Obamanomics

Tom Hundley had a long piece in the Chicago Tribune on Sunday describing the influence of the University of Chicago on Barack Obama.

The most interesting part comes near the end, where law professors Cass Sunstein and Richard Epstein spar over whether Obama really believes in free markets.

Sunstein says, “As Nixon went to China, Obama will go to deregulation.” Epstein says Obama “has never met a mandate that he would vote against.”

Epstein then goes on to describe his prediction for the Obama economics team:

Obama comes from the tradition that thinks you can get your way on social justice and economic issues without affecting productivity very much — and that’s simply living in a dream world. … [Obama and his economics team] are very smart, but the problem is these high-I.Q. guys always think they can square the circle; they always believe they can beat the system with a cleverer system, and they always fail.

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  1. C. Larity says:

    It was very discouraging (as an ardent Obama supporter) to see some of Obama’s cabinet appointees. Daschle was one of the worst, but luckily he managed to stumble over that one on his own.

    Geithner seemed nearly as bad, and although it’s early and he’s clearly overwhelmed with the job, I’m unimpressed with his plans. I do like that he gets in jabs at Krugman’s insanity, though.

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  2. Brion Emde says:

    “…but the problem is these high-I.Q. guys always think they can square the circle; they always believe they can beat the system with a cleverer system, and they always fail.”

    Isn’t this a description of the last 10 years?

    A clear-cut case of projection: unconsciously attributing to others what is totally yours.

    Wow!

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  3. Mike B says:

    Well doesn’t fixing many types of social issues generally increase growth and productivity? People who are healthy don’t miss work. People who are educated make better choices, impose lower social costs and invent new products. The belief is that our system being held at a sub-optimal state by entrenched interests that seek to prevent their own loss at the expense of everybody else’s gain.

    The trick is hitting the sweet spot. To much regulation and meddling will result in European style stagnation. Obama and his advisers will be able to benefit from hindsight in both the costs of filing to regulate that have become apparent in the last 30 years as well as the lessons in over regulation. At this point they can take the enviable position of being able to fix what’s clearly broke and leave alone what clearly works.

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  4. Justin Harper says:

    I have to disagree with Epstein here. Obama would not vote for *or* against any mandates- he would vote “present”

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  5. P. Shah says:

    Last year, the University of Chicago Federalist Society actually had a debate between Professors Epstein and Sunstein titled “Should Conservatives Support Obama?”

    It was a pretty interesting debate (with Epstein demolishing Sunstein, IMO), which people can listen to here if they want:

    http://federalist.uchicago.edu/podcasts/080303_obama.mp3

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  6. Sebastian Jaen says:

    You can change the system, the problem is that probably you won?t see it.

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  7. Colin says:

    “Well doesn’t fixing many types of social issues generally increase growth and productivity?”

    This assumes that government has the power to fix social ills.

    Since we began the War on Poverty the number of people in poverty has basically flatlined. The biggest poverty reduction act of the last 20 years was welfare reform which reduced the role of government in eliminating poverty.

    Also, there is little reason to think that more government regulation or spending will help improve education. The correlation between the establishment of the Department of Education and educational outcomes is, if anything, negative.

    To the extent can government can promote improvements it is to be found in largely getting out of the way. Reducing its size and scope to better promote economic growth and enrichen society is the best path to dealing with issues such as poverty, health care and education.

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  8. AMG says:

    Mike B,

    Why do you assume that the increase in productivity outweighs the cost of fixing the social issue?

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