I read Tyler Cowen’s The Great Stagnation during the first half of my flight from Boston to San Francisco. That was the good half. There’s a lot to like about the book, as well as a lot I could pick at. But I won’t pick. OK, I will, but only about one thing.
But first, let me tell you what I liked: it’s a story of what ails the American economy without blaming any of the usual suspects. It’s not the corporations. It’s not the politicians. It’s not the decline of morality. It’s not the dysfunction of family. Cowen deserves credit for avoiding the standard tropes. The problem is deeper than all that, according to Cowen. It’s that our pace of making huge, productivity increasing innovations has slowed, relative to what it once was.
That’s actually inevitable. Once you’ve picked all the low-hanging fruit the rest of the fruit is harder to reach, that is, until the next generation of fruit trees grow. Well they haven’t, yet.
The problem with blaming America’s ills on something so fundamental is that the things we fight over most won’t do a lot of good. A Republican take over of the government won’t help. Nor will decades of Democratic rule. The Tea Party movement isn’t the answer either. And so on.
It sounds rather pessimistic. But Cowen does end with a few rays of hope. My favorite is,
Challenge the scientists you know, ask them to educate you and your kids, and reward them with your sincere admiration. […]
[W]e should respect the scientific enterprise in general at a much higher level.
Amen! And that brings me to my criticism of the book, or one tiny part of it. If one really has a scientific mind, and a respect for the scientific enterprise, one must take a more careful look at Medicaid than Cowen did in the book. He wrote, “When it comes to surgical patients, the uninsured seem to have better health outcomes than do Medicaid patients,” with a reference to an Avik Roy post on the UVa surgical outcomes study. This statement was made in the context of discussing how much we spend on health care (a lot) relative to what we get for it (not enough).
I agree with Cowen’s take on our system — too costly for the outcomes it produces — but I have a problem with this characterization of Medicaid. It’s not correct. As I’ve written before, the best evidence does not indicate that Medicaid is bad for health. I’ll say much more about what’s wrong with the UVa surgical outcomes study and what constitutes the best evidence in a subsequent post.
I do hope that those who think Medicaid is harming health will update their thinking once they are acquainted with more credible evidence than Cowen cited on this topic.
Without a lot of work, I can’t evaluate most of the rest of Cowen’s claims and his sources for them. One of them is this blog — yes it’s in the endnotes — so I really can’t complain more than I have.
Read the book. It’s cheap and short, but neither is an indication of its value.
UPDATE: I have added more context to Cowen’s take on our health system and his reference to the UVa surgical outcomes study.