Interventionism

It is always agreeable to be proved right. In an earlier review, I suggested that Thomas Sowell "had a genius for the striking fact and the apt analogy."

The New York Times recently ran a three-part series on a string of tragic industrial accidents at facilities owned by McWane Inc., a large producer of sewer and water pipe based in Alabama. The series describes nine apparently needless and sometimes especially gruesome deaths, as well as several horrendous injuries suffered by workmen. All of them are presented as taking place in an environment of such reckless irresponsibility and callous disregard for the value of human life as to strain credulity.

Consider: the government reports that job discrimination complaints against private employers increased 4 percent in 2002, to a total of 84,442, the highest level in seven years. Those filing complaints took in $310.5 million in monetary benefits. The main complaint involves race, followed by sex, but the big increase came with allegations involving religion, age, and national origin. The trend represents a huge diversion from the main goal of restoring economic growth.

Sympathy and justice are wonderful.  But neither is furthered by the "living wage" movement, writes John Egger. A university shouldn't put its workers on its own welfare system. To respect their dignity we must pay them what they earn, and that can be established only on the market.

It is debatable whether Bush should be intervening in the admission standards of one Michigan College. But it is perfectly apparent that he should do something to restore a free market in labor in his own neck of the woods.  As might be expected, Bush intervenes where he either can't or should not, but doesn't intervene to restore freedom where he can and should.

Do deficits cause interest rates to be higher than they otherwise would be? Supply Siders, armed with historical data, say no. Unfortunately for them, writes Christopher Mayer, the conventional wisdom is closer to the truth. Deficits crowd out private investment, fritter away savings, and rob the public of valuable capital. 

To the extent additional safety comes at a higher cost, it restricts the ability to make provision for other needs and wants, including safety, in other areas of life, writes George Reisman. And this remains true even when the higher costs of safety are initially imposed on business firms rather than directly on consumers. 

The cry of the Wall Street reformer is always the same: Let's have more regulators and regulations to correct the problem of prior regulators and regulations! Gregory Bresiger reviews Arthur Levitt's new book.

The Spitzer settlement is a travesty of justice. If it is true that individuals in the securities industry perpetrated fraud in order to garner investment banking fees, they should be criminally prosecuted and punished. Only a corrupt politician would ignore possible crimes in return for an industry’s support in future political campaigns. The liberal New York democrat helped himself, not investors.

Many of the most interesting issues in economics derive from a lesser-known category of alleged market failure: so-called asymmetric information. The problem of asymmetric information is simple. Different people know different things about economic goods. However, rather than indicting a need for government intervention, asymmetries in information make the free operation of markets all the more important.