Tuesday, October 18, 2011

Forget about it

We know that the recovery picture is discouraging.  Massive policy interventions have failed and all that we get from advocates is that their policies would have-could have succeeded if only the programs were bigger and better.  Many people did not get the hope-and-change they dreamed about.  They seemingly do not buy the excuses.

Tea Party dissatisfaction is a few years old and has had an effect, as 2010 and assorted off-year elections have demonstrated.   As I had noted a few posts ago, I have no idea how conventional politicians (namely Democrats) will handle the Occupy people.  Part of the problem is that it's hard to figure out who/what they are.  There are fewer than media coverage suggests.

Some are in love with the idea of a second chance at participating in a counterculture.  If they missed the 1960s and 1970s, here is their opportunity.  Others are legitimately frustrated as mentioned in the opening paragraph.  Arnold Kling writes about the Myth of the Median Worker.  Different workers are on very different escalators, some going up and others going down.  Some skills are valued while others not at all.  How does one switch escalators?  It may be harder than ever.

Finally, there are horrible economic misunderstandings re the current recession.  Blame Wall Street?  Blame Washington?  I had mentioned in previous posts that crony capitalism includes both.  It's a tent big enough include Democrats as well as Republicans.  The research will go on for years, but Gretchen Morgenson and Joshua Rosner implicate both.

The Occupiers make themselves feel good by railing against greed.  Do they feel the same about the other six deadly sins, including envy?

Their teachers (in and out of school) should not be left off the hook.  Every human being has the capacity to binge on every one of the deadly sins, but we have had (since at least Adam Smith) a remarkable recognition that competition in markets harnesses one of them (greed) in positive directions.  If and only if we allow competition -- and wall the economy off from crony capitalism.  It is mission that will never get traction if it is not even understood.  I fear that it is not even widely taught.

Do not even mention the Invisible Hand if you do not immediately note that it is all lost when sweetheart deals are possible.  And forget about the charms of "public-private sector cooperation."


And much closer to home than I thought.  Here is the update.


Fred Siegel on crony capitalism.