It’s Monday and Robert Samuelson Is Wrong11th June 2019
Robert Samuelson complains in his column that people want too much from government and that the Democratic presidential candidates are being unrealistic in promising them more. He begins the piece with John Kennedy’s famous “ask not what your country can do for you” line, then tells readers:
“Anyone who has paid the slightest bit of attention knows that government has expanded substantially over the past half-century.”
He’s of course right about this, but not in the way he discusses in his column, which is a diatribe against government social programs.
The main way government has expanded over the last half-century is through interventions that redistribute trillions of dollars every year upward to people at the top of the income distribution.
The most obvious mechanism is through government-granted patent and copyright monopolies, which make items that would otherwise be cheap very expensive. This is most obvious in the case of prescription drugs, where drugs that would likely sell for less than $80 billion a free market will cost the country more than $460 billion this year.
This gap of $380 billion annually, is equal to 1.8 percent of GDP. It is five times the size of the food stamp program. And, that is just prescription drugs. Throw in at least $100 billion a year for medical equipment and other medical supplies, hundreds of billions more for computers and software, and you’re talking real money.
And Robert Samuelson has literally never said a word about these government-granted monopolies in any of his columns. I guess they are too big to worry about.
Then we get to trade. The reason why trade has depressed the wages of manufacturing workers (and workers without college degrees more generally) and not doctors is that we structured globalization to subject manufacturing workers to international competition, while protecting doctors and other highly paid professionals. Yes, the government did a lot over the last five decades to raise the pay of the most highly paid professionals, but Samuelson also didn’t notice this one.
And then there is the head I win, tails you lose way we structure financial markets. We rigged the system in a variety of ways to create a financial sector that sucks money from the rest of us to make a small number of Wall Street types very rich.
Yes, this the topic of my book Rigged [it’s free], but don’t expect to see the issue of designing the market to redistribute upward discussed in the Washington Post. They only have room to print recycled pieces complaining about people wanting health care, education for their kids, and a planet that’s habitable for life.
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