Economies Need a Gardener’s Invisible Hand
I haven’t posted on Nick Hanauer and Eric Liu’s stuff, and I should have, long ago. Nick, along with Bill Gates Senior, was one of the big proponents of the Washington State high-earner income tax initiative a while back (which failed utterly, I’m sad to say). As was I, in my little way.
I think this new Bloomberg piece says what they’re trying to say better than I could, so I’ll just say “go read it.” It’s short.
Economies Need a Gardener’s Invisible Hand: Hanauer and Liu – Bloomberg
Cross-posted at Asymptosis.
The big idea take-away for me is the implicit rejection of equilibrium-based economic models.
Noah’s post and Roger’s comment there are all about equilibrium models. I think the entie ediface of modern econ relies on equilibrium models.
Perhaps this is why they, in general, reflect reality so poorly.
A much smaller take-away is this implicit endorsement of my consumption relates to income not wealth idea.
Gardenbrain exposes the fallacy of policies that drive down taxes for the richest Americans because they are “job creators.” Jobs are a consequence of an organic feedback loop between consumers and businesses. It’s a thriving middle class that can afford to buy goods that creates jobs, not more wealth for the wealthy.
Cheers!
JzB
Noah’s post.
http://noahpinionblog.blogspot.com/2012/01/filling-hole-or-priming-pump.html
My citation of Noah’s post.
http://www.angrybearblog.com/2012/01/wealth-vs-income.html
JzB
“The prevailing assumption in economics is that markets should be perfectly efficient and thus self-correcting. In this view, regulation is an unfortunate interference with a frictionless process of wealth creation.”
This is very similar to the many cliches offered by “commentators,” professional economists and otherwise. David Frum, one of the otherwise who makes his living suggesting that he has some expertise concerning such issues, wrote an article in Newsweek this week critical of something Andrew Sullivan had written there in a prior issue. Frum states, “The President prefers to rely on the brute force of government, not the market.” Ah, the free market!! Not actually free, not really a market place.
It got me to thinking. What is the market other than groups of groups of actors. All the talk of this market phenomenon describes the process as though it were some machination of the gods. It is the work of men. It is no more perfect than is the behavior of those participating in the market. Market participants produce, but they also lie, cheat and steal. No, not all market participants act in bad faith, but they are defined as intending to act selfishly. One selfish actor is thoght to offset the actions of another. There is thought to be some form of balance between these actors. That is not what human history demonstrates. The market, like all human endeavor, is subject to the imperfections and bad intentions of its participants. It is the force of the whole of the people of any society within which an economic process occurs which is required to assure that the market does function is a balanced manner. That’s what we call government.
hmm…that sounds like it’ll put a lot of mechanics (aka economists) out of business..
I totally agree.
JzB
If that’s what it takes to get a little bit of the real world into economics, then I’m all for it.
Let them experience the thrill of not knowing if your money will stretch until the next paycheck, or which bill do I pay – for the rent or the car.
Yep. That wuld make the world a far, far better place.
JzB
maybe we could get them jobs as “beasts of burden” on one of steve’s other threads…
Jack
but don’t you know that if everyone runs for the exit at the same time it produces maximum efficiency
for the first guy to get to the door.