When Every Practical Economic Idea Is
Political Suicide, Something's Wrong With Politics
from the too-bad dept
Last week, Planet Money brought together five different
economists, who represent a pretty broad spectrum of
political ideologies in general, to see what policies there
are that all of them (mostly) agree on -- and then noted why
every single
one of those policies is political suicide for a
Presidential candidate. The list of economists is a
fantastic one, including my Econ 101 Professor, Robert Frank
(who I forever remember kindly for letting me take my first
ever college final exam late, after I accidentally
overslept, waking up in my dorm room an hour and a half
after the exam began...). Also included is Russ Roberts,
whose writings and thoughts on economics I follow closely.
Then there's Dean Baker, whose work we've cited here a few times.
Next up is Luigi Zignales, who I had the pleasure of meeting
a couple months ago, and whose new book, A
Capitalism for the People is on my shortlist of
books I need to read this year. Finally, they have Katherine
Baicker from Harvard, whose done really interesting
work on health care economics -- a field that needs plenty
of study.
So what policies did all five agree on? Here's the list
(though you really should listen to the podcast to hear them
all talk about the details)
One: Eliminate the mortgage tax deduction, which lets
homeowners deduct the interest they pay on their
mortgages. Gone. After all, big houses get bigger tax
breaks, driving up prices for everyone. Why distort the
housing market and subsidize people buying expensive
houses?
Two: End the tax deduction companies get for providing
health-care to employees. Neither employees nor employers
pay taxes on workplace health insurance benefits. That
encourages fancier insurance coverage, driving up usage
and, therefore, health costs overall. Eliminating the
deduction will drive up costs for people with workplace
healthcare, but makes the health-care market fairer.
Three: Eliminate the corporate income tax. Completely. If
companies reinvest the money into their businesses, that's
good. Don't tax companies in an effort to tax rich people.
Four: Eliminate all income and payroll taxes. All of them.
For everyone. Taxes discourage whatever you're taxing, but
we like income, so why tax it? Payroll taxes discourage
creating jobs. Not such a good idea. Instead, impose a
consumption tax, designed to be progressive to protect
lower-income households.
Five: Tax carbon emissions. Yes, that means higher
gasoline prices. It's a kind of consumption tax, and can
be structured to make sure it doesn't disproportionately
harm lower-income Americans. More, it's taxing something
that's bad, which gives people an incentive to stop
polluting.
Six: Legalize marijuana. Stop spending so much trying to
put pot users and dealers in jail — it costs a lot of
money to catch them, prosecute them, and then put them up
in jail. Criminalizing drugs also drives drug prices up,
making gang leaders rich.
So there you go. Six proposals from five economists who
represent a very wide spectrum of political views, which they
all agree on. And nearly every one of those is political
suicide (though, to be fair, Libertarian candidate -- and
former beloved New Mexico Governor -- Gary Johnson's platform
actually
does include many of these).
The show suggests they're going to explore in future episodes
why so many proposals that a large number of economists think
make sense are simply politically unfeasible, and I look
forward to that. But, a lot of these are situations where old
policies effectively locked us in, and making changes would
upset an awful lot of existing infrastructure and jobs, not to
mention beneficiaries of those policies. And that's one of the
reasons why we're always a bit worried about government
leaping in to regulate areas where they don't fully understand
what's going on. Those regulations can (and often do) lock us
into a situation that is not easy to get out of -- even if
getting out of it makes a lot of sense...
What's really unfortunate, of course, is that we can't even
have reasonable discussions about most of the proposals above.
Bringing up nearly any of them is considered a political
non-starter, even though if people really understood the
overall impact of them, they might agree that all are at least
worthy of discussion.
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