Former Treasury Secretary and former Harvard Prez Lawrence Summers, in the
June 24, 2007, Financial Times:
By definition what one group gains from changes in the distribution of income another group must lose.
As I have
repeatedly shown, this is nonsense:
money is not a zero-sum game; the
economic "pie" expands. Hence
this comment on
Greg Mankiw's blog:
Why does one person's success actually constitute someone else's loss? It presupposes that somehow there is a fixed amount of resources to be divided. It seems that someone always wants to divide the pie when an economy is on the upswing but curiously there is little desire to divide the risk or share in the losses.
It seems 2007 will be the year of fear: fear of immigration, free trade, globalization, global warming, income inequality, Islamo fascism, China, etc. Let's hope that the next president can sort out the populist noise from the real issues. As Summers illustrates, few of the handwringers seem to offer much in the way of practical solutions.
Agreed--as
another commenter said, "Amazingly superficial commentary from a supposedly brilliant man." The
pervasive pessimism is dead wrong--but
comes with a purportedly impressive pedigree.
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