Thursday, September 25, 2008

an economist's take

Brad Delong is an economist at Cal-Berkely. While he is admittedly left leaning, he is an independent thinker. He is, for example, a critic of cap-and-trade proposals put forth by both Obama and McCain. Here's a quote from Delong on that subject:
His anti-corruption sensibilities do not seem to have given him reservations about his other high-profile defection from Republican orthodoxy. McCain supports a cap-and-trade system as a means to control emissions. Unfortunately, cap-and-trade would produce levels of congressional corruption not seen since the Gilded Age and make all of the earmarking abuses seem mild in comparison. A cap-and-trade system would set a limit on production in the United States and then issue emission credits that could be bought and sold.... The problem is that Congress would establish the allotments! Every business in America, along with the affected workers and local politicians, would frantically lobby their senators and representatives for additional allotments. In exchange for campaign contributions, more allotments would be forthcoming.

This system would be a nightmare of corruption and inefficiency. Economists have been sounding the warning about this for some time and pointing out that a simple carbon tax with the proceeds going to the U.S. Treasury or an auction of allotments would be far more efficient....


On this blog post he furnishes some interesting graphs.
The first one represents graphically the size of earmarks in the general budget. You may be surprised to see it and then ponder how McCain proposes to use savings from this area to eliminate the budget deficit. Take a look. It's reality check.
The other graphs on the post offer indexes of economic prosperity or the lack thereof in past presidential administrations dating back to Roosevelt. Check it out.

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