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You are right. Political systems are not in a good position to design policies in the best possible way. I am completely willing to accept that. But there is some design going on, it is not complete chaos. It's not like neither of these goals has ever had any sort of influence on policy. It isn't as if this is just some big, obvious & uncontroversial policy mistake that everyone would see if they only visit reason.org that politicians have just overlooked.

The system, flawed as it is, is "trying" to solve the problem as I articulated, more or less.

Take your solution as an example. Don't you think these sort of blog posts could easily criticise it's consequences too? First, the same criticism of perverse incentives applies. It takes more compensation to motivate a person take a job if he already has $10k + $6h/hr. Second, you'd have a lot of people in guaranteed 'make work jobs' that are probably more expensive to run then just giving away money.

I'm not yours is a bad idea, but only because the problem is hard. Pretty much every proposed solution is messy & ugly with lots of loose ends & perverse incentives.

The elegant solutions can be found on either extreme of the political spectrum where you don't have to worry about one of the conflicting goals. They are also conveniently excused from reality because neither socialism nor capitalism has ever been truly applied.



It isn't as if this is just some big, obvious & uncontroversial policy mistake that everyone would see if they only visit reason.org that politicians have just overlooked.

Well, all I can say is this. I've spent too much of my time in life studying politics. I've worked in multiple levels of government ( U.S. Congress, city government, state senate), worked in non-profits trying to help the homeless, tutoring inner city kids, etc. I used to browse my college's social library for fun to read journal articles, and on almost every single issue I've read the top books and articles.

My conclusion is that, actually, yes, there is almost always a much, much better, solution, that would make most people much better off, that the political system has simply overlooked.

Note, I do not feel this way about things outside of politics and government. At the company I work at, I think the management generally makes the very reasonable decisions given the trade offs involved. But when I worked in government, I thought the process was insane.

For a few examples:

On the healthcare issue, see my blog post: http://intellectual-detox.com/2009/09/10/the-perfect-healthc...

Or consider Iraq/Afghanistan. If you believe that the U.S. should just get out, then you probably already believe that our current policy is insane. If you believe that the U.S. should stay in and build a workable government/economy, our policy is also insane. For comparison, Britain once ruled Egypt, which at the time had 1/3rd of Iraq's population, with a mere 5,000 soldiers, ruled it so well that Cairo was a notable international destination, and actually turned a profit. The tactics the British used are well documented, and in the end resulted in far, far less bloodshed and collateral damage than our current tactics. Yet we ignore them, and everyone loses. Iraq and Afghanistan remain in chaos and both the Iraqi civilians and the American taxpayer bleed red. Again, insanity.

Or consider education: http://steve-olson.com/how-the-public-school-system-crushes-... and http://www.paulgraham.com/nerds.html Again sheer insanity. And again, if you actually study the history and politics of the educational system, you'll find that the system is not the result of balancing hard tradeoffs. It's the result of an insanely dysfunctional political system.

And don't even get me started on economics and the financial crisis.

Again, I spent a lot of time in the political world and it only slowly grew on me just how insane the system was. I basically went from believing the mainstream academia/NYTimes view ( ie. the American system is flaws, but generally arrives at a workable solution given the constraints) to being legitimately scared at how badly everything is being run.

First, the same criticism of perverse incentives applies. It takes more compensation to motivate a person take a job if he already has $10k + $6h/hr.

There is still a bit of a disincentive, but it's much, much, much better than a 110% marginal tax rate.

Second, you'd have a lot of people in guaranteed 'make work jobs' that are probably more expensive to run then just giving away money.

$6 an hour is still a lower wage than ~98% of the jobs out there, so people would still have the incentive to switch to a higher paying, not-make work job.


Lets not get too caught up in the specifics of particular policy. I was just trying to point to the fact that there is a genuinely hard problem with inevitably messy solutions. Your solution is also messy. Maybe it is better. but it is not uncontroversially better & it does not give a solution with no perverse incentives.

I also agree that the political system does not produce optimal decisions. I agree with you. But there is a big gap between sub optimal & random.




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