Over the last decade I’ve noticed how many issues in economics, or at least the political economy, turn out the exact opposite of what was intended or promised.
Now I’m not referring to a slight or even moderate divergence from goals, I’m talking 180° off.
If we were told that unemployment would drop to 7%, but it only dropped to 7.5%, you could argue that the plan was right, just a little off and implemented poorly. If we were told that a higher minimum-wage would help a million people, but it only helped 800,000, we could again argue that estimates were a bit off.
… economic history is a long record of government policies that failed because they were designed with a bold disregard for the laws of economics.
– Ludwig von Mises
But no, that’s not what I mean. I’m referring to the apparent large number of things in economic public policy that have exact opposite effects of the stated goals. Note that whether those making the statements were malevolent or just ignorant is a matter for another post.
Here are a few:
- We’re told that a higher minimum-wage would help the young and the poor, yet it does the opposite
- We’re told that so-called stimulus will be good for the economy, yet we see the opposite
- We’re told that under freer-markets the rich get richer and the poor get poorer, yet we see all get richer (and do see this)
- We’re told that rent-control will help people looking for homes, yet we find the opposite (even more)
- We’re told that we will be richer with more exports and fewer imports, yet the opposite is true
- We’re told that it was critical that we bail out the auto companies, yet it would be better economically had they gone bankrupt
I’m starting to think that we will never learn.
Would You Trade Places With George Vanderbilt?
Challenging the Middle Class Stagnation Myth
QE2 helped the rich and screwed the poor
Politics versus reality — part II – Thomas Sowell
We Saved The Auto Industry! Thanks For Nothin’