What the 99% really needs

There was a great discussion on the Diane Rehm show yesterday.  It started out about the Occupy movement, but it focused mostly on the inequality of power among different special interests.   The Occupy movement thinks that this is caused by the difference between rich and poor (as I blogged yesterday) and therefore we need more income redistribution.  The panelists (Lawrence Lessig, Tyler Cowen, and a few Occupiers) represented both the right and the left (not GOP and Dem, but philosophically) and everyone was very well informed, intelligent, and not demagogic. 

Tyler Cowen made a few great points from the right.  He said that even in the 2008 election when Obama dominated the young vote, older people still outvoted young people by a wide margin.  So rather than occupying parks, maybe they should do more occupying of voting booths.  He also made the point that the wealthy and powerful interest groups will always seek to influence government for their own benefit and government (right and left) will always be susceptible to their influence. So the best way to make things equal is to minimize the influence of government on the economy in the first place. 

Of course you could take that too far:  we do need progressive taxation and a social safety net of some kind.  And regulating food safety, workplace safety, drug approval, and these kinds of things need to be regulated at the federal level to be efficient.  But if everyone were more educated about the issues, and not whipsawed this way and that by extremist talk show hosts (on both sides), maybe we can make the system more equal. 

Lessig made the great point that free market capitalism and crony capitalism are not the same things.  The free market has equal opportunity for everyone and does not allow the wealthy to abuse their power.  Crony capitalism is ostensibly free, but if the wealthy are free to use their wealth to exert influence, change the rules, and perpetuate their wealth (i.e. privatize profits and socialize risks), then that is a freedom we can do without.  What we need is the right kind of regulation that keeps the playing field level and then opens up a free market within that constraint. 

I want to download the podcast and listen to it 2 or 3 times.  There was so much good stuff in there.  If I get some new insights, I will add to this discussion.