Tuesday, March 26, 2013

Josh Barro — For 'Faster Growth,' Soak the Poor?

This weekend, the Wall Street Journal assembled a redoubtable list of conservative heavies in economics (George Schulz! Gary Becker! John Taylor!) to produce a completely insane account of what is wrong with America's economy and how to fix it. The upshot of the piece is that the U.S. economy is in the tank because the government gives too much money to poor people, and so it should stop.What's most amazing about this piece is what's not in it: any acknowledgement of the specific circumstances that led to the downturn of 2008 and the slow recovery from it. There's no discussion of the housing bubble and the financial crisis, of weak consumer demand as households struggle to deleverage, or of the vast number of job seekers for each available job.
Instead, the authors identify the country's pressing problems as "excessive spending and taxes, growing debt, interventionist monetary policy, and burdensome regulations that have slowed economic growth and job creation." Some of these conditions have indeed arisen from the 2008 crash: Recessions cause government spending and debt to rise relative to the economy. But the authors have the causation wrong: Slow growth has led to rising spending and debt, not the other way around.
So why focus on high spending and regulation rather than the actual cause of our economic woes? Conservatives have made these complaints for the past 30 years. The choice to ignore current economic conditions allows them to advance the same set of soak-the-poor policy solutions at any time and in any economic condition....
Bloomberg | The Ticker

For 'Faster Growth,' Soak the Poor?
Josh Barro | Lead Writer for The Ticker

Bravo Josh Barro

The first two comments at The Ticker:

Laura — They want an aristocracy and won't quit until we all be serfs, plain and simple. 

lemnyc — 

There is a very simple name for the approach favored by Schultz, Becker and Taylor: Class Warfare.


Unknown said...

Our money system already soaks the poor and other less "credit-worthies." Such socialism as we have is meager compensation for systematic exploitation by what is essentially a government backed counterfeiting cartel, the banks.

Is endogenous money creation bad? No, not necessarily. But it must be done ethically. And our money system, which depends on heavy government privilege (How is that consistent with "free-markets? It isn't."), is far from ethical.

Roger Erickson said...

Thanks for that F. Beard.

The solution is NOT to deny our increasing degrees of freedom. Rather, evolution = inventing methods to apply adaptive tolerance limits on our increasing degrees of freedom.

i.e., don't forego new tools, just learn how to use them, by practicing more

Increasing degrees of freedom requires increasing discipline. Regression to Luddites, aka Libertarians, aka Roddisites = extinction.

You can complain all you want about the unfairness of being lost in the middle of an ocean, while you go down with your ship, and even say you shouldn't have been put in that situation to start with. Others will just sail off in yet newer versions of improvised kayaks, outriggers, catamarans, trimarans ... even submarines and seaplanes.

Face it. Life will never be completely fair, simply because there's this thing called unpredictable innovation, initially unpredictably distributed.

So the choice is to either chase initially unfairly distributed options by helping to increase regulatory discipline, or to pout and curse your companions on your way to extinction.

Tom Hickey said...

Successful competitors continually ask, what's beating me (us)? This is characteristic of individuals, teams, and firms, but larger social groups, not so much, where success is left to chance.