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The business lobby thinks forward

I haven't read Jacob Hacker and Paul Pierson's new book on the rise of the business lobby yet, but Kevin Drum sure likes it. Consider it on the list.

But one thing that's always annoyed me about the business lobby is its relentless focus on today's giveaways rather than tomorrow's economic foundation. The Chamber of Commerce will tell you that it supports infrastructure investment, as it knows perfectly well that bad roads and crumbling schools are bad for business. But compared with, say, its jihad on tax rates, it doesn't try all that hard.

Nevertheless, I was glad to see the group publish a new report on the importance of investing in early childhood education. Every piece of evidence I've seen suggests that this is probably the biggest free lunch in American policy. Investing in very young kids produces huge gains, but because infants don't vote, we wildly underinvest in it.

Consider the amount of energy we expend trying to improve K-12, which is extremely hard and expensive and will have uncertain results vs. guaranteeing everyone gets preschool, which is straightforward and would have huge benefits. The Chamber's report, in fact, has a great graph on this. It's a graph, actually, that should really inform a lot more of our policy choices than it does:

rateofreturneducation.png

By Ezra Klein  |  September 10, 2010; 10:23 AM ET
Categories:  Education  
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Comments

"But one thing that's always annoyed me about the business lobby is its relentless focus on today's giveaways rather than tomorrow's economic foundation."

Steven Teles, in a book chapter "Conservative Mobilization against Entrenched Liberalism" (found in the book "The Transformation of American Politics," ed. by Paul Pierson and Theda Skocpol) makes that point wonderfully in relation to the development of right-wing legal institutions.

"Conservatives were slowly recognizing that businesses could not be counted on to protect the free market; they would always take advantage of short-term opportunities, even when this extended government control. Ultimately, conservatives needed to find nonbusiness constituencies to defend, ones that would them to claim the mantle of public interest from the left" (177).

It's interesting how they've dealt with the incentive problem: businesses are driven mainly by short term profit maximization, while the right wing has been able to create an extended intellectual network that is not tied to similar short term incentives (elections say) but to the longer-term incentives offered by ideological consistency (and the so called wingnut welfare that adopting such a stance affords one).

Posted by: y2josh_us | September 10, 2010 11:41 AM | Report abuse

Socialism! Bad... um... just because, ok?

Posted by: mezcalero | September 10, 2010 12:16 PM | Report abuse

I don't want none of my kids to go to one of them there nazi-commie indoctrination camps! Little Lenin's Early Childhood re-education program is what they should call it!!

/sarcasm

Posted by: will12 | September 10, 2010 3:17 PM | Report abuse

You are apparently confused because business would like to see infrastructure creation coupled with tax breaks. That's not at all contradictory. Whenever a factory is lured into an area, it's done with a combination of infrastructure improvements...and tax breaks--but only for the new business. What the business community as a whole wants is clear--goodies that help them, but are paid for by the rest of the community. Sports team owners are the kings and queens of this mindset, but lots of other business owners think the same way.

Posted by: ciocia1 | September 10, 2010 3:50 PM | Report abuse

I like the general idea of this graph--but it's what Edward Tufte calls "mystery meat data"--where are the actual numbers of the rate of return to investment?

Posted by: moiraeve1 | September 12, 2010 5:02 PM | Report abuse

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