Aug

14

 P. J. O'Rourke, of all people, has a quote that has gotten me thinking.

"There is a simple rule here, a rule of legislation, a rule of business, a rule of life: beyond a certain point, complexity is fraud. You can apply that rule to left-wing social programs, but you can also apply that rule to credit derivatives, hedge funds, all the rest of it."

Does this contain some truth, in the areas that this list is most interested in? Or does it reflect the suspicion people have for things they can't understand?

Gordon Haave writes:

I've held this view for a long time about the Fed and most economic matters. The basics are easy, they are then made more complex primarily so that people don't understand them.

Another good example of this, by the way, is trade policy/stagnant real wages. Why are real wages stagnant? Well, NAFTA and trade policy. If you increase the supply of labor, you decrease the market clearing price. It's simple stuff. Very simple. Econ 101.

However, if the people understood it that clearly they would revolt against it, which is why it is presented as being complex, when it isn't.

That is not to say that I am anti-free trade per se, but the average american would be if he understood the short to medium run implications.


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