Via Scott Sumner's
The Money Illusion, we re-gifting U of Chicago's
John Cochrane's Christmas cheer;
By Keynesian logic, fraud is good; thieves have notoriously high
marginal propensities to consume. That’s a hard sell, so stimulus is
routinely dressed in “infrastructure” clothes. Clever. How can anyone
who hit a pothole complain about infrastructure spending?
.... Stimulus advocates: Can you bring yourselves to say that the Keystone
XL pipeline, LNG export terminals, nuclear power plants and dams are
infrastructure? Can you bring yourselves to mention that the
Environmental Protection Agency makes it nearly impossible to build
anything in the U.S.? How can you assure us that infrastructure does not
mean “crony boondoggle,” or high-speed trains to nowhere?
Now you like roads and bridges. Where were you during decades of
opposition to every new road on grounds that they only encouraged
suburban “sprawl”? ....
Keynesians tell us that “sticky wages” are the big underlying
economic problem. But why do they just repeat this story to justify
inflation and stimulus? Why do they not advocate policies to undo
minimum wages, labor laws, occupational licenses and other regulations
that make wages stickier?
Good questions to ponder (in our bold above) after an eggnog or two.
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