A noted economist takes the president and Congress to task for pursuing short terms fixes to the economy when the problems we face - in his mind - are structural. Part of his criticism should sound familiar to students who just finished reading Fed 10. Interests who are now benefiting from existing policies are resistant to any change that might undermine those benefits. This is what Jonathan Rauch referred to as Demosclerosis. He calls for policies that focus on investments, not temporary boosts to consumer spending:
The big mistake of Obama and his economic team from the start was to treat the downturn as a temporary recession, albeit a very big one. A temporary recession requires a temporary fix. A structural crisis requires long-term strategies. Here we are in 2012 without any long-term strategies except to wait out the crisis.
Real solutions require fresh strategies to break free of vested interests in energy, healthcare, education, and infrastructure. In other words, in today's political environment, real solutions won't happen any time soon. We are stuck.
.... The question for America is how we are going to break free of this low-level trap. First, we will need a government that is not subservient to the status-quo corporate interests blocking innovation in key sectors such as health, transport, and energy. Second, we need a government that can strategize, not just improvise. Third, we need to end the nonsensical bluster against government. Our specialist scientific agencies are still doing amazing things right before our eyes this year: exploring Mars and unlocking the complex mysteries of the human genome. We could be doing a lot more to solve our social and economic problems and to re-establish our prosperity if we put our confidence back into science, technology, advanced training, and public-private partnerships.
