George Will, finding much deserved merit in Michael Strain’s new book, is rightly critical of what he (Will) calls the “Cassandra caucus” – that large group of people from left to right – from Elizabeth Warren and Robert Reich to Oren Cass and Josh Hawley – who insist, against all credible evidence, that ordinary Americans have stagnated economically for decades. A slice:
The argument that the typical household’s and individual’s quality of life has not improved for decades, says Strain, “borders on the absurd.” Leave aside the vast but difficult-to-quantify product quality improvements (e.g., cellphones before and after smartphones; automobiles in 1990 and 2020). Between 1983 and 2016, the median net worth for a family increased from approximately $52,000 to $97,300.
Equally pointless would be tax relief – or subsidized loans – to employers. Yes, during the crisis many fundamentally healthy firms might encounter liquidity challenges. Such firms, however, would have no trouble borrowing the necessary liquidity from banks and other capital-market sources. Supplying such liquidity is among the core functions of capital markets. Nothing about the coronavirus crisis renders capital markets unable to perform this worthwhile function.
But being a central planner does not get you much traction outside the faculty lounge. Technocracy does not stir people’s souls. And being a planner can trip you up as a politician. Warren faded when she could not successfully cost out the enormously expensive government takeover of health care. For a planner not to have a plan about costs is fatal. But revealing the full costs and taxes realistically needed to pay for that plan would have been equally fatal.