 President-elect Donald Trump gestures after speaking at Carrier Corp. Thursday in Indianapolis. (AP Photo/Darron Cummings) By Lawrence H. Summers There are many aspects of the economic policy of the new administration that I find misguided. But I am most troubled by what President-elect Donald Trump did with Carrier to hold on to an extra 700 jobs in Indiana. Ronald Reagan's response to the air traffic controllers' strike was a small act that had profound consequences. I fear in a similar way that the negotiation with Carrier is a small thing that is actually a very big thing — a change very much for the worse with regards to the operating assumptions of American capitalism. I have always thought of American capitalism as dominantly rule and law based. Courts enforce contracts and property rights in ways that are largely independent of just who it is who is before them. Taxes are calculable on the basis of an arithmetic algorithm. Companies and governments buy from the cheapest bidder. Regulation follows previously promulgated rules. In the economic arena, the state's monopoly on the use of force is used to enforce contract and property rights and to enforce previously promulgated laws. Even though we know of instances of corruption, abuse of power, favoritism and selective enforcement, we take this rules-based system for granted. But looking around the world today or back through American history, this model is hardly a norm. Read the rest on Wonkblog.
Top policy tweets | 
Twitter
Facebook
No comments:
Post a Comment