GMU Econ alum Dominic Pino is not impressed with Sohrab Ahmari’s new book. Three slices:
There are two groups of people who would dispute Ahmari’s dystopian characterization of the American economy. The first are people who study the American economy, and the second are people who work in it.
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Ahmari pooh-poohs this pairing in U.S. labor relations, writing of the “downright depraved way it equates the employee’s ‘power’ to quit with the boss’s right to dismiss him.” But according to a July 2022 report from the Pew Research Center, 60 percent of U.S. job-quitters in the previous year saw real wage gains when they found a new job. And the U.S. job market has plenty of turnover, with 2.5 percent of workers changing employers, on average, every single month. Millions of workers regularly use the power to quit as an effective way to raise their compensation.
The U.S. labor market’s greater flexibility compared with more social-democratic European labor markets is a source of national strength. Only petrostates and tax havens have higher average incomes than the U.S., the U.S. takes less of that income from its citizens as taxes, and the U.S. has higher average income growth than Europe. Economist Niklas Engbom found in a January 2022 paper that countries with more fluid labor markets see higher life-cycle wage growth for workers. That’s because a more flexible labor market makes it easier for a worker to find the employer that most highly values his skill set. Since workers know this, they have more incentive to develop valuable skills. That virtuous cycle results in the United States’ having higher life-cycle wage growth than nearly every other country in the OECD, Engbom found.
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While Ahmari shakes his fist at the system from his nice house in Florida, most working Americans seem oblivious of the tyranny that he sees in everyday employment. Perhaps it’s false consciousness among the proletariat — or maybe Americans know their economic situations better than Ahmari does.
Gary Galles writes wisely about competition and “competition.” A slice:
The word competition is scattered throughout the antitrust laws, where it is frequently supposedly defended, while unfair or predatory competition is prohibited. The FTC recently followed that rhetorical pattern in challenging the Microsoft-Activision merger as a supposed threat to competition. And the newly released draft guidelines for the FTC and Department of Justice to follow in evaluating mergers and acquisitions include a bushel of directives about protecting competition and preventing monopoly power.
Those guidelines include that “mergers should not eliminate substantial competition between firms,” they should “not entrench or extend a dominant position,” they “should not further a trend toward concentration,” they should “not otherwise substantially lessen competition,” and that “they should not eliminate a potential entrant in a concentrated market,” among others.
As Elizabeth Nolan Brown notes, however, that set of principles (relying on inconsistent meanings of competition) “could be used to justify blocking any merger,” echoing the conclusion of Geoffrey Manne, President of the International Center for Law and Economics, that “The overbroad guidelines are clearly designed to deter merger activity as a whole, regardless of the risk posed to competition.”
The problem, however, comes when politicians shamelessly abuse the emergency label to push through non-emergency spending that would otherwise violate budget constraints. This is exactly what’s happening with President Joe Biden asking Congress to agree to $40 billion in new spending that won’t count toward the debt ceiling cap. This includes $24 billion in aid to Ukraine, along with some funds for disaster relief and border enforcement.
No matter what you think of the merits of helping Ukraine repel Russia’s invasion, one thing is for sure: The need to fund a war that started a year and a half ago is neither unforeseen nor temporary. Congress already authorized $113 billion in aid to Ukraine. If legislators believe more is needed, they should debate and allocate that money through the regular budget process. They should also decide which programs will lose funding.
Arnold Kling meditates on Michael Huemer’s mediations on “thought crimes.”
Art Carden reasonably blames ignorance, avarice, and arrogance. A slice:
Arrogance is our political beast’s third head. Arrogance comes with thinking the world is a simple place that would be easy to fix if we only had the political will to put the right people in power or make the right policies. Experts in international economic development tend toward arrogance: It is easy to see the cures for all that plagues Southeast Asia, Africa, and Latin America from a comfortable office at an American or European university.
Modern noblesse oblige demands that those of us who know better boss around the benighted fools who do not share our enlightened worldview. Maybe it is for their own good. Maybe it is because we among what Thomas Sowell called “The Anointed” are burdened with glorious purpose like Loki in the Marvel Cinematic Universe. Doesn’t everyone know that we are going to change the world? Historically, it might have been because someone was chosen by the local deity. Nowadays it might be because we are experts in The Science™, which is settled. Regardless, the world has not yet realized that we should be in charge, and they would gladly hand us our rightful scepters and crowns if they knew what was good for them.
“The political war on ride-share companies in California is relentless.”
James Pethokoukis is appropriately relentless in his criticisms of the “degrowth” movement.
John O. McGinnis reviews C.W. Goodyear’s biography of James Garfield.
Joseph Ladapo tweets: (HT Jay Bhattacharya)
What do you call re-imposing mask policies that have been proven ineffective or restarting lockdowns that are known to cause harm?
You don’t call it sanity.
These terrible policies only work with your cooperation. How about refusing to participate…
