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Quotation of the Day…

… is from the opening paragraph (page 91) of Casey Mulligan’s speech at Stanford University to a September 2014 conference on inequality sponsored by the Hoover Institution; this speech is published in the new collection Inequality & Economic Policy: Essays in Memory of Gary Becker:

I’ll start with a two-sentence summary….  First sentence: the federal government has recently created or expanded a number of redistribution programs, and these programs have made the American economy smaller than it would have been.  Second sentence: the effects of these programs are right in line with basic economics, right in line with basic price theory, but the opposite of what the program advocates have been telling us.

Incentives matter.  Redistribution destroys rather than creates wealth.  Unseen and unintended consequences are inevitable.  These consequences are revealed by basic economics, but even too few credentialed economists (never mind the general public) understand basic economics.  Politicians win office, power, and prestige by playing on a toxic combination of people’s economic ignorance and greed to live off of the stolen fruits of other people’s labor and risk-taking – especially when the ‘other people’ are successfully demonized by power-mad politicians and economically ignorant pundits, professors, and preachers.  And politicians (with the assistance of their dupes in the media and in the academy) misrepresent the consequences of their predations. That is the all-too-common reality.