The first failing, of which Mr Obama in particular is guilty, is misstating the problem. He likes to frame America\u2019s challenges in terms of \u201ccompetitiveness\u201d\u009d, particularly versus China. America\u2019s prosperity, he argues, depends on \u201cout-innovating, out-educating and out-building\u201d\u009d China. This is mostly nonsense. America\u2019s prosperity depends not on other countries\u2019 productivity growth, but on its own (actually pretty fast) pace. Ideas spill over from one economy to another: when China innovates Americans benefit.<\/p>\n
Of course, plenty more could be done to spur innovation. The system of corporate taxation is a mess and deters domestic investment. Mr Obama is right that America\u2019s infrastructure is creaking (see article). But the solution there has as much to do with reforming Neanderthal funding systems as it does with the greater public spending he advocates. Too much of the \u201ccompetitiveness\u201d\u009d talk is a canard\u201d\u201done that justifies misguided policies, such as subsidies for green technology, and diverts attention from the country\u2019s real to-do list.<\/p>\n
High on that list is sorting out America\u2019s public finances….<\/p>\n