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Post by Savoir Faire-Demogague in NJ on Feb 15, 2012 13:14:26 GMT -5
Interesting article on govt economic policies. www.city-journal.org/2012/bc0131gs.html#.TzvwTcp7Jho.facebookGuy Sorman Steady As You Go John Taylor’s new economic treatise would make helpful reading for our political leaders. 31 January 2012 First Principles: Five Keys to Restoring America’s Prosperity, by John B. Taylor (Norton, 240 pp., $24.95) Millions of Americans, reeling from the slumping economy, have become skeptical about the free market and inclined to listen to proponents of discretionary economic intervention. In election years, in which all political candidates must pledge to create jobs (and pretend that they’ve done so in their former positions), even pro-market candidates cannot entirely avoid advocating government policies to boost employment. They should read Stanford University economist John Taylor’s new book, First Principles. Taylor’s defense of free-market principles as the only engine of long-term, sustained economic growth stems not from an ideological belief in capitalism but from empirical facts. The market works because it has been proven to work. Predictability and the rule of law, Taylor argues, are the twin conditions for prosperity. Establishing and sticking with sensible rules gives entrepreneurs an incentive to innovate while helping policymakers resist interest-group pressure. Milton Friedman, Taylor’s mentor, liked to say that growth in America was a natural phenomenon engineered by entrepreneurship and innovation, when not hampered by reckless government intervention. Whenever interventionist approaches have prevailed against fixed rules and predictability, the American economy has struggled. A brief economic history of the twentieth century demonstrates Taylor’s argument. He unveils graphs showing an unbroken connection between steady, predictable policies and full employment. All Keynesian-style interventions, by contrast, have led to inflation, slow growth, high unemployment, or chronic recession. This pattern has held in the 1930s, the 1970s, and again after the 2008 financial crisis. Click link for full text, I pasted a few paragraphs, article is a bit longer. |
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