Economists tend not to pay enough attention to this sort of thing, in part because it's hard to measure. We argue about taxes and government spending because we can at least try to measure them. We acknowledge that government mandates are the same as taxing and spending, but tend to leave them out because it's hard to get numbers. Intrusive regulation, just as damaging, is even harder to quantify. And pervasive corruption harder still. Yet it's just as much, maybe more, sand in the gears as are headline taxing and spending.
It just looks like mysterious "low productivity." Keynesians see low output and employment and ask for more stimulus. That's not the problem.
Saturday, June 9, 2012
Crony Capitalism and Economists
The Grumpy Economist has a great post on the economic effects of crony capitalism. Some quotes: