Richard Epstein on Thomas Piketty | IEA

Excellent critique by Richard Epstein, Professor Emeritus of Law and Senior Lecturer at the University of Chicago Law School, of the thesis and policy recommendations of French economist Thomas Piketty from his recent book, Capital in the Twenty-First Century.

With voluntary bargaining, one can assume that both parties will benefit from the transaction: they are unlikely to enter into a bargain where there is not at least some benefit for themselves. What Epstein does not address is crony capitalism, where special interest groups (either corporations or unions) may influence government to act (or fail to act) in a way that benefits the group at the expense of the whole. Wal-mart profits, for example, may rise as a result of China’s suppression of the yuan/dollar exchange rate, but the same exchange rate may cause the loss of manufacturing jobs and exports, and depress wages.

Herman Cain Explains His 9-9-9 Plan

WSJ interview with Herman Cain:

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His plan ticks many of the right boxes:

  • Low corporate tax rate
  • Low flat personal tax rate
  • Broad-based consumption tax
  • Remove the Fed’s dual mandate and limit them to protecting the dollar against inflation

Consumption taxes are often seen as regressive — because everyone pays the same rate — but can easily cater for the poor/unemployed through food stamps and/or changes to unemployment benefits. The worst thing is to create an administrative nightmare with a two-tier system where some items (e.g. basic food or medicines) are exempt from the tax.