Politics may be the art of compromise, but economic policy is not. In fact, compromised economic policy is arguably what caused the economic insecurity we are currently dealing with.This was written with reference to President-Elect Obama and the difficult problems he will face when he assumes office in January. But it could equally have been written about whoever wins the next election here in New Zealand. Comprise just to get a coalition together just to be able to govern may be good politics, but it can also lead to very bad economics. Coordination of different areas of economic policy is important if they are not to end up working at odds with each other. Unfortunately politics always beats economics.
Thursday, 6 November 2008
Good politics is not good economics
Peter Boettke at The Austrian Economists blog writes,