Missed By That Much

Paul Krugman correctly identifies the fallacy of the prevailing wisdom about education:

Some years ago, however, the economists David Autor, Frank Levy and Richard Murnane argued that this was the wrong way to think about it. Computers, they pointed out, excel at routine tasks, “cognitive and manual tasks that can be accomplished by following explicit rules.” Therefore, any routine task — a category that includes many white-collar, nonmanual jobs — is in the firing line. Conversely, jobs that can’t be carried out by following explicit rules — a category that includes many kinds of manual labor, from truck drivers to janitors — will tend to grow even in the face of technological progress.

And here’s the thing: Most of the manual labor still being done in our economy seems to be of the kind that’s hard to automate. Notably, with production workers in manufacturing down to about 6 percent of U.S. employment, there aren’t many assembly-line jobs left to lose. Meanwhile, quite a lot of white-collar work currently carried out by well-educated, relatively well-paid workers may soon be computerized. Roombas are cute, but robot janitors are a long way off; computerized legal research and computer-aided medical diagnosis are already here.

And then there’s globalization. Once, only manufacturing workers needed to worry about competition from overseas, but the combination of computers and telecommunications has made it possible to provide many services at long range.

and stumbles as he nears the finish line:

We need to restore the bargaining power that labor has lost over the last 30 years, so that ordinary workers as well as superstars have the power to bargain for good wages.

Can he really believe that unions will be able, in the long term, to garner wages for their members above the market clearing price? Unions work by limiting membership; those able to perform the work and willing to perform it for a wage below the union wage become unemployed. That’s how the system works. Even a 100% unionized workforce would just drive jobs overseas faster or make automation that much more attractive.

My solution is don’t raise the bridge, lower the water. Strip the subsidies from those who are getting them now. Examples: our current banking laws constitute an enormous subsidy to bankers. They are not laws of nature.

43 comments… add one
  • john personna Link

    I read a science fiction story a long time ago. It was composed when we had grander dreams about robotics. Basically, so much was automated that there were just a few thousand jobs left, to oversee them. The science fiction solution was a lottery where “winners” got to work, and everyone else … basically spent time at Club Med.

    Science fiction can be crap, but now and then it rises to “speculative fiction.” The question of what to do, should robots (or the equivalent) take over a large percentage of “labor” is a good one.

    … and I think the idea that some large percentage of the population would spend time on the dole is inevitable. That is, assuming that technology continues to advance and displace “repetitive” workers.

    That’s why one of my pessimistically compassionate strategies would be to improve the lives of the poor. We should make it possible to be civilized and poor. Whether we’ll be rich enough to send everyone to Club Med is another question.

  • john personna Link

    “My solution is don’t raise the bridge, lower the water. Strip the subsidies from those who are getting them now.”

    BTW sure, as a short-term strategy. 30-50 years down the line, things get trickier.

  • For a less optimistic science fiction take on a similar them see Cyril Kornbluth’s “The Marching Morons”..

    I think what you’re describing, jp, is essentially the Star Trek universe. Ever notice that it’s not really clear what people other than members of Star Fleet do for a living? Star Fleet, scientists, a couple of people trading in the un-replicable. That’s because when you have unlimited energy, teleportation, and replication there isn’t a great deal to do.

  • john personna Link

    Star Trek is tricky. I prefer Series I, but that series has the weirdest and most monolithic military culture. Where are the cruise ships? The tourists? The backpackers?

    The later series attempted to add elements of those in, but I think they messed it up. They confused a wealthless society with a egalitarian one. Without wealth, status-seeking would move to the experiential.

    .. we see that with folks in similar economic conditions, as they compare what they did last summer.

  • john personna Link

    BTW, the Net Generation opening monologue about the end of wealth, spoken to the (IIRC) unfrozen capitalist was particularly dreadful.

  • sam Link

    Speaking of science fiction and employment. I once read a story that went something like: half the population goes to work in the morning to tighten bolts on bridges and such; the other half goes to work at night to loosen bolts on bridges and such.

  • Drew Link

    “We need to restore the bargaining power that labor has lost over the last 30 years, so that ordinary workers as well as superstars have the power to bargain for good wages.”

    I read the Who Do You Think You Are essay first. I didn’t know we were moving next to reruns of “Fantasy Island.”

  • sam Link

    @Dave
    “I think what you’re describing, jp, is essentially the Star Trek universe. Ever notice that it’s not really clear what people other than members of Star Fleet do for a living? ”

    Well, except for the Ferengi, who seem to have a culture based entirely on some form of buccaneer capitalism. See, Ferengi Rules Of Acquisition

  • PD Shaw Link

    I don’t think you have to go back that far. The Pixar film, Wall-E, had as a major plot element, a future in which mankind has abandoned the earth to live on club-med type spacecrafts. (This was not the result of increased automation; it was the result of increased consumerism, that left the planet uninhabitable)

    My distant relative, Philip Jose Farmer, wrote a series called Dayworld, where the problem of overpopulation was solved by placing people into suspended animation for six days a week, and on the seventh, they live, work and love.

  • john personna Link

    Heh, Pizza In A Cup.

  • PD Shaw Link

    Star Trek worked best in the context of frontier exploration; you don’t have all of these pesky questions about what is going on in the homeland. Maybe some of the technology was too expensive for mass use. IIRC it was the latter episodes of the original series that began writing more from space stations (where we learn the two-sided economics of tribbles), engaging the crew in diplomatic missions, or returning them to Vulcan.

  • I wouldn’t have thought it ten years ago, but it seems entirely possible we’ll end up somewhat like Augustan Rome – a ruling class with all the wealth and a Plebeian class with no employment prospects who are dependent upon the state. For Rome it was slavery that displaced the Roman “middle class” for us it could be automation and foreign competition.

  • PD Shaw Link

    I’d rather talk science fiction, but as to the topic of the post: I think the future phobia needs a little dose of Jevons Paradox. If automation technology makes certain tasks more effient, then new uses will be found for application of the technology. Some of the things that have been listed aren’t necessarily being done today as a routine matter because the labor hours are too expensive. Some jobs will be created and some will be lost.

  • john personna Link

    But that’s the thing PD, declining middle class prospects are already the unexpected outcome (a generation reaching retirement with empty 401K’s and fewer job openings.)

  • steve Link

    Unions seem to work better in Europe, so I think it is possible for them to work, but the US appears to be different. Based upon a lot of reading over the last week or two, I would expect that public sector unions will begin to fade away. It is not really clear that they provide much benefit to their members.

    While I like your suggestion Dave, I agree with the Roman analogy. I think that we are headed towards a two tiered society. I suspect that we are sitting at or have passed some critical tipping point beyond which it is much more difficult to curb the power of the wealthy.

    Steve

  • While I like your suggestion Dave, I agree with the Roman analogy. I think that we are headed towards a two tiered society. I suspect that we are sitting at or have passed some critical tipping point beyond which it is much more difficult to curb the power of the wealthy.

    I know! Lets expand the power of government to solve this problem, after all it isn’t like the wealthy have access to powerful people…in…the….govern….hmmm….let me get back to you…..

  • I know! Lets expand the power of government to solve this problem, after all it isn’t like the wealthy have access to powerful people…in…the….govern….hmmm….let me get back to you…..

    One of many contradictions progressives seem to ignore.

  • steve Link

    “I know! Lets expand the power of government to solve this problem, after all it isn’t like the wealthy have access to powerful people…in…the….govern….hmmm….let me get back to you…..”

    The only way wealthy people can exert power is through government? Countries with smaller, weaker governments are devoid of warlords, oligarchies and plutocracies? With smaller, weaker government in the 1800s, for whom did the government work? It sure wasnt the common man. Find me an example of a country with a small, weak government that is not run as a two tiered economy.

    Steve

  • steve,

    I think you’re arguing a strawman there. The point I would make is that our political system is particularly prone to regulatory capture; thus we should be skeptical that additional regulatory schemes, more “regulation” (whatever that means), or more attempts by government to level the playing field or advantage the disadvantaged will be the silver bullets that proponents claim. See health care and especially financial “reform.” On the latter, Legislators gave regulators additional power and wide discretion to write rules to keep us all safe and prevent another financial crisis. Guess who’s helping them write those rules?

  • john personna Link

    Who made the strawman?

    I didn’t see Steve (no-V) actually propose policy. I saw Steve (V) make some up for him, and then disagree with that. At which point Andy jumped on.

  • Countries with smaller, weaker governments are devoid of warlords, oligarchies and plutocracies?

    Those are all forms of government. And using government is the best way to exercise power since government is the sole legitimate monopolist for the use of violence.

    With smaller, weaker government in the 1800s, for whom did the government work?

    I’d argue it wasn’t working against them…at least not as much as today. The idea the government is “going to work for the common man” is where you go off the rails.

    Find me an example of a country with a small, weak government that is not run as a two tiered economy.

    Look at the western U.S. during the late 1800’s. Government power was very weak. I don’t think there was a two tiered economy.

    I didn’t see Steve (no-V) actually propose policy. I saw Steve (V) make some up for him, and then disagree with that. At which point Andy jumped on.

    Actually I was pointing out what I see as the inherent contradiction in steve’s position. He doesn’t seem to see a problem with increasing the power of government which is how the wealthy can most easily exercise power. Who does your congressperson listen too most? You or the billionaire he sometimes plays golf with? Your letters and e-mails, at best, are read by an unpaid intern who decides if the content is worthy enough to be passed along to the next flunky in line.

    Its almost comical. I’ll say, “part of our problem is the incestuous relationship between DC and Wall Street,” and people like JP and others who are more “left/progressive/centrist” will say, “Yeah!” Then when I point out that same argument by saying, “Increasing the power of the government really only ends up benefiting the wealthy,” it gets poo-pooed.

    Would you people make up your minds. Sheesh.

  • steve Link

    It is not a dichotomy, or so I believe. Smaller or larger govt is not so much the problem as functional government. I fully acknowledge the problem with capture. I actually believe that the deep capture that Johnson writes about is even more of a problem, ie, having regulators and regulated engaged in the same groupthink.

    Where I differ from Steve V is refusing to throw up my hands and give up on trying to deal with the problems created by business, in particlar the financial se tor. As. I have said before, I think we interfere too much with small business. Our problems lie with big business, especially the finance sector. They really can, and have, crash the economy. Find me a way to deal with that issue absent some kind of govt intervention.

    Steve

  • Brett Link

    Ever notice that it’s not really clear what people other than members of Star Fleet do for a living?

    I think it’s just because we don’t see it, and because the Federation by the time of The Next Generation series has morphed into a socialist organization (it was not necessarily that during the time period of the Original Series in-universe).

    Realistically, a society with Star Trek-style replicators would be the Ultimate Service Economy. Most people would be involved in services, with a small fraction of the economy working in Resource Extraction, Energy Production, Large Scale Assembly/Construction (they can’t replicate starships and houses), and the manufacturing of certain components that can’t be replicated well. The replicators don’t make things out of thin air – they need raw material and energy, plus maintenance.

    Well, except for the Ferengi, who seem to have a culture based entirely on some form of buccaneer capitalism.

    The Ferengi are a “brain bug race”. They morphed into an absurd capitalist caricature, in the same way that Klingons morphed into an absurd Viking caricature.

  • Our problems lie with big business, especially the finance sector. They really can, and have, crash the economy. Find me a way to deal with that issue absent some kind of govt intervention.

    FWIW, I’ve never really bought into the more vs less government dichotomy, nor the more vs less regulation. The character of regulation and governance matters more than the scope IMO. That’s why I’ve very, very skeptical of things like Frank-Dodd, which simply hands a bunch of authority to regulators – who are already largely captured – and lets them write the rules with the help of their friends from industry. IOW, more regulation and more power to regulators doesn’t automatically mean better regulation and more stability in the financial system.

    This speaks to the internal contradictions of progressive rhetoric. You look at the policies they advocate for and bills they had a large say in crafting (ie. Frank Dodd) and it’s hard to miss the disconnect. In short you don’t stem the power of plutocrats by handing more power to the plutocrats.

  • john personna Link

    The problem with hypothetcal arguments that there can be no successful government solution is that other countries can make one or another of them work.

    Cue the “but we are not Danes!” refrain.

    It’s a rediculous (but popular) sentiment that as stupid Americans were are sentenced to our particular hell. Success is not an option.

  • john,

    Oh, I think there are solutions -it’s just that none of them are politically viable in the current environment.

  • john personna Link

    Our particular hell then.

  • Where I differ from Steve V is refusing to throw up my hands and give up on trying to deal with the problems created by business, in particlar the financial se tor. As. I have said before, I think we interfere too much with small business. Our problems lie with big business, especially the finance sector. They really can, and have, crash the economy. Find me a way to deal with that issue absent some kind of govt intervention.

    The problem is that you can’t find the solution you are looking for with bigger and more powerful government as those with money will simply continue to exert influence over that larger and stronger government and thereby ensuring their positions.

    A real solution is also painful. Letting large financial firms fail is what is needed. The downside to the market has to be real or it will always fail. Private profits and public risks simply does not work. Yes, now we have gotten to a point where things would get really bad if we just stopped bailing out these firms that are causing so many problems. But that is what it will take, IMO, to keep things from repeating themselves. The longer we wait the greater the pain due to the readjustment.

    Tweaking things around the edge and further entrenching what are clearly broken institutions wont solve the problem.

    The problem with hypothetcal arguments that there can be no successful government solution is that other countries can make one or another of them work.

    Oh bollocks. It isn’t that “we aren’t the Danes,” but that making those kinds of changes will impose losses on people who matter much more than you or I do. People who have more money, more access to policy makers, and will likely end up employing some of those policy makers. How many ex-Senators can you hire at $350,000/year? Can you give Larry Summers a million dollar a year job? No? Then sitting here and talking about “good and logical” regulation is about as helpful as trying to polish a turd.

    Dave has said it many times: politically it can’t happen. I don’t care what the topic is, but if it makes sense, then politically it is almost surely a dead horse. Why everyone thinks differently I don’t know. Or to put it another way:

    (Sensible Policy)Intersect(Politically Feasible Policy) = empty set.

    The two sets are disjoint. Why do I think this? Look at all the areas where there is an obvious sensible policy. Take gasoline blends for instance. Would a national standard for gasoline blends make sense? Sure, given that pollution caused by gasoline can cross state boundaries and that having a national market can help reduce price volatility it makes quite a bit of sense. Why isn’t it done? Because, politically it is infeasible. Instead we typically get bullshit about opening the SPR.

  • steve Link

    “The problem is that you can’t find the solution you are looking for with bigger and more powerful government as those with money will simply continue to exert influence over that larger and stronger government and thereby ensuring their positions.

    A real solution is also painful. Letting large financial firms fail is what is needed. The downside to the market has to be real or it will always fail. Private profits and public risks simply does not work.”

    You do remember how the Fed got started? At a time when government was much smaller and much weaker. Let us assume incentives matter. On that I think you will agree. If that is the case, then with or without government intervention, there is billions of dollars worth of incentives to take excessive risks. The interests of those running the large financial institutions and the institutions themselves are not one and the same. This also goes for at least some other large businesses. The story is different for small business, excepting law firms and landscaping businesses IMO. Small businesses need to maintain their business. Excess risk can leave them w/o a job and w/o, usually, the possibility of huge payoffs.

    Steve

  • john personna Link

    There are two threads, one here and one at OTB, which really converge to the same conservative sentiment.

    You can dress it up with smarter words or leave it with the simpler ones, it comes out the same. Basically, a certain segment of conservatives (and/or libertarians) see the problems in our society, but they are ideologically blocked from any forward motion. It is an article of faith that any government solution will be worse. Therefore, any incremental change toward solution will really be an incremental change toward greater ruin.

    As I say above, you can’t answer that with logic, they are already making it up. They are scared by their own hypotheticals. Those of us who would like to see a little incremental change, and the attempt at improvement, can only hope that this sad, wizened, demographic isn’t too large. That not everybody is ready to lie down in the dirt and say “this is as good as it gets.”

    The really sad thing (as I might have mentioned above) is that theirs is not a winner’s argument. It isn’t triumphant. They aren’t saying everything is running on all cylinders and the American system is working better than any other. It’s Eeyore for President.

  • If that is the case, then with or without government intervention, there is billions of dollars worth of incentives to take excessive risks.

    Uhhmmm no, I don’t agree with this. I think risk taking is also a function on interventions (type, scope, etc.) on the part of the government.

    The interests of those running the large financial institutions and the institutions themselves are not one and the same.

    Yes, there is a principle-agent problem for corporate governance, I don’t see why this has to be a government issue…unless of course you want to get into that sticky mess of interventions…which will change the risk taking.

    See, a firm that sets up a bad solution to its principle agent problem should be allowed to fail, just like a business that sets up a bad business model. It is one of the factors of running a business and if the government takes that over, then it changes the risk/reward structure. A business in certain situations could go before a court and say, “We wouldn’t be in this mess except for the government’s insistence that we set up governance structure X.” Now the government is left holding the bag.

    Further, I think you have skirted the issue of are the big financial firms a result of our financial regulatory structure? Has government been, inadvertently or otherwise, pushing for bigger and bigger financial firms?

    So steve, your argument has some serious, serious holes in it, so I’m not at all confident in your conclusions.

    Basically, a certain segment of conservatives (and/or libertarians) see the problems in our society, but they are ideologically blocked from any forward motion. It is an article of faith that any government solution will be worse. Therefore, any incremental change toward solution will really be an incremental change toward greater ruin.

    Actually, I’d say that you JP, and others are the conservatives (note the small ‘c’). I’m all for a big change. A drastic change. I see that as the only real solution to the problem. You, steve, and others on the other hand are “tinker around the edges” people. That can be re-phrased as, “pretty much keep the status quo, but try to make it a little bit better.” That is the definition of conservatism,

    a political philosophy based on tradition and social stability, stressing established institutions, and preferring gradual development to abrupt change

    That’s you John, not me. Is there something preventing the kind of changes that are needed? Yes. It is people like you John who describe themselves as moderate and don’t want to make the necessary large scale changes we need. Keep, in mind that one solution to the financial problems we face is limited purpose banking. That is not something that is going to be done without government. It will need quite a bit of government action if it is to be implemented.

    Therefore, any incremental change toward solution will really be an incremental change toward greater ruin.

    As Andy has noted, having the big wigs in the financial industry “re-writing the rules” isn’t much of a change…incremental or otherwise. I’ve made my arguments against the current financial reform as essentially codifying how future bailouts will work. Instead of having the unpleasant spectacle of having to pass horrendous legislation now it will just be a matter of course to bail these guys out. The problem of excessive risk taking will be further entrenched not reduced.

    So to say that there is no logic here is really lame on your part. It is lame because it doesn’t address the actual arguments us “conservatives and libertarians” are putting forward. But nice try at shifting the topic from the actual arguments to motives and belief systems.

  • matt b Link

    A real solution is also painful. Letting large financial firms fail is what is needed. The downside to the market has to be real or it will always fail. Private profits and public risks simply does not work. Yes, now we have gotten to a point where things would get really bad if we just stopped bailing out these firms that are causing so many problems. But that is what it will take, IMO, to keep things from repeating themselves. The longer we wait the greater the pain due to the readjustment.

    In general Steve, I think you are right. However there is a major caveat, or stumbling block: the issue of a social safety net.

    We (as a culture/nation/whatever) have allowed ourselves to get to a point where mass failure would mean that “things would get really bad.” And that “correction” would create a lot of human suffering at home (let’s not even worry about internationally right now). What is our ethical and moral responsibility to people who necessarily *have to be harmed* in order for a correction to take place?

    Until we’re really open to having that particular conversation, no correction will ever be possible because everyone has too much to fear from said correction. It’s better (easier) to pray that you die *before* the crash, than let the crash happen and know you may die as a result of it (btw, this is the story of just about every existing institution faced with major change… just replace “die” with “retire”).

  • matt b Link

    Ok, to Geek out — The question is always what might a “post-scarcity” society look like? Or, when general commodity goods cease being scarce, what takes over that value. This Roddenberry wasn’t particularly interested in building a “complete” world, he never dealt with the issues of economics (which only really entered into ST lore with DS9 — btw, looking at each series as embodying the zeitgeist of their day is a fun exercise).

    For a couple interesting speculative fiction works on this very problem check out the work of Cory Doctorow (yes, EL’s son), in particular “Down and Out in the Magic Kingdom” and “Markers”

  • john personna Link

    If you want to campaign for failing out bad banks and etc (BofA right now? Haven’t been following this bad bank split too closely) I won’t argue.

    But I think it is a classic way to set up (your) perfect as the enemy of the good.

  • But I think it is a classic way to set up (your) perfect as the enemy of the good.

    You do realize that you have just very strongly implied that the financial reform legislation is “good”. That is where we have a fundamental disagreement. I don’t think it is good all by itself. Irrespective of my preferred policy, that reform is going to further entrench our current flawed system…not help move forward to a better system.

  • matt b,

    Yes, it is very painful and it comes into conflict with the safety net, but that is also a “public risks/losses v. private profits” policy as well. Screw up really badly in your life and the social safety net wont let you hit the ground.

    Sometimes I think it is like an addict. Addicts often need to hit rock bottom before they realize the extent of their problem and start to try and take corrective action. Keep catching the addict and you become an enabler, assuring that the addict continues to be an addict and to have serious problems.

    And it isn’t just the social safety net, but the billionaires as well. I don’t see too many of them suffering. In fact, while if you make comparisons from say 2008 to present yeah they might have taken some losses, but if you look back a bit further as your starting point I bet many are still well ahead of the game. So, they are in the worst case scenario and taking some losses, but when things stabilize and go back to the way they were….why they’ll start reaping the rewards again. And when the next bubble bursts who cares the American tax payer will be there to bail them out.

    But here is the dirty little secret…the American taxpayer is not a source of infinite cash….eventually things will stop working because as Dave says, that which cannot be sustained wont be sustained. And an economy built on a sequence of bubbles strikes me as being particularly difficult to sustain. Then what will you do about the social safety net?

  • john personna Link

    “You do realize that you have just very strongly implied that the financial reform legislation is “good”. ”

    Logical fail. I have just said that of the constellation of possible incremental changes, some must be good.

    You are trying to hold the line that there should be no change.

  • Logical fail. I have just said that of the constellation of possible incremental changes, some must be good.

    In the context of this discussion, financial reform, which changes do you see that are incremental and for the better? Or are you going to fall back on glittering generalities? Some incremental change in some policy at some time must, even if by accident, be good?

    You are trying to hold the line that there should be no change.

    Of course I have not made this argument. My argument, which is apparently too subtle for you, is that while we need change (for the better), most likely significant change, such change (for the better) is not politically feasible.

  • steve Link

    “Uhhmmm no, I don’t agree with this. I think risk taking is also a function on interventions (type, scope, etc.) on the part of the government.”

    Then what is your take on the panics of the 1800s and 1907? At a time when there was no Fed, laissez faire attitudes towards business and small government, banksters were still willing to take large risks. They were also willing to turn to government for help when needed. Small government or large government is not so relevant.

    ” Has government been, inadvertently or otherwise, pushing for bigger and bigger financial firms?”

    A lot of the deregulation of the 80s, 90s and 2000s was towards that end. I see that as government getting out of the way of the banks and letting them do what they want. That said, I think a lot of the policies/actions since the crash have favored making banks larger.

    Steve

  • matt b Link

    Steve,

    Sometimes I think it is like an addict. Addicts often need to hit rock bottom before they realize the extent of their problem and start to try and take corrective action. Keep catching the addict and you become an enabler, assuring that the addict continues to be an addict and to have serious problems.

    I don’t think that a safety net needs to necessarily be enabling. Rock bottom only works – for most addicts – if there’s a framework that allows the person to rebuild in a more stable way. Otherwise hitting rock bottom can literally kill.

    Again, I agree that the current bubble system is fundamentally unsustainable. And I do think that thing have to be allowed to fail and crash.

    My concern, is that when that crash happens, a lot of “innocent people” are going to be caught up in it. I really don’t worry about the top 1% or whatever the going breakdown is… it’s making sure that the other 99% are able to make it through the crash.

    Given the amount of retirement money invested in financial markets (something that a generation en-mass was encouraged to do), the corrective crash that you are discussing would have a profound effect on people (before we address its effect on jobs, etc.).

    I just seems to me that ethically/morally, if the government would allow a crash to happen, then they must first plan for the human cost of such a crash.

    In that planning, btw, I think we can the debate/compromise on what an acceptable split of individual vs. social responsibility is. And note, I’m not advocating for total social responsibility. But saying that it’s all on the individual is an impossible position as well.

  • Then what is your take on the panics of the 1800s and 1907?

    If we look at the Long Depression you can see that there were at least several government actions that at the very least contributed to the crisis…namely monetary policies such as returning to the gold standard in the U.S., depegging currencies in Europe, etc.

    And you are setting up a strawman position here. The contention isn’t that there wont be bubbles or economic hardship if we don’t have a strong activist government, just that a strong activist democratic government is going to have a very serious problem in not distorting incentives that lead to excessive risk taking–i.e. bubbles and economic hardship.

  • That sounds lovely Matt, but I don’t think the wallet is big enough to handle all that, and it is a mess the “innocent people” have helped cause by voting the way they have. Setting up systems and institutions that are unsustainable. Fixing it without causing hardship strikes me as an impossibility, but good luck.

  • Icepick Link

    Fixing it without causing hardship strikes me as an impossibility, but good luck.

    Matt isn’t stating there won’t be hardships. He’s arguing for mitigating a disaster. Different things entirely.

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