DISQUS

Interesting post and I agree with a lot of what you say. Still, I find two issues with your piece:

1) How you can be certain about the claim that "[f]inancial innovation affects growth at the margin by more efficiently allocating capital ... but this is obviously secondary to developments in the real economy..." In particular, it seems that the correct allocation of resources is THE central difference between capitalism and other forms of economic organization. If developments in our capital markets can make our allocation even more efficient, this could arguably give us a significant advantage over other countries. Indeed, this could be a central reason for why "the rule of law" is required to achieve otherwise libertarian economic growth - without the basic correct allocation of capital which the rule of law provides, economic growth cannot begin to develop.

2) You make two claims which may contradict each other:
A. "Financial innovation affects growth at the margin by more efficiently allocating capital to its most efficient uses, but this is obviously secondary to developments in the real economy that increase capital’s productivity."
B. "I happen to think Summers is making a mistake in believing that government has adequate information or motivation to do a very good job at identifying growth-enhancing investments."

If the second is true, how can you claim the first with confidence, e.g., if the government cannot know what is correct, how can you? Not such an error, but I find it interesting that you can make such claims about the right course and yet claim that the government is ignorant about the way to go forward.

Just small comments - take them for what you will. Many thanks for your work.

"there’s not really a serious argument for not getting rid of the status quo Social Security system."

To claim that you cannot think of a single good argument for a position supported by the vast majority of the electorate and the political class is like the asylum inmate claiming that he is the one who is sane and everyone is society is crazy - not saying it's not true, just that you might want to pause for a second to consider other options before taking such a position.

In general, a remark like that is an indication that someone has not given his opponent enough credit and is engaging in sloppy thinking. It is commonly heard in political arguments, and when it emerges is a sure sign of sloppy thinking.

Surely you can think of some arguments in favor of the current social security regime. If not, think harder, and consider especially the perspective of people of different ages and socio-economic standing and sophistication - why might they prefer the current regime, and what do those preferences tell you about the advantages that it offers?

Once you come up with some of these arguments, engage them, and then make your own argument again. I think that you are probably right in the end, but to claim in a summarily fashion that the only reason someone would support the current regime is electoral politics is cynical, insulting to the electorate, and completely unconvincing.

I wish you could have engaged the title of the post more. There really is a challenge to neoliberalism here - politically, if nothing else - and while there are people worth ridiculing, there are also people seriously considering the implications of what we are currently going through for future policy making. I'd be very interested to hear your thoughts.

I don't know what parents you know who aren't willing to admit this - all the ones I know bitch and complain plenty about having kids.

Having kids is like marriage itself in that there is a recognition that you've gained a lot, but also that you've sacrificing and lost a lot. Most parents, because of the bond and sense of purpose you mention, consider it worth the trade-off, but I don't know many who won't readily admit that they wish they were getting more sleep, that their kids cost them a bundle, that they have intense fantasies of being able to just go to whatever restaurant they want and eat a meal at their leisure, etc.

Or did I misunderstand what you were talking about?