Saturday, April 27, 2013

We need stimulus, not STEM

In my last two posts, I argued that the national push for STEM—that is, using education policy to push students toward careers in science, technology, engineering, and math—is a form of corporate welfare. But isn’t it possible that pushing STEM might reduce unemployment and help us get out of this recession?

Don’t bet on it. The argument for pushing STEM is not only dubious, it’s part of a larger dubious argument about what’s wrong with our economy and how we should fix it. Here’s Paul Krugman discussing research by economist Edward Lazear:
Lazear’s question is whether a large part of the rise in unemployment is “structural”, that is, reflecting supply factors, or whether it’s mainly simple lack of demand. The Keynesian view is, of course, that it’s demand, and that fiscal and monetary policy should be acting to provide the missing demand. On the other side you have either supply-side views a la Mulligan claiming that taxes and benefits are discouraging people from working, or more or less Austrianish views that it’s about maladaption of the structure of production that left too many workers and too much capital stuck in the wrong industries.

Lazear goes through the data, and finds overwhelming evidence of inadequate demand, little if any evidence of structural problems.
In other words, the argument for pushing STEM is brought to you by the same people who brought you fiscal austerity, and who—as Krugman never tires of reminding us—have been wrong about everything.

If the problem is inadequate demand, the fix is fiscal stimulus, not education policy. Funny how often education proposals function as substitutes for addressing real economic ills.

More from Freddie deBoer here.


David said...

Chris, I think connecting the STEM folks to the austerity folks is a brilliant insight. May we thank your liberal arts education for it?

Billy Zelsnack said...

What austerity?

Chris said...

David -- Thanks!

Billy -- Austerity relative to what it would take to bring us out of the recession. Here's Krugman.

Billy Zelsnack said...

In 2012 austerity was redefined to mean a decrease in the increase in spending. In 2013 austerity now means not substantially increasing spending?

Chris said...

Billy -- I don't understand the objection to the word as Krugman is using it. You can use a different word if you want, but the argument would remain: we would come out of the recession much more quickly if we spent more. Do you disagree with Krugman that spending more would be good for the economy, or are you against spending more even if it is good for the economy?