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April 02, 2008


Christian Prophet

Sounds fun. Meanwhile Obama wants to hugely increase the capital gains tax. Candidates seem to understand nothing about economics.

Libertarians might be interested in getting themselves elected:


"The lack of such discipline has left almost every other social science discipline vulnerable to being taken over by Marxist and other psychobabble, while economics has preserved a staid sanity."

Well, I think there's also the argument that economics has a quantifiable, (largely) fungible basic particle: money. In most of the rest of the social sciences, the standards of success don't condense, and telling good answers from bad ones is very difficult. Models, graphs and other mathematical paraphernalia are part of that, of course, but more a symptom than a cause.

Of course, sometimes the apparently uncomplicated relationship between money and (the broad sense of) "goods" obscures rather than simplifies problems, but it's rational (necessary?) to address the tractable now and try to find ways to elaborate to cover more phenomena later.

Incidentally, while I think capital gains taxes should stay low relative to, for example, dividend and other income taxes, there's lots of smart folks out there (e.g. Warren Buffet) who don't seem to think raising them into the 20, 25% range for top earners would be very distortionary. Of course, my exposure to a new capital gains tax top rate is essentially nil, so it's easy for me to prefer this to the renewed higher top rate schedules dipping low enough to affect me, which is a much more plausible threat.

I also suspect the relatively low capital gains top rate was a nontrivial influence on the real-estate bubble. Of course, it wasn't necessary for the internet bubble, so I don't insist on it.


I'd say that economics has been taken over by different variants of insanity, including Randism and the peculiar, quasi-mystical ideas of Julian Simon.

Nathan Smith

"Taken over?" Ayn Rand isn't particularly influential in economics, except in the small libertarian corner of it. Julian Simon is well-known for making some accurate predictions, but this is the first I've heard of his quasi-mysticism.


I wish popular Libertarianism was as, well, popular as James seems to think it is. Of course, economists tend to be more libertarian than the public at large, but interventionism (e.g. Keynes) remains still alive and well.

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