Pre-blogging the State of the Union

Your humble blogger has, in the past, live-blogged or live-tweeted the State of the Union address. After reading the National Journal's draft of the speech, I've decided that the mindless applause will convert a decent 30-minute speech into an interminable 75-minute talkathonso I'm gonna watch Mystery Men instead to pass.

Looking over the draft, however, I see that the Obama administration has really taken this competitiveness theme to heart. More than any State of the Union I've seen before, President Obama raises the examples of other countries doing things better than the United States as an impetus for the U.S. to do more. Consider:

The rules have changed. In a single generation, revolutions in technology have transformed the way we live, work and do business. Steel mills that once needed 1,000 workers can now do the same work with 100. Today, just about any company can set up shop, hire workers, and sell their products wherever there's an internet connection.

Meanwhile, nations like China and India realized that with some changes of their own, they could compete in this new world. And so they started educating their children earlier and longer, with greater emphasis on math and science. They're investing in research and new technologies. Just recently, China became home to the world's largest private solar research facility, and the world's fastest computer....

Half a century ago, when the Soviets beat us into space with the launch of a satellite called Sputnik¸ we had no idea how we'd beat them to the moon. The science wasn't there yet. NASA didn't even exist. But after investing in better research and education, we didn't just surpass the Soviets; we unleashed a wave of innovation that created new industries and millions of new jobs.

This is our generation's Sputnik moment....

The quality of our math and science education lags behind many other nations. America has fallen to 9th in the proportion of young people with a college degree. And so the question is whether all of us - as citizens, and as parents - are willing to do what's necessary to give every child a chance to succeed....

Our infrastructure used to be the best - but our lead has slipped. South Korean homes now have greater internet access than we do. Countries in Europe and Russia invest more in their roads and railways than we do. China is building faster trains and newer airports. Meanwhile, when our own engineers graded our nation's infrastructure, they gave us a "D."

We have to do better.

I'm curious to see how this will play out. On the one hand, the administration is obviously using this kind of "we're falling behind other countries!" shtick as a way to build public support for investments in education and infrastructure. In the same speech he talks about falling behind South Korea, for example, he embraces the Korea-U.S. Free Trade Agreement.

At the same time, I have two big concerns with this approach. First, there's the risk of rhetorical blowback, in which everyone freaks out and reacts in a hysterical manner.

Second, and more important, the percentage of the speech devoted to microeconomic "competitiveness" issues vastly exceeds the amount devoted to long-term macroeconomic policy. If the federal government really wants to create a better climate for innovation, it needs to send a credible signal that steps are being taken to deal with long-term budgetary problems. That section of the speech was, er, less solid.

[What about the foreign policy sections?!--ed. Meh. Nothing bad -- just nothing of substance either. One could argue that the biggest foreign policy innovation of the SOTU is the administration's decision to use globalization as the political crowbar to pry infrastructure spending investments from Congress.]

Feel free to comment away on what you would like to see in the speech.

Daniel W. Drezner

Is the American economy really like a university?

In his New York Times column today, David Brooks analogizes the government's proper role in the economy to an administration's actual role in a modern U.S. university:

[G]overnment will be a bit like the administration of a university. A university president is nominally the head of the institutions. He or she lives in the big house. But everybody knows a university president is a powerful stagehand.

The professors, the researchers, the tutors, the coaches and the students are the real guts of a university. They handle the substance of what gets done. The administrators play vital but secondary roles. They build the settings. They raise money. They recruit and do marketing. They help students who are stumbling.

The administrators couldn't possibly understand or control the work in the physics or history departments. They just try to gather talent, set guidelines and create an atmosphere where brilliance can happen.

Mulling it over, this is a better analogy than even Brooks indicates. The administration/everyone else dynamic at a university also captures the feelings that often predominate debates about the role of government in society.

To be specific:

1) Most faculty and students do their damndest to simply ignore the fact that a university administration actually exists.

2) Most faculty and students cultivate an active ignorance about things like budgets, revenues, etc.

3) The only time any university administration is popular is when it has resources to dole out;

4) Any time the administration interferes with what faculty, students, etc. want to do it provokes fierce resentment -- unless the faculty/student is in trouble, in which case the hope is that the administration will make it all better.

5) Trying to change any aspect of university governance is, I suspect, even more difficult than trying to get a law passed through Congress.

6) Paying customers rack up massive debts and inevitably feel like they're not getting close to their money's worth, even though the data suggests that the pecuniary rewards from going to college are pretty significant.

7) Even if administrators lack local knowledge about the research going on in their schools, they're nevertheless sure that they completely understand the research.

8) Even though administrators come from the faculty, approximately 99.8 percent of all faculty are completely ill-suited for administrative responsibilities.

Brooks uses this analogy because of his argument for how the global economy will function in this century:

In this century, economic competition between countries is less like the competition between armies or sports teams (with hermetically sealed units bashing or racing against each other). It's more like the competition between elite universities, who vie for prestige in a networked search for knowledge. It's less: "We will crush you with our efficiency and might." It's more: "We have the best talent and the best values, so if you want to make the most of your own capacities, you'll come join us."

The new sort of competition is all about charisma. It's about gathering talent in one spot (in the information economy, geography matters more than ever because people are most creative when they collaborate face to face). This concentration of talent then attracts more talent, which creates more collaboration, which multiplies everybody's skills, which attracts more talent and so on.

Well.... economic competition among countries has been something of a misnomer since the start of the Industrial Revolution. It's mattered only in the sense that geopolitical competition exists. To put this into concrete terms, from a strictly economic perspective China's massive growth is an unalloyed good for Americans, because it means a future growth market for U.S. goods and services. It good becomes slightly less pure only when people start worrying about a) whether China will convert its growing wealth into power; and b) whether Chinese power will advance interests that conflict with the United States.

More importantly, however, there's a way in which Brooks' model is the great power equivalent of the Dubai model of economic growth -- and as I noted earlier this month, a world in which everyone races after the Dubai model is a world of massive overinvestment and inadequate demand. Like the dollar auction game, a few countries might win, but most will lose in pursuing this strategy.

Readers are warmly encouraged to provide more ways in which the administration/university relationship is akin to the government/economy relationship.