Yglesias says that TARP exposed the myth of “the Natural Free Market” I guess the few short years I’ve been in the tower have already messed me up because I didn’t even know this myth was out there.
Who doesn’t defend at least a night watchmen state? Are there some people really pushing free banking? I thought Murray Rothbard died like 15 years ago.
The rest below the fold
7 comments
Comments feed for this article
Friday ~ September 17th, 2010 at 2:13 pm
Wonks Anonymous
Scott Sumner and other like-minded economists favor free-banking. What kind of track record does the federal reserve have? Great depression, stagflation, great recession. Canada without a central bank did better, and the closest thing to free-banking (Scotland) also seems to have worked out fairly well. That’s distinct from Rothbard’s 100%-reserves, “warehousing” position.
Friday ~ September 17th, 2010 at 2:41 pm
jazzbumpa
Most of your slides are topic and sub-topic headings. It’s not obvious to a poor schlub like me what the narrative would be.
I’ll say this, re: what Laffer scribbled on Dick Cheney’s cocktail napkin -
There is no way to know, from Laffer’s hypothesis, where the max of the curve is. And tax policy effects many other things besides direct Gov’t revinues – wealth distribution, quite prominently, I believe.
Mike Kimmel at Angry Bear has given this some thought, as have
I, actually. Don’t have anything specific at my finger-tips to support this, but I think the results in the U.S suggest that the optimum top personal tax rate is no less than 60 to 70%. Certainly, we are far below that, now, despite what they might think in certain segments of the population.
http://jazzbumpa.blogspot.com/2010/09/what-hell-friday-broadcasting-stupidity.html
I’ll say a reason to tax is to redistribute wealth from the haves to the have-nots. And setting all altruism aside, I say this because it makes for a more robust economy, and a more stable, better functioning society.
Ditto regulation, which has been systematically undone since Reagan.
And I’ll mention again that Reaganomics started the slow slide into economic oblivion. Not only GDP growth, but very economic measure you can think of has been sliding since the 80′s. Untill Bush threw us off the cliff.
Lo siento,
JzB
Friday ~ September 17th, 2010 at 3:00 pm
Karl Smith
Jazz
I don’t usually put up my class slides because most of them are topics the majority of the information comes from my speaking which of course is more difficult to distribute.
However, I thought it interesting because I know Yglesias being a philosophy major will get most of the references.
Re: Laffer – I haven’t seen Kimmel’s analysis but it would concord with my basic reading of the facts. Supply seemed to straight up work when Kennedy dropped the tax rate from 90% to 70%. It seemed to sort of kinda maybe work when Reagen dropped it from 70% -> 50%.
However, if definately did not work when Bush dropped it from 39.6% -> 35%
The Second Reagen “Tax Cut” is harder to analyze because it closed so many loopholes that’s its not really clear if taxes on top earners went down or up. For sure the statutory rate went down but I don’t know about th effective rate.
Friday ~ September 17th, 2010 at 5:43 pm
jazzbumpa
The funny thing about the Kennedy tax rate drop was he said that, rich as he was, he didn’t pay the rate, and didn’t know of anyone who did.
I would imagine closing loop-holes is a big deal.
Cheers!
JzB
Friday ~ September 17th, 2010 at 5:58 pm
jazzbumpa
Laffer analysis also needs to be informed by the number of and step size between brackets.
My belief is that there are far too few brackets, and the upper bracket marginal rates are far too low. Again, setting aside any issue of altruism or fairness, the kind of wealth concentration we have now – echoing the 20′s, simply makes for economic disruption and an unstable society.
JzB
Friday ~ September 17th, 2010 at 8:05 pm
jazzbumpa
Back on topic:
“Natural the Free Market” I guess the few short years I’ve been in the tower have already messed me up because I didn’t even know this myth was out there.
Seriously? Drs. Paul, the greater and lesser, the Cato Institute, The American Heritage Society, Club for Growth, Cafe Hayek, Elliott Wave International, the Editorial Page of the Wall Street Journal . . .
Do you think adherents to Libertarian dogma have gone extinct, or am I misunderstanding something?
Cheers!
JzB
Monday ~ September 20th, 2010 at 9:58 am
Bosola
Can I just say that’s a hell of a nice deck? I’d enjoy seeing future lectures. Actually, I’d enjoy seeing the lectures themselves, not just the notes.
One quibble–examining the 1981 tax cuts just in terms of the marginal rates may not give the best picture. The cuts were, after all, only half of a “grand bargain” in which the tax code would be simplified and purged of countless loopholes (sounds crazy today, but it was the idea at the time). I don’t really know if the right data are available, but what you’d really want to look at are the _effective_ tax rates paid by people at various income levels before and after the change in law. This will reflect a much less dramatic reduction, and, frankly, argue against the “Laffer curve” interpretation all the more forcefully.