The explanations for things are often not simple, though our politicians of a red hue often claim that they are. On the other hand, it is often the case that the best remedy for stuff that ails us is the simplest solution, a fact which politicians of both parties seem to do their best to ignore. Witness the Dodd Frank bill, which, in various half ass, complicated and confusing ways, attempts (or claims to attempt) to achieve the same result as the comparatively simple Glass-Steagall act in fact achieved for over forty years. While there are some voices crying in the wilderness, no one seriously believes we will reenact the Glass-Steagall act, precisely, one suspects, because everyone knows it would work, and that would displease the people who count.
For reasons probably related to the will of God, or some such thing, I have run across many references to simplicity today. In each , we are reminded that we live in a country that is averse to simple solutions, while being totally enthralled with simplistic explanations.
First on the list is Dean Baker's post, in which he again points out that we could seriously limit the activities of what have now been christened Flash Boys (insider traders by any other name) very simply:
There are many complicated ways to try to address this problem, but there is one simple method that would virtually destroy the practice. A modest tax on financial transactions would make this sort of rapid trading unprofitable since it depends on extremely small margins.
He then points out that this simple solution is unlikely to be adopted for the simple reason that it would work.
Here, we have Paul Krugman explaining why we couldn't get a simple solution to our health care mess:
I’ve always thought of Obamacare as a sort of Rube Goldberg device that awkwardly simulates the results of a single-payer system. It’s run through private insurance companies in part to buy off the industry, in part to let most people with good insurance keep it. It relies on a mandate plus subsidies, rather than full funding via the tax system, in part to keep down the headline spending number. And so on. The resulting system isn’t what anyone would design from scratch; it was, however, probably the only kind of system we could get.
So here you have the supreme irony. We cannot enact simple solutions to complex problems because we are a nation of simpletons.
Sidenote: Krugman's reference to buying off the insurance companies reminds me that what is often referred to by economists as “rent-seeking” (which is what the insurance companies did during the health care debate) is simply a “tax” by another name. It would be interesting to know if the amount by which taxes have been reduced (mostly on the rich) in the last thirty years or so, has been more than offset by economic rents (which mainly affect the rest of us) pushed through Congress, in which case one could cogently argue that the Republicans have raised taxes more than the Democrats ever did, the difference being that the general public has gotten no benefit from these tax equivalents. I would pursue this in more depth, however, I just opened a 32 ounce growler from our local Beer'd brewery; my wife has refused to drink her share, and I am therefore somewhat incapacitated for further research. Still and all, a question worth pursuing.
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