Steve Wynn's take on the world

The idea that "government doesn't know what to do with our money" is not a tenet of conservatism. Rather, the conservative tenet to which you refer is that allocative efficiency is inversely related to government's prominence as a driver of the economy. Put simply, the argument is that the free market maximizes the value or utility of scarce resources better than does government.

 

Exactly. And, again, in a world without transaction costs, with strong property rights, and without information assymetry, the tenet is pretty much infallible.

 

Did all the servers at our national sarcasm detection center go down this morning?

 

It's Economics 101.

What is your specific quibble?

 

Our inert and slavish devotion to the Reaganite fantasm of a perfect "Free Market." A thing which, as you point out, has only ever existed as a hypothetical. In the meantime, the rich get richer but create no jobs.

Note, please, the qualifier "American."

 

I don't think a free market academian takes Reagan's perverted "free market" model seriously.

 

Then why do American voters?

 

The idea that "government doesn't know what to do with our money" is not a tenet of American conservatism. That may be the way it comes across to you, but that's simply not true.

American conservatives NEVER have argued that government has no role to play in a free market. Rather, American conservatives' argument is that government's essential economic role is to foster a legal climate in which a free market is possible. American conservatives would further argue that as government moves beyond this role, allocative efficiency becomes more and more compromised.

 

Because politicians are better at messaging than academics.

 

Let me edit mine a bit, because it's usually a dangerous proposition to use "NEVER" in a political discussion. I am sure you can probably find some quote from some American conservative in which it is argued that the government can't do anything. My position is that such an argument would not represent the essential economic viewpoints of American conservatives.

 

On all of these economic threads, we see people advocating for American businesses to operate in a more "compassionate" -- for lack of a better word -- way.

They should hire more. They should pay better. They should pay more heed to the environment. They should pay more taxes. They shouldn't outsource jobs. Etc. Etc. Etc.

Now, wouldn't that just make U.S. companies less competitive in a global economy? And, wouldn't that do more long term harm to the job picture and our economy?

 

Milton Friedman visits China. He sees hundreds of workers digging with shovels. He's puzzled.

"Why not just use an excavator?" he asks his host.

"Because," the Chinese host explains, "these people need jobs. An excavator takes jobs away."

"Well then," Friedman says, "why not just have them dig with spoons then?"

YF, where we probably depart is that businesses should absolutely have to absorb their costs, i.e. externalities. And to address your concern, which is valid, we have to find ways to force other nations to do the same. Protective tariffs that nobody wants to talk about, for example.

Government spending has to add sustainable value to the economy. The WPA is a great example. The interstate highway system is another one. This is why I never understand why conservatives make fun of high-speed train or other infrastructure improvement ideas. These are things that the private sector won't undertake because of various collective action obstacles.