When Markets and Gov’t Fail

November 1st, 2013 at 4:36 pm

I talk a lot, as one should, about market failures.  But government failure is unfortunately, increasingly worthy of attention.  Over at the NYT Economix blog.

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5 comments in reply to "When Markets and Gov’t Fail"

  1. smith says:

    Is there any politician who would say:

    “That’s idiotic, why would we cut spending with high unemployment? You’re nuts. We had this debate in 1932, and guess what? Roosevelt won, Hoover? Not so well remembered. And during the Great Depression when the recovery slackened and debt grew, we spent more. Here [first name here] This is a book on American History, open the chapter to the Great Depression and read. When you become more familiar with basic economics and what worked in the past, then perhaps you might consider running for higher office or passing bills to help rather than hurt the economy. Meantime, it would help if you knew more than a C student taking Econ 101.”

    Not happening, even Dick Durbin and Bernie Sanders feel constrained to keep there mouths mostly shut.

  2. save_the_rustbelt says:

    FWIW, Great Lake ports have been doing overseas shipping since the opening of the St. Lawrence Seaway. It is good to see progress in Cleveland, lots of good folks there done a great disservice by corporate American, NAFTA and etc.

    (Has Obama reformed NAFTA yet? No, just 2008 hot air.)

    There is plenty of blame to go around, but the left will never discuss the possibility that the bigger federal government advocates scare the bejeesus out of business leaders,

    • Jared Bernstein says:

      I was wondering, how do they get around Niagara Falls? (Pardon typically northeastern geographical ignorance.)

  3. Perplexed says:

    Not to go all linguistic on you here Jared, but where exactly do you see this “government failure”? Oxford suggests the following 3 definitions of failure:
    1) lack of success…; 2) the omission of expected or required action…; 3) the action or state of not functioning…;

    By which definition did the government “fail”? It seems that the actual results show that the government was highly successful in almost everything in attempted:

    The government attempted and was highly successful at:
    1. disabling and undermining the regulatory structure;
    2. disabling and undermining anti-trust legislation;
    3. strengthening and lengthening patent protections and other forms of monopolies and rent production;
    4. strengthening the abilities of wealthy Americans (and organizations) to divert what was meant to be government tax revenues to themselves and their own designated beneficiaries;
    5. Conferring to and enhancing the power of those with money (including through “organizations” not even eligible to vote under the Constitution) to influence elections and actual legislation far beyond the one-person, one-vote relationship established the Constitution.
    6. Establishing and strengthening legislation that redistributes wealth to the very top while simultaneously drastically reducing the marginal tax rates on that income and thereby generating the most severe wealth inequality in the Country’s history.
    7. Disabling and undermining unions and collective bargaining rights;
    8. Using public money and the faith and credit of the U.S. to “bail out” private organizations without taking over ownership to insure that the full benefits would accrue only to the public;
    9. Selling cheap “indulgences” to the perpetrators of the most massive and costly criminal counterfeiting fraud ever conducted and allowing these perpetrators to remain in control of what are now even larger, more risky (to the public) organizations.
    10. Allowing most of the $13trillion plus damages that resulted from the counterfeiting fraud to be absorbed by the victims with no claw-backs of the gains made by the perpetrators to help offset the massive damages they caused.
    11. Not only blocking the needed stimulus but actually imposing severe austerity in the aftermath of the most severe downturn since the great depression thereby imposing the full costs of the output gap on the “losers” of the jobs lottery; and denying the country of the opportunity to massively invest in its infrastructure at one of the most opportune times in the last 70 years to do so.
    13. Maintain a “strong dollar” and unprecedented tolerance of interventions by other countries to weaken their currencies against the dollar and benefit from price discrepancies achieved thereby, regardless of their costs to U.S. producers and American workers.
    13. Establishing “national” health care legislation designed to preserve protected private financial interests wherever conflicts between those interests and public benefits arose.

    No doubt this list could be greatly expanded but it seems that every example seems to show the same results: what the government attempted to do, it was highly successful at accomplishing.

    Where exactly did the “government” try and do something and not succeed at it? Just because the “government” is no longer under the control of “We the People” as intended, doesn’t mean that its “failing” to do the will of those that are ultimately in control of it.