Steven Pearlstein fires off another shot in the liberals’ war on decentralization and freedom. Evidently, the “services” sector of the economy does not develop as efficiently as the manufacturing sector, which may lead to relatively higher prices for services. Although he initially makes a big deal about this, Pearlstein ultimately admits that we shouldn’t be concerned because this is how the economy works. Yet in a remarkable display of non sequitur reasoning, Pearlstein has thought to use the relative inefficiencyof services to push for more government spending and control over the economy.
Here is Pearlstein’s argument: the services sector progresses less efficiently than other sectors, prices tend to be relatively higher in the services sector, and the services sector includes healthcare and education, therefore government spending “must grow as a percentage of the economy.” Huh? This conclusion doesn’t follow from the premises. It would work only if society had already determined that government must provide or finance services such as healthcare and education. Whether or not we should continue down that road is precisely the question, especially with respect to healthcare.
As a factual matter, government plays a major role in healthcare and education, but you wouldn’t know that from Pearlstein’s discussion. Nowhere in his column does he even wonder whether the government’s involvement in healthcare and education (i.e., throwing money at everyone) might be the cause of the relative price increases. This failure pretty much proves that Pearlstein is not serious in his thinking on the subject.
Pearlstein’s lack of seriousness doesn’t stop him from claiming that Republicans who want to hold government spending to some “historical average” as a percentage of the economy ignore the reality of economics. In fact, Republicans are only ignoring his non sequitur reasoning and failure to consider the role of government in these things. Pearlstein’s column is very misleading, but hopefully this is not intentional. After Obama’s recent debate performance, however, liberals may be more desperate than ever.