NPR lists policies that economists agree are good ideas but which are political non-starters. Basically, they want to replace the corporate income tax and the payroll tax with a consumption tax and a carbon tax. Let’s stipulate that they are correct and not quibble.
Pro-cyclical fiscal policy worsens the dangers of overheating, inflation, and asset bubbles during booms, and exacerbates output and employment losses during recessions, thereby magnifying the swings of the business cycle. Yet many politicians in the United States, the United Kingdom, and the eurozone seem to live by it. They argue against fiscal discipline when the economy is strong, only to become deficit hawks when the economy is weak.
Pointers from Mark Thoma.
Economists are forever chastised for assuming that ordinary people behave rationally. We are told that instead we should appreciate the insights of behavioral economics.
But the same people who love behavioral economics are shocked, shocked to discover that politicians are not perfectly wise, benevolent servants of the public interest. When they observe what might be called “behavioral politics” (i.e., politics as it is actually practiced, not as assumed in the model of wise, benevolent public service), they see it not as a reality to be dealt with but as something that can be overcome…