Monday, May 16, 2011

Everything you need to know...

About the great economic philosophy debate now raging.

FWIW, I think this overall is remarkably accurate. Logic seems to side slightly more heavily with the Hayekian principles, but it simply has been demonstrated* as beyond our ability to enact.

Example one is any attempt to touch Medicare, despite the screaming danger signals flashing in our eyes. When the ACA tried, the GOP ran to victory by scaring old people. Unbelievably, they ran to jump on the same land mine as soon as they could.

Example two is every attempt at even modest financial regulation. Both parties feigned holding their noses to bail out banks, Wall Street, and companies.  But you'd think that would encourage regulation to wall off big firms to prevent chain reactions in crises. Once again, it was not  possible, and even the modest Dodd-Frank reform is pilloried from (illogically) the right.

So we are stuck with incremental adjustments which neither side likes and are probably grossly - but not totally - inefficient. My feeling is we will see some Hayek results in the reluctance to bailout large firms in the future, as well as acceptance more resources (taxes) to fund sacrosanct social welfare (safety net) programs.

*Full article well worth the time

1 comment:

Tim said...

Thanks for the link to the Manzi article. Outstanding, and a good example of why I continue to read your blog.