A colleague mentioned to me the other day that I’m “pretty conservative” on some state and local government issues, with reference to some recent posts on occupational licensing. Someone on twitter asked if I’m trying to score a date with a Cato staffer. I’m not. And I’m not. And I think that whole framing represents a bad way of understanding the whole situation.

I think it’s pretty clear that, as a historical matter of fact, the main thing “the state” has been used to do is to help the wealthy and powerful further enrich and entrench themselves. Think Pharaoh and his pyramids. Or more generally the fancy houses of European nobility, the plantations of Old South slaveowners, or Imelda Marcos’ shoes. The “left-wing” position is to be against this stuff—to be on the side of the people and against the forces of privilege. It’s true that some useful egalitarian activism over the past 150 years has consisted of trying to get the state to take affirmative steps to help people—social insurance, the welfare state, infrastructure, schools—but dismantling efforts to use the state to help the privileged has always been on the agenda. Don’t think to yourself “we need to regulate carbon emissions therefore regulation is good therefore regulation of barbers is good.” Think to yourself “we can’t let the privileged trample all over everyone, therefore we need to regulate carbon emissions and we need to break the dentists’ cartel.”

I feel certain that if Financial Times did an article about how some country’s determination to provide free bags of rice to all its citizens was leading people to spend a huge amount of time standing on line waiting for rice, that they would highlight the fact that this is what happens when you don’t price things correctly. There’s only so much rice. There are only so many hander-outers of rice. If you try to make the rice free to everyone, you’re going to get lines and shortages.

At any rate, as Clive Cookson points out in the FT a comparable problem exists on most countries’ roadways:

Access to these roadways is generally either free, or else set a price determined by something other than the scarcity of space on the roadway. And yet any given street or highway can only fit so many cars at a time. So when the price is unrelated to the scarcity, you get shortages and queuing—traffic jams. But weirdly a whole long article on improved traffic management just leaves this as a throwaway line “In the long term, variable road pricing or tolls on main roads may provide a partial answer but these are not yet technically or politically feasible in most countries.”

That’s fair enough, but none of the other stuff in the article is yet technically or politically feasible in most countries either. And the question of what is and isn’t “politically feasible” is itself amenable to influence by media coverage.

I would highly recommend that you take a look at Adam Pozen’s talk “The Realities and Relevance of Japan’s Great Recession – Neither Ran nor Rashomon“. His point is that poor Japanese economic performance, though of course not unrelated to the bursting of asset bubbles, was fundamentally caused by policy errors and that when better policies were implemented growth became strong:

What was necessary was the clean-up and recapitalization of the banking system, the further loosening of monetary policy (to the extent possible given that interest rates were at zero), and the avoidance of any further premature fiscal tightening, as I set out in Posen (1998, 1999a, and 2001b). This was obviously not a simple list, economically or politically. Yet, it was also not a list of the impossible, it emphasized demand side factors, and was a list that seemed all the more plausible when Japanese policymakers recognized that Japan was not doomed to a permanently low trend growth rate – a belief that had bedevilled both fiscal and monetary policy decisions in Japan for much of the 1990s.

Japan’s new economic leadership in the early 2000s, Prime Minister Junichiro Koizumi, Cabinet Office and later Financial Services Minister Heizo Takenaka, and Bank of Japan Governor Toshihiko Fukui, turned matters around. They reversed monetary policies that contributed to deflation, turned the fiscal impulse to average net zero (see figure 5), and forced bad loan write- offs and recapitalization by the Japanese banks (figure 6).10 What few seem to appreciate, either inside or outside of Japan, is just how strong the resulting Japanese recovery from 2002-2008 was. It was the longest unbroken recovery of Japan’s postwar history, and, while not as strong as pre-bubble Japanese performance, was in fact stronger than the growth in comparable economies even when fuelled by their own bubbles.

People can get confused about Koizumi-era Japan’s economic performance because demographics were driving a pretty rapid reduction in the number of workers. That drags down overall output. But even though China’s GDP is much larger than Switzerland, Switzerland is still much richer and its workers are much more productive.

Posen’s piece is important, because I fear that historical evidence of poor economic performance in the wake of asset price bubbles bursting is creating a mood of dangerous complacency. You can read that as evidence that we’re destined to experience an extended period of poor growth, but you can also read it as evidence that what normally happens after a bust is that policymakers implement an ineffective response. And as Posen argues, accepting the view that slow growth is inevitable is a major cause of ineffective policy and becomes self-fulfilling. Japan started growing once it got some policymakers who believed it was possible for Japan to grow, and thus that they would try pro-growth things and try them on a large scale.

For the long drive, I’ve tried to assemble a playlist of state-appropriate songs that take us from DC to Maine as follows:

1. For Washington, DC it’s the Postal Service “The District Sleeps Alone Tonight.”
2. For Maryland, it’s REM “(Don’t Go Back to) Rockville.”
3. Then Delaware, Promise Ring “Is This Thing On?”
4. New Jersey is Less Than Jake “Never Going Back to New Jersey.”
5. I know a million New York songs, but since the route just involves a quick jaunt across the Cross Bronx Expressway I’m going with Boogie Down Productions, “South Bronx.”
6. I think from the title that Rainer Maria’s “CT Catholic” is Connecticut, though the only specific place referenced is the BQE in New York. But I guess that’s how you’d get from Williamsburg to Connecticut.
7. Next up, The Get-Up Kids “Mass Pike.”
8. There don’t seem to be any real songs about New Hampshire, but the “Granite State of Mind” parody is hilarious.
9. John Linnel’s “Maine” is pretty great.

This ended up being a more emo list than I’d intended. Peppy bands should write more songs about locations in the Northeast.

Voting is mostly about the objective situation, not about what people say about the election. But insofar as talking is inevitable, you may as well do it well. Looking at the Democrats message heading into the midterms it all seems mighty backward looking: “we accomplished a bunch of stuff / the economy’s not really our fault / etc.” Missing here is what you’d call the narrative about what Democrats envision the 112th Congress as doing.

Suppose you voted for Democrats in 2006 and 2008 because you wanted to see action on health reform, energy reform, and immigration reform. Now you’re happy that health reform happened, but sad that energy reform and immigration reform didn’t happen. If Democrats come back this fall with a surprisingly good result—diminished but still robust majorities—are those things going to happen? Or are the remaining pieces of that agenda dead either way?

I’m off this morning to a strange and distant land for a bit of vacation. Specifically, my girlfriend and I will be driving up to sunny Cambridge, MA today and then pushing forward Sunday morning to my dad’s summer place in Brooklin, ME recently profiled by the Internet’s own Emily Gould. My hope is to enjoy some breeze, nice views, lobster rolls, peekytoe crab, and perhaps some sea kayaking.

Anyways, I like blogging so I’ll put some posts up while I’m gone, but obviously at a much-reduced pace and possibly focused on photos of quaint stuff.