Economics
Open Letter to Brink Lindsey and Sam Hammond
(Don Boudreaux) TweetMessrs. Brink Lindsey and Samuel Hammond Niskanen Center Washington, D.C. Brink and Sam: I just read your new paper, “Faster Growth, Fairer Growth: Policies for a High Road, High Performance Economy.” I agree with much that you write, and I applaud your eloquence. But some key parts of your paper are mystifying – not least your […]
Messrs. Brink Lindsey and Samuel Hammond
Niskanen Center
Washington, D.C.
Brink and Sam:
I just read your new paper, “Faster Growth, Fairer Growth: Policies for a High Road, High Performance Economy.” I agree with much that you write, and I applaud your eloquence. But some key parts of your paper are mystifying – not least your unquestioned acceptance of the claim that America’s middle-class has stagnated economically for the past few decades. Equally mystifying is your endorsement of what you call “development policy.”
On the stagnation point, you ignore Michael Strain’s recent data-filled book that challenges the stagnation thesis. You also overlook the anti-stagnation research of – to name only a few scholars – William Cline, Steve Horwitz, Scott Lincicome, Alan Reynolds, Bruce Sacerdote, Scott Winship, and even that of Stephen Rose. (And although it’s now 21 years old, the work of Michael Cox and Richard Alm nevertheless remains relevant – and ignored by you.)
Because much of the justification for your proposed policies depends upon the truth of the claim that ordinary Americans have for decades stagnated economically, you do your readers a disservice by pretending that middle-class stagnation is an established fact when, in reality, it most emphatically is not.
As for “development policy” (which is your new name for industrial policy) you write that “strategic federal investments should focus on spurring the creation of new markets and capacities” and that “policymakers should focus on ensuring the next generation of high-tech manufacturers have the capital they need to scale.” Such words are so very fun and easy to write!
But who will be the flesh-and-blood officials possessing the genius to know which “new markets and capacities” are the ones that should be goosed up with “strategic federal investments”? From where will these officials get their knowledge of which particular markets and “capacities” are best to stimulate, and which high-tech manufacturers are of “the next generation”? On these all-important questions you are utterly silent.
You’re silent also about how your “development policy” will escape being sabotaged by rent-seekers. For two reasons this silence is especially curious. First, elsewhere in your paper you correctly identify many of the ways that rent-seekers distort government policies. Second, the very purpose of your “development policy” is to create rents for favored firms. What miracle repellant do you envision will keep rent-seekers away from the special privileges that you propose be created? Your readers are left to guess.
Your case for “development policy,” in summary, is to cure an imaginary problem (that is, middle-class stagnation) by giving more discretionary power to imaginary government officials (that is, men and women assumed to possess god-like knowledge and integrity).
Surely you can do better than this.
Sincerely,
Don

Study Shows 186 Banks Are On The Brink Of Failure
The Fed has done it again: raised their interest rates for the 9th time on March 22, 2023, by 25 basis points. This brings the fed fund rate to 4.75%-5%….
‘What Lies Beneath’? Market Headlines Mask Mayhem Below The Surface This Week
‘What Lies Beneath’? Market Headlines Mask Mayhem Below The Surface This Week
At the macro level, strong PMI data today was the icing on the…
Biden Says “Banks In Pretty Good Shape” As Small Banks See Biggest Deposit Outflow On Record
Biden Says "Banks In Pretty Good Shape" As Small Banks See Biggest Deposit Outflow On Record
The Fed just released its weekly commercial bank…
-
Economics20 hours ago
Fed Gets Its Wish: Real-Time Card Data Shows Consumer Spending Craters After Start Of Bank Crisis
-
Energy & Critical Metals12 hours ago
Commercially operated Wärtsilä engine runs on 25 vol% hydrogen blend
-
Companies8 hours ago
Gold Record ‘not that far away’ Says Analyst. We Damn Sell Hope So
-
News Releases21 hours ago
Ascot Reports 2022 Annual Results
-
Financing News21 hours ago
Ascot Publishes 2022 Sustainability Report
-
Precious Metals8 hours ago
Todd “Bubba” Horwitz Sees $2200 Gold & $35 Silver In 2023
-
Precious Metals6 hours ago
Gold Upleg Rockets Back
-
Financing News9 hours ago
Eastern Platinum Limited Announces Rights Offering to Fund Growth Opportunities