…continues, with thoughts from Ilya Somin. And this continues to make me crazy:
In a strange way, the Bush record of massive expansions of government has also shifted the goalposts for liberal Democrats. They seem to assume that anything Bush and the Republicans did must have been “laissez faire” (despite overwhelming evidence to the contrary) and that the current Democratic agenda represents a needed course relative to failed free market policies rather than a continuation of Bush-era trends of greatly increased government spending and regulation.
I continue to be both appalled and dismayed at this inability of the Democrats to recognize (or to be honest about their recognition) that the last eight years bore no resemblance to free markets, or laissez-faire. We overspend, and overregulate, and when it goes south, it gets blamed on tax cuts and underregulation. Madness.
[Update a couple minutes later]
Randy Barnett follows up.
“Liberaltarianism” serves the goal of giving young, urban, single male libertarians something to talk about with all those lovely NARAL supporters they keep meeting in bars. No logical analysis of economic goals will weaken their support for it.
So the government enacts policies to make people spend more (lower taxes, lower rates), jobs keep getting moved offshore, then everyone is amazed some people end up stuck in debt they cannot pay, while others join ponzi schemes to get rich quick? Color me surprised. Not.
The tax cuts may provide a positive reinforcement to the economy upto a point. But the current problem is IMO due to fundamental issues like energy and food prices going haywire, which no tax relief can fix. Only investment into alternative means of energy production, distribution, storage, can fix this. Sure either the state or free enterprise can fund this. But how can you seriously expect free enterprise to do this on itself with a failed bank sector which is unwilling to do long term loans? It was the poor loaning market prospects, among other factors, which led to the demise of new nuclear reactor projects. France’s government funded their nuclear reactors. So now France, which was considered a failing European economy a couple of years ago, is actually one of the economies in best position at the moment. Funny how the tables get turned uh? Perhaps having a strong economic backbone is important after all. Free-market enterprise is not a magical bullet for all ills.
So the government enacts policies to make people spend more (lower taxes, lower rates)
When did that happen?
But the current problem is IMO due to fundamental issues like energy and food prices going haywire, which no tax relief can fix. Only investment into alternative means of energy production, distribution, storage, can fix this. Sure either the state or free enterprise can fund this.
Yeah, I can agree. We should remove ethanol subsidies.
But how can you seriously expect free enterprise to do this on itself with a failed bank sector which is unwilling to do long term loans?
Get rid of the Community Reinvestment Act, so banks will quit loaning money to people to buy houses they can’t afford. This will give banks more money to loan to entrepreneurs to develop knew technology that will grow the economy.
It’s not all about economics or energy or government. My formal economics education consists of one undergraduate course at Rutgers a very long time ago. My knowledge of both physics and social psychology is in much better depth. Yes, I have even done grad work in both.
For instance, from what I have read, AIG was an extremely authoritarian hierarchy dominated, in part, by abusive bullies. They managed to get away with some pretty bad activities for a long time because people were impressed with their economic “success.” Now we are finding out that their “success” was not all that successful.
Is more regulation the answer to messes caused by the likes of the AIG bullies? Perhaps — perhaps not. But we do need some reforms of business culture — just like we still need reforms of NASA culture. It would be better for everyone if people in business understood and acted on the reforms that they need — just like it would be better for all if NASA reformed itself in response to the identified failures of their culture.
> So the government enacts policies to make people spend more (lower taxes, lower rates),
Interestingly enough, lower taxes and lower rates are different.
We often see that lower rates lead to higher revenues.
Note that a huge fraction of working Americans don’t pay taxes. (They do pay some for their subsidized retirements but they don’t pay for anything else at the federal level.) Do our progressive friends want to argue that this is a mistake?
Chuck,
If you’ve done grad work in Psych and Physics you’re way ahead of most Econ grads on the actual econ. Econ is just mathematical models of psychology interacting with the world.
I am amazed at simple things people don’t understand. Years of increasing government regulations created the recent energy crisis. Years of increasing government regulations created the banking crisis. Inept and lax government oversight under exsisting law along with congressional interference kept the problem from being solved earlier.
Brock,
I have gotten that impression at times. Thanks for the information. I will, I hope, use it judiciously.
Best,
Chuck