OPINION

[Noah Smith] Five unpopular policies the US should adopt

By Bloomberg
  • Published : Oct 14, 2019 - 17:08
  • Updated : Oct 14, 2019 - 17:09

Not every good policy is going to be popular. Sometimes either the public, activists or the commentariat -- or all three -- just get something wrong. This can happen for ideological reasons, or simply because of a lack of information. I’m more optimistic than most pundits, in that I think the public usually gets at least the outlines broadly right. But there are a few issues where the tide of opinion simply seems to be against me. Here are a few:


No. 1. The Trans-Pacific Partnership

The TPP was attacked from both the left and the right during the 2016 presidential campaign, and President Donald Trump withdrew the US from the treaty right after taking office. This was a mistake. For one thing, the TPP was about much more than trade -- it was a geopolitical strategy, meant to create a large trade zone among the dozen treaty members that would serve as an alternative to the vast Chinese market. The recent spat between China and the NBA demonstrates how China uses the lure of its market to bully businesses and people around the world into toeing its party line; TPP was one step toward countering Chinese heavy-handedness.

Many on the left objected to the intellectual property provisions in the TPP, which were mainly designed to increase the profits of US companies. But after the US abandoned the treaty, these provisions were removed. Now, other countries are pressing ahead with trade agreements all over the world, threatening to reduce US influence and divert revenue away from US exporters. Rejoining TPP would be the smart move.


No. 2. More H-1B visas

Support for increased immigration tends to mysteriously dry up when the H-1B visa program is mentioned. Commentators on both sides of the aisle have called the program “indentured servitude,” claiming that it lets employers replace US-born workers with lower-paid foreign employees who are tethered to their jobs. The Trump administration has substantially reduced the number of H-1B approvals.

This popular notion contains a grain of truth; it really is difficult for H-1B workers to switch jobs while they apply for green cards. But H-1B workers are not underpaid relative to native-born workers, and the tethering problem could be solved by letting H-1B holders sponsor themselves for permanent residency. Meanwhile, H-1B workers are a big driver of US innovation. Rather than pushing wages down, their presence tends to raise the incomes of native-born workers of all kinds, by drawing in investment and keeping high-value industries inside the US. We need more H-1B workers, not fewer.


No. 3. More robots

Panic over robots eliminating jobs or lowering wages appears to be spreading. A steady drumbeat of studies purport to show that huge numbers of jobs are vulnerable to automation. But these dire headlines actually say nothing about the broader impact of automation on labor markets or wages. Meanwhile, employment levels are high, wages are increasing at the bottom of the distribution and economic studies show little reason to panic.

What the US needs is not fewer robots, but more of them. Countries with large numbers of industrial robots, such as Germany and South Korea, have risen to manufacturing stardom in recent decades.

Other countries aren’t just using more robots; they’re making them. The US has forfeited leadership in the valuable machine-tool and industrial-robot industries, especially to China. If US manufacturing is going to make a comeback, it will need a lot of automation.


No. 4. Fracking and nuclear energy

The US needs to transition to green energy -- solar and wind power, and electric vehicles -- as quickly as possible. But bans on hydraulic fracturing and nuclear energy will work against this goal. Without fracking, the US will be forced to rely on coal and imported oil to provide electricity and fuel during the transition to green energy. Meanwhile, existing nuclear power plants still provide about 19 percent of US electricity generation, all without releasing an ounce of carbon into the air.

The US will eventually need to phase out fracking, and will need to stop using fossil fuels. And the economics of new nuclear plants is in doubt. But an immediate ban on fracking, or a decommissioning of existing nuclear plants, would hurt the goal of a greener future rather than help it.


No. 5. Student-debt forgiveness

A majority of Americans oppose a broad program of student-debt forgiveness, but it’s still the right thing to do. The crushing increase in student loans -- often made to teenagers who had no idea of what they were getting themselves into -- has hobbled a broad swath of skilled workers with burdensome monthly payments. Those payments make it harder for educated young Americans to start businesses or switch jobs, sapping the dynamism of the entire economy. Meanwhile, the government owns almost all of the debt, so cancelling it wouldn’t hurt the financial system. A one-time loan forgiveness program, followed by a permanent transition toward making debt repayment based on income levels and tuition waivers for low-income students, is the best policy -- even if it may seem unfair.

All of these policies will offend either a majority or a broad minority of the American public and pundits. But sometimes the public gets it wrong, and on these issues, the discourse is overdue for a shift.


Noah Smith
Noah Smith is a Bloomberg Opinion columnist. -- Ed.

(Bloomberg)