A good Rule

Nassim Taleb is one of my favorite thinkers.  He has written a very interesting list of rules in the FT today.  Chief among these is as he puts it: 2. No socialisation of losses and privatisation of gains. 

We have, as he suggests, combined the worst of capitalism and socialism. I think that the worst mistake the liberal and the lay person makes these days is that anti-Corporatism is anti-Capitalism. If we really had capitalism we would not have all these behemoth corporations. We would have a smaller, more entrepreneurial society. 

It is socialist impulses that create large corporations. When tax, reporting, zoning, environmental regulation, min wage–whatever socialist laws you like–are put in place, it changes the economies of scale for doing business. Now only large corporations can spread these costs over enough units to stay afloat. 

Here is what I am saying: The same retards that clamor for 'buy local' and independent businesses vote for the very policies that make these businesses fail.

Here is the easy solution: Constitutionally limited government. This is what our Founders wanted to avoid. They have been diluted through 250 years of lobbying by big business or elites claiming to act for the 'people'.

I will say it again so even the dullest can appreciate it: pro-capitalist policies are often the exact opposite of pro-corporate policies. If we limited our government once again so that it is not for the socialist desires of the elite and big business, we would then have the small local, entrepreneurial economy that yuppie troglodytes claim they want. 

Rejoinder

I should point out one small problem I have with Glaeser's general argument. When you decrease the number of people who pay taxes at all, you increase the number of people who are willing to tax high-income individuals. Although the earned income tax credit was championed by none other than Milton Friedman, there is an element of public choice theory that of course has been borne out in reality. Without getting in to all of that, the general point still stands, which is that government is terrible at the equitable distribution of wealth because politicians have no incentive to actually respond to poor people. 

If they are no longer poor, they will not vote for Democrats! The Republicans don't get their votes anyhow. Government has always responded to those who have enough money and influence to ask it for money. The poor do not hire K St. lobbyists. 

Finally. I have one more thing to ad about this despicable bailout. You are now poorer by $800b not just because you paid taxes into that pool, but more because they pulled that money out of thin air. Today there are suddenly $800b more dollars. That makes every dollar you own worth $800b less all of the dollars in circulation. Not only is your stock account down, your house worth less etc, but now the politicians have decided that your dollars themselves should be each worth a little less.  Congratulations.