What Ails Us - Part II

Would he rather work in America? Does our freedom still attract? Why do we need to import this man?

In his State of the Union speech the President alludes to the challenges facing the nation due to globalization and rightfully calls on our nation to rise to the occasion. He then proceeds to lay out small beer as to how to meet the challenge, with government "investment." He skirts the real issues facing our nation. He share the left's fascination with 19th century technology - trains, as if that's the wave of the future, our "sputnik" moment. The fact is, government investment is not what made this country great, nor will it cause us to meet the current challenges. Our problems are not easy to solve, but they are simple to diagnose.

Education

Our schools are being strangled by 19th century methods of instruction and 20th century unionism. In spite of computers and multimedia technology, little has changed in our schools curricula for over 100 years. We have not applied scientific knowledge about brain function with new technologies to change the way our children learn. Why? Because innovation is stifled by massive government control of our schools and union resistance to any innovation.

But just like telecommunications innovation didn't really start until the AT&T monopoly was broken up, so education must be freed of government control. But without government standards, we can't guarantee a quality education for our kids, some argue. Really? The inner city schools of our country have already lost a generation that we may never retrieve. Internationally, kids taught with the same techniques that we have used for decades, but with more intensity, are of course doing better on standardized tests. I don't think those tests necessarily prove that any particular group is more ready to face new challenges, because the tests are necessarily backwards looking. But if they are the only measure, what does it mean that we are falling behind? Innovation will only come from competition. Time to make huge changes to our school system.

Human Capital and Freedom (Personal and Regulatory)

Traditionally, many of our greatest innovators have been immigrants. Why do they come to this country? It isn't because of our love of diversity, but because our way of life, with its greater freedom that so many foreigners have come to call Americans home. Further, the immigrants are much more likely to start up new businesses than the native born. Even now, our nation is still much less regulated and less corrupt than most of the rest of the world. It means that entrepreneurs can keep the fruits of their labors. It means that immigrants won't be jailed for criticizing the President, unlike Russia for instance. Immigrants with drive and education are a source of strength.

To continue to attract immigrants, our regulatory regime must be simple and understandable. This administration is moving in the wrong direction, granting the Secretary of HHS vast new law-making powers under Obamacare, for instance. I grant that some regulation is desirable to prevent harm from coming to individuals, but our approach is out of control. We opt for the complex when the simple will do. Some easy examples:

• To deal with the less than 15% uninsured, we overhaul everyone's health insurance, rather than just dealing with that group.
• We perform elaborate "stress tests" rather than just saying the larger the bank, the larger its required capital reserves.
• We license professions, like those who braid hair, for which there is no rational basis.
• We propose an elaborate cap and trade system, rife with potential fraud (or actual fraud in Europe) rather than a straightforward carbon tax.

Immigration Policy

We desperately need skilled immigrants to counter the deficiencies in our education system and to balance our demographic profile. But because we haven't secured the border we actually have large numbers of unskilled workers as our actual immigrant population. You can argue whether low skilled illegal immigrants a net positive or not, but who would argue that we wouldn't be better off if those were replaced with engineers with advanced degrees or doctors?

The failure of our immigration policy prevents a rational discussion about opening up programs like H-1B, that would increase the inflow of accomplished individuals. Further, by increasing these inflows, we would halt outflows of jobs due to offshoring, because it makes more sense for the other members of project teams to be colocated with the most productive members of the team.

That's most of it. I also agree with KT that lack of intact families is an even more fundamental cause of our problems, but that isn't tractable by government policy. But the President didn't really address any of it. Judging by the snoozefest, no one was excited by trains either.