1/20/2008

01-20-08 - 2

"Free Lunch: How The Wealthiest Americans Enrich Themselves At Government Expense (and Stick you With the Bill)" looks like a pretty solid book with lots of specific case evidence. There are two good interviews online from rather different sides : on Democracy Now and Reason magazine (libertarian) .

One thing we should understand is that "selective libertarianism" actually makes markets less free and less competetive. There's a wing of the Republican party that supports any tax cut or reduction of regulation. They claim to be supporting the goal of free markets and libertarianism - lower taxes, less regulation, smaller government. That goal is understandable and reasonable in theory, however in practices we rarely actually get an across the board reduction of regulation. Instead taxes are lowered for some specific thing, or regulation is reduced on one specific thing. This is what I call "selective libertarianism" and it's actually worse for the competitive environment than just leaving the higher taxes and regulation that was more even. The supporters claim they are opening up the market for business, but in reality they are supporting one specific business or one specific practice, which is highly distorting of the market.

Low unemployment is often trotted out these days as a sign that economy is basically healthy. There are a lot of ways those numbers are questionable, but even aside from that I'm skeptical that unemployment actually means much. You can have low unemployment (eg. China or India) and still have people in abject poverty because the jobs are just awful. You can have very high unemployment (like much of Europe) and yet still have a high standard of living because the welfare is so generous (which is what causes the high unemployment, people won't take the shitty jobs because they don't have to).

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