1. Charles Baudelaire, “Le Joueur généreux,” in Œuvres complètes de Charles Baudelaire, vol. 4 (Michel Lévy Frères, 1869), 80, translation by the author.
1. The Best of All Possible Worlds
1. Voltaire, Candide: Or, Optimism, trans. John Butt (Penguin, 1947), 20.
2. Gottfried Wilhelm Leibniz, Theodicy: Essays on the Goodness of God, the Freedom of Man, and the Origin of Evil, trans. E. M. Huggard (Routledge & Kegan Paul, 1951), 128. As one philosopher and Leibniz biographer writes, “All the evils of this actual world are logically necessary for the greater good of the best of all possible worlds.” Maria Rosa Antognazza, Leibniz: An Intellectual Biography (Cambridge University Press, 2009), 486.
3. Voltaire, Candide, 20, 23.
4. Thomas Piketty, Capital in the Twenty-First Century, trans. Arthur Goldhammer (Belknap Press, 2014), 341.
5. Max Weber, The Protestant Ethic and the Spirit of Capitalism, trans. Talcott Parsons (Unwin, 1985).
6. Piketty, Capital, 349.
7. Quoted in Sidney Fine, Laissez Faire and the General-Welfare State (University of Michigan Press, 1956), 38.
8. Sumner quoted in Richard Hofstadter, Social Darwinism in American Thought, rev. ed. (Beacon Press, 1955), 58. See also Fine, Laissez Faire, 84–85.
9. Hofstadter, Social Darwinism, 5. The steel magnate Andrew Carnegie, for example, considered himself a follower of Spencer. Fine, Laissez Faire, 42.
10. Facundo Alvaredo et al., The World Wealth and Income Database, “United States, Top 1% Income Share,” http://www.wid.world; Caroline Freund and Sarah Oliver, “The Origins of the Superrich: The Billionaire Characteristics Database” (Peterson Institute for International Economics working paper 16-1, Feb. 2016), fig. 1.
11. “$3M Party Fit for Buyout King,” New York Post, Feb. 14, 2007; Alexandra Stevenson and Julie Creswell, “Bill Ackman and His Hedge Fund, Betting Big,” New York Times, Oct. 25, 2014.
12. Real median household income, averaged over 2011–13, was 8 percent higher than the corresponding figure averaged over 1971–73. U.S. Census Bureau, Historical Income Tables: Households, Table H-5: Race and Hispanic Origin of Householder—Households by Median and Mean Income: 1967 to 2013. Over that same period, the proportion of people aged twenty-five to fifty-four in the labor force increased from 72.4 percent to 81.3 percent—an increase of more than 12 percent. Federal Reserve Bank of St. Louis, FRED Economic Data, “Civilian Labor Force Participation Rate: 25 to 54 Years” (seasonally adjusted). Median income for men: Matt O’Brien, “A Stunning Stat About Pay Seems Impossible but Actually Is True,” Wonkblog (blog), Washington Post, Sept. 22, 2015.
13. Elliot Blair Smith and Phil Kuntz, “CEO Pay 1,795-to-1 Multiple of Wages Skirts U.S. Law,” Bloomberg, April 30, 2013; Carmen DeNavas-Walt and Bernadette D. Proctor, Income and Poverty in the United States: 2013 (U.S. Census Bureau, Current Population Reports, P60-249, Sept. 2014), fig. 4.
14. See, for example, G. Warren Nutter, “On Economism,” Journal of Law and Economics 22, no. 2 (Oct. 1979): 263–68; John Braithwaite, “The Limits of Economism in Controlling Harmful Corporate Conduct,” Law and Society Review 16, no. 3 (1981): 481–504; Richard K. Ashley, “Three Modes of Economism,” International Studies Quarterly 27 (1983): 463–96; Teivo Teivainen, Enter Economism, Exit Politics: Experts, Economic Policy, and the Damage to Democracy (Zed Books, 2002), 1–5; Des Gasper, The Ethics of Development: From Economism to Human Development (Edinburgh University Press, 2004), 80–81; Jonathan Wolff and Dirk Haubrich, “Economism and Its Limits,” in The Oxford Handbook of Public Policy, ed. Michael Moran, Martin Rein, and Robert E. Goodin (Oxford University Press, 2006); Howard Brody, The Golden Calf: Economism and American Policy (CreateSpace, 2011).
15. Noah Smith, “101ism,” Noahpinion (blog), Jan. 21, 2016.
16. Wanniski: Jude Wanniski, The Way the World Works, 4th ed. (Regnery, 1998), 89. Reagan: Jerold L. Waltman, The Politics of the Minimum Wage (University of Illinois Press, 2000), 44. Mankiw: N. Gregory Mankiw, “I Can Afford Higher Taxes. But They’ll Make Me Work Less,” New York Times, Oct. 9, 2010. Ryan: John McCormack, “Paul Ryan: More Important to Cut Top Tax Rate Than Expand Child Tax Credit,” Weekly Standard, Aug. 20, 2014.
17. Paul A. Samuelson, Economics (McGraw-Hill, 1948), 36.
18. Michael M. Weinstein, “Paul A. Samuelson, Economist, Dies at 94,” New York Times, Dec. 13, 2009. Samuelson’s textbook, first published in 1948, was the market leader until the 1970s.
19. Every introductory textbook includes chapters on monopolies and oligopolies, but those lessons are also highly stylized and tend to be forgotten sooner than the lesson about competitive markets.
20. Max Weber, “The Social Psychology of the World Religions,” in From Max Weber: Essays in Sociology, ed. H. H. Gerth and C. Wright Mills (Routledge, 1991), 271.
21. William J. Baumol and Alan S. Blinder, Economics: Principles and Policy, 12th ed. (South-Western Cengage Learning, 2012), 5.
22. Actually, Marx never wrote those words. The Communist Manifesto concludes, “The proletarians have nothing to lose but their chains. They have a world to win. WORKING MEN OF ALL COUNTRIES, UNITE!” Karl Marx and Friedrich Engels, “Manifesto of the Communist Party,” in The Marx-Engels Reader, ed. Robert C. Tucker, 2nd ed. (W. W. Norton, 1978), 500.
23. N. Gregory Mankiw, Principles of Economics, 5th ed. (South-Western Cengage Learning, 2008), 150.
24. Henry Hazlitt, Economics in One Lesson (Pocket Books, 1952), 181–82.
25. Bork: Sidney Blumenthal, The Rise of the Counter-establishment: From Conservative Ideology to Political Power (Times Books, 1986), 303. Hensarling: Joseph Guinto, “Jeb Hensarling: The GOP’s Most Powerful Nobody,” D Magazine, Nov. 2009. Carender: Michael Grabell, Money Well Spent? The Truth Behind the Trillion-Dollar Stimulus, the Biggest Economic Recovery Plan in History (PublicAffairs, 2012), 84.
26. On the shortcomings of neoclassical economics, see Julie A. Nelson, “Poisoning the Well, or How Economic Theory Damages Moral Imagination,” in The Oxford Handbook of Professional Economic Ethics, ed. George DeMartino and Deirdre McCloskey (Oxford University Press, 2016).
27. Matthew Yglesias, “Sorry, Conservatives—Basic Economics Has a Liberal Bias,” MoneyBox (blog), Slate, Feb. 4, 2014.
28. Dani Rodrik, Economics Rules: The Rights and Wrongs of the Dismal Science (W. W. Norton, 2015), 170.
29. Mark Thoma, “Yes, Nick Kristof, There Is a Conservative Bias in Economics,” Fiscal Times, May 31, 2016.
30. Justin Fox, “How Economics Went from Theory to Data,” Bloomberg, Jan. 6, 2016.
31. John Komlos, What Every Economics Student Needs to Know and Doesn’t Get in the Usual Principles Text (M. E. Sharpe, 2014), 10–11; Noah Smith, “Most of What You Learned in Econ 101 Is Wrong,” Bloomberg, Nov. 24, 2015.
32. Rodrik, Economics Rules, 174.
2. The Magic of the Marketplace
1. Irving Fisher, The Rate of Interest: Its Nature, Determination, and Relation to Economic Phenomena (Macmillan, 1907), 6. See “Teach a Parrot to Say ‘Supply and Demand’ and You Have an Economist,” Quote Investigator, July 19, 2013.
2. Daniel Kahneman, Jack L. Knetsch, and Richard Thaler, “Fairness as a Constraint on Profit Seeking: Entitlements in the Market,” American Economic Review 76, no. 4 (Sept. 1986): 728–41; Richard Thaler, Misbehaving: The Making of Behavioral Economics (W. W. Norton, 2015), 128; IGM Forum, “Price Gouging,” University of Chicago Booth School of Business, May 2, 2012.
3. Clare Stroud, Lori Nadig, and Bruce M. Altevogt, rapporteurs, The 2009 H1N1 Influence Vaccination Campaign: Summary of a Workshop Series (National Academies Press, 2010), 15–16.
4. Matthew Yglesias, “When Supply Is Elastic, Gouge Away,” MoneyBox (blog), Slate, Nov. 2, 2012.
5. Samuelson, Economics, 38.
3. The Long March of Economism
1. Karl Marx and Friedrich Engels, “The German Ideology: Part I,” in Tucker, Marx-Engels Reader, 174.
2. John Maynard Keynes, The General Theory of Employment, Interest, and Money (Harvest, 1964), 383; F. A. Hayek, “The Intellectuals and Socialism,” University of Chicago Law Review 16 (Spring 1949): 418.
3. Hayek, “Intellectuals and Socialism,” 418, 432.
4. Karl Marx, “Marx on the History of His Opinions” (from the preface to A Contribution to the Critique of Political Economy), in Tucker, Marx-Engels Reader, 5.
5. Adam Smith, The Wealth of Nations, ed. Edwin Cannan (Bantam Classic, 2003), 78–82.
6. Thomas M. Humphrey, “Marshallian Cross Diagrams and Their Uses Before Alfred Marshall: The Origins of Supply and Demand Geometry,” Federal Reserve Bank of Richmond Economic Review 78, no. 2 (March–April 1992): 3–23.
7. Daniel T. Rodgers, Age of Fracture (Harvard University, 2012), 45.
8. Alfred Marshall, Principles of Economics, 9th ed. (Macmillan, 1961), vol. 1, bk. 5, chap. 13, § 5, 471–72.
9. See David A. Moss, When All Else Fails: Government as the Ultimate Risk Manager (Harvard University Press, 2002).
10. Keynes, General Theory, 249–50, 33–34.
11. Ibid., 129, 378–81.
12. Thomas Ferguson and Joel Rogers, Right Turn: The Decline of the Democrats and the Future of American Politics (Hill and Wang, 1986), 46–50.
13. Kim Phillips-Fein, Invisible Hands: The Making of the Conservative Movement from the New Deal to Reagan (W. W. Norton, 2009), 56–57.
14. Samuelson, Economics, 3; Jacob S. Hacker and Paul Pierson, American Amnesia: How the War on Government Led Us to Forget What Made America Prosper (Simon & Schuster, 2016), 168–69.
15. John F. Kennedy, “Commencement Address at Yale University” (June 11, 1962), American Presidency Project, http://www.presidency.ucsb.edu/ws/?pid=29661.
16. They included David Goodrich, president of the B. F. Goodrich Company; Jasper Crane, an executive vice president at DuPont Chemical; Harold Luhnow, who ran William Volker & Company and the William Volker Fund; Lewis H. Brown, the president of the Johns-Manville Corporation; and Harry Bradley, co-founder of the Allen-Bradley Company. Phillips-Fein, Invisible Hands, 27, 42, 61.
17. Ibid., 54, 61–65, 163; Ferguson and Rogers, Right Turn, 86.
18. These included the Lynde and Harry Bradley, Adolph Coors, Earhart, JM, Koch Family, Sarah Scaife, Smith Richardson, and John M. Olin Foundations. Alice O’Connor, “Financing the Counterrevolution,” in Rightward Bound: Making America Conservative in the 1970s, ed. Bruce J. Schulman and Julian E. Zelizer (Harvard University Press, 2008), 152.
19. Quoted in Hacker and Pierson, American Amnesia, 232.
20. On the history of American conservative ideas, see, for example, Sidney Blumenthal, The Rise of the Counter-establishment: From Conservative Ideology to Political Power (Times Books, 1986); George H. Nash, The Conservative Intellectual Movement in America Since 1945 (Intercollegiate Studies Institute, 1996); Jonathan Schoenwald, A Time for Choosing: The Rise of Modern American Conservatism (Oxford University Press, 2001); John Micklethwait and Adrian Wooldridge, The Right Nation: Conservative Power in America (Penguin Books, 2005); Donald T. Critchlow, The Conservative Ascendancy: How the GOP Right Made Political History (Harvard University Press, 2007); Brian Doherty, Radicals for Capitalism: A Freewheeling History of the Modern American Libertarian Movement (PublicAffairs, 2007); Phillips-Fein, Invisible Hands; Angus Burgin, The Great Persuasion: Reinventing Free Markets Since the Depression (Harvard University Press, 2012); Daniel Stedman Jones, Masters of the Universe: Hayek, Friedman, and the Birth of Neoliberal Politics (Princeton University Press, 2012); Thomas O. McGarity, Freedom to Harm: The Lasting Legacy of the Laissez Faire Revival (Yale University Press, 2013).
21. Hacker and Pierson, American Amnesia, 172.
22. Ludwig von Mises, Bureaucracy (Yale University Press, 1944), 20–21, 26–27, 30–31.
23. F. A. Hayek, The Road to Serfdom: Text and Documents, definitive ed., ed. Bruce Caldwell (University of Chicago Press, 2007), 59.
24. Ibid., 59, 95–96.
25. McGarity, Freedom to Harm, 36.
26. Bruce Caldwell, introduction to Road to Serfdom, by Hayek, 19.
27. Bruce Caldwell, “The Chicago School, Hayek, and Neoliberalism,” in Building Chicago Economics: New Perspectives on the History of America’s Most Powerful Economics Program, ed. Robert Van Horn, Philip Mirowski, and Thomas A. Stapleford (Cambridge University Press, 2011), 303; Phillips-Fein, Invisible Hands, 42; Rob Van Horn and Philip Mirowski, “The Rise of the Chicago School of Economics and the Birth of Neoliberalism,” in The Road from Mont Pèlerin: The Making of the Neoliberal Thought Collective, ed. Philip Mirowski and Dieter Plehwe (Harvard University Press, 2009).
28. F. A. Hayek, The Constitution of Liberty, definitive ed., ed. Ronald Hamowy (University of Chicago Press, 2011), pt. 3.
29. Corey Robin, “Nietzsche’s Marginal Children: On Friedrich Hayek,” Nation, May 7, 2013.
30. Quoted in Daniel Yergin and Joseph Stanislaw, The Commanding Heights: The Battle for the World Economy (Free Press, 2002), 89.
31. Stedman Jones, Masters of the Universe, 77; Phillips-Fein, Invisible Hands, 44, 49.
32. Nash, Conservative Intellectual Movement, 267; Stedman Jones, Masters of the Universe, 153.
33. Stedman Jones, Masters of the Universe, 98; Milton Friedman, Capitalism and Freedom, 40th anniversary ed. (University of Chicago Press, 2002), xv.
34. Friedman, Capitalism and Freedom, chap. 2.
35. Ibid., 91–96, 156–58, 124, 185–89.
36. Milton Friedman and Rose Friedman, Free to Choose: A Personal Statement (Avon, 1980), 5–12.
37. Underwriters included the Sarah Scaife Foundation, the John M. Olin Foundation, Getty Oil, Reader’s Digest, Firestone Tire and Rubber, and the National Federation of Independent Business, for example. Free to Choose Media, “Underwriters,” http://www.freetochoosemedia.org/broadcasts/freetochoose/underwriters.php.
38. Friedman, Capitalism and Freedom, xii.
39. Phillips-Fein, Invisible Hands, 19, 26, 54; Stedman Jones, Masters of the Universe, 155; Nash, Conservative Intellectual Movement, 18, 346. Early supporters included Harold Luhnow, Jasper Crane of DuPont, David Goodrich of B. F. Goodrich, Charles White of Republic Steel, and Donaldson Brown of General Motors.
40. Quoted in Phillips-Fein, Invisible Hands, 27.
41. Milton Friedman and George J. Stigler, “Roofs or Ceilings? The Current Housing Problem,” FEE Popular Essays on Current Problems 1, no. 2 (Sept. 1946): 18–19.
42. Stedman Jones, Masters of the Universe, 155.
43. Phillips-Fein, Invisible Hands, 61–65; Critchlow, Conservative Ascendancy, 119–20; Micklethwait and Wooldridge, Right Nation, 80.
44. Lee Edwards, The Power of Ideas: The Heritage Foundation at 25 Years (Jameson Books, 1997), 26, 32, 53–54, 74.
45. James Allen Smith, The Idea Brokers: Think Tanks and the Rise of the New Policy Elite (Free Press, 1991), 221.
46. Roger Hertog and Lawrence J. Mone, preface to Turning Intellect into Influence: The Manhattan Institute at 25, ed. Brian C. Anderson (Reed Press, 2004), vi.
47. Edwards, Power of Ideas, 4–9; Smith, Idea Brokers, 220; Doherty, Radicals for Capitalism, 454, 478; John Blundell, “Hayek, Fisher, and The Road to Serfdom,” introduction to “The Road to Serfdom,” in Friedrich A. Hayek, The Road to Serfdom, with The Intellectuals and Socialism (Institute of Economic Affairs, 2001), 28; Critchlow, Conservative Ascendancy, 122; Micklethwait and Wooldridge, Right Nation, 80; Manhattan Institute, Manhattan Forums: The First Five Years, http://www.manhattan-institute.org/pdf/mi_five.pdf; Rick Carp, “Who Pays for Think Tanks?,” Fairness & Accuracy in Reporting, July 1, 2013.
48. Phillips-Fein, Invisible Hands, 176.
49. Jane Mayer, “Covert Operations,” New Yorker, Aug. 30, 2010; Dave Levinthal, “Inside the Koch Brothers’ Campus Crusade,” Center for Public Integrity, March 27, 2014; Dave Levinthal, “Koch Brothers’ Higher-Ed Investments Advance Political Goals,” Center for Public Integrity, Oct. 30, 2015; Kris Hundley, “Billionaire’s Role in Hiring Decisions at Florida State University Raises Questions,” Tampa Bay Times, May 9, 2011.
50. Steven M. Teles, The Rise of the Conservative Legal Movement: The Battle for Control of the Law (Princeton University Press, 2008), 93–100.
51. Rodgers, Age of Fracture, 58.
52. Teles, The Rise of the Conservative Legal Movement, 105–8, 112–13, 115–17.
53. Quoted in ibid., 212.
54. Ibid., 211.
55. Hazlitt, Economics in One Lesson, vii.
56. Quoted in Blumenthal, Rise of the Counter-establishment, 64.
57. Quoted in Phillips-Fein, Invisible Hands, 163.
58. Daniel J. Arbess, “The Young and the Economically Clueless,” Wall Street Journal, Feb. 19, 2016.
59. Elizabeth A. Fones-Wolf, Selling Free Enterprise: The Business Assault on Labor and Liberalism, 1945–60 (University of Illinois Press, 1994), 40, 83–85.
60. Ibid., 40, 174–75.
61. Matthew C. Klein, “What Does It Mean to Be ‘Economically Literate’ Anyway?,” FT Alphaville (blog), Financial Times, March 25, 2016.
62. Fones-Wolf, Selling Free Enterprise, 196–97, 201–5.
63. Bethany E. Moreton, “Make Payroll, Not War: Business Culture as Youth Culture,” in Schulman and Zelizer, Rightward Bound, 55–61, 69.
64. Hazlitt, Economics in One Lesson, 5.
65. Ibid., 98.
66. Micklethwait and Wooldridge, Right Nation, 79.
67. Nash, Conservative Intellectual Movement, 134–40.
68. Stedman Jones, Masters of the Universe, 173.
69. William F. Buckley, God and Man at Yale: The Superstitions of “Academic Freedom” (Henry Regnery, 1951), 51; William F. Buckley, “Our Mission Statement,” National Review, Nov. 19, 1955; William F. Buckley, Up from Liberalism (Honor Books, 1965), 201–2.
70. Wanniski, Way the World Works, xv–xvi.
71. Blumenthal, Rise of the Counter-establishment, 194.
72. Wanniski, Way the World Works, chaps. 7, 11.
73. Jude Wanniski, “It’s Time to Cut Taxes,” Wall Street Journal, Dec. 11, 1974.
74. Wanniski, Way the World Works, 346; Blumenthal, Rise of the Counter-establishment, 185–86, 201–2; Jonathan Chait, The Big Con: The True Story of How Washington Got Hoodwinked and Hijacked by Crackpot Economics (Houghton Mifflin, 2007), 16.
75. George F. Will, “Utah’s Schools Showdown,” Washington Post, Nov. 1, 2007; George F. Will, “Social Security: Opportunity, Not a Crisis,” Washington Post, Jan. 20, 2005.
76. David Brooks, “The Center-Right Moment,” New York Times, May 12, 2015; David Brooks, “The Minimum Wage Muddle,” New York Times, July 24, 2015.
77. Kiron K. Skinner, Annelise Anderson, and Martin Anderson, Reagan’s Path to Victory: The Shaping of Ronald Reagan’s Vision: Selected Writings (Free Press, 2004), 24.
78. The Rush Limbaugh Show, Sept. 29, 2015, http://www.rushlimbaugh.com/daily/2015/09/29/trump_s_tax_plan_reaganesque_but; The Rush Limbaugh Show, Jan. 6, 2010, http://www.rushlimbaugh.com/daily/2010/01/06/state_run_media_has_cow_over_rush_s_hospital_press_conference; The Rush Limbaugh Show, Dec. 7, 2012, http://www.rushlimbaugh.com/daily/2012/12/07/a_16_year_old_rush_baby.
79. Annie Baxter, “Landlords Have the Upper Hand in Many Rental Markets,” Marketplace, Feb. 17, 2015; Noel King, “Catching an Uber on New Year’s Eve? It’ll Cost You,” Marketplace, Dec. 31, 2014.
80. Quoted in Jacob S. Hacker and Paul Pierson, Winner-Take-All Politics: How Washington Made the Rich Richer—and Turned Its Back on the Middle Class (Simon & Schuster, 2010), 189.
81. Barry Goldwater, The Conscience of a Conservative (Victor, 1960), 5, 12. The book was actually ghostwritten by L. Brent Bozell. Nash, Conservative Intellectual Movement, 192.
82. Goldwater, Conscience of a Conservative, 39–43, 99.
83. Blumenthal, Rise of the Counter-establishment, 39–40.
84. Phillips-Fein, Invisible Hands, 112–14; Micklethwait and Wooldridge, Right Nation, 48.
85. Ronald Reagan, “A Time for Choosing” (Oct. 27, 1964), Ronald Reagan Presidential Library & Museum, https://en.wikipedia.org/wiki/A_Time_for_Choosing.
86. Stedman Jones, Masters of the Universe, 265.
87. Chuck’s New Classic TV Clubhouse, “Ronald Reagan Political Ad #2, 1980,” YouTube, May 11, 2015.
88. Blumenthal, Rise of the Counter-establishment, 120; Phillips-Fein, Invisible Hands, 261.
89. Quoted in Edward Cowan, “How Regan Sees the Budget,” New York Times, Oct. 18, 1981.
90. Ronald Reagan, “Inaugural Address” (Jan. 20, 1981), American Presidency Project, http://www.presidency.ucsb.edu/ws/?pid=43130.
91. Ronald Reagan, “Remarks at the Annual Meeting of the Boards of Governors of the World Bank Group and International Monetary Fund” (Sept. 29, 1981), Ronald Reagan Presidential Library & Museum, http://www.reagan.utexas.edu/archives/speeches/1981/92981a.htm.
92. Quoted in Blumenthal, Rise of the Counter-establishment, 260.
93. Quoted in Phillips-Fein, Invisible Hands, 259.
94. William J. Clinton, “Address Before a Joint Session of the Congress on the State of the Union” (Jan. 23, 1996), American Presidency Project, http://www.presidency.ucsb.edu/ws/?pid=53091.
95. Richard K. Armey, The Freedom Revolution: The New Republican Majority Leader Tells Why Big Government Failed, Why Freedom Works, and How We Will Rebuild America (Regnery, 1995), 316.
96. George W. Bush, “Address Before a Joint Session of the Congress on the State of the Union” (Jan. 28, 2003), American Presidency Project, http://www.presidency.ucsb.edu/ws/index.php?pid=29645; George W. Bush, “Remarks in Aurora, Mississippi” (Jan. 14, 2002), in Public Papers of the Presidents of the United States: George W. Bush, 2002, bk. 1 (U.S. Government Printing Office, 2004), 64–69.
97. Mitt Romney, “Tax Deal, Bad Deal,” USA Today, Dec. 14, 2010; Mitt Romney campaign website, archived at archive.org on Sept. 3, 2012; Mitt Romney campaign website, archived at archive.org on Sept. 11, 2012.
98. House Committee on the Budget, The Path to Prosperity: Restoring America’s Promise: Fiscal Year 2012 Budget Resolution (April 5, 2011), 47, 51.
99. Stephen S. Cohen and J. Bradford DeLong, Concrete Economics: The Hamilton Approach to Economic Growth and Policy (Harvard Business Review Press, 2016), 107–8.
100. Rodgers, Age of Fracture, 76.
101. David M. Kotz, The Rise and Fall of Neoliberal Capitalism (Harvard University Press, 2015), 83.
4. You Get What You Deserve
1. Ray Dalio, Principles (Bridgewater Associates, 2011), 6.
2. U.S. Bureau of Labor Statistics, “A Profile of the Working Poor, 2013,” BLS Reports, no. 1055 (July 2015). (For these purposes, the BLS includes people in the workforce for more than half the year.) U.S. Bureau of Labor Statistics, “Occupational Employment and Wages—May 2014” (press release), March 25, 2015. The median hourly wages for retail salespeople and cashiers are $10.19 and $9.17, respectively.
3. “McDonald’s Helps Workers Get Food Stamps,” CNNMoney, Oct. 24, 2013.
4. Drew DeSilver, “5 Facts About the Minimum Wage,” Pew Research Center Fact Tank, July 23, 2015.
5. In September 1965, the minimum wage ($1.25) was almost half the average wage for frontline employees ($2.65); in 2015, the minimum wage ($7.25) was barely one-third the average wage ($20.81). Federal Reserve Bank of St. Louis, FRED Economic Data, “Average Hourly Earnings of Production and Nonsupervisory Employees: Total Private.” The United States is tied with Mexico for the lowest ratio of minimum wage to average wage in the OECD. OECD.Stat, Labour, Earnings, “Minimum Relative to Average Wages of Full-Time Workers.”
6. Baumol and Blinder, Economics, 5.
7. Hazlitt, Economics in One Lesson, 119; Friedman, Capitalism and Freedom, 180; Wanniski, Way the World Works, 89; Waltman, Politics of the Minimum Wage, 44.
8. For example, see Mark Wilson, “The Negative Effects of Minimum Wage Laws” (Cato Institute Policy Analysis No. 701, June 21, 2012); “Facts About the Minimum Wage” (Heritage Foundation Factsheet No. 136, Jan. 30, 2014); Douglas Holtz-Eakin and Ben Gitis, “Counterproductive: The Employment and Income Effects of Raising America’s Minimum Wage” (Manhattan Institute issue brief 36, July 2015).
9. Richard K. Vedder, “The Transformation of Economics,” Wall Street Journal, March 1, 2016; Tim Worstall, “Proof That Raising the Minimum Wage Will Increase Unemployment,” Forbes, June 11, 2015; Jonah Goldberg, “Bernie and Hillary’s Harmful Good Intentions on the Minimum Wage,” National Review, April 20, 2016.
10. “The Real Minimum Wage,” The FRED Blog, Federal Reserve Bank of St. Louis, July 23, 2015; Federal Reserve Bank of St. Louis, FRED Economic Data, “Average Hourly Earnings of Production and Nonsupervisory Employees: Total Private.”
11. David Card and Alan B. Krueger, “Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania,” American Economic Review 84, no. 4 (Sept. 1994): 792.
12. David Neumark and William Wascher, “Minimum Wages and Employment: A Review of Evidence from the New Minimum Wage Research” (NBER working paper 12663, Nov. 2006), 121; Hristos Doucouliagos and T. D. Stanley, “Publication Selection Bias in Minimum-Wage Research? A Meta-regression Analysis,” British Journal of Industrial Relations 47, no. 2 (2009): 406–28; Dale Belman and Paul J. Wolfson, What Does the Minimum Wage Do? (Upjohn Institute, 2014), chap. 4.
13. Arindrajit Dube, T. William Lester, and Michael Reich, “Minimum Wage Effects Across State Borders: Estimates Using Contiguous Counties,” Review of Economics and Statistics 92, no. 4 (Nov. 2010): 961; David Neumark, J. M. Ian Salas, and William Wascher, “Revisiting the Minimum Wage–Employment Debate: Throwing Out the Baby with the Bathwater?,” ILR Review 67, no. 3 (May 2014) supplement: 608–48. For a detailed review of empirical minimum-wage research since the 1990s, see Belman and Wolfson, What Does the Minimum Wage Do? especially chap. 2.
14. IGM Forum, “Minimum Wage,” University of Chicago Booth School of Business, Feb. 26, 2013. Thirty-four percent thought it would be harder for low-skilled workers to find jobs, while 32 percent did not (the rest were undecided or had no opinion). The same panel was also divided over whether an increase in the minimum wage to $15 would increase unemployment: 26 percent thought it would, and 24 percent thought it would not. IGM Forum, “$15 Minimum Wage,” University of Chicago Booth School of Business, Sept. 22, 2015.
15. Justin Wolfers and Jan Zilinsky, “Higher Wages for Low-Income Workers Lead to Higher Productivity,” in Raising Lower-Level Wages: When and Why It Makes Economic Sense (Peterson Institute for International Economics briefing 15-2, April 2015), 6–8.
16. See John Schmitt, “Why Does the Minimum Wage Have No Discernible Effect on Employment?” (Center for Economic and Policy Research, Feb. 2013), 11–13.
17. Congressional Budget Office, The Effects of a Minimum-Wage Increase on Employment and Family Income, Pub. No. 4856 (Feb. 2014); Arindrajit Dube, “Minimum Wages and the Distribution of Family Incomes,” Dec. 30, 2013, http://arindube.com/working-papers/. Neumark has argued that a higher minimum wage does not affect the poverty rate. David Neumark, “Should Missouri Raise Its Minimum Wage?” (Show-Me Institute Policy Study No. 33, Sept. 2012). Dube, however, finds that data from Neumark’s own empirical research show that a higher minimum wage does reduce poverty.
18. IGM Forum, “Minimum Wage.” Forty-seven percent agreed that a $9 federal minimum wage would be desirable, while 11 percent disagreed.
19. Mike Konczal, “7 Bipartisan Reasons to Raise the Minimum Wage,” Boston Review, March 3, 2014. In a recent review, all eight empirical studies on the topic found that higher minimum wages resulted in lower levels of inequality. Belman and Wolfson, What Does the Minimum Wage Do?, 336.
20. Friedman, Capitalism and Freedom, 191–92; Hayek, Constitution of Liberty, 424.
21. Peter Coy, “Seven Nobel Economists Endorse a $10.10 Minimum Wage,” Bloomberg, Jan. 14, 2014.
22. Rubio, Cruz, and Paul: “Transcript: Freedom Partners Forum: Ted Cruz, Rand Paul and Marco Rubio in Conversation with ABC’s Jonathan Karl,” ABC News, Jan. 26, 2015. Bush: J. D. Lutz, “Jeb Bush on Raising Minimum Wage,” YouTube, March 17, 2015. Ryan: Washington Free Beacon, “Paul Ryan Demolishes Case for Raising Minimum Wage,” YouTube, Jan. 29, 2014.
23. Eric Lipton, “Fight over Minimum Wage Illustrates Web of Industry Ties,” New York Times, Feb. 9, 2014. Campaigns for a higher minimum wage have their own supporting interest groups, but their arguments are generally not based on economic models.
24. Andy Puzder, “Killing the Working Class at Wal-Mart,” Wall Street Journal, Feb. 4, 2016.
25. Michael Lynn and Christopher Boone, “Have Minimum Wage Increases Hurt the Restaurant Industry? The Evidence Says No!,” Cornell Hospitality Report 15, no. 22 (Dec. 2015): 3–13.
26. Barry Ritholtz, “Historical Perspective on the Minimum Wage,” The Big Picture, March 3, 2016.
27. Gerald Mayer, Union Membership Trends in the United States (Congressional Research Service Report, Aug. 31, 2004), app. A.
28. Hayek, Constitution of Liberty, 388–92; Friedman, Capitalism and Freedom, 124.
29. U.S. Bureau of Labor Statistics, “Union Members—2015” (press release), Jan. 28, 2016, table 3.
30. Bruce Western and Jake Rosenfeld, “Unions, Norms, and the Rise in U.S. Wage Inequality,” American Sociological Review 76, no. 4 (2011): 532.
31. “Transcript: Freedom Partners Forum.”
32. Emmanuel Saez and Gabriel Zucman, “Wealth Inequality in the United States Since 1913: Evidence from Capitalized Income Tax Data,” Quarterly Journal of Economics (2016), table 1; Piketty, Capital, 315; Alvaredo et al., World Wealth and Income Database, “United States, Top 0.1% Income Share—Including Capital Gains,” http://www.wid.world. Not counting capital gains, the top 0.1 percent income share grew from 2.0 percent in the 1970s to 7.6 percent since 2010. At the very high end, a large proportion of labor income is actually reported as capital gains, for reasons discussed below.
33. Elliot Blair Smith and Phil Kuntz, “CEO Pay 1,795-to-1 Multiple of Wages Skirts U.S. Law,” Bloomberg, April 30, 2013.
34. Ylan Q. Mui, “Seeing Red over a Golden Parachute,” Washington Post, Jan. 4, 2007.
35. Stephen Taub, “The 2015 Rich List: The Highest Earning Hedge Fund Managers of the Past Year,” Institutional Investor’s Alpha, May 5, 2015.
36. Forbes 400 (2015 Ranking), Forbes.
37. Michael I. Norton and Dan Ariely, “Building a Better America—One Wealth Quintile at a Time,” Perspectives on Psychological Science 6, no. 1 (2011): 9–12.
38. Hazlitt, Economics in One Lesson, 122.
39. Peter Rudegeair, “Goldman Ties Leaders’ Compensation to Performance,” Wall Street Journal, April 10, 2015.
40. Friedman, Capitalism and Freedom, 166.
41. Laura M. Holson, “Ruling Upholds Disney’s Payment in Firing of Ovitz,” New York Times, Aug. 10, 2005.
42. “Executive Envy,” Wall Street Journal, Jan. 21, 2006; Mark A. Calabria, “Regulating Executive Pay” (Cato Institute, Aug. 16, 2010); Jeffrey Dorfman, “The Wrong People Care About CEO Pay, and They Care for the Wrong Reasons,” Forbes, July 18, 2013; Robert B. Reich, “CEOs Deserve Their Pay,” Wall Street Journal, Sept. 14, 2007.
43. Tomoeh Murakami Tse, “Long-Serving AT&T Chief to Leave with Huge Payout,” Washington Post, April 28, 2007; The Intercept, “Former GOP Sen. Phil Gramm: ‘It Was an Outrage’ That ‘Exploited’ AT&T CEO Only Got $75 Million at Retirement,” Vimeo, July 29, 2015. Although Gramm said Whitacre received $75 million, his actual package was worth at least $158 million.
44. Susan Fleck, John Glaser, and Shawn Sprague, “The Compensation-Productivity Gap: A Visual Essay,” Monthly Labor Review, Jan. 2011, 59.
45. Nancy F. Koehn, “Great Men, Great Pay? Why CEO Compensation Is Sky High,” Washington Post, June 12, 2014.
46. Adair Morse, Vikram Nanda, and Amit Seru, “Are Incentive Contracts Rigged by Powerful CEOs?,” Journal of Finance 66, no. 5 (Oct. 2011): 1779–821.
47. Buffett: John Komlos, What Every Economics Student Needs to Know and Doesn’t Get in the Usual Principles Text (M. E. Sharpe, 2014), 127. Galbraith: John Kenneth Galbraith, Annals of an Abiding Liberal (Houghton Mifflin, 1979), 79.
48. Finkelstein quoted in James Surowiecki, “The Comeback Conundrum,” New Yorker, Sept. 21, 2015; Marianne Bertrand and Sendhil Mullainathan, “Are CEOs Rewarded for Luck? The Ones Without Principals Are,” Quarterly Journal of Economics 116, no. 3 (Aug. 2001): 901–32. See also Markus A. Fitzka, “The Use of Variance Decomposition in the Investigation of CEO Effects: How Large Must the CEO Effect Be to Rule Out Chance?,” Strategic Management Journal 35, no. 12 (Dec. 2014): 1839–52.
49. Lucian Arye Bebchuk and Jesse M. Fried, “Executive Compensation as an Agency Problem,” Journal of Economic Perspectives 17, no. 3 (Summer 2003): 71–92; Lucian A. Bebchuk, K. J. Martijn Cremers, and Urs C. Peyer, “The CEO Pay Slice,” Journal of Financial Economics 102, no. 1 (Oct. 2011): 199–221; Lucian A. Bebchuk, Yaniv Grinstein, and Urs Peyer, “Lucky CEOs and Lucky Directors,” Journal of Finance 65, no. 6 (Dec. 2010): 2363–401; Lucian Bebchuk and Jesse Fried, Pay Without Performance: The Unfulfilled Promise of Executive Compensation (Harvard University Press, 2004); Steven N. Kaplan and Joshua Rauh, “Wall Street and Main Street: What Contributes to the Rise in the Highest Incomes?,” Review of Financial Studies 23, no. 3 (March 2010): 1004–50; Steven N. Kaplan, “Executive Compensation and Corporate Governance in the United States: Perceptions, Facts, and Challenges,” Cato Papers on Public Policy 2 (2012): 99–164.
50. Financial Crisis Inquiry Commission, The Financial Crisis Inquiry Report: Final Report of the National Commission on the Causes of the Financial and Economic Crisis in the United States (PublicAffairs, 2011), 141.
51. Jesse Eisinger and Jake Bernstein, “The Magnetar Trade: How One Hedge Fund Kept the Bubble Going,” ProPublica, April 9, 2010; Felix Salmon, “The Big Short,” Reuters, March 15, 2010.
52. Jon Bakija, Adam Cole, and Bradley T. Heim, “Jobs and Income Growth of Top Earners and the Causes of Changing Income Inequality: Evidence from U.S. Tax Return Data” (Williams College Economics Department working paper 2010-22, rev. April 2012), table 3.
53. Vivek Wadhwa et al., The Anatomy of an Entrepreneur: Making of a Successful Entrepreneur (Ewing Marion Kauffman Foundation, Nov. 2009).
54. Hayek, Road to Serfdom, 134.
55. David M. Mason, “Why Government Control of Bank Salaries Will Hurt, Not Help, the Economy” (Heritage Foundation Backgrounder 2336, Nov. 4, 2009).
5. Incentives Are Everything
1. George Gilder, Wealth and Poverty (Regnery, 2012), 256.
2. “The World’s Billionaires,” Forbes, March 1, 2016; Warren E. Buffett, “Stop Coddling the Super-rich,” New York Times, Aug. 14, 2011.
3. Hazlitt, Economics in One Lesson, 25–26; Friedman, Capitalism and Freedom, 173; Mankiw, “I Can Afford Higher Taxes”; Holman W. Jenkins Jr., “Bad Days for Wal-Mart Americans,” Wall Street Journal, Jan. 19, 2016.
4. Boehner and Ryan: David Jackson, “Obama, GOP to Revive Tax Debate,” USA Today, Sept. 18, 2011. Ryan: McCormack, “Paul Ryan.”
5. Curtis S. Dubay and David R. Burton, “The Lee-Rubio Tax Plan’s Business Reforms Are Tremendously Pro-growth” (Heritage Foundation Backgrounder 3000, March 9, 2015).
6. Friedman, Capitalism and Freedom, 174–75.
7. Rand Paul 2016, “Rand Paul’s Tax Plan Would Blow Up the Tax Code and Start Over,” https://randpaul.com/issue/taxes (this website is no longer active); Ted Cruz, “A Simple Flat Tax for Economic Growth,” Wall Street Journal, Oct. 28, 2015; James Freeman, “The End of the War on Business?,” Wall Street Journal, Jan. 20, 2016.
8. Howard Gleckman, “How the GOP Candidates’ Tax Plans Stack Up Against One Another,” TaxVox, Tax Policy Center, Feb. 18, 2016; Joseph Rosenberg et al., “An Analysis of Ted Cruz’s Tax Plan,” Tax Policy Center, Feb. 16, 2016.
9. Paul D. Ryan, “A GOP Road Map for America’s Future,” Wall Street Journal, Jan. 26, 2010; Kyle Pomerleau, “Details and Analysis of Dr. Ben Carson’s Tax Plan,” Tax Foundation, Jan. 6, 2016; Elaine Maag et al., “An Analysis of Marco Rubio’s Tax Plan,” Tax Policy Center, Feb. 11, 2016.
10. Hazlitt, Economics in One Lesson, 25–26; Wanniski, Way the World Works, 89–90; Amity Shlaes and Matthew Denhart, “Where the Rubio Tax Plan Falls Short,” Wall Street Journal, April 2, 2015.
11. Milton Friedman, “High Living as a Tax Shelter,” Newsweek, Nov. 8, 1976; Hayek, Constitution of Liberty, 445; George F. Will, “The Nonexistent Case for Progressive Taxation,” Washington Post, Dec. 4, 2015.
12. Alan Greenspan, “The Tax System” (testimony before the President’s Advisory Panel on Federal Tax Reform, March 3, 2005); House Committee on the Budget, Path to Prosperity, 51.
13. James Risen and Robert A. Rosenblatt, “He Urges National Sales Tax: Economists Like Babbitt Plan—but Few Others Do,” Los Angeles Times, Jan. 25, 1988.
14. Harland Prechel, Big Business and the State: Historical Transitions and Corporate Transformations, 1880s–1990s (SUNY Press, 2000), 167.
15. Ronald Reagan, “Message to the Congress Transmitting the Annual Economic Report of the President” (Feb. 10, 1982), American Presidency Project, http://www.presidency.ucsb.edu/ws/?pid=42121.
16. Buffett, “Stop Coddling the Super-rich.”
17. As it turns out, there is a particular tax break for investing in small businesses that we did qualify for, but none of us knew about it until years later.
18. Citizens for Tax Justice, “Top Federal Income Tax Rates Since 1913”; U.S. Bureau of Economic Analysis, table 1.1.1, “Percent Change from Preceding Period in Real Gross Domestic Product”; table 2.1, “Personal Income and Its Disposition.”
19. Congressional Budget Office, The Economic Effects of Comprehensive Tax Reform, July 1997, 25; Michael J. Boskin, “Taxation, Saving, and the Rate of Interest,” Journal of Political Economy 86, no. 2, pt. 2 (April 1978): S16.
20. Eric Toder and Kim Rueben, “Should We Eliminate Taxation of Capital Income?,” in Taxing Capital Income, ed. Henry J. Aaron, Leonard E. Burman, and C. Eugene Steuerle (Urban Institute Press, 2007), 127, 135; Jane G. Gravelle and Donald J. Marples, “Tax Rates and Economic Growth” (Congressional Research Service report R42111, Jan. 2, 2014), 6.
21. Leonard E. Burman, The Labyrinth of Capital Gains Tax Policy: A Guide for the Perplexed (Brookings Institution Press, 1999), 56–57, 81.
22. Christopher D. Carroll, “Why Do the Rich Save So Much?,” in Does Atlas Shrug? The Economic Consequences of Taxing the Rich, ed. Joel B. Slemrod (Harvard University Press, 2002).
23. Cuts in capital gains tax rates can lead to onetime increases in tax revenues, but this effect is due to taxpayers’ ability to time asset sales; in the long term, different capital gains tax rates have little or no impact on income from capital gains. Burman, Labyrinth of Capital Gains Tax Policy, 60–63.
24. Citizens for Tax Justice, “Top Federal Income Tax Rates Since 1913”; U.S. Bureau of Economic Analysis, table 1.1.1, “Percent Change from Preceding Period in Real Gross Domestic Product.”
25. Congressional Budget Office, The Distribution of Household Income and Federal Taxes, 2010, Pub. No. 4613 (Dec. 2013) (Supplemental Data); U.S. Bureau of Economic Analysis, table 1.1.1, “Percent Change from Preceding Period in Real Gross Domestic Product”; U.S. Bureau of Labor Statistics, “Labor Force Participation Rate, 25–54 Years.”
26. William G. Gale, Aaron Krupkin, and Kim Rueben, “The Relationship Between Taxes and Growth at the State Level: New Evidence,” National Tax Journal 68, no. 4 (Dec. 2015): 919–42.
27. Noah Smith, “Growth Fantasy of Tax Cuts and Small Government,” Bloomberg, July 17, 2015; Menzie Chinn, “The Information Content of the ALEC-Laffer-Moore-Williams Economic Outlook Ranking,” Econbrowser (blog), July 11, 2015; Menzie Chinn, “Kansas Relative Employment Performance since 2005,” Econbrowser (blog), May 7, 2016.
28. Emmanuel Saez, Joel Slemrod, and Seth H. Giertz, “The Elasticity of Taxable Income with Respect to Marginal Tax Rates: A Critical Review,” Journal of Economic Literature 50, no. 1 (March 2012): 3–4; Robert McClelland and Shannon Mok, “A Review of Recent Research on Labor Supply Elasticities” (Congressional Budget Office working paper, 2012-12, Oct. 2012), table 2; Gravelle and Marples, “Tax Rates and Economic Growth,” summary.
29. Robert A. Moffitt and Mark O. Wilhelm, “Taxation and the Labor Supply: Decisions of the Affluent,” in Slemrod, Does Atlas Shrug?; McClelland and Mok, “Review of Recent Research,” 5; Leonard E. Burman, “Taxes and Inequality,” Tax Law Review 66 (2013): 585.
30. Saez, Slemrod, and Giertz, “Elasticity of Taxable Income,” 43.
31. Thomas L. Hungerford, “Taxes and the Economy: An Economic Analysis of the Top Tax Rates Since 1945 (Updated)” (Congressional Research Service report, R42729, Dec. 12, 2012).
32. Peter Diamond and Emmanuel Saez, “The Case for a Progressive Tax: From Basic Research to Policy Recommendations,” Journal of Economic Perspectives 25, no. 4 (Fall 2011): 171. The optimal rate could be a little higher or a little lower, depending on how easy it is to avoid taxes through creative accounting.
33. Simon Johnson and James Kwak, 13 Bankers: The Wall Street Takeover and the Next Financial Meltdown (Pantheon, 2010).
34. For example, see Andy Kessler, “The Capitalist as the Ultimate Philanthropist,” Wall Street Journal, June 24, 2015.
35. Hayek, Constitution of Liberty, 332–33; Friedman, Capitalism and Freedom, 34.
36. As recollected by the Supreme Court justice Felix Frankfurter. See “Taxes Are What We Pay for Civilized Society,” Quote Investigator, April 13, 2012.
37. The top 1 percent of households received more than 30 percent of the total tax cuts. Greg Leiserson and Jeffrey Rohaly, “The Distribution of the 2001–2006 Tax Cuts: Updated Projections, November 2006,” Tax Policy Center, tables 7–12.
6. The Consumer Knows Best
1. Milton Friedman, “Leonard Woodcock’s Free Lunch,” Newsweek, April 21, 1975.
2. Centers for Medicare & Medicaid Services, “National Health Expenditures 2014 Highlights”; OECD, “OECD Health Statistics 2015—Frequently Requested Data.”
3. Karen Davis et al., “Mirror, Mirror on the Wall: How the Performance of the U.S. Health Care System Compares Internationally, 2014 Update,” Commonwealth Fund, June 2014, 7–9; OECD, “OECD Health Statistics 2015.” The Commonwealth Fund’s overall outcomes metric includes “mortality amenable to medical care, infant mortality, and healthy life expectancy at age 60.”
4. Raj Chetty et al., “The Association Between Income and Life Expectancy in the United States, 2001–2014,” Journal of the American Medical Association, April 26, 2016, 1750–66.
5. Mises, Bureaucracy, 21.
6. John F. Cogan, R. Glenn Hubbard, and Daniel P. Kessler, “Healthy, Wealthy, and Wise,” Wall Street Journal, May 4, 2004.
7. Stuart M. Butler, “Why Conservatives Need a National Health Plan” (Heritage Lecture 442 on Political Thought, March 22, 1993); the CIGNA CEO is quoted in Wendell Potter, Deadly Spin: An Insurance Company Insider Speaks Out on How Corporate PR Is Killing Health Care and Deceiving Americans (Bloomsbury Press, 2010), 110.
8. Quoted in Potter, Deadly Spin, 127.
9. White House National Economic Council, Reforming Health Care for the 21st Century, Feb. 2006, 4. Matthews is quoted in Julie Rovner, “Bush Makes Push for Health Care Savings Plans,” NPR, Feb. 1, 2006.
10. Kaiser Family Foundation and Health Research & Educational Trust, Employer Health Benefits: 2015 Annual Survey (Kaiser Family Foundation and Health Research & Educational Trust, 2015), 79, 126.
11. Nina Owcharenko and Robert E. Moffit, “The Massachusetts Health Plan: Lessons for the States” (Heritage Foundation Backgrounder 1953, July 18, 2006); Robert E. Moffit, “State-Based Health Reform: A Comparison of Health Insurance Exchanges and the Federal Employees Health Benefits Program” (Heritage Foundation WebMemo 1515, June 20, 2007).
12. Edmund F. Haislmaier et al., “A Fresh Start for Health Care Reform” (Heritage Foundation Backgrounder 2970, Oct. 30, 2014); Merrill Matthews, “Ten Principles of a Market-Oriented Health Care System,” Human Events, Jan. 27, 2014; Lanhee J. Chen and James C. Capretta, “Instead of ObamaCare: Giving Health-Care Power to the People,” Wall Street Journal, Jan. 22, 2016.
13. House Committee on the Budget, Path to Prosperity, 47; see also Congressional Budget Office, “An Analysis of the Roadmap for America’s Future Act of 2010” (letter to Paul Ryan), Jan. 27, 2010.
14. David Goldhill and Paul Howard, “An ObamaCare-Inspired Rebellion,” Wall Street Journal, July 2, 2015; Sally C. Pipes, “Medicare at 50: Hello, Mid-Life Crisis,” Wall Street Journal, July 30, 2015. See also Scott W. Atlas and John F. Cogan, “Two Essential Tools for Repairing the ObamaCare Damage,” Wall Street Journal, Sept. 2, 2015.
15. Marco Rubio for President, “It’s Time to Repeal and Replace ObamaCare,” https://marcorubio.com/issues/repeal-obamacare-and-replace-it-with-this/ (this website is no longer active); Contract from America, http://contractfromamerica.org; Rick Santorum, “A Flat Tax Is the Best Path to Prosperity,” Wall Street Journal, Oct. 12, 2015; Trump, Time to Get Tough: Making America #1 Again (Regnery, 2011), 131; Donald J. Trump for President, “Healthcare Reform to Make America Great Again,” https://www.donaldjtrump.com/positions/healthcare-reform.
16. Kenneth J. Arrow, “Uncertainty and the Welfare Economics of Medical Care,” American Economic Review 53, no. 5 (Dec. 1963): 948–51.
17. Uwe E. Reinhardt, “Rethinking the Gruber Controversy: Americans Aren’t Stupid, but They’re Often Ignorant—and Why,” Health Affairs Blog, Dec. 29, 2014.
18. For a more comprehensive discussion of the theoretical peculiarities of the health-care market, see Timothy Stoltzfus Jost, Health Care at Risk: A Critique of the Consumer-Driven Movement (Duke University Press, 2007), 96–108.
19. RAND Health, “The Health Insurance Experiment: A Classic RAND Study Speaks to the Current Health Care Reform Debate” (RAND Health Research Highlights, 2006), 3; Jost, Health Care at Risk, 130; Zarek C. Brot-Goldberg et al., “What Does a Deductible Do? The Impact of Cost-Sharing on Health Care Prices, Quantities, and Spending Dynamics” (National Bureau of Economic Research working paper 21632, Oct. 2015).
20. Quoted in Robert Pear, “Harvard Ideas on Health Care Hit Home, Hard,” New York Times, Jan. 5, 2015.
21. Jost, Health Care at Risk, 130; Peter J. Huckfeldt et al., “Patient Responses to Incentives in Consumer-Directed Health Plans: Evidence from Pharmaceuticals” (National Bureau of Economic Research working paper 20927, Feb. 2015).
22. Aaron E. Carroll, “People with Chronic Illness Fare Worse Under Cost-Sharing,” The Upshot (blog), New York Times, May 19, 2014; Amitabh Chandra, Jonathan Gruber, and Robin McKnight, “Patient Cost-Sharing and Hospitalization Offsets in the Elderly,” American Economic Review 100, no. 1 (March 2010): 193–213.
23. Asher Schechter, “There Is Regulatory Capture, but It Is by No Means Complete,” Pro-Market (blog), Stigler Center at the University of Chicago Booth School of Business, March 15, 2016.
24. Arrow, “Uncertainty and Welfare Economics,” 945.
25. Ibid., 963–64.
26. John Nyman, “Is ‘Moral Hazard’ Inefficient? The Policy Implications of a New Theory,” Health Affairs 23, no. 5 (Sept.–Oct. 2004), 199.
27. Kaiser Family Foundation, “Summary of the Affordable Care Act,” April 23, 2013.
28. Liz Hamel et al., The Burden of Medical Debt: Results from the Kaiser Family Foundation/New York Times Medical Bills Survey, Kaiser Family Foundation, Jan. 2016.
29. Pear, “Harvard Ideas on Health Care.”
30. Jacob S. Hacker, The Great Risk Shift: The New Economic Insecurity and the Decline of the American Dream (Oxford University Press, 2008), 142.
31. Commonwealth Fund, International Profiles of Health Care Systems, 2014 (Commonwealth Fund, Jan. 2015).
32. Daniel Callahan and Angela A. Wasunna, Medicine and the Market: Equity v. Choice (Johns Hopkins University Press, 2006), 90.
33. Friedman and Friedman, Free to Choose, 106.
34. OECD, Health at a Glance 2015: OECD Indicators (OECD, 2015), 171 and tables 1.1, 1.3, 1.5.
35. See Frank Pasquale, “The Hidden Costs of Health Care Cost-Cutting: Toward a Postneoliberal Health-Reform Agenda,” Law and Contemporary Problems 77, no. 4 (2014): 174.
36. Hayek, Constitution of Liberty, 424.
37. Quoted in Callahan and Wasunna, Medicine and the Market, 210–11.
38. Thomas Rice, “Can Markets Give Us the Health System We Want?,” Journal of Health Politics, Policy, and Law 22, no. 2 (April 1997): 422–23.
39. See Robert G. Evans, “Going for the Gold: The Redistributive Agenda Behind Market-Based Health Care Reform,” Journal of Health Politics, Policy, and Law 22, no. 3 (April 1997): 447.
40. Reinhardt, “Rethinking the Gruber Controversy.”
41. Daniel A. Austin, “Medical Debt as a Cause of Bankruptcy,” Maine Law Review 67, no. 1 (2014): 1–23.
42. Lucien Febvre, The Problem of Unbelief in the Sixteenth Century: The Religion of Rabelais, trans. Beatrice Gottlieb (Harvard University Press, 1985).
7. Capital Unbound
1. Ben Bernanke, “Regulation and Financial Innovation” (remarks at the Federal Reserve Bank of Atlanta’s 2007 Financial Markets Conference, May 15, 2007), https://www.federalreserve.gov/newsevents/speech/bernanke20070515a.htm.
2. Housing prices: Federal Reserve Bank of St. Louis, FRED Economic Data, “S&P/Case-Shiller 20-City Composite Home Price Index,” “S&P/Case-Shiller AZ-Phoenix Home Price Index,” and “S&P/Case-Shiller NV-Las Vegas Home Price Index.” Foreclosures: Jennifer Taub, Other People’s Houses: How Decades of Bailouts, Captive Regulators, and Toxic Bankers Made Home Mortgages a Thrilling Business (Yale University Press, 2014), 3; Bill McBride, “MBA: Mortgage Delinquency and Foreclosure Rates Decrease in Q3, Lowest Since 2007,” Calculated Risk (blog), Nov. 14, 2014.
3. See Alyssa Katz, Our Lot: How Real Estate Came to Own Us (Bloomsbury, 2009), 78–81.
4. Bill McBride, “Mortgage Delinquencies by Loan Type,” Calculated Risk (blog), Aug. 12, 2012.
5. Federal Reserve Bank of St. Louis, FRED Economic Data, “All Employees: Total Nonfarm Payrolls”; Menzie Chinn, “Closing the Output Gap,” Econbrowser (blog), Nov. 19, 2015.
6. See, for example, Mankiw, Principles of Economics, 268.
7. Hayek, Road to Serfdom, 86; Dieter Plehwe, introduction to Road from Mont Pèlerin, ed., Mirowski and Plehwe, 23.
8. Financial Crisis Inquiry Commission, Financial Crisis Inquiry Report, 34.
9. Taub, Other People’s Houses, 125–27.
10. Kathleen C. Engel and Patricia A. McCoy, The Subprime Virus: Reckless Credit, Regulatory Failure, and Next Steps (Oxford University Press, 2011), 158.
11. Greg Ip, “Did Greenspan Add to Subprime Woes? Gramlich Says Ex-colleague Blocked Crackdown on Predatory Lenders Despite Growing Concerns,” Wall Street Journal, June 9, 2007.
12. Alan Greenspan, “Consumer Finance” (remarks at the Federal Reserve System’s Fourth Annual Community Affairs Research Conference, April 8, 2005), http://www.federalreserve.gov/boarddocs/speeches/2005/20050408/default.htm.
13. Quoted in Manuel Roig-Franzia, “Credit Crisis Cassandra: Brooksley Born’s Unheeded Warning Is a Rueful Echo 10 Years On,” Washington Post, May 26, 2009. Summers declined to comment for the Roig-Franzia article. See also “Interview with Michael Greenberger,” Frontline, July 14, 2009, transcript at http://www.pbs.org/wgbh/pages/frontline/warning/interviews/greenberger.html.
14. Alan Greenspan, “Government Regulation and Derivative Contracts” (remarks at the Financial Markets Conference of the Federal Reserve Bank of Atlanta, Feb. 21, 1997), http://www.federalreserve.gov/boarddocs/speeches/1997/19970221.htm; Alan Greenspan, “The Regulation of OTC Derivatives” (testimony before the House Committee on Banking and Financial Services, July 24, 1998), http://www.federalreserve.gov/boarddocs/testimony/1998/19980724.htm.
15. Johnson and Kwak, 13 Bankers, 138–40.
16. U.S. Securities and Exchange Commission, “Final Rule: Alternative Net Capital Requirements for Broker-Dealers That Are Part of Consolidated Supervised Entities” (release 34-49830, June 8, 2004).
17. Cohen and DeLong, Concrete Economics, 184–85.
18. U.S. Bureau of Economic Analysis, table 6.16, “Corporate Profits by Industry”; Johnson and Kwak, 13 Bankers, 115–16.
19. Alana Semuels, “The Unfinished Suburbs of America,” Atlantic, Nov. 14, 2014.
20. Charles Duhigg and Carter Dougherty, “From Midwest to M.T.A., Pain from Global Gamble,” New York Times, Nov. 1, 2008; Mark Landler, “U.S. Credit Crisis Adds to Gloom in Norway,” New York Times, Dec. 2, 2007.
21. Financial Crisis Inquiry Commission, Financial Crisis Inquiry Report, 90, 108; Taub, Other People’s Houses, 129.
22. Financial Crisis Inquiry Commission, Financial Crisis Inquiry Report, 108.
23. Ibid., 106; Michael Lewis, The Big Short (W. W. Norton, 2010), 97.
24. Taub, Other People’s Houses, 141.
25. Financial Crisis Inquiry Commission, Financial Crisis Inquiry Report, 107; Taub, Other People’s Houses, 129; Engel and McCoy, Subprime Virus, 30–32; David Dayen, Chain of Title: How Three Ordinary Americans Uncovered Wall Street’s Great Foreclosure Fraud (New Press, 2016), 31.
26. Rick Brooks and Ruth Simon, “Subprime Debacle Traps Even Very Credit-Worthy,” Wall Street Journal, Dec. 3, 2007.
27. Taub, Other People’s Houses, 140–45.
28. The State of the Nation’s Housing, 2006, Joint Center for Housing Studies of Harvard University, 2006, 3.
29. Dayen, Chain of Title, 31–32.
30. Jake Bernstein and Jesse Eisinger, “The ‘Subsidy’: How a Handful of Merrill Lynch Bankers Helped Blow Up Their Own Firm,” ProPublica, Dec. 22, 2010.
31. Eisinger and Bernstein, “Magnetar Trade”; Securities and Exchange Commission, “J. P. Morgan to Pay $153.6 Million to Settle SEC Charges of Misleading Investors in CDO Tied to U.S. Housing Market” (press release), June 21, 2011.
32. Michiyo Nakamoto and David Wighton, “Citigroup Chief Stays Bullish on Buy-Outs,” Financial Times, July 9, 2007.
33. Jake Bernstein and Jesse Eisinger, “Banks’ Self-Dealing Super-charged Financial Crisis,” ProPublica, Aug. 26, 2010.
34. Lewis, Big Short, 141–42.
35. Quoted in “The Watchmen,” This American Life, WBEZ, originally broadcast June 5, 2009.
36. Kevin G. Hall, “How Moody’s Sold Its Ratings—and Sold Out Investors,” McClatchy, Oct. 18, 2009; Ben Protess, “S.&P.’s $1.37 Billion Reckoning over Crisis-Era Misdeeds,” New York Times, Feb. 3, 2015.
37. Andrew Ross Sorkin et al., “As Credit Crisis Spiraled, Alarm Led to Action,” New York Times, Oct. 1, 2008.
38. James E. Glassman, “Markets & the Economy/The Week Ahead,” JPMorgan Chase, May 3, 2010.
39. Peter J. Wallison, “Elitist Protection Consumers Don’t Need,” Washington Post, July 13, 2009; David C. John, “The Lehman Brothers Collapse: Financial Regulation One Year Later” (Heritage Foundation WebMemo 2610, Sept. 14, 2009); Jeb Hensarling, “Punishing Consumers to ‘Protect’ Them,” Washington Times, July 22, 2009.
40. “A Trillion Unintended Consequences,” Wall Street Journal, July 6, 2010; Peter J. Wallison, “Crisis and Ideology: The Administration’s Financial Reform Legislation” (American Enterprise Institute Financial Services Outlook, April 2010); Matt Kibbe, “Key Vote ‘No’ H.R. 4173: Dodd-Frank Wall Street Reform and Consumer Protection Act,” FreedomWorks (press release), July 14, 2010.
41. Peter J. Wallison, “Financial Crisis Inquiry Commission Dissenting Statement,” in Financial Crisis Inquiry Commission, Financial Crisis Inquiry Report, 441–538.
42. “JPMorgan Chief Warns of Overregulation—Report,” Reuters, April 18, 2010.
43. See Anat Admati and Martin Hellwig, The Bankers’ New Clothes: What’s Wrong with Banking and What to Do About It (Princeton University Press, 2013).
44. Diane Katz, “The CFPB in Action: Consumer Bureau Harms Those It Claims to Protect” (Heritage Foundation Backgrounder 2760, Jan. 22, 2013).
45. “Dodd-Frank Cripples Innovation and Economic Growth,” Marco Rubio for President, https://marcorubio.com/news/dodd-frank-cripples-innovation-and-economic-growth/ (this website is no longer active); Glenn Kessler, “Rubio’s Fantasy Figure on Bank Closures Due to Dodd-Frank,” Washington Post, Aug. 10, 2015; Guy Bentley, “Sen. Richard Shelby Slams Dodd-Frank and Takes Aim at CFPB,” Daily Caller, July 21, 2015; Jeb Hensarling, “After Five Years, Dodd-Frank Is a Failure,” Wall Street Journal, July 20, 2015.
46. Alvaredo et al., World Wealth and Income Database, “United States, Top 1% Income Share,” http://www.wid.world; Peter Rudegeair, “Pay Gap Between Wall Street CEOs and Employees Narrows,” Wall Street Journal, April 5, 2015; Federal Reserve Bank of St. Louis, FRED Economic Data, “Real Median Household Income in the United States.”
8. It’s a Small World After All
1. Charles Krauthammer, “Save Obama (on Trade),” Washington Post, May 14, 2015.
2. Michael Wayland, “Sanders: Bad Trade Policies Killing Middle Class Jobs,” Detroit News, March 3, 2016; David Weigel and Lydia DePillis, “Voters Skeptical on Free Trade Drive Sanders, Trump Victories in Michigan,” Washington Post, March 9, 2016; Binyamin Appelbaum, “On Trade, Donald Trump Breaks with 200 Years of Economic Orthodoxy,” New York Times, March 10, 2016; “Transcript: Donald Trump Expounds on His Foreign Policy Views,” New York Times, March 16, 2016.
3. Dave Jamieson, “Why Bernie Sanders and Donald Trump Won the Michigan Primaries,” Huffington Post, March 9, 2016.
4. John McCormick, “Free-Trade Opposition Unites Political Parties in Bloomberg Poll,” Bloomberg, March 24, 2016.
5. Federal Reserve Bank of St. Louis, FRED Economic Data, “All Employees: Manufacturing”; U.S. Census Bureau and U.S. Bureau of Economic Analysis, “U.S. International Trade in Goods and Services, January 2016” (press release), March 4, 2016.
6. Milton Friedman, “Free Trade,” Newsweek, Aug. 17, 1970; Friedman, Capitalism and Freedom, 71; Barry Eichengreen, “Keynes and Protection,” Journal of Economic History 44, no. 2 (June 1984): 363–73.
7. Matt Yglesias, “Here’s What Economists Cheering for the Pacific Trade Deal Are Missing,” Mother Jones, April 30, 2015; IGM Forum, “Free Trade,” University of Chicago Booth School of Business, March 13, 2012.
8. Friedman, Capitalism and Freedom, 73; Paul Krugman, “What Should Trade Negotiators Negotiate About?,” Journal of Economic Literature 35 (March 1997): 113.
9. Appelbaum, “On Trade.”
10. Daron Acemoglu et al., “Import Competition and the Great US Employment Sag of the 2000s,” Journal of Labor Economics 34, no. S1, pt. 2 (Jan. 2016): S145.
11. Milton Friedman, “Do Imports Cost Jobs?,” Newsweek, Feb. 9, 1981.
12. Cohen and DeLong, Concrete Economics, chaps. 1, 4.
13. Congressional Budget Office, The Effects of NAFTA on U.S.-Mexican Trade and GDP, May 2003, 19; Robert E. Scott, “Heading South: U.S.–Mexico Trade and Job Displacement After NAFTA” (Economic Policy Institute briefing paper 308, May 3, 2011); Gary Clyde Hufbauer, Cathleen Cimino, and Tyler Moran, “NAFTA at 20: Misleading Charges and Positive Achievements” (Peterson Institute for International Economics PB14-13, May 2014); Lorenzo Caliendo and Fernando Parro, “Estimates of the Trade and Welfare Effects of NAFTA,” Review of Economic Studies 82, no. 1 (Jan. 2015): 3.
14. Caliendo and Parro, “Effects of NAFTA,” 3; Mark Weisbrot, Stephan Lefebvre, and Joseph Sammut, “Did NAFTA Help Mexico? An Assessment After 20 Years,” Center for Economic and Policy Research, Feb. 2014.
15. John McLaren and Shushanik Hakobyan, “Looking for Local Labor-Market Effects of NAFTA,” Review of Economics and Statistics (forthcoming), 6.
16. Acemoglu et al., “Import Competition,” S145–S147, S181.
17. Justin R. Pierce and Peter K. Schott, “The Surprisingly Swift Decline of US Manufacturing Employment,” American Economic Review 106, no. 7 (July 2016): 1632–62.
18. David H. Autor, David Dorn, and Gordon H. Hanson, “The China Syndrome: Local Labor Market Effects of Import Competition in the United States,” American Economic Review 103, no. 6 (Oct. 2013): 2144–45.
19. David H. Autor, David Dorn, and Gordon H. Hanson, “The China Shock: Learning from Labor Market Adjustment to Large Changes in Trade” (National Bureau of Economic Research working paper 21906, Jan. 2016), 31–35, 37.
20. Lawrence Summers, “A Trade Deal Must Work for America’s Middle Class,” Financial Times, March 8, 2015.
21. Paul Krugman, “TPP at the NABE,” The Conscience of a Liberal (blog), New York Times, March 11, 2015.
22. Jason Furman, “Trade, Innovation, and Economic Growth” (remarks at the Brookings Institution, April 8, 2015), https://www.whitehouse.gov/sites/default/files/docs/20150408_trade_innovation_growth_brookings.pdf; Krauthammer, “Save Obama (on Trade)”; Roger Lowenstein, “TPP and Free Trade: Why Congress Should Listen to the World’s Richest Economist,” Fortune, June 22, 2015; N. Gregory Mankiw, “Economists Actually Agree on This: The Wisdom of Free Trade,” The Upshot (blog), New York Times, April 24, 2015.
23. Peter A. Petri and Michael G. Plummer, “The Economic Effects of the Trans-Pacific Partnership: New Estimates” (Peterson Institute for International Economics working paper 16-2, Jan. 2016), 20; Jeronim Capaldo and Alex Izurieta, “Trading Down: Unemployment, Inequality, and Other Risks of the Trans-Pacific Partnership Agreement,” with Jomo Kwame Sundaram (Tufts University Global Development and Environment Institute working paper 16-01, Jan. 2016), 11, 17.
24. Dean Baker, “Fools or Liars on the Trans-Pacific Partnership?,” Truthout, March 21, 2016.
25. Jing Luo and Aaron S. Kesselheim, “The Trans-Pacific Partnership Agreement and Implications for Access to Essential Medicines,” Journal of the American Medical Association, Oct. 20, 2015, 1563–64.
26. See Elhanan Helpman, “Innovation, Imitation, and Intellectual Property Rights,” Econometrica 61, no. 6 (Nov. 1993): 1247–80.
27. Scott Sinclair, “Democracy Under Challenge: Canada and Two Decades of NAFTA’s Investor-State Dispute Settlement Mechanism,” Canadian Centre for Policy Alternatives, 2015, 32; Lori Wallach, “Public Interest Takes a Hit Even When Phillip [sic] Morris’ Investor-State Attack on Australia Is Dismissed,” Huffington Post, Jan. 5, 2016; Alexander Hellemans, “Vattenfall Seeks $6 Billion in Compensation for German Nuclear Phase-Out,” IEEE Spectrum, Nov. 12, 2014; Todd Tucker, “TransCanada Is Suing the U.S. over Obama’s Rejection of the Keystone XL Pipeline: The U.S. Might Lose,” Monkey Cage (blog), Washington Post, Jan. 8, 2016.
28. Lise Johnson, Lisa Sachs, and Jeffrey Sachs, “The Real Danger in TPP,” CNN, Feb. 19, 2016; see also Joseph Stiglitz, “The Secret Corporate Takeover of Trade Agreements,” Guardian, May 13, 2015.
29. Christopher Ingraham, “Interactive: How Companies Wield Off-the-Record Influence on Obama’s Trade Policy,” Wonkblog (blog), Washington Post, Feb. 28, 2014.
30. Jared Bernstein, “Seeing Is Believing,” Democracy: A Journal of Ideas no. 38 (Fall 2015).
31. Simon Johnson and Andrei Levchenko, “The Trans-Pacific Partnership (TPP): This Is Not About Ricardo,” The Baseline Scenario (blog), May 21, 2015; Paul Krugman, “101 Boosterism,” The Conscience of a Liberal (blog), New York Times, April 20, 2016.
9. The Best Possible World—for Whom?
1. Irving Kristol, “On Conservatism and Capitalism,” in Irving Kristol, Neoconservatism: The Autobiography of an Idea (Free Press, 1995), 233.
2. Hayek, Road to Serfdom, 59, 82.
3. F. A. Hayek, “Foreword to the 1956 American Paperback Edition,” in Road to Serfdom, 42.
4. William J. Clinton, “Address Before a Joint Session of the Congress on the State of the Union” (Jan. 23, 1996), American Presidency Project, http://www.presidency.ucsb.edu/ws/?pid=53091.
5. IGM Forum, “Rent Control,” Feb. 7, 2012.
6. Norton and Ariely, “Building a Better America—One Wealth Quintile at a Time.”
7. Alvaredo et al., World Wealth and Income Database, “United States, Top 1% Income Share,” http://www.wid.world.
8. Benjamin I. Page, Larry M. Bartels, and Jason Seawright, “Democracy and the Policy Preferences of Wealthy Americans,” Perspectives on Politics 11, no. 1 (March 2013): 57, 58, 63.
9. Martin Gilens and Benjamin I. Page, “Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens,” Perspectives on Politics 12, no. 3 (Sept. 2014): 572–73.
10. Adam Bonica et al., “Why Hasn’t Democracy Slowed Rising Inequality?,” Journal of Economic Perspectives 27, no. 3 (Summer 2013): 111.
11. Lawrence Lessig, Republic, Lost: The Corruption of Equality and the Steps to End It, rev. ed. (Twelve, 2015), 16–17.
12. Arthur M. Okun, Equality and Efficiency: The Big Trade-Off (Brookings Institution, 1975).
13. Jonathan D. Ostry, Andrew Berg, and Charalambos G. Tsangarides, “Redistribution, Inequality, and Growth” (IMF staff discussion note 14/02, Feb. 2014), 8–9, 26.
14. Daron Acemoglu and James Robinson, Why Nations Fail: The Origins of Power, Prosperity, and Poverty (Crown Business, 2012), 152–58.
15. John Kenneth Galbraith, “Power and the Useful Economist,” American Economic Review 63, no. 1 (March 1973), 6.
16. “Economics Degrees Still ‘Too Narrow in Focus,’ ” Times Higher Education, March 26, 2016.
17. People’s day-to-day emotional well-being only tends to improve up to a level of family income around $75,000 per year; people’s evaluations of their own lives, another measure of happiness, do continue to improve as they make more money. Daniel Kahneman and Angus Deaton, “High Income Improves Evaluation of Life but Not Emotional Well-Being,” Proceedings of the National Academy of Sciences 107, no. 38 (Sept. 21, 2010): 16489–493.
18. Quoted in Hacker and Pierson, American Amnesia, 27.
19. John Maynard Keynes, “Economic Possibilities for Our Grandchildren,” in Essays in Persuasion (Classic House Books, 2009), 201.
20. Louis Johnston and Samuel H. Williamson, “What Was the U.S. GDP Then?,” MeasuringWorth, http://www.measuringworth.org/usgdp/.