That Used to Be Us_ How America Fell Behind in thted and How We Can Come Back - Friedman, Thomas L. & Mandelbaum, Michael [26]
All these regulations, notes the Stanford University historian David Kennedy, “were not about creating more state control and less private ownership. They were about creating the right synergy between the two.” When you undergird markets with the right government rules, regulations, and incentives, “you set the stage for more risk-taking,” said Kennedy. “Predictability actually creates the opportunity and more incentives to innovate.”
The country’s economy would scarcely be what it is today without highly motivated risk takers such as Warren Buffett, Bill Gates, and Steve Jobs. But their achievements would not have been possible without the public side of America’s unique public-private partnership for success.
And that is why we are worried.
The Secret of Our Success Is Too Secret
While it is true that in driver education class one of the first things a student learns is not to pass on the turns, in economic history classes students learn that turns are where you get passed. So in a high-speed turn, a country has to drive with much more determination than on a straightaway. The end of the Cold War has coincided with the fastest turn America has ever faced. It is driven by the merger of two major trends: globalization and the IT revolution. We need to win in this turn. So we need to upgrade and improve our American formula—now more than ever. Unfortunately, our politics have moved in the opposite direction.
Again, former representative Bob Inglis, the South Carolina Republican, can testify to this. He recalled a vivid example from a town hall meeting on health care that he held in Simpsonville, South Carolina, during the 2010 campaign. “I was talking about health-care issues and an elderly man stands up and says, ‘Keep your government hands off my Medicare.’
“I said to him, ‘Well, sir, of course Medicare is a government program.’ ‘Yes,’ he says, ‘but I am paying for it.’ And I say, ‘Yes, you are. You are paying—25 percent of the premium—and the government is picking up 75 percent’ through Medicare Part B. Now he is threatened, and he says, ‘Yes, but I paid for it while I was working.’ And I say, ‘Yes, 1.45 percent you, and 1.45 percent your employers, paid a Medicare tax on your payroll.’ I was trying to be as diplomatic as I could be. He looked to be about seventy-five years old, a man in okay health. So I added: ‘And I have to say, if you had one or two hospital admissions you have used up all that you and your employer have ever paid in.’ He sat down, angry. That man’s self-conception was that he rode out onto the prairie on his own horse and tamed this country and got what he has entirely by his own effort. Deep down, though, he knew that he had not gotten this on his own. He was dependent on other people and that threatened his identity.
“What I needed to say to win him over and win my election,” Inglis said, “was that ‘I am going to prevent that socialist in the White House, who is probably not even an American citizen and who is illegitimately in the White House, from getting his hands on your Medicare.’ Then I would have been a political hero—but I would have left them in ignorance. What is tragic right now is that we have people—leading people—who choose to leave audiences in ignorance or even encourage stupidity.”
That same ignorance can be found in sectors of the business community, where scorn for the government and regulation has become the norm. Who can ever forget Ronald Reagan’s famous campaign line: “The nine most terrifying words in the English language are, ‘I’m from the government and I’m here to help.’” Of course, every businessperson in America wants lower taxes and less regulation. Most Americans do. But every one of us also benefits from, indeed depends upon, the five pillars of the American formula. Failing to recognize that fact endangers one of the major sources of our strength.
Fortunately, at least some of America’s most prominent investors and