Mark Steyn Resides In a Crowded - And Centuries Old - Echo Chamber of 'American Doom'
There are croakers in every country, always boding its ruin. Such a one then lived in Philadelphia; a person of note, an elderly man, with a wise look and a very grave manner of speaking; his name was Samuel Mickle....This man continued to live in this decaying place, and to declaim in the same strain, refusing for many years to buy a house there, because all was going to destruction; and at last I had the pleasure of seeing him give five times as much for one as he might have bought it for when he first began his croaking. - Benjamin Franklin
Mark Steyn is easily one of the most entertaining - and frequently insightful - Opinion writers in existence today. Agree or disagree, his National Review Op-eds count as a must-read for many - including this writer - as evidenced by his popularity.
But right or wrong, and it says here that Steyn is wrong, one of his most popular modern narratives is the one about how the U.S.'s best days are behind it. To quote Steyn from a recent book, After America, "the prevailing political realities of the United States do not allow for any meaningful course correction," and "without meaningful course correction, America is doomed." There you have it, and while Steyn seemingly is not the crank that Samuel Mickle was, his writing is far too entertaining, he holds views that animated a man whom Ben Franklin luckily dismissed back in the 18th century.
To be blunt, ‘America' has been ‘doomed' for longer than the United States has even existed as a country. Steyn has entered an echo chamber of doomsayers that is long in tooth, and that could fill many Rose Bowls. Maybe Steyn is correct this time despite joining a chorus of naysayers who've always been wrong, but even if correct, it seems he misreads what ‘doom' is, or what it will look like. Read on.
Steyn is gloomy firstly given his view that low birthrates wreck our long-term demographics. Humans are surely capital per Adam Smith, but perhaps missed by Steyn is the basic and happy truth that economic and societal advancement have always and everywhere been driven by the ‘vital few,' as opposed to huge populations of many. Figure Seattle, WA was so depressed in the ‘70s that a billboard went up asking the last one to leave to turn out the lights. Birthrates were doubtless low, but thanks to the return of two natives in Microsoft founders Bill Gates and Paul Allen, Seattle now booms, and is filled with the talented who are eager to start their businesses in the popular city's cluster of great minds.
After that, it has to be remembered that per Robert Mundell, the only closed economy is the world economy. Leaving aside the basic market truth that the world's richest countries tend to have the lowest rates of birth versus the poorest ones that tend to have the highest, in an integrated global economy the talented are producing for the world, working alongside the world thanks to the Internet, and thinking about highflying companies like Seattle based Amazon.com, the modern reality is that Jeff Bezos could have created it in a retirement community thanks to the technological genius of those who reside in low-birthrate Silicon Valley.
Immigration also bothers Steyn, and while that's odd considering immigrants bring new bodies to the U.S. usually in search of work, the reality is that markets aren't dumb, and the movement of ‘feet' to the U.S. is a certain market signal. If America were in fact doomed, wouldn't it also be true that foreigners would no longer view the U.S. as one of the world's ultimate destinations?
And then there are the budget deficits obnoxiously run up by our political class. Steyn rightly asks "How you can ‘control' spending" under our political system, points to the massive debt relative to GDP amassed by our wasteful federal government relative to other countries, and concludes that doom is ours.
Notable here is that Steyn's similarly excellent National Review colleague Kevin Williamson also thinks the deficits are insurmountable, but concludes in his new book that we'll essentially emerge unscathed from that which we won't pay. I share Williamson's long-term optimism about the U.S., but don't for a second buy the notion that the debts won't be paid, nor the view that they're insurmountable as is. If so, is Williamson really that smart and investors so stupid as to buy Treasuries that won't be paid off? That's doubtful. Markets for Treasuries are for good or bad very deep, and very informed. Treasury prices signal a market belief that growth in the U.S. will be so grand that the debts will be easy to pay off.
Still, it can't be stressed enough that government is profligate, and that's bothersome. But far longer than there's been QE, investors have lined up to buy the debt. Maybe they're stupid, but it's once again hard to believe that markets can be that dense, and then if Steyn ever is proven right it just means government won't be able to borrow as much. Good.
Politicians can try to raise taxes, but not only would that be counterproductive in terms of paying off the debt, history is pretty clear that we pay about 18% of GDP (not a very useful number, but so what) to the feds no matter the rate. The rate should not exist, we should have a consumption tax or a flat tax (the latter is more problematic because it penalizes work), but our government wastes a lot of money. One obvious reason for its ability to, and this is what's so misleading about Steyn's comparisons of U.S. federal debt to other countries, is that Americans are far more productive than anyone else. Low-growth Yemen can't run up deficits, but the hyper-growth oriented U.S. can. Is Steyn, like Williamson, really that much smarter than one of the deepest markets in the world? That's hard to believe.
This isn't to say that we should excuse the deficits, but it is to argue that Steyn and other purveyors of doom miss the point. It's fashionable to say that 'this time' Americans have lost their way, that we're finished, but to be fair to the optimists drowned out amid all the negativity, commentary like Steyn's has once again been the norm since the U.S.'s founding, and surely before. There's nothing remotely new about it. Countries do die, maybe we're about to, but history calls for a great deal of skepticism about our allegedly diminished prospects.
More realistically, the massive forest fire isn't government debt that is easily financed, but how extraordinarily low our standard of living is relative to what it could be. The richest country in the world and its people live enormously well, but the true horror is how pedestrian are our lifestyles and how deprived they are relative to what they would be if we had a reasonable tax code, no regulations, the ability to trade freely, a stable dollar, and greatly reduced government spending. That's what the Steyns of the world seemingly miss, and in a big way. Put plainly, any reasonable economic thinker not deluded by the false notion that governments can stimulate would agree that we'd be much better off economically if we had annual deficits of $250 billion on $500 billion in spending, as opposed to balanced budgets annually on spending of $3.5 trillion.
It's fun and easy to join a centuries old echo chamber about how lazy we've all become, but the facts are that the U.S. is still full of the most brilliant, productive, and innovative people on earth. Indeed, while most anyone around the world would be hard-pressed to name even five entrepreneurs in countries not the U.S., most could list many handfuls of American innovators.
Do we have indolent takers? No doubt we do, and we also have politicians who don't have a clue. But the more reasonable truth is that what Steyn considers 'doom' is the here and now, specifically in terms of Fredric Bastiat's the ‘seen.' The ‘seen' is that despite all the shackles placed on our vital few, surely the equivalent of forcing Tom Brady to pass with his left hand, LeBron James to play with 20 pound weights on each leg, and Floyd Mayweather to box with one arm tied behind his back, that we as a nation are still jaw-droppingly rich.
The ‘unseen,' however, is that a staggeringly rich country is not exponentially wealthier. This idea that Americans who treasure lifestyle and gadgets will suddenly be forced into caves, or will accept something like it, ignores what makes ambitious Americans tick. That's not us. Today is the forest fire, and what should amaze us is that we live so amazingly well despite all the shackles.
No doubt we can do much better, better in the sense that without all the barriers erected by government that our present lifestyle of plenty would seem like Haiti relative to what we could be economically. But to posit as Steyn and others have for centuries, that we're on the path to destruction is not credible. And as evidenced by the massive capital inflows that our productive are still entrusted to deploy, markets confirm this basic assertion.
To be clear, ‘doom' per Steyn's definition isn't some horrid future that never seems to reveal itself despite centuries of predictions offered up by our wise commentariat. Instead, ‘doom' is today, it's the ‘unseen,' it's what we don't have in terms of future Googles and Intels, cancer and heart disease cures, and transportation advances that would make the automobile and the airplane seem positively pedestrian. That's what Steyn and the chorus of doomsayers might be talking about were they not so blinded by inconsequential notions of birthrate, unwashed immigrants who renew us, and deficits that investors line up to buy the income streams of.