I Don't Know Why She Swallowed the Fly

EconTalk Extra
by Amy Willis
John Cochrane on Economic Grow... Cathy O'Neil on Weapons of Mat...

old lady.jpg There was an old lady who swallowed a fly...So goes the story of the regulation of the United States economy, according to this week's EconTalk guest, John Cochrane. Cochrane is concerned about the effects of creeping regulation and what he sees as a lack of respect for the rule of law in government today. He also sees policy debates today like bad marriages, with each side just shouting over one another. He aspires to change the nature of this debate...

As always, we want to hear from you...Share your thoughts with us in the Comments, on social media, or simply with your own friends and family.

1. Both Roberts and Cochrane are anxious to get rid of barriers to innovation, but they approach this with different rationales. How does the moral case for the removal of such barriers differ from the practical case? Which side are you on, and why?

2. Do you agree with Cochrane that economic growth has been consistently ignored in policy and campaign rhetoric? What evidence can you cite for this omission? What do you think needs to happen for the issue of economic growth to take center stage again?

3. Cochrane likens well-intentioned reforms such as the Affordable Care Act and Dodd-Frank to "the little old lady who swallowed a fly." To what extent do you think this is an apt analogy, and how sanguine are you that effective leadership is the cure, as Cochrane suggests? (You may want to revisit this 2012 episode with Cochrane, in which he and Roberts focused on health care issues.)

4. What do you think of Cochrane's "policy trading" scheme? (He suggests, for example, that we might make a "trade" with environmentalists of a carbon tax for a reduction in crony environmental subsidies.) Is this a realistic strategy for change?

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CATEGORIES: Extras (194) , Growth (80)

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COMMENTS (7 to date)
Gene Banman writes:


I know you hate that electric vehicle companies claim they are "zero emissions." However, you commit the same error the other way when you and John joked that they should be called Coal fueled cars, as if that was a terrible thing.

Several points:

- A Tesla charged up in a part of the country supplied by coal fired power plants produces about as much CO2 as a car getting 30 MPG. But a Tesla is more like a car which gets 18-24 MPG in terms of what it replaces in the market. So, even if its charged off of coal its a win in CO2, and its a huge win in terms of NOX emissions.

- US power generation is about 1/3 coal, 1/3 (and growing) Natural Gas, and 1/3 emissions free (Nuclear, Hydro, wind, solar and other renewables). So the average Tesla is providing a big improvements over gasoline powered cars on average. California has no coal, but is 2/3 gas for even more of a win in terms of CO2 and NOX.

- More and more people are charging their electric vehicles from their own solar arrays. Those cars truly ARE zero emissions.

- As the power generation sources get cleaner, the electric vehicles get cleaner automatically.

I'm totally with you, that the government should not be giving rebates to rich folks who can afford $100K cars, but at the same time we should get rid of all the ways in which gas and oil are subsidized.

You have powerful positions to take, don't weaken them with misleading and incorrect statements that come out of your irritation with misleading and incorrect statements from the other side.

Loved the show!

Trent writes:

Answering #2...

Yes, I think it's obvious that economic growth has been ignored in policy and campaign rhetoric.

Just look at what gets covered:

* The latest poll
* Hillary's health
* Donald's tax returns
* Hillary's emails
* Donald insulting a former Miss Universe
* Hillary's dealing with The Clinton Foundation
* Donald sniffing/sniffling throughout the first debate

and so on

In fact, I dare say that it's not only economic growth that's getting ignored, but any serious analysis of any policies that either candidate supports. Any of that gets lost in the noise of "the kerfluffle of the day" (which today seems to be whether Donald wanted to hire only attractive female employees at his Florida golf course).

As a sidenote, Gary Johnson does talk some about the importance of economic growth & related policies, but he never gets covered seriously by the media.....it's either the Aleppo kerfluffle or now the 'name your favorite world leader' kerfluffle.

Grant writes:

I think John would appreciate this depiction of the major political parties as a married (but separated) couple: https://youtu.be/aXyDAi51A7s

Harvey Cody writes:

Something very important omitted in the discussion about obstacles to getting politicians to revamp the tax code is the fact that the Internal Revenue Code is a tremendous source of power - something many politicians crave as much as fortune, fame and respect. With a tax code dispensation, politicians can get people scrambling to do things which politicians could not force them to do with a law.

Andrew Whicker writes:


Moral issues are a sliding scale, an invention of man. They are not a rule of nature.

I have moral standards different than you and you of me. As an engineer, I try to continually turn problems into rational knows and unknowns. This easy in technical fields. It isn't easy in social sciences, obviously.

However, when it comes to many of our problems, we are able to break the problem into rational components. We may not be able to accurately measure the components, but we can make an accurate list of knows and unknowns (excluding unknown unknowns).

My opinion is that we ignore our ability to create an equation of costs and benefits. We stand by our morals instead of fact finding. If each side stands strongly with their own morals, without compromise, there is no solution that can be reached.

We have to dig deep inside ourselves and ask why we have our morals. Then we can understand why another may have theirs.

It is not just practical to negotiate, it is the right thing to do... may I even say 'moral' thing to do?

I'll give you an example:

I remember you (Russ) telling your children (story on podcast) that they should use more paper if they love trees. The forests created by companies are completely different than natural forests. A regular forest ecosystem is not preserved. However, it isn't in your best interest to look into this. It would harm a fundamental thought you have with respect to free markets.

I do this same thing in my own life. I avoid looking up reasons why Gary Johnson would be a bad president, even though I'm sure I would find some problems with him, for example. I'm afraid I'll find something.

We need to not only be cognizant of our inherent bias (as you say so often), we need to actively go against it. Without doing this we will constantly be bickering instead of listening.


Russ Roberts writes:

Andrew Whicker,

I may have told my children to use more paper towels if they love trees but usually it was related to the ability of trees to soak up CO2 rather than to create more forest. That's the usual claim of the hot air blower in the bathroom--that it's saving trees and preventing climate change. Yes, it is important to remember that tree farms are not old-growth forests.

Amy Willis writes:

@Trent, I appreciate your comments re: Libertarian presidential candidate Gary Johnson.

One of the best commentaries I've seen on the "world leader" business is from EconLog's Scott Sumner. Here's the link in case you missed it:


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