Paul Krugman’s One Bad Idea
October 2, 2014
There is one thing that unites left wing political parties all over the world, regardless of their other differences. It is the conviction that incentives don’t matter. I suspect that a hefty majority of the delegates to the Democratic National Convention sincerely believe that if a price is judged to be too high, government can push it down and nothing bad will happen (e.g., shortages). If a price is judged too low, government can push it up and nothing bad will happen (e.g., surpluses).
