Ronald Brownstein has taken up the growing divide between the brown and the gray, a subject of longstanding interest to me which we’ve often discussed in this space, as an ongoing theme in his columns. Tino Sanandaji are co-authoring a longer essay on this subject, which will appear in National Review later this year. For now, I’ll just note that Brownstein has a very different take on the subject than we do.

Aging whites now provide huge electoral margins for a Republican Party committed to retrenching government, while minorities preponderantly back a Democratic Party defending public investment. It’s telling that even the budget cuts the two parties have agreed on so far largely protected entitlements (which mostly benefit seniors) and squeezed discretionary programs (which offer more for young people).
Demography offers no break from these pressures. Minorities, for the first time, will likely make up a majority of newborns this year. Frey calculates that the number of people in their childbearing years is falling for whites and rising for minorities. That means the browning of the youth population will accelerate, even as the white share of seniors declines only slowly.
The irony is that security for the gray requires opportunity for the brown: Unless America can equip its young people to obtain good-paying jobs, Social Security and Medicare will face increasing financial strain. As usual, Americans will rise or fall together, even if no one acknowledged that inescapable interdependence from the tea party stage last weekend.

There is some truth to Brownstein’s analysis. But one wonders why he fixates on resistance of aging whites to public investment, which is to say government spending, rather than the resistance of aging white public sector workers to productivity-enhancing reform. Brownstein seems to be operating under the assumption that increases in government spending amount to increases in productive public investment, which is far from obvious, particularly when public workers are a powerful political constituency that is in a strong position to extract rents from taxpayers. This is particularly true in regions with climate amenities and an immobile capital stock, e.g., unusually attractive regions like coastal California, older and denser American cities, etc.

Those striking changes capture the other major demographic force reshaping American politics: the rise of a huge, heavily nonwhite generation of youths that needs public investments in education and health care to ascend to the middle class. The contrast between their needs and the hardening antigovernment attitudes of the aging baby boom could sentence the nation to sustained conflict between the brown and the gray, unless the United States forges a new social consensus between them.

I tend to think that the hardening progovernment attitudes of aging baby boomers who work for government and in allied nontradable sectors is actually a much bigger problem.

It is easy to see why the left would want to characterize this conflict as aging whites uninterested in investing in non-whites versus less-affluent browns. This makes antigovernment sentiment seem pernicious and racially motivated. There is an alternative theory that, in my view, makes more sense. All aging whites and browns have an interest in minimizing their lifetime net tax rates. That is not in dispute, and that clearly creates a problem in light of the outsized political power of older voters as the electorate ages. A strategy to minimize lifetime net tax rates will entail keeping the current tax burden low and maintaining high levels of entitlement spending, causes embraced by the left and right respectively. Add to this mix the fact that public workers, a large, educated, well-organized constituency, has a strong interest in defending compensation levels that are higher than those we’d find in a competitive marketplace and work rules that limit the scope for improving productivity. The people who suffer most from dysfunctional public institutions — which I would suggest are dysfunctional due to organizational failures rather than a shortage of resources, and that these organizational failures actual stem from a lack of fiscal discipline and autonomy on the part of public sector managers – are less-affluent browns, particularly those who haven’t sorted into public sector work and who live in disrupted households and thus need an extra boost from productive and responsive public institutions, including K-12 schools and health services, etc.

Nothing about my analysis suggests that aging whites, Tea Party voters, etc., are angels. Rather, I’m suggesting that progovernment constituencies are very much a part of the problem. Insofar as aging whites are pressing for more fiscal discipline, they might actually help the cause of public sector reform by creating constraints that public sector managers can use to dislodge entrenched constituencies that are undermining our collective ability to improve the quality of public services.