Mr. Peter Galuszka took one for the team when he bought, read and reported on Thomas Sowell’s “Basic Economics.” I was unable to respond to his post in a timely fashion, so I’m posting here to show where our political perspectives from the Right and the Left blend on the basics of basic economics. Because, I theorize, we are both children of the Enlightenment and agree that rational empiricism is the foundation of good science.
Likewise, we might posit, jointly if I may presume so, that good governance for policy issues that involve issues with scientifically-based alternatives should rack and stack alternatives with clear links to rational empiricism. Analysis. Good analysis.
Here are my comments on Mr. Galuszka’s (PG) findings.
I would grade him with an A-. And I was a tough grader at the Department of Social Sciences, USMA. The minus comes from his last comment which is addressed at the end of this list.
I, too, used Paul Samuelson’s text on econ as an undergrad and went took economics at Keynesian grad schools.
But, what jumped out at me in Herman K. Bator’s bedsheet model of the macroeconomy was how little government spending did and how much productivity did. Nothing beat improvements in productivity as a single variable change in the olde GNP.
Since then I read Milton Friedman on the role of capital growth. But, even in grad school I got the idea that the way to cut the American pie for the American People better is, first, to grow the pie. Bigger slices for all are possible.
I agree with PG that unions are important. Unions and shareholders are the only checks and balances on corporate bad behavior. When the legislatures try to fix the corporate barn doors after the horses have run, they pretty much muck it all up for everyone – creating a new set of winners and losers in the business/government mixed economy.
I argue that unions and shareholders have vital roles in the future to provide the moral suasion needed on organizations run by sinful men (as we all are) and to protect the employees. My political issue with unions is ideological – and not pertinent here.
I agree that CEO compensation is out of whack. But, it isn’t an issue for government. It’s an issue for the unions, shareholders and the public marketplace of ideas.
The impacts of free trade are tough to live with. But, economic risk has always been brutal. The long range study I led (back in 90-92 for the period 2005-2015) pointed to the biggest single driver of change would be – domestically and internationally – political understandings (reactions) to economic changes. Whole regions can lose industries in no time. But, there are counters that can mitigate such events – to a degree – like Commonwealth Trust Accounts and SS that are individually owned. Producing more capital can offset the loss of an industry. New industries will be created.
I don’t see the problem with foreign corporations given our laws and shareholders – what is different now that is so scary?
My only complaint with PG’s findings is his comment about not seeing the application specifically for Virginia.
We need a Macro-Economic model of the Commonwealth. The GA could put together a consortium of our universities for a couple of million and get a first class model for tax policies. And the economic effects of transportation and land policies, as well as environmental policies.
We may still break Right and Left on issues, but where possible, lets do so from the same common economic analysis.
