David Henderson isn’t impressed with Brad DeLong’s case for industrial policy. A slice:
What is neoliberalism and who advocated it? DeLong never tells us. He doesn’t name even one neoliberal economist. (I know only one economist who self-identifies as a neoliberal: my co-blogger Scott Sumner.) DeLong seems to have in mind people who call or called themselves classical liberals, economic conservatives, and libertarians. A number of us in those days shared most of those views, although many of us disagreed with DeLong about whether shrinking the state and deregulating would lead to higher economic inequality. I never heard one of them state, and I never stated, that markets would always deliver better outcomes than government programs could. Usually? Yes. Almost always? Probably. But always? That case is much harder to make, which may explain why none of us tried to make it.
Also, if the consensus is that this approach failed spectacularly, it shouldn’t be hard to point to evidence both of the failure and of the consensus. DeLong doesn’t even try. Does he think airline deregulation, which brought down airfares, trucking and railroad deregulation, which brought down shipping rates and revived the railroad industry, failed? Or how about getting rid of price controls on oil, gasoline, and natural gas in the 1980s, measures that ended shortages and revived America’s energy industries? DeLong doesn’t address any of this.
Joel Kotkin and Michael Toth report on businesses fleeing California. A slice:
California’s climate policies, while largely irrelevant for global emissions, have chased out large employers like Chevron. A recent report from the California Air Resources Board projects that these policies are directing billions in subsidies to “clean” tech firms whose employees are disproportionately upper-income earners. This is what Holland & Knight’s Jennifer Hernandez calls the “Green Jim Crow.” California’s climate policies drive up the cost of housing, food and electricity while destroying thousands of energy-sector jobs held primarily by black and Latino workers.
Ms. Harris, who embraced California’s climate policies as attorney general and a senator, worked to limit building on the suburban fringe, one reason California now has the nation’s second lowest homeownership rate. A recent study by Knock.com found the median family in San Jose or San Francisco would need 125 years to save the money necessary to make the down payment on a median-priced home; in Atlanta or Houston (where Chevron’s new headquarters is) the figure is 12 years. Not one unionized construction worker can afford to buy a median-priced home in any coastal California county, according to a recent study by economist John Husing.
Speaking of California, Jack Nicastro reports on more of that state-government’s nannying.
Jim Dorn’s letter in Thursday’s Wall Street Journal is excellent:
Your editorial is correct in arguing that Democrats twist the word “freedom” to mean something the Framers of the U.S. Constitution never intended. Namely, the use of government to achieve social or distributive justice by directing scarce resources to political ends satisfying interest groups, rather than to secure the natural rights of each individual.
As James Madison, the chief architect of the Constitution, wrote in 1792: “That is not a just government, nor is property secure under it, where the property which a man has in his personal safety and personal liberty, is violated by arbitrary seizures of one class of citizens for the service of the rest.”
With limited government under a just rule of law, and a free-market economy, people are more likely to enjoy tranquility and prosperity than in a society lacking those institutions.
James A. Dorn
Cato Institute
