Thursday, May 28, 2009

The special world of politics

PERC has just published 7 Myths About Green Jobs. Read it. I thought that there was just one: There are no trade-offs.

Nevertheless, wherever I go, I see smart people (from the President on down) espouse the no-trade-offs religion. And they do this with impunity. To be sure, they are careful to be on guard for anyone espousing flat-earth theories or creationism.

Bond markets are reflecting another unpleasant trade-off. When government debt explodes so that politicians can promise everyone that they will "solve" every problem, bond traders get nervous and push up interest rates. And what will that do to the recovery that the President announced in Beverly Hills just last night?