The Era of Good Economic Policy Is Over – WSJ

Ms. Harris s support of price controls fits neatly into her worldview. She is hostile to corporate profit, which she sees as exploiting workers and consumers. Her running mate, Tim Walz, confusing government coercion and the generosity at the heart of the American character, says socialism is neighborly. The Republican populists are a mix of those who have thrown in the towel on doing the hard work of explaining to voters the ideas that promote economic growth and the true believers who don t understand how an economy grows.

Across the political spectrum, economists understand that the average person can t have more purchasing power and the nation as a whole can t be wealthier without higher output. That comes from higher productivity, technological innovation, and increased labor input. During the past few decades, Republicans have proposed lower marginal tax rates on saving, investment and work to encourage entrepreneurial activity and expanded private sector output. Democrats have generally supported the idea that increased investment be undertaken by the government for example, on education and infrastructure. They have played down the disincentives to work associated with higher tax rates and a more generous social safety net, but they have operated within a market framework. Until recently, both parties largely supported sound money, free trade and modest regulation.

The Democrats lurch to the left and the Republicans embrace of populism threaten to usher in an era of counterproductive policy decisions that could reduce America s economic growth and living standards.

via www.wsj.com

Andy Laperriere.

That’s it! Why didn’t I think of that? I’ve been trying to explain how markets work to law students for thirty years. With mixed success. If it’s a new era, that’s much easier.