chairs in a circle to talk to others about all this, I'll be happy.

Various writes:

Well Arnold, all I can say is good job! It's never fun being surrounded by unfriendlies. Your situation was probably down right depressing, not to mention that it probably felt like a waste of time. Thank you for carrying the banner in this hostile environment. Your efforts are greatly appreciated by this reader, and others that I associate with.

Gene writes:

Rebecca, at least it's very likely those people will, assuming they live at least 20 more years, have to live in that insolvent world ... and we can rub their noses in it. I know, that won't actually be satisfying, but I guess it's something.

David Rockwell writes:

Thanks for fighting for us all Arnold.

Mike writes:

Texas-OU weekend here in Dallas. The big game is tomorrow. There is a party tonight where, after a few drinks, I will no doubt take on Arnold's role.

My wife will be mad at me for the rest of the weekend.

SWH writes:

Don't argue with the insane....folks may not know the difference.

Your experience confirms, again, that we are going nowhere until the slate is wiped clean.

Will Hayworth writes:

Just to second some others here: thank you for arguing for sense. I'm working on a political campaign right now and, in the course of doing so, have encountered so many rent-seeking individuals pretending to act in the public interest that I feel thoroughly (and perhaps appropriately) demoralized. Argh!

I did not expect this coming from you, Arnold Kling. Bravo!

fundamentalist writes:

I feel your pain! And admire your self-control. But sometimes I wonder if Jesus' warning about religion doesn't sometimes apply to economic issues: don't caste your pearls before swine.

You can't fool all of the people all of the time, but you can fool most of em most of the time, especially about economic issues. As China has shown, sometimes it takes a terrible crisis to change the minds of the most.

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