Morning Must Reads: What Went Wrong and the Confidence Fairy Is Back!

Over the next year, The Philadelphia Inquirer will be updating a series from 1991 titled "America: What Went Wrong," by Donald L. Barlett and James B. Steele. This morning, Barlett and Steele take on the legacy of Apple Computers. 

The death of Steve Jobs was followed by an avalanche of superlatives — brilliant, genius, and visionary among the more common. He was likened to Leonardo da Vinci, Albert Einstein, and Thomas Edison.

But in the case of Edison, there was one significant difference that went unmentioned. For more than a century, just one of Edison's inventions alone — the incandescent lightbulb — was manufactured at numerous locations in the United States, providing employment for millions of Americans across family generations.

The Apple home computer, not at all. After only one generation, all the Apple manufacturing jobs in America disappeared, as the work of building and assembling the machines was turned over to laborers in sweatshops in China and other countries. Jobs that should have provided employment for Americans for decades to come were terminated

While Barlett and Steele explore what went wrong, the Pittsburgh Post-Gazette's series Middle of Nowhere continues today with a survey of major events and policy choices that are thought to be important to creating the middle class in America.

Bill Dunkelberg of the National Federation of Independent Business (NFIB) has a rather gloomy column in The Philadelphia Inquirer about the economic outlook.

Small-business owners remained pessimistic, with more than 25 percent reporting weak sales as their top business problem. The October survey of the National Federation of Independent Business indicated 5 percent of owners think the current period is a good time to expand their operations.

Eighty-one percent of the 350,000 businesses belonging to NFIB expected conditions to be no better or even worse in the next six months. Thirty-nine percent expect their real sales volumes to fall, and just 23 percent expect improvements in their businesses.

Despite his own data indicating that the chief problem in the economy is a lack of demand, Dunkelberg writes that what is holding employers back from hiring is the likely failure of the supercommittee to make deep cuts in federal spending. Paul Krugman regularly refers to this kind of magical thinking as belief in the confidence fairy. In fact, this morning Krugman suggests that the likes of Dunkelberg are plagued by a cruel romanticism.

Just to be clear, this is not an anti-European rant, since we have our own pseudo-technocrats warping the policy debate. In particular, allegedly nonpartisan groups of 'experts' — the Committee for a Responsible Federal Budget, the Concord Coalition, and so on — have been all too successful at hijacking the economic policy debate, shifting its focus from jobs to deficits.

Real technocrats would have asked why this makes sense at a time when the unemployment rate is 9 percent and the interest rate on U.S. debt is only 2 percent. But like the E.C.B., our fiscal scolds have their story about what’s important, and they’re sticking to it no matter what the data say.

So am I against technocrats? Not at all. I like technocrats — technocrats are friends of mine. And we need technical expertise to deal with our economic woes.

But our discourse is being badly distorted by ideologues and wishful thinkers — boring, cruel romantics — pretending to be technocrats. And it’s time to puncture their pretensions.

Speaking of romantics, the editorial page of the Pittsburgh Tribune-Review takes issue with our report on trends in public-sector employment.

The liberal Keystone Research Center is duly concerned about Pennsylvania's public-sector job losses. The center's solution? Hire more public employees, of course.

What the Keystone researchers don't say in their report, 'Public-sector Job Losses Put Brakes on Pennsylvania's Recovery,' is that to increase government hiring, the state, school districts and municipalities would have to raise taxes.

As the news pages of the Pittsburgh Tribune-Review regularly report, school districts and municipalities are already raising taxes while cutting employment. To prevent further tax increases and job losses in a period of high unemployment, there are proposals before Congress to extend aid to state and local governments. In our report, we also note that state policymakers could help improve the situation here by doing the following:

  • Spending more of the state’s revenue surplus;
  • Enacting a natural gas drilling tax that supports shared statewide priorities like education as well as the environment and local communities;
  • Maximizing the potential for Marcellus Shale development to create jobs for Pennsylvania workers; and
  • Bond-financing infrastructure, school construction and energy efficiency investments at a time when borrowing and construction costs are both low.


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