Comments on: There’s no tradeoff between dynamism and safety A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 By: nyetter Wed, 30 Dec 2009 01:06:49 +0000 “And the financial innovation and dynamism of the past few decades has brought only modest rewards for most American families (measured by median household incomes).”

One major problem – median household income DOES NOT MEASURE the rewards for most American families. It is a point statistic that is a characteristic of a distribution, and does not describe actual economic reality for any person or group.

Would anyone willingly teleport back to 1999? 1989? 1979? We are fantastically better off than we were at each of those times, and it is entirely because of economic dynamism and not at all due to your silly “safety nets”.

By: howard7 Mon, 28 Dec 2009 20:14:36 +0000 felix, actually, hayek made the same point long ago: that if we want people to listen to market signals, we need to eliminate those things that prevent or distort the market’s signals from getting through.

and as a result, hayek favored a safety net for the exact reason that it freed people to listen to the market:

There is no reason why in a society which has reached the general level of wealth which ours has attained the first kind of security should not be guaranteed to all without endangering general freedom…there can be no doubt that some minimum of food, shelter, and clothing, sufficient to preserve health and the capacity to work, can be assured to everybody…Nor is there any reason why the state should not assist the individuals in providing for those common hazards of life against which, because of their uncertainty, few individuals can make adequate provision. Where, as in the case of sickness and accident, neither the desire to avoid such calamities nor the efforts to overcome their consequences are as a rule weakened by the provision of the assistance – where, in short, we deal with genuinely insurable risks – the case for the state’s helping to organize a comprehensive system of social insurance is very strong….To the same category belongs also the increase of security through the state’s rendering assistance to the victims of such “acts of God” as earthquakes and floods. Whenever communal action can mitigate disasters against which the individual can neither attempt to guard himself or make provision for the consequences, such communal action should undoubtedly be taken….There is, finally, the supremely important problem of combating general fluctuations of economic activity and the recurrent waves of large-scale unemployment which accompany them… istsview/2006/10/tim_duy_in_defe.html

By: Dollared Mon, 28 Dec 2009 19:56:23 +0000 Dead right, Felix. And two comments on this:

1. It’s absolutely clear that the single biggest inhibitor to startup innovation in the US is the lack of health care. No engineering talent with family is going to leave GE, Microsoft, Merck, etc., to join a startup if they can’t get great health care.

2. This also reeks of classism. Frat boys with family resources can always start new businesses. But bright middle class kids, with no family money, student loans, etc., can’t interrupt salary. Like so many things in the US, it’s reverse meritocracy.

By: Beer_numbers Mon, 28 Dec 2009 19:21:14 +0000 I think this is exactly right. If you want people to take more risks, you can either:
A. Increase the benefits they get from successful outcomes (which I view as the generally Republican view, such as reducing capital gains taxes or inheritance taxes)
B. Decrease the costs they bear from unsuccessful outcomes
C. Increase the probability of a successful outcome

I think all of these are plausible goals, but in my eyes if you want me to walk a tightrope, making the wire more stable and adding a safety net is going to jack up the probability much more than adding some gold to the pot on the other side.

On a related note, I saw “Man On Wire” recently, which was an excellent movie.

By: q_is_too_short Mon, 28 Dec 2009 18:50:33 +0000 it did a lot of good. it absorbed a large number of people who only cared about making money, removing them from causing problems in the real economy, for a number of years.