Tuesday, September 16, 2008

Political economy

Arnold Kling described folk Marxism a couple of years ago. Burton Folsom has written about the Myth of the Robber Barons, showing us there is always a horse race between the romantics and those who make it their business to dig deeper. In any case, read both if you have not already done so.

We now have a serious economic situation in the middle of a heated presidential campaign. So both sides in the campaign will sink to populist explanations of (and fixes for) the downturn.

This morning's WSJ includes a very nice op-ed by Jeremy Siegel. He points to regulators that dropped the ball (many still employed) and Wall Street money managers who made bad bets (many now unemployed). He makes no mention of the "Bush tax cuts." Repealing these is probably the main economic plank of the Democrats' platform. And I expect that they will be extraordinarily creative linking these to the credit market problems. But I recall Doris Kearns Goodwin telling the Jim Lehrer News audience that the Great Depression was caused by the "inequities" spawned by the 1920s boom.

If she can do that 70+ years after the event, and get away with it, linking tax cuts to today's credit market woes should be child's play.