Richard Epstein on Income Differences

by Don Boudreaux on October 28, 2011

in Inequality, Video

This PBS interview of the indomitable Richard Epstein on income differences is superb.  Truly, remarkably superb.  It’ll repay manyfold the nine minutes you’ll spend watching it.  (HT my GMU Law colleague David Bernstein)

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Nikolai Luzhin, Eastern Promises October 28, 2011 at 6:21 am

Richard Epstein

Now there is walking, talking Code for the Cause (and the Rich and Powerful).

A few days ago this blog was blah. blah, blah about investment, its down, etc.

Richard, where is the investment that is supposed to be behind all this innovation that all the income for the rich has brought us?

Richard, how do you explain that income inequality has coincided with our Greater and Lesser Depression.

Remember, around here correlation is causation. Tariffs went up, after the Depression started, so that “prolonged” the Depression. Unions developed, increasing aggregate demand, but that “prolonged” the Depression.

IOW, you want to live on the cross of correlation, this Die on the Cross of Correlation.

Methinks1776 October 28, 2011 at 7:58 am

All I want to know is where is your lithium?

Nikolai Luzhin, Eastern Promises October 28, 2011 at 8:21 am

Methinks, where is your brain?

Methinks1776 October 28, 2011 at 8:43 am

Considering I’m responding to your idiocy this morning, I’m wondering the same thing. Happy trolling, moron.

Anotherphil October 28, 2011 at 9:16 am

Lazyson, nobody with a rectal-cranial inversion as severe as yours should ever make inquiries about the location of anyone else’s brain. Bring your own out of the dark recesses that constains only odious waste that needs to be flushed first.

SheetWise October 29, 2011 at 6:01 am

Welcome to the kinder, gentler Cafe Hayek. Would you like cream with that?

EG October 28, 2011 at 1:20 pm

“Richard, how do you explain that income inequality has coincided with our Greater and Lesser Depression.”

But haven’t you people been complaining that income inequality has been around forever? Isn’t income inequality…the main product of capitalism?

Didn’t Comrade Karl Marx say ” the rich get richer, and the poor get poorer”? He was so right…wasn’t he?

DWAnderson October 28, 2011 at 5:16 pm

FWIW, income inequality has actually declined during the recent downturn. Probably more as an effect than a cause, however.

Methinks1776 October 28, 2011 at 5:33 pm

The incomes of the top earners are much more variable.

SheetWise October 29, 2011 at 6:09 am

If magically everyone doubled their income overnight, many people would see this as a bad trend — as it would widen the gap between the rich and poor.

vikingvista October 29, 2011 at 4:40 pm

A practical way of increasing that gap is to increase the progressivity of the income tax.

SheetWise October 29, 2011 at 11:56 pm

And it’s beyond comprehension that people don’t understand that.

Nikolai Luzhin, Eastern Promises October 28, 2011 at 6:31 am

Don

Didn’t you read Tyler Cowen, The Great Stagnation: How America Ate All The Low-Hanging Fruit of Modern History,Got Sick for $3.99 on your Kindle

Richard, where, truly, is all this innovation your are talking about (those high speed trains—they are in China).

Oh, I can get a backup camera on my pickup truck

Right

Cliff October 28, 2011 at 12:55 pm

Yes, the China with no income inequality? By the way, I hear those Chinese high-speed rails are really high quality due to sourcing from local Chinese companies (not).

Ken October 28, 2011 at 1:07 pm

But those high speed rails sure do provide fast service between all those cities in which no one lives. That’s some innovative thinking there to build, not just one, not just two, but many cities in which no one wants to live.

The Chinese to build a lot of things, but how much of it is actually useful?

Using China as an example for the US to follow is laughable.

Regards,
Ken

Ken October 28, 2011 at 1:10 pm

I think I entered the above link incorrectly. Try this for a look at China’s ghost cities. If this link doesn’t work, google for Chinese ghost cities.

Regards,
Ken

HaywoodU October 28, 2011 at 5:06 pm

Reminds me of a couple of new “towns” in Florida.

JWH October 28, 2011 at 4:06 pm

As a point of fact, the Chinese readily admit they got their rail technology from Japan for the most part, some came from the French. A small amount in Shanghai came from the Germans. It was not not a purely Chinese development.

Nikolai Luzhin, Eastern Promises October 28, 2011 at 6:53 am

In the news, today:

It was approaching 2 a.m. Thursday, not long before the Asian markets would open, and the two leaders were desperately trying to nail down the last component of a complex deal to save the euro: forcing the banks to pay a greater share of Greece’s effective default.

For hours, negotiators had been trying to persuade the banks to accede to a “voluntary” 50 percent loss in the face value of their Greek bond holdings. The banks, which had already agreed to a 21 percent write-down, had dug in their heels.

They knew how badly the European leaders needed a deal, and how much financial experts feared a disorderly, involuntary default. That could set off a “credit event,” throwing world financial markets into turmoil, much as the collapse of Lehman Brothers did in the fall of 2008.

But Mrs. Merkel called the bankers’ bluff, said officials present at the discussions. Accept the 50 percent write-down, she told the bankers, or bear the consequences of default. In effect, she was willing to risk a credit event, and to place the blame for any fallout on them.

Now for all you followers of the Cause, was Merkel: (a) a tyrant, using Government to trend on the property rights (and freedom of those bond holders) or (b) a real leader in the FDR/Truman mold, using the power of government as it should be used?

You cannot have it both ways.

Methinks1776 October 28, 2011 at 8:36 am

Merkozy (the unholy alliance that is Merkel and Sarkozy) is trying to save the Euro at the expense of the Europeans. I know a deranged fool like you is fine with that. Like all useful idiots, you assume the role of government is to dominate and torture the population for the pleasure of the politicians. However, Merkozy understands it’s political poison it has to pin on someone or something else.

The banks (and other buyers of PIIGS debt) paid up for CDS to hedge their exposure to these rotten, profligate, no growth dung holes. The investors are being strong-armed into accepting a “voluntary” haircut precisely so that they can’t collect on their CDS contracts so that the CDS counterparties are spared (hmmm….I see reoccurring theme here). So, now investors will not only lose on their investment, but they will not be able to collect on the hedge they paid for. That meanstheir investors get hosed. But, who cares about that, right? There are no consequences, no fallout if that happens, right?

CDS for sovereign debt allowed the creditors to accept lower interest rates. It doesn’t take a genius to figure out that Merkozy’s willingness to abrogate contracts will lead to higher borrowing rates across the Eurozone and may very possibly have implications for CDS contracts on all debt. Yes, using government power as it “should be used”, idiot.

Merkozy is playing chicken with the ECB. There’s no money to pay creditors. The PIIGS are in default or soon to be in default (depending on the PIG). There are only three ways to deal with it. Tell the creditors they can’t pay (straight forward, no bullshit default) and allow every Eurozone country’s borrowing rate to explode, tax the hell out of the Germans, or print Euros and repay creditors with devalued currency.

It’s political poison to raise tax rates – particularly since the taxes are going to pay for the mistakes of some other European country. So, Merkozy wants the ECB to print. The ECB doesn’t want to print. This latest expansion of the EFSF is just an attempt to fool credit markets and their own populations. There will be no money to fund the EFSF expansion and the ECB will be forced to monetize the debt. So, Merkozy will get its highly unpopular tax – just in a more surreptitious way – inflation. Oh, glory.

Yes, I can see why destroying the capital markets and the lives of millions of people to hold on to a stupid political idea (the Euro) is so appealing to a foot soldier of the drone army. One who apparently missed that Sarkozy is once again committing to cutting further the size of the unsustanably huge French government (where something like 50% of the workforce are government functionaries). That ain’t nothin’ like FDR, fool.

Economiser October 28, 2011 at 2:02 pm

Silly question re: CDSs:

Shouldn’t future CDSs expand their trigger event to include this sort of “voluntary” write-down? Otherwise who would want to buy a CDS that can be effectively aborgated by government strong-arming?

Methinks1776 October 28, 2011 at 4:13 pm

Well, sure (it’ll be up to ISDA to decide).

However, if there are ways and a willingness to get around this trigger (at an egregious 50% haircut!), why would anyone believe another trigger will be respected?

IMO, so long as government is willing to abrogate private contracts, any trigger (and therefore the CDS contracts on Sovereign debt and crony companies) are potentially useless.

In the mean time, the moral hazard is yielding predictable results. It looks like Ireland is taking its first step toward asking for a similar haircut. This is getting interestinger and interestinger.

Methinks1776 October 28, 2011 at 4:27 pm

That is written by crony companies – which is so tautological, I really should have left it out. Apologies.

Randy October 28, 2011 at 6:56 am

Point by point, the presentation is excellent. But the point that most grabbed my attention was the 18% growth in wealth for the poorest fifth of the population during the 27 year period. If I’m figuring this right, that is a .66% per year growth rate for people who arguably produce little if anything of value. If there is a complaint associated with this, it can only be attributed to irrational expectations.

Economic Freedom October 28, 2011 at 12:23 pm

You are an insulting dimwit to suggest that poor people produce “little if anything of value.” The food on your plate may have been picked by a low-wage farm-worker. I could wish that you choke on your food, but that wouldn’t be charitable of me.

EG October 28, 2011 at 1:22 pm

Thats not what he means. What he means, I think rightfully, is that the people who are in the bottom “fifth”, which is how everyone wants to do these silly comparisons…is typically unemployed, unemployable, and unproductive. So to expect a 0.66% growth rate per year from the unemployed-unemployable people…is probably too high! Income is related to productivity.

Ken October 28, 2011 at 1:24 pm

EF,

What makes you think farmers are low wage? The average American farmer earns twice as much income as the average American. Very little food, if any is provided by low wage farmers.

Wages are determined by the value of the work you do. Earning a low wage is indicative of either not working very much or doing low value work.

Regards,
Ken

Randy October 28, 2011 at 1:57 pm

EF,
First, I grew up in Iowa. I’ve done field work. I have more respect for field workers than I do for any politician. But if I had chosen to apply myself no more than what was necessary to be able to pull sunflowers, pick up rocks, or bale hay, then I would have no reason to expect that my standard of living would improve at all. No reason.

SheetWise October 29, 2011 at 6:44 am

“I would have no reason to expect that my standard of living would improve at all. No reason.”

Other than participating in a relatively free market economy.

Randy October 29, 2011 at 8:11 am

Exactly – and thus the 18% growth.

House of Cards & Economic Freedom October 28, 2011 at 2:33 pm

You believe that picking crops is a high-value activity?

You’re a dumbass. Try reading something about economics — on a basic, 101-level — before forming an opinion on things you obviously don’t understand. You’re still stuck-on-stupid with the old “water/diamonds” paradox. (“You think that those poor workers who carry water aren’t producing anything of value??? Water is so much more valuable than diamonds! It’s just capitalist unfairness and exploitation that diamond merchants get lots of money and water carriers get little! Water-carriers, and their buddies, the crop-pickers, might be poor, but they add lots and lots and lots of value to an economy! Only elitist snobbery could deny such a thing!!”) — that paradox was solved around 1870. Try playing a little catch-up with the rest of us before posting something stupid.

Methinks1776 October 28, 2011 at 4:34 pm

Give ‘em a break. Picking crops is higher value than crapping and sleeping in a park to demand someone else provide you with the lifestyle to which you would like to become accustomed. I’m pretty sure (but not certain) their lifestyle doesn’t include a roofless space where they eat and sleep in close proximity to where they defecate.

SheetWise October 29, 2011 at 6:46 am

“I’m pretty sure (but not certain) their lifestyle doesn’t include a roofless space where they eat and sleep in close proximity to where they defecate.”

It seems that there is a relatively crude summary of your sentiments that can be easily translated into all known languages.

House of Cards & Economic Freedom October 28, 2011 at 3:09 pm

Additionally, as both Don and Russ have shown many times, the individuals comprising the lowest quintile in one year have moved up to a middle quintile in later years; so while the category called “lowest fifth” might appear to have undergone little improvement, the individuals in that category — were they only followed as individuals by the statisticians — have seen great improvement.

The left, however, is keen on maintaining the myth that there’s a static group of individuals called “the poor”, who — as the saying goes — “will always be among us.” The maintenance of this myth is necessary for the left to implement its policies of redistribution.

J. W. October 28, 2011 at 3:56 pm

The left, however, is keen on maintaining the myth that there’s a static group of individuals called “the poor”, who — as the saying goes — “will always be among us.” The maintenance of this myth is necessary for the left to implement its policies of redistribution.

I’m going through Sowell’s A Conflict of Visions right now and came across an interesting bit where he explains that even if each person shared the same lifetime of making, spending, and saving, one could still use statistics to show disparities in income and wealth. That is, if (for example) everyone started making an equal amount of money at age 20 and received equal raises in pay until retirement at age 70, until which time they had been saving an equal percentage of their income, then statistics would still reflect a disparity in income (with those at 60 making more than those at 50, who would be making more than those at 20, who would be making more than those at 70 who had retired) as well as a disparity in wealth (with those at 70 having saved more than those at 60, who would have saved more than those at 20 who had just begun work).

In short, even in a circumstance of perfect equality of income and wealth as considered over the course of equal life spans, one could still use statistics to divide people up into “rich” and “poor.”

Economiser October 28, 2011 at 7:25 pm

Exactly so. Just look at your Social Security annual wage summary – if each of those years represented a distinct person you would have substantial income inequality.

SheetWise October 29, 2011 at 7:03 am

“Social Security annual wage summary …”

As I get older I notice I’m receiving them more frequently. They’re remarkably good at accounting for money they don’t have.

Randy October 29, 2011 at 8:14 am

The administrators have been giving themselves on average 8% per year raises ever since the program began, so one would think they’d be getting good at something.

Methinks1776 October 29, 2011 at 1:18 pm

Makes you feel rich, doesn’t it, Sheetwise? Like an investor in a Ponzi scheme getting his statements.

Thomas Boyle October 28, 2011 at 8:02 am

He makes many familiar points, but does somewhat lack the passion and moral positioning of Friedman. Did Friedman ever address this question of why growth was higher at a time when marginal tax rates were very high? I find the answer given here very un-compelling: sure, there may have been lots of loopholes, but loopholes tend to have a second-order effect on marginal rates. In the populous coastal states, the top rates are now close to 50%; a home mortgage deduction will reduce the total tax bill, but will not change the 50% marginal rate on incremental effort/investment.

Anotherphil October 28, 2011 at 9:19 am

Did Friedman ever address this question of why growth was higher at a time when marginal tax rates were very high?

Interestingly, growth rates also corresponded with higher birthrates.

I doubt you’ll ever hear the left insisting on higher birthrates.

Dan H October 28, 2011 at 9:29 am

And the fact that the rest of the world’s manufacturing base was obliterated by something called WWII. Pretty much the only manufacturing base that was 100% in-tact was the US.

Also, the population thing, like Phil said. I can tell you with 100% certitude that if we got rid of the minimum wage, did away with the EPA, and opened the borders that our economy would double in a matter if decades, maybe even sooner.

EG October 28, 2011 at 1:42 pm

I’ll give you another answer. When marginal top rates were higher in the past, they affected a smaller % of people than they do today. not to say that they were “less harmful” than today…but they were harmful to less people then.

Not only were there more loopholes and shelter opportunities then, but also fewer people had to use them.

It just a very silly point the Leftists make.

Nikolai Luzhin, Eastern Promises October 28, 2011 at 8:35 am

Did Friedman ever address this question of why growth was higher at a time when marginal tax rates were very high?

The facts never bothered Friedman

Methinks1776 October 28, 2011 at 8:42 am

Because nobody ever paid those rates. Everything from credit card debt to your kid’s chew toy was tax deductible. There were a zillion loopholes.

The effective tax rate (which translates into “what was actually paid”) was much lower than the posted tax rate.

The facts never seem to drill their way into your skull. The only thing you are capable of fully embracing is the love of violence of the crown against the peasants.

Anotherphil October 28, 2011 at 9:19 am

The facts never bothered Friedman.

How would you know?

Eric October 28, 2011 at 8:48 am

“Did Friedman ever address this question of why growth was higher at a time when marginal tax rates were very high? I find the answer given here very un-compelling”

I tend to agree with this point. When Epstein was asked that question, I thought it was in the context of the higher rate Clinton years but he referred back to the 50′s. I think Epstein is correct, all things being equal, but that is a hard thing to explain quickly based on historical examples.

Randy October 28, 2011 at 9:17 am

In my opinion, growth was high in the 90s for two primary reasons; Exhubarance at the end of the cold war, and an enormous new industry generated around the PC.

Gray Brendle October 28, 2011 at 10:24 am

The 90′s growth rate was also a result of the Y2K bubble. I am in full commission sales, and it took me 7 years and significantly more effort to exceed my 1998 & 1999 earnings. It was truly amazing.

EG October 28, 2011 at 1:44 pm

Its very easy to explain, besides the point Epstein made (which is very right). Even during the Clinton years, the higher rates applied to higher income levels than they do today. So less people were technically included in them.

Krishnan October 28, 2011 at 9:50 am

Please stop feeding the trolls … the noise they create drowns out so much signal – yes, we cannot stop them from doing what they do, but we can stop responding to them – Take a look at how they respond, what they respond to – please do stop giving them a sense of how important they are – they feed on that … there is simply nothing they will hear or read about that will change what they think

Rick Hull October 28, 2011 at 11:30 am

Yes. Stop feeding them. It’s the only way. If you are ever tempted to label someone a troll, even merely in your head, please resist the urge to hit the Submit button.

House of Cards & Economic Freedom October 28, 2011 at 2:41 pm

Creating this sort of noise in discourse is one of Saul Alinsky’s “Rules for Radicals.”

Methinks1776 October 28, 2011 at 4:19 pm

I was hammered with communist/socialist propaganda from birth and i TuRd ouT gRatE.

You become immune to it. Especially when you only skim 10% of what they vomit up. Let ‘em bang the pots and pans. We’re tough.

Steve October 28, 2011 at 10:10 am

Don,

It has been a while since I checked out the comments section of one of your posts. If the comments above are any indication, it would appear that the level of discourse has deteriorated. In any event, I agree that Epstein’s arguments are superb. I have never understood why income inequality, in and of itself, should be demonized, as long as people are free to pursue their own self-interest and achieve income mobility through their efforts.

Dan H October 28, 2011 at 10:16 am

For better or worse, The Cafe has gained some attention from the Professional Lefty Blog-trolls.

Krishnan October 28, 2011 at 11:53 am

I recall a time when almost all usenet groups were unmoderated … the comments were always thoughtful and helpful – yes, there are still newsgroups that remain pristine, but that number is shrinking fast … today, the targets are blogs (like this) – a few can distort the purpose rather quickly (which is their goal) … it is unfortunate, but that is the reality -

muirgeo October 28, 2011 at 10:17 am

That was indeed a great interview. An obvious self-skewering of the libertarian position. Epstein walks away with an arrow through his head declaring victory. The interviewer subtly repeatedly consistently asked the right questions and allow the foolish professor to walk into walls he can not see and lay bare what a libertarians believes stepping on one bear trap after another. He’s a clear supporter of crony capitalism and a society of privilege. He would have been a supporter of King George in 1776.
One classic part is when he’s talking about how bad high marginal tax rates are and simultaneously brings up Steve Jobs who started Apple when the marginal rate was an “oppressive” 70%.

Sam Grove October 28, 2011 at 12:20 pm

Bought your mirror from the fun house?

Ken October 28, 2011 at 1:26 pm

HAHAHAHAHAHAHAHAHAHAHAHAHA!!!

Seth October 28, 2011 at 1:30 pm

‘One classic part is when he’s talking about how bad high marginal tax rates are and simultaneously brings up Steve Jobs who started Apple when the marginal rate was an “oppressive” 70%.’

So you missed his point that they had tax shelters?

Ken October 28, 2011 at 1:32 pm

Seth,

muirgeo can’t even read a calendar. He doesn’t seem to understand that 1986 come after the 1970′s.

Regards,
Ken

muirgeo October 28, 2011 at 3:19 pm

No I didn’t miss it. It is a lie because when Bill Gates and Steve Jobs were developing Microsoft and Apple the combined effective rates of the highest earners and corporations were much higher.

Dan H October 28, 2011 at 3:34 pm

So higher effective tax rates lead to more innovation? You’re so silly, good doctor!

http://www.cbsnews.com/8301-503544_162-20123670-503544/steve-jobs-obamas-focus-on-excuses-infuriated-him/

muirgeo October 29, 2011 at 2:15 am

Epstein claimed it negatively effects innovation… apparently not for Jobs and Gates and many others when are economy was humming along far better then now.

Methinks1776 October 28, 2011 at 3:44 pm

So, lemme get this straight, Muirdiot.

Even an idiot as big asYou won’t work for $0.30 on the $1.00, but you think everyone else will?

Ha ha ha ha ha HA!!

muirgeo October 29, 2011 at 2:21 am

My father did back in the day. Instead of taking excess profits as salary he re-invested the money into the company added more employees and grew a multi-million dollar business back in the 60′s and 70′s.

Overland Aviation Flight Safety Equipment… he performed real work making real things actually being productive for his earnings. Later he sold the business and became an honest banker making honest loans and did not gamble with other peoples money.

Methinks1776 October 29, 2011 at 10:52 am

Ask your dad what his effective tax rate was.

brotio October 29, 2011 at 6:11 pm

My father did back in the day

You can, too! But it might interfere with those CO2-spewing vacations to exotic locales across the globe. Send your check to:

Gifts to the United States
U.S. Department of the Treasury
Credit Accounting Branch
3700 East-West Highway, Room 622D
Hyattsville, MD 20782

HaywoodU October 28, 2011 at 5:11 pm

F’ economics. Where are those accounting credits?

Methinks1776 October 28, 2011 at 10:34 am

Don,

I played the interview for our group today and we all thought it was breathtaking. There’s really no other way to put it. So wonderful.

Thank you so much for posting it on your blog.

Don Boudreaux October 28, 2011 at 10:41 am

Thanks, Methinks.

Richard is a national treasure – despite the fact that the ‘distribution’ of brain-power has made him one of the smartest people in the world and, thus, his existence increases measured “intelligence inequality.” ;-)

(But, quite seriously, his unusual stock and flow of intelligence not only has not reduced other people’s intelligence; it has INCREASED it.

Dan H October 28, 2011 at 10:42 am

^LIKE! :)

dullgeek October 28, 2011 at 2:53 pm

+1 (for those of us using el-goog’s social network)

mlewis October 28, 2011 at 4:48 pm

Indeed, thanks for posting the interview. I’m so happy that Epstein has become much more of a public intellectual these days. He was always brilliant on Hoover’s Uncommon Knowledge series, but there he’s preaching to the choir. It’s much more entertaining to see him eviscerate Democratic bromides for a much broader audience.

Folks who want to see more in this vein should watch his recent performance at an NYU-hosted debate on the American Jobs Act. The left-leaning economists arguing for the Act are by no means idiots, but by the end of the debate Mark Zandi is reduced to mumbling that Epstein is right on every essential point.

It’s also worth noting Epstein’s geniality and humor. The audience at the debate frequently booed and hissed at his (entirely sensible) comments about labor market deregulation and liberalization, yet he took it all in stride (after one particularly loud boo he smiled and said “Now that’s an intelligent argument!”) Since Friedman, have we libertarians had such a winning combination of brilliance and good nature in an advocate of our views?

Link to debate:
http://intelligencesquaredus.org/index.php/past-debates/congress-should-approve-obamas-jobs-plan/

House of Cards & Economic Freedom October 30, 2011 at 7:04 pm

Looks like an interesting debate, but I wish it weren’t on Vimeo. Vimeo takes forever to buffer and it doesn’t allow shuttling ahead to more interesting parts of a video (such as the part where Epstein speaks).

House of Cards & Economic Freedom October 28, 2011 at 7:39 pm

MiLady1776: I also posted a video lecture by Epstein a few weeks ago on the topic of intellectual property. Hope everyone had a chance to see it.

Methinks1776 October 28, 2011 at 9:31 pm

I missed it. Dammit. Mr. Methinks and I just finished watching the debate mlewis posted the link to (thank you, mlewis). Apparently, they were conducting it in a pasture because there was a lot of mooing.

House of Cards & Economic Freedom October 28, 2011 at 11:28 pm

Here’s the link again:

http://newmedia.ufm.edu/gsm/index.php?title=Epsteinintellectualproperty

Richard Epstein at Universidad Francisco Marroquin (Guatamala)

“Intellectual Property for the Technological Age”

Methinks1776 October 29, 2011 at 10:53 am

Thank you!

House of Cards & Economic Freedom October 30, 2011 at 5:17 pm

And for a modest encore, here’s Epstein at NYU debating some annoying yenta from the far leftist “Center for American Progress” on Obamacare. Among other things, he mentions the important legal issue of the McCarren-Ferguson act, which cartelized insurance providers in each individual state, making it impossible for someone in Oregon, e.g., to purchase insurance from a provider in Florida. Just one of the regulations that reduces supply and increases prices. The debate is from the spring of 2009.

http://www.youtube.com/watch?v=vIfsGL_2Zo8&feature=relmfu

muirgeo October 29, 2011 at 2:22 am

“….we all thought it was breathtaking. ”

Freaks! “breathtaking”…JHC….LOL

John McGinnis October 28, 2011 at 10:52 am

Epstein does err in the attribution of the quotation, “You cannot make a poor man rich by making a rich man poor.” It was not Lincoln, but William Boetker.

Sam Grove October 28, 2011 at 12:21 pm

Possibly Lincoln quoted Boetker?

tms October 28, 2011 at 1:38 pm
Economic Freedom October 30, 2011 at 4:57 pm

Possibly Lincoln quoted Boetker?

I doubt it. Lincoln died in 1865; Boetker was born in 1873.

See: http://en.wikipedia.org/wiki/William_J._H._Boetcker

Boetker was a number of maxims that he called “The Ten Cannots”; to wit:

You cannot bring about prosperity by discouraging thrift.

You cannot strengthen the weak by weakening the strong.

You cannot help little men by tearing down big men.

You cannot lift the wage earner by pulling down the wage payer.

You cannot help the poor by destroying the rich.

You cannot establish sound security on borrowed money.

You cannot further the brotherhood of man by inciting class hatred.

You cannot keep out of trouble by spending more than you earn.

You cannot build character and courage by destroying men’s initiative and independence.

You cannot help men permanently by doing for them what they can and should do for themselves.

He also lists “seven national crimes” committed by individuals:

I don’t think.

I don’t know.

I don’t care.

I am too busy.

I leave well enough alone.

I have no time to read and find out.

I am not interested.

That pretty much describes everyone on the left, especially regarding their attitude toward the subject of economics.

Krishnan October 28, 2011 at 2:25 pm

What today’s liberals (and class warriors) seek is a) to make the rich man poorer so the poor man feels richer, by comparison and b) to do their best to give the rich man misery which will reduce the distance between the rich and the poor.

It IS about redistribution – take away from the rich what they have and give them what they do not have (more misery) – today’s liberals cannot stand people who are happy with what they have and can keep

J Cortez October 28, 2011 at 10:52 am

That interview was awesome. Thanks for linking to it.

Brian Donohue October 28, 2011 at 10:53 am

Don’t buy the anti-inheritance tax idea. If you gotta have taxes, this seems like far and away the best one.

Vagabundus October 28, 2011 at 12:43 pm

Why should death be a taxable event?

Brad Petersen October 28, 2011 at 1:04 pm

They already paid taxes on the money they accumulated, why on earth should it be taxed again? Worse yet, such taxes reward those who squander their money and punishes those who save and invest?

Ken October 28, 2011 at 1:29 pm

Brian,

In the “Some Links” posted earlier by done, Don provides a link to a video detailing exactly why the death tax is a stupid idea. In no way could this tax be described as “far and away the best one”.

Regards,
Ken

EG October 28, 2011 at 1:45 pm

Its probably the most harmful tax you can have.

muirgeo October 29, 2011 at 2:25 am

Yeah especially for Kings and Queens….

EG October 30, 2011 at 1:12 pm

I suspect that before you die, in the event that the good ol’ government hasn’t instituted a 100% inheritance tax…that you will be SURE to give 100% of your money to the government, voluntarily, and not leave any to your kids (if you have, or will have any).

You will do that…won’t you? You’re not a king, or a queen…so you not passing on any wealth to your children, should be absolutely harmless and perfectly beneficial, to your children and society.

Right? Oh never mind. Why am I arguing with you?

Anotherphil October 28, 2011 at 4:46 pm

Don’t buy the anti-inheritance tax idea. If you gotta have taxes, this seems like far and away the best one.

Actually, there is no “anti-inheritance” tax idea. The federal tax is an ESTATE tax. If you want to know the difference, look it up. I’m only pointing it out to indicate your indifference to it is based partially on ignorance.

House of Cards & Economic Freedom October 30, 2011 at 5:44 pm

Don’t buy the anti-inheritance tax idea. If you gotta have taxes, this seems like far and away the best one.

The inheritance tax encourages “conspicuous consumption” on the part of the wealthy: they can’t take their wealth with them when they die; they can’t bequeath it to their heirs. So instead of investing their wealth for the long-term — which is what the wealthy normally do when building up an estate — the inheritance tax incentivizes them to spend it on more consumption goods that can be enjoyed immediately: more summer homes; more cars; more parties; more vacations; more yachts; etc.

We don’t understand why you think that’s a better idea than more investment.

Greg Webb October 28, 2011 at 11:14 am

Don, thank you for posting the interview with Richard Epstein! He is very well spoken and makes clear and convincing arguments as to why income inequality, a natural occurrence in societies with greater individual liberty, benefits everyone. His explanations clarify why the poor in the United States have homes, cars, television sets, cable or satellite TV, mobile telephones, etc. while the poor in centrally planned economies live in squalor without the luxuries that Americans take for granted.

Sam Grove October 28, 2011 at 12:23 pm

If you gotta have taxes, then the best way would be to have people vote on government expenditures knowing the full cost to themselves of each choice they make.

Greg Webb October 28, 2011 at 1:32 pm

Sam, I think taxes ought to be no more than necessary for government to provide legitimate services. For the federal government, this means that it may not assess taxes that exceed those reasonably necessary to carry out only those activities expressly authorized and enumerated in the Constitution.

Sam Grove October 29, 2011 at 12:20 am

Looks like I clicked the wrong “reply” for that remark…belongs upthread.

Vagabundus October 28, 2011 at 12:43 pm

This guy has never lost a argument, even with himself. There is no more articulate defender of liberty.

Manfred October 28, 2011 at 12:47 pm

Does anybody know if Epstein (or anybody else for that matter) has writings with arguments along the lines Epstein espoused in the clip? Thanks.
I loved that clip. One of the best I’ve seen.

Chucklehead October 28, 2011 at 2:13 pm
Chucklehead October 28, 2011 at 2:55 pm
Manfred October 29, 2011 at 11:06 am

Thanks very much!

Economic Freedom October 28, 2011 at 12:47 pm

My computer monitor started to emit black smoke when I was listening to Epstein’s dangerous reactionary broken-record of foul propaganda. Perhaps it is due to Halloween, but I think my computer objects to being misused that way. We should all object to being misused that way. Epstein apparently has no facts only opinions. He’s a lawyer out of his league discussing political economy. He tows the pro-rich librarian party line. Me and My computer can’t stomach him. Bad man.

Bill October 28, 2011 at 1:17 pm

Your choice of alias strikes me as irony.

Randy October 28, 2011 at 2:22 pm

No, it is totally in line with totalitarian propaganda. Its Newspeak.

House of Cards & Economic Freedom October 28, 2011 at 7:41 pm

It’s Alinskyite Newspeak. The political cadre officers who act as his handlers insisted that he use it.

Miles Stevenson October 28, 2011 at 1:31 pm

“He tows the pro-rich librarian party line.”

As opposed to what? The pro-poverty line?

Ken October 28, 2011 at 1:33 pm

How many librarians are “pro-rich”? Aren’t they busy organizing and keeping track of books?

Regards,
Ken

Economiser October 28, 2011 at 1:51 pm

Must be librarians in well-to-do libraries.

Chucklehead October 28, 2011 at 2:08 pm

The computer was trying to tell you that a new Pope has yet to be chosen. Epstien is a law professor, but he is well versed in political economy. He is never out of his league, but there is no other in his league.

EG October 28, 2011 at 2:25 pm

Epstein is brilliant, and he’s even more interesting in his writing than in his speeches.

I wish “libertarians” would find someone…only half as intelligent…as Epstein to run as a candidate for president, instead of that one guy who I won’t mention his name. I wish.

dullgeek October 28, 2011 at 2:51 pm

I’ve listened to Epstein several times on econtalk. It’s good to finally put a face to the voice. Honestly, my favorite game when listening to him, is see how long he can talk w/out pause. Ignore the fact that it’s all completely cogent and rational. It’s impressive how long he can go just producing words without requiring some sort of pause every so often. Add to it that what he’s saying is brilliant, and I thoroughly enjoy when he’s on econtalk. Although I have to stop & rewind frequently to make sure I heard and understood what he said.

Brad Hutchings October 28, 2011 at 3:01 pm

Epstein would win a rap battle against Keynes, Hayek, or Eminem for that matter. Libertarians will never win on brevity, but we could win on sheer force of fitting complicated explanations into short time periods like Epstein.

EG October 30, 2011 at 1:07 pm

There’s very very very few “libertarians” who are as intelligent, coherent, and consistent as Epstein, or Friedman, or the likes. Not today anyway. Today we get…Ron Paul and Gary Johnson, and Sotssel (dear God!).

But than again, Epstein, Friedman and the likes, are classical liberals, not “libertarians” of the Big-L persuasion.

House of Cards & Economic Freedom October 28, 2011 at 3:01 pm

Excellent interview with Richard Epstein.

I love how Epstein is pigeon-holed at the very end when the announcer says “And that was libertarian law professor, Richard Epstein.” How come the announcer didn’t also say “And that was left-wing interviewer Paul Solomon”?

Oh, that’s right, I forgot. There is NO leftist bias in the mainstream media. To think so (not to mention pointing it out) is just right-wing propaganda.

MWG October 28, 2011 at 3:33 pm

You were correct professor. The video did not disappoint.

James Strong October 28, 2011 at 4:30 pm

I’m amazed at his incredibly fast mind and eloquence. He never misses a beat, instantly answers the interviewer’s questions without having to pause and says everything with almost perfect english.

Vance Armor October 30, 2011 at 1:29 pm

Here’s an idea that I’d like Don to address. I believe all Hayekians and even most libertarians would support it. I call it the Millionaire Moochers’ Tax. Impose a forty percent surtax on any individual or business entity that reports more than one million dollars in gross total income in the reporting year IF AND ONLY IF such individual or business entity receives more than one hundred dollars in the reporting year from any federal, state, municipal or foreign governmental source.

House of Cards & Economic Freedom October 30, 2011 at 8:37 pm

http://www.safehaven.com/article/23113/in-defense-of-the-1

Peter Schiff interviews some the Occupy Wall Street demonstrators.

Last week, I spent the afternoon visiting the Occupy Wall Street demonstrations in lower Manhattan. I brought a film crew and a sign that said “I Am The 1%, Let’s Talk.” The purpose was to understand what was motivating these protesters and try to educate them about what caused the financial crisis. I went down there with the feeling that much of their anger was justified, but broadly misdirected.

Indeed, there were plenty of heated discussions. I did little more than ask how much of my earnings I should be allowed to keep. In return, I was called an idiot, a fool, heartless, and selfish. But when we started talking about the issues, it seemed like the protesters fell into two categories: those who generally understood and agreed that Washington caused this mess, and those who could only recite Marxist talking points. It was the latter who usually resorted to calling names once I pointed out the hypocrisy of their positions. They might shout, “the banks have taken over the regulatory agencies, so we need more regulations!” Obviously, this is paradoxical. If they’re blaming government for causing this problem, why would they suggest more government as the solution?

See link above for rest of article and video of Schiff’s interview.

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