There is some truth to the saying that those who fail to learn from the past will be doomed to repeat it.
Essentially, this was the message that former Treasury Secretary Larry Summers delivered recently as part of his larger concern that Massachusetts not become complacent despite U.S. unemployment hitting a 10-year low in April.
In an interview with the Boston Globe, Summers compared the problem facing the state — the lure of complacency — to what he found on assuming the Harvard presidency, as Stanford cleaned Harvard’s clock as all things Internet came to dominate the new American economy. The impact locally on Route 128’s hold as “America’s technology highway” was dramatic.
The emergence of biotechnology saved the Boston area from a precipitous decline in economic standing among major innovation regions in a technology-driven global economy.
Mr. Summer’s admits that Massachusetts’ $500 million state deficit might make his call for investment seem a bit odd as Massachusetts’ governor, Charlie Baker, works to close the gap. He argues: “Ironically, sometimes not spending money is taking a much bigger risk than spending money, because it’s gambling with your preeminence.”
Further, Mr. Summers warns that some budget balancing acts, like trying to reign in Medicaid spending (40 percent of the state’s budget) as well as fees on employers and caps on health care might have the opposite effect.
Massachusetts is “Eds and Meds” Capital of the World
Massachusetts stakes a claim as the “eds and meds” capital of the world. Mr. Summers asserts that Medicaid may appear to be a budgetary expense, for example, “but at the margin, it’s coming out of being the place where the smartest scientists want to come and work their miracles.” He suggests that the efforts to end Obamacare and replace it with Trumpcare, moreover, could effectively destabilize the state’s critical health care economy. And Mr. Summers notes that rival technology regions like New York are already making heavy state investments in new life science initiatives.
Mr. Summer’s comments have tremendous implications for the role that American higher education will play in the American economy in the future. When the U.S. House of Representatives passed its version of a new health care bill, it legislated changes that impacted one sixth of the American economy. Separate out how and why this was done. Set aside the timing tied to the first 100 days of the new Trump Administration.
The facts are that the American economy is a little like a three-dimensional chessboard. Any move has a dramatic effect that must be comprehended on multiple levels.
Higher Education Is Foundation of U.S. Economic Competitiveness
There’s much at stake for higher education that reaches beyond the different political philosophy, chronic dysfunction, and incremental governmental bureaucratic practices. From an economic perspective, higher education plays two important roles in the American economy:
- The first is that it trains an educated workforce through programs that adjust this education to evolving economic needs.
- The second is that the “eds and meds” complexes of America largely moved the American economy – and the regions that they support — into a competitive post-industrial global economy. They are the foundation for the future of American competitiveness in a global market.
These centers of innovation and creativity are typically in urban, blue states or in regions where the voters historically vote or are trending blue. They inhabit one side of a cultural divide in an anxious America. They welcome immigrants, many of whom provide the talent and skill sets to keep the “eds and meds” miracle happening. As such, the “eds and meds” community has a great deal at stake as the states and the federal government move the chess pieces around.
Many in the western U.S. repeat a saying that is pertinent to this discussion: “I’m from the government and I’m here to help.” But, in fact, government at all levels does have the perspective and resources that can move the needle.
What government lacks are the courage and consensus to put an investment strategy in place. Government funding is a rationing tool built on an annual funding cycle. This hardly supports imaginative and enlightened government policy and programs.
We can have the debate over whether higher taxes, deficit funding, or better economic growth will ultimately pay the investment bill. But America must get over its deeply partisan divide to support what drives the American economy.
Mr. Summers was right. Having the vision and confidence to invest strategically — despite the competing pressures on government budgets — makes sense. Combining the social and cultural need to invest in better schools with the economic necessity to make infrastructure and life science investments is a sane path forward.