As he celebrated Democrats’ November election wins, California’s overwrought Tom Steyer took a moment to sound a bit like someone from the other party — before he reverted back to form.
“When we think about what a more prosperous, healthy America would look like, we really have to start again with the idea of investment in the American people,” Steyer told MSNBC viewers, then ruining a perfectly good idea by adding “in education and health care,” which in his world simply means spending more and more taxpayers’ dollars.
“That’s what’s going to make our country successful,” he added.
Investing in human capital might be the best investment that can be made. As economist Julian Simon would always say, people are the ultimate resource. But creating new programs and spending more government money won’t “make our country more successful.” As PRI’s Wayne Winegarden notes in his “Beyond the New Normal” series, government doesn’t really focus on whether spending more taxpayers’ adds any value to the economy.
Take public education, for example. Pacific Research Institute senior fellow and director of PRI’s Center for Education Lance Izumi says that today’s public school classrooms have been corrupted. Teaching has become politicized, curriculum is biased, schools have been financially mismanaged, and violence, toward both students and teachers, is widespread.
Izumi also points out that our system continues to spend more money and is getting less for those dollars than it ever has, in terms of both graduation rates and academic achievement. Increased “investment” will yield only more of the same. Maybe that’s good for the agenda of Steyer and the political left, but it won’t “make our country more successful.” That’s why, Izumi argues, parents should have more choices about where to send their kids to school, including private schools and parochial schools, so they can escape the failing status quo.
It’s the same story with health care. PRI President and CEO Sally Pipes has for decades warned that further government intervention into health care will increase costs and fail patients. See some of her recent work here, here and here. Public “investment” in health care just hasn’t produced the promised returns. And it’s clear it never will.
So how do we invest in the American people?
Why not employ private financing of higher education, as the Cato Institute has endorsed? Education, done the right way, is one of the best paths to improved human capital.
And why not also encourage entrepreneurship rather than discourage it, which is generally what happens in California? Policymakers should, as well, allow low-skill workers to invest in themselves by working for a wage both employer and employee agree on, not one set by the government that puts people out of work. Workers cannot improve their skills sitting at home.
Furthermore, lawmakers need to backtrack on decades of policies and remove those that established disincentives for creating intact families, which economists have cited as helpful to forming and nurturing human capital.
Finally, investing in human capital means allowing humans to have the freedom to work without government fetters. This means lower taxes (and lower tax rates), deregulation and the removal of all policies that make human capital more expensive than true market cost.
None of these ideas fit into Steyer’s worldview. Which makes no sense. How did this guy, who is worth an estimated $1.61 billion, make so much money without understanding how economies grow? A misguided rich man instructing others on how to boost an economy is sure to have all the wrong answers.
Kerry Jackson is a fellow with the Center for California Reform at the Pacific Research Institute.