* Ross Douthat has written an outstanding column for the Times on the case for a conservative class war:
In case after case, Washington’s web of subsidies and tax breaks effectively takes money from the middle class and hands it out to speculators and have-mores. We subsidize drug companies, oil companies, agribusinesses disguised as “family farms” and “clean energy” firms that aren’t energy-efficient at all. We give tax breaks to immensely profitable corporations that don’t need the money and boondoggles that wouldn’t exist without government favoritism.
This was an important theme of Grand New Party, and my hope is that more conservatives will embrace it. I noticed that the Obama administration is talking up its efforts in copyright and patent reform, and I worry that this is another case of defending the interests of privileged incumbents over grassroots entrepreneurs. We’ll see.
* Will Wilkinson writes the post I wanted to write on Hayek and social insurance. Mark Thompson struck a similar note last fall, from a perspective harshly critical of present-day movement conservatives:
The above-referenced quote does not in the least imply that any system of social insurance is acceptable or will work. An individual-based system supported by tax credits or vouchers? Sure. A system of nationalized re-insurance? Quite possibly. Single-payer insurance? Maybe. But a byzantine system of employer and individual mandates, public options, increased regulation, etc.? Absolutely not.
Yet because the Right is so much more infatuated with the Randian vision rather than the Hayekian vision (even as it so often claims devotion to Hayek), leaving unmoored centrists as the gatekeepers, the reform we will get will be the latter. This, I would submit, is the worst of all worlds from the supposedly free market perspective held by the movement Right – the reinforcement of existing flaws and regulatory regimes; increased opportunities for regulatory capture; large increases in overall government expenditures and an ever-larger national debt; and only marginal improvements in the delivery of health care to the currently uninsured (at a cost that many of them may be unable to afford).
There is something to Thompson’s argument. I’m intrigued by his reference to public reinsurance, which strikes me as the best approach for dealing with pre-existing conditions and chronic illnesses while allowing a diverse marketplace that allows for business-model innovation. I’ll be writing more on this subject.
* Barry Ritholtz has a feisty response to Fareed Zakaria’s column on corporate balance sheets. Ritholtz was following up on a post by Invictus, also responding to Zakaria. Here’s what I don’t get: isn’t it possible that political risk is, if not the sole driving force, relevant all the same, and that it became more relevant post-9/11?
* Brad DeLong continues to be very optimistic about PPACA:
CBO’s belief that the Obama health care reform bill–the PPACA–will produce a health-care system that (a) is probably more efficient and (b) certainly spends less on Medicare than would have been the case otherwise. It’s up to us to see whether the slower rate of growth of Medicare and Medicaid spending now written into the law will be the result of a more efficient system that gets us more health care treatment for the same money or of a system that shuts its wallet on the sick more quickly, but we do now have a slower rate of growth of federal Medicare and Medicaid spending written into law.
We also had a slower rate of growth of federal Medicare and Medicaid spending written into the Balanced Budget Act of 1997.
* DeLong takes Greg Mankiw to task in this post:
So Mankiw is saying that if the federal government spends an extra $1 on infrastructure today, and taxes the present value of $1 in the future to repay the debt, the excess burden of those taxes is so large as to make it optimal for consumers and businesses today to reduce their spending by $1 or more today…
I searched through Mankiw’s original post for the word “infrastructure,” and I couldn’t find a reference. It’s worth noting that the infrastructure spending in the Recovery Act was very popular with so-called “grow-the-pie” pro-infrastructure congressional Republicans. (It was less popular with me.) There is considerable debate regarding the merits of infrastructure spending, but I think it is safe to say that infrastructure spending isn’t a very useful proxy for the bulk of the stimulus spending we’ve seen thus far. Moreover, one might argue that at least some stimulus spending is “propping up” inefficient public institutions. I understand that it would be difficult if not impossible to tease out the multipliers of every item of spending. But characterizing all stimulus spending as akin to infrastructure spending does seem like an important move that’s worth highlighting.
* Did Prohibition give us the income tax?
* I’m encouraged by what Dan Balz’s reporting on President Obama’s debt commission.
* Tesla Motors has received a great deal of glowing press coverage, and, not coincidentally, it has also received a large infusion of taxpayer resources. Now Owen Thomas is raising questions about the company. I can’t tell who is right. What I do know is that the DOE loans make this a subject of public interest.