The post-recession reckoning among economists (and others) is in full swing and will go on. Among my favorites is the very readable Behind the Model: A Constructive Critique of Economic Modeling by Peter Spiegler. My review is forthcoming in the Independent Review.
Beyond all this, I have often mentioned that economic theory of any kind is almost useless if it ignores public choice analysis -- as much of it still does.
Here is news from Washington DC's Metro:
“Uber and Lyft are part of the transit system here, and so they should help pay to fix Metro because they’re benefiting from Metro’s demise,” [D.C. Councilman Jack] Evans told The Washington Post after D.C. Mayor Muriel E. Bowser introduced new taxes on the ride-sharing companies based largely off his advice. (reports Timothy Meads)
This is not an unusual sentiment. The public schools must be defended and maintained because they are a jobs program. So it is with public transit, the post office and an uncountable number of public programs and agencies. This bizarre logic is natural to its proponents but under the radar for much of the electorate -- just as public choice analysis suggests.
What else does the theory predict? These programs will survive even as the red ink (and awful rhetoric) accumulate. The California bullet train will be continue to be funded. Trump's infrastructure plan will spawn more such projects -- with considerable bi-partisan support.
Mike Munger and Russ Roberts discuss the various problems with textbook prescriptions for congestion taxes. They only lightly treat the problem of who will set the fees -- and what will they do with the revenues? That is the elephant-in-the-room highlighted by the Washington D.C. episode mentioned above.