Mnuchin Should Study Economics
At Davos, US Treasury Secretary Steve Mnuchin dismissed Greta Thunberg by saying,
But Mnuchin has shown over and over again that he cares more about ideology than about economics.
He has said that tax cuts will pay for themselves by stimulating growth, though it hasn't ever happened since Ronald Reagan first made that claim. In Reagan's day, they called it "voodoo economics." Now, it is zombie economics - a theory that should be dead but that is kept alive, despite all the evidence against it, purely because right-wingers want it to be alive. Mnuchin ignores the empirical evidence in favor of his ideology.
He has said that we don't need government regulations to control global warming because businesses can do it on their own, ignoring a fundamental principle of economics, the idea of external costs. Basic economic theory tells us that the market benefits producers and consumers, but that their transactions can impose costs on third-parties who are "external" to their transactions. In theory (though not always in practice), the best response is to impose a tax on products that reflects their external costs - called a Pigovian tax. Mnuchin ignores basic economic theory in favor of his ideology.
In reality, Mnuchin is the one who needs to study economics. He needs to review the economic theory and the evidence that he has been ignoring. Then he needs to take a look at himself and to think about how much damage he is causing to future generations.
"Is she the chief economist, or who is she? I'm confused. It's a joke. After she goes and studies economics in college she can come back and explain that to us."If Mnuchin really cared about the economics of global warming, he would talk about the special IPCC study of 2018 which showed that the present value of the damages avoided by limiting warming to 1.5 degrees Celsius is at least four times as great as the cost.
But Mnuchin has shown over and over again that he cares more about ideology than about economics.
He has said that tax cuts will pay for themselves by stimulating growth, though it hasn't ever happened since Ronald Reagan first made that claim. In Reagan's day, they called it "voodoo economics." Now, it is zombie economics - a theory that should be dead but that is kept alive, despite all the evidence against it, purely because right-wingers want it to be alive. Mnuchin ignores the empirical evidence in favor of his ideology.
He has said that we don't need government regulations to control global warming because businesses can do it on their own, ignoring a fundamental principle of economics, the idea of external costs. Basic economic theory tells us that the market benefits producers and consumers, but that their transactions can impose costs on third-parties who are "external" to their transactions. In theory (though not always in practice), the best response is to impose a tax on products that reflects their external costs - called a Pigovian tax. Mnuchin ignores basic economic theory in favor of his ideology.
In reality, Mnuchin is the one who needs to study economics. He needs to review the economic theory and the evidence that he has been ignoring. Then he needs to take a look at himself and to think about how much damage he is causing to future generations.
posted by C. Siegel at 1:01 PM
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