Growth vs. static efficiency



I have a new Bloomberg piece where I criticize John Cochrane, and conservatives in general by extension, for selling static efficiency policies as "growth" policies. The title is not the best (and the picture they use of John is also not the best; sorry about that). But the point is one I've really wanted to make for a long time:
Most of the so-called growth policies Cochrane and other conservatives propose don't really target growth at all, just short-term efficiency...Cochrane sells us on the need for growth policies by citing the undeniable benefits of long-term economic growth...But most of the policies Cochrane recommends are most certainly not things that would increase the growth rate for decades on end!...[S]uppose we cut taxes...the deadweight loss goes away...It provides a one-time bump, but nothing more...The same is true of most regulation.
You can read the whole thing here.

Now, Cochrane's piece is a very good one, as far as conservative policy manifestos go - it is non-polemical, thoughtful, and well-researched. It includes not just standard Republican planks like tax cuts, but also some things like increased spending on research. I think Cochrane would be a great chief economic advisor for the Rubio administration.

Nor is he trying to be dishonest here. Cochrane is a good guy. The focus on "growth", and the tendency to sell static-efficiency policies with paeans to the benefits of multi-decade compounding, is just a bad habit - a holdover from Reagan days. But nevertheless, I think it's sloppy. Policies to boost static efficiency should be able to stand on their own merits; they don't need to be oversold like this.

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