Rawls, Cohen and the Laffer hypothesis

John Quiggin, restating the obvious.

Rawls, Cohen and the Laffer hypothesis

… There’s very little reason to believe the Laffer hypothesis or equivalent claims about the banks. The reason tax rates aren’t higher and bankers are getting bailed out on hugely generous terms isn’t because Rawlsians have outvoted Cohenites behind the veil of ignorance, or even because lots of economists believe the Laffer hypothesis. It’s because the rich and powerful are, well, rich and powerful. Not only can they promote ideas, however dubious, that serve their cause, they can bring powerful force to bear against any government or political movement that threatens their interest. All of this is obvious enough, but after thirty years in which any mention of these facts has been shouted down as the “politics of envy” or “class hatred”, it may be necessary to restate the obvious. …

Here’s a meta-quandry: I categorized this post (and a couple of other recent posts) under Politics as well as Economics. I’ve been debating the wisdom of doing so, though. In the past, I’ve tended to omit the Politics category on the grounds of redundancy, at least within the context of this blog. What to do…

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