Now Less Than Ever

I think at least one problem with the desire to raise taxes on high income earners is it focuses discussion on income redistribution.  I think we arguably have issues there.  The biggest threats now however are the intractable recession and in the intermediate run the budget deficit. 

The piece I lift here focuses on the concept:  Now Less Than Ever.  The point being for policy makers to not focus on what are ones core concerns but what are the nation’s biggest problems.  

A recent back and forth between Paul Krugman and Russ Roberts on Keynesian economics reminded me of something I discussed briefly on twitter some time ago and wanted elevate it blog post level. Here’s what Russ said:

Krugman is a Keynesian because he wants bigger government. I’m an anti-Keynesian because I want smaller government. Both of us can find evidence for our worldviews.

But I think Russ’ point tends to be very true, and is exemplified by what, I think, Ezra Klein called “Now-More-Than-Everism”. This is when someone argues that the solution for any given problem is simply that their favored policies are needed Now More Than Ever. We find ourselves in an extended recession-like economy, obviously Now More Than Ever we need to gut the EPA, or Now More Than Ever we need green energy subsidies.

In the anti-spirit of this mindset I want to focus on Now-Less-Than-Everism. I’ll let Krugman go first:

“Here’s an example: is economic inequality the source of our macroeconomic malaise? Many people think so — and I’ve written a lot about the evils of soaring inequality. But I have not gone that route. I’m not ruling out a connection between inequality and the mess we’re in, but for now I don’t see a clear mechanism, and I often annoy liberal audiences by saying that it’s probably possible to have a full-employment economy largely producing luxury goods for the richest 1 percent. More equality would be good, but not, as far as I can tell, because it would restore full employment.”

Deregulation is important, and necessary, and too much regulation is a problem. But it’s not the problem the economy is facing right now. Attempts to focus on regulation are a distraction, and we’re not going to deregulate our way to full employment. We need to focus on deregulation now less than ever.

I am a creative destruction proponent and regulatory burden is a big long-term concern of mine. I wish that was what was causing our current malaise, I really do. Everyone likes to have their beliefs confirmed, and Now More Than Everism feels good. But it isn’t the problem.

So now it’s your turn. Help prove Russ Roberts’ cynicism wrong, and tell us what favorite policies of yours we need Now Less Than Ever. These can be things that either would be downright harmful now, or that we simply shouldn’t be focusing on and aren’t as important as actual recession cures.

I think the President did not make the economy his main focus for nearly long enough.  Instead, he put a stimulus in place more focused on his social welfare concerns, followed by health care. 

On taxes from his campaign on, he mostly focused on the idea of making the rich pay more.  I think it would have made more sense to simply enact at least a partial roll back across the board of the Bush tax cuts, timed to follow the recession and address the fiscal situation, perhaps accompanied by a payroll tax rollback much earlier.  His focus on raising income taxes on the wealthy was much to focused on his concerns with extracting wealth from the well off, not addressing our fiscal balance or the recession. 

He fell into the now more than ever trap.  Admittedly, Republicans are doing the same thing.

Filed under: Bias and Rationality, Economics

Now Less Than Ever
Adam Ozimek
Sat, 15 Oct 2011 02:56:35 GMT


5 responses to “Now Less Than Ever

  1. Bruce, I could not agree more with you here.

  2. Bruce, in a few more words, I believe you are saying that what we need now is a balanced approach. That would involve compromise. Too bad that notion seems to be dead, or at least from the right wing.
    Obama has attempted compromise and gotten nowhere.

    I think we need a combination of the two approaches, but it has to be timely. We need to start with government spending along with instituting the financial reforms that have been passed yet failed to be applied. This should be accompanied by the repeal of the Bush tax cuts to offset some of the cost. Once the middle class is able to spend again, we need to adopt a more conservative fiscal policy to sustain any gains we may have made, thus avoiding another boom/bust cycle.
    With health care costs soaring in comparison to most everything else, we need to include this in any compromise. My BCBS policy costs 25% of my earnings, about the same amount that a working man used to be able to buy a home with.

    Then again, that’s just my uneducated opinion from the working-poor man’s point of view.

  3. Thanks for the comments. I added a post script.

  4. Excellent post. I appreciate the post-script as it captures the essence of the issue in a political light.

  5. It’s not just balance. I think my feeling is that people need to go into evaluating more things thinking this: how would the fact here influence me if IF I HADN’T ALREADY MADE UP MIND ON THIS ISSUE.

    Instead I think people go in with a strong preconceived idea usually, and just think about how to refute an idea they don’t agree with, or how it reinforces their beliefs. Or if they can’t do either they just ignore it.

    You don’t necessarily have to split the difference, but actually think about all the facts and their implications.

    In other words, I think people need to go into more things willing to be taught.

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