PeakTrader.com

[administrator]

PeakTrader:

“…individually selfish decisions must lead to a collectively efficient outcome…”

However, is that the most efficient outcome?

For example, what about ethics, e.g. in negative externalities, labor standards, and safety nets under the free market?

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Government is inefficient when it does more than it can afford (in the long-run), and when there are too many “bad” polices with “good” policies.

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It’s completely unnecessary to have inefficient economic boom/bust cycles (which are inefficient in both the boom and bust phases), or massive idle resources for years.

With appropriate macroeconomic policies, we could have an economy similar to the Clinton economy of 1995-00, when actual output slightly exceeded potential output, the country was a little beyond full employment, real wages rose substantially, and we had large annual budget surpluses.

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A pragmatic Democrat President and a GOP Congress worked wonders:

U.S. average annual per capita real GDP growth

1995-2000: 3.14%
1982-2007: 2.30% (height of the Information Revolution)
1871-1914: 1.56% (height of the Industrial Revolution)

Source: Academic economists, academic papers, Census data, and the BEA.

Also, it should be noted, during the Information Revolution, the U.S. consumed up to $800 billion a year more than produced in the global economy, and trade deficits lower GDP growth.

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Attacks:

http://www.aei-ideas.org/2013/11/giving-thanks-for-the-invisible-hand-the-kaleidoscopic-energy-and-productivity-of-the-free-market-and-no-turkey-czar/#comments

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