Some Links

by Don Boudreaux on January 8, 2014

in Crony Capitalism, Hayek, Inequality, Myths and Fallacies

Alberto Mingardi, over at EconLog, reflects on Matt Zwolinski’s recent case, arguably on Hayekian grounds, for government provision of a universal “basic income” to all citizens.  Here’s Alberto’s conclusion:

And what about its unintended consequences? Hayek would have been fine with replacing the welfare state altogether with a basic income. In Europe at least, most advocates of the basic income are for adding it to the existing welfare provisions. If this happened, I suspect Hayek would not be very confortable in the position of the useful idiot (neither would Matt, for that matter).

While I have enormous respect for Matt – and worry on those rare occasions when I disagree with him – in this case I do disagree with him (and with Hayek?), in part for the reason that Alberto raises in the quoted passage here and in part for other reasons.  (One day soon I hope to spell out my reasons, perhaps in an op-ed.)

David Friedman disagrees with Matt’s Hayekian case for a guaranteed “basic income.”

Here’s Thomas Sowell at his best.  A slice (but do read the whole column):

Years ago, this column challenged anybody to quote any economist outside of an insane asylum who had ever advocated this “trickle-down” theory. Some readers said that somebody said that somebody else had advocated a “trickle-down” policy. They could never name that somebody else and quote them, though.

Mr. de Blasio is by no means the first politician to denounce this nonexistent theory. Back in 2008, presidential candidate Barack Obama attacked what he called “an economic philosophy” that “says we should give more and more to those with the most and hope that prosperity trickles down to everyone else.”

Let’s do something completely unexpected: Let’s stop and think. Why would anyone advocate that we “give” something to A in hopes that it would trickle down to B? Why in the world would any sane person not give it to B and cut out the middleman? All this is moot, however, because there was no trickle-down theory about giving something to anybody in the first place.

W. Bradford Wilcox writes about income inequality and growth.

Mark Perry, over at Carpe Diem, has some data that cast heavy doubt on the argument that more and more middle-income Americans are earning incomes that are becoming lower and lower over time.  Here’s Mark’s concluding paragraph:

On the previous [Carpe Diem] post, Ken commented that although “Many prominent people like Paul Krugman claim that the middle class has been in decline since the 1970s, that assertion is incredibly and verifiably wrong.” According to the percent distribution of household income in Table 690 from the Census Bureau, I think Ken is exactly right. Despite all of the reports on stagnating household income, decreased mobility for the middle-class, the top 1% reaping all of the benefits of income/wealth gains over time, increasing income inequality, current generations doing worse than their parents, the general decline of the middle class, etc., the Census Bureau data and the charts above tells a different story of an America with documented evidence of rising income levels for a rising share of American households.

Colossal economic ignorance and its close cousin, naiveté about government power, are never in short supply.  They appeared recently in the pages of Rolling Stone in the form of an essay – really, a torrent of ignorance and naiveté – by one Jesse A. Myerson.  Jonah Goldberg exposes some of Mr. Myerson’s absurdities.  A slice from Goldberg’s smack-down:

In the ensuing kerfuffle, Myerson, whose Twitter hashtag is “#FULLCOMMUNISM,” seemed shocked that any of his ideas sounded Soviet to his critics. Andrew McCoy, a conservative blogger, offered the specific citations for Myerson’s proposals in the Soviet constitution. I suspect this was news to Myerson, but even if not, I bet he doesn’t care. It is a permanent trope of the left that its ideas failed because we didn’t try hard enough. This time is always different.

Over at Reason.com, Shawn Regan casts light on an instance of cronyism masquerading as environmental responsibility.  (HT Frank Stephenson)

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