This is a moment when policymakers should be thinking big, not small. History will little note nor long remember that the payroll tax holiday was extended for two months rather than 12. The complex and difficult questions we're avoiding, however, may haunt us through the century.
Let me be clear that I applaud President Obama and the Democrats for the political victory they won last week. The impact was to weaken the influence of the most reactionary and clueless faction in Congress -- the tea party Republicans -- and strengthen the hand of both progressives and pragmatic conservatives. This can only be a good thing.
But let me also be honest: It's crazy to have spent so much brainpower and energy on a skirmish that was purely tactical, while blithely ignoring the enormous challenges we face. It would be difficult to squander all of our nation's tremendous advantages. At present, however, we seem to be doing our best.
Our manufacturing sector is just a shadow of what it once was, and that's not China's fault. Because of automation and the globalization of the labor market, rich countries can only excel at high-end manufacturing that requires more brains than brawn. Our future lies in knowledge and information. So let's go there.
We've done it before. After World War II, the GI Bill dramatically boosted the percentage of Americans with college degrees. That one piece of farsighted legislation prepared a generation to run the industrial economy that was forged by the war -- and helped absorb the excess labor that resulted from mechanization of the agricultural sector. What we need now is transformation on a similarly grand scale.
The solution that conservatives advocate -- let free markets do it -- isn't enough. Yes, free markets are marvelously efficient at allocating capital and creating wealth. But they have to be overseen and helped along, as with the GI Bill. It's important to remember that markets are supposed to serve the nation, not the other way around.
And it's important to recognize that while long-term debt isn't the most urgent problem facing the nation, it has to be addressed. Transformation, after all, isn't cheap.
Understanding the challenge we face is one thing; meeting that challenge is another. When Obama insisted on a set of moderate reforms to begin to address just one facet -- health care access and costs -- he faced such fierce opposition that the momentum for reform that carried him into the White House quickly dissipated.
Since last year's Republican landslide, instead of reaching boldly for the future we find ourselves mired in trench warfare. Every inch gained is an inch not surrendered. There's a real difference between a two-month tax holiday and a 12-month tax holiday, not for any intrinsic reason but because of what each side did or didn't give up -- and how each side is able to position itself for the next battle.
Is the political system broken? Yes, but this can't be an excuse. The system didn't break itself. Our elected officials put in place the rules that create dysfunction -- campaign finance regulations that allow money to corrupt the political process, redistricting procedures that ensconce our representatives in districts where they couldn't lose if they tried. The rules can be changed.
But our leaders, beginning with Obama, can't settle for playing small ball. As he campaigns for re-election, the president's task is to explain why this is a time to think big -- and why we have no choice.