If a leading economist agrees, it must be true.
If a leading economist agrees, it must be true.
But in one century, everything was changed. Sweden had the fastest economic and social development that its people had ever experienced, and one of the fastest the world had ever seen. Between 1850 and 1950 the average Swedish income multiplied eightfold, while population doubled. Infant mortality fell from 15 to 2 per cent, and average life expectancy rose an incredible 28 years. A poor peasant nation had become one of the world’s richest countries.
Many people abroad think that this was the triumph of the Swedish Social Democratic Party, which somehow found the perfect middle way, managing to tax, spend, and regulate Sweden into a more equitable distribution of wealth—without hurting its productive capacity. And so Sweden—a small country of nine million inhabitants in the north of Europe—became a source of inspiration for people around the world who believe in government-led development and distribution.
But there is something wrong with this interpretation. In 1950, when Sweden was known worldwide as the great success story, taxes in Sweden were lower and the public sector smallerthan in the rest of Europe and the United States. It was not until then that Swedish politicians started levying taxes and disbursing handouts on a large scale, that is, redistributing the wealth that businesses and workers had already created. Sweden’s biggest social and economic successes took place when Sweden had a laissez-faire economy, and widely distributed wealth preceded the welfare state.
Syllabi and lecture notes.
Spot on: a lot of charity, whether public or private, is designed to make the givers feel better, consequences for the recipients be damned.
The result of these exchanges reminds me of the "Jesus Comes at Christmas" trips our family would take to some of the relatively poor families in our North Jersey suburb. These were quick drop-offs of holiday food baskets that included toys for the kids, but it was hard not to have a bit of a savior mentality as we drove house to house.
In the light of this exchange, we all knew who was playing the part of Jesus. I vividly remember the feeling of disappointment when a young child answered the door and sheepishly accepted our gift basket and closed the door quickly without any of the appreciation that we were all secretly expecting to receive. The problem was that we had no relationship with these families except to play Santa Claus one day a year. Looking back, both families were a bit worse off by the awkward exchange.
Our family left disappointed by the thankless welfare mentality we observed, and any feelings of superiority we harbored at the beginning of the expedition were only reinforced. The receiving family had to endure the humiliation of another unknown do-gooder family showing up at their doorstep on their journey to save the world.
See also "Let's Kill the Aid Industry".
A terrific lesson in Public Choice: how a reasonable entitlement soon becomes unreasonable.
"Bailouts for Cities? Advocates for cash-strapped municipalities want Washington to clean up their mess."
Just say no.
Of course, inflation has gone inexplicably missing for a couple of years now, but this sounds right. We'll see.
Randall Holcombe makes a simple but important point.
One difference between choice in markets versus choice in government is that in markets, people choose among alternatives that already exist, whereas with government, people choose among alternatives that might exist in the future. When people cast their dollar votes, sellers in markets already have the products available, whereas when they vote at the ballot box, they are choosing among sellers (candidates) who advertise products they hope to produce if they are elected.
This is bad: "The FDA Wants 23andMe To Stop Selling Its Genetic Testing Kits". "Our DNA, Our Selves" level-headed but pointed criticism by Alex Tabarrok. More criticism by blogger "Scott Alexander". First prize for excellence goes, though, to Nick Gillespie:
Because when it comes to learning about your own goddamn genes, the FDA doesn’t think you can handle the truth. That means the FDA is now officially worse than Oedipus’s parents, Dr. Zaius, and the god of Genesis combined, telling us that there are things that us mere mortals just shouldn’t be allowed to know.
(The CEO of 23andMe stands by her company's data.)
And this, listed among things that Can Not Be Made Up: "The FDA Wants to Ban Berger Cookies, the World's Most Delicious Dessert".
This crap reminds me of TJ's alleged famous quote.
Cathy O'Neil, the "Mathbabe," suspects it's true. And history seems to support her.
Admati and Hellwig’s suggestion is to raise capital requirements to much higher levels than we currently have.
Here’s the thing though, and it’s really a question for you readers. How do derivatives show up on the balance sheet exactly, and what prevents me from building a derivative that avoids adding to my capital requirement but which adds risk to my portfolio?