He claims in the video that he is part of the “1%” and wants to understand why they’re protesting Wall Street and not the federal government, which he places a large part of the blame on for the Great Recession and inequalities present in our current economic system.

Schiff was right on that one. The Great Recession was caused by government housing policy run amok.

His position is that the free market can handle those aspects much more effectively than the federal government can.

On this, Schiff is DIRECTIONALLY correct, but he is not taking into account situations when market signals come too late to be responded to, and that lag causes deaths or consequences which are very difficult to walk back.

Not only is capitalism not capable of self-regulating, it has proven to do the exact opposite in many cases, as I will delve into later. It is only through regulation that capitalism’s excesses can be kept in check and moderated.

This statement is way too broad. Whether capitalism needs regulation or not is very dependent on specific situations.

And this is where these discussions go off the rails. If we decide, for example, that we need an EPA, then one “side” of the debate erroneously decides that ALL parts of the economy need regulation. And when a regulation fails, the other “side” of the debate starts talking like Schiff.

Based on your ideology, how would you go about solving the climate crisis?

I don’t expect he would have a canned response for this, but I assume he would talk to how the free market and consumer choices would pave the way towards sustainability and reducing emissions.

Probably. Milton Friedman referred to “neighborhood effects” as one of the exceptions to the “no regulation” rule. This exception comes into play when the free market does not provide, as mentioned above) signals which control the behavior of the actor, or provides those signals too late.

Certain decisions WRT climate change fall into the neighborhood effects matter above; some do not.

If you want a good example of where “neighborhood effects” require regulations be imposed, use Love Canal.

In the 1940s, DDT found widespread use because of its effectiveness in combating serious diseases like malaria as well as insect control for farms, homes, and other buildings.

You probably don’t want to use this one. Recent studies have questioned the wisdom of DDT bans in developing nations, pointing out that the bans in, for example, India and tropical Africa, have caused more deaths from mosquito borne diseases than would have been caused by DDT.

DDT has become an awfully good example of how governments do not always think through problems to its fullest extent.

It wasn’t until 1990 that the FDA was given the authority to enforce nutrition labeling on food products and evaluate health claims listed on those products through the Nutrition Labeling and Education Act.

Although I like having food labels, I’m not sure “people are stupid” is the greatest defense for regulatory activity. On this one, eventually, 3rd parties would have gotten involved, the public would have been informed as to which food companies were being honest and which were BSing, and the market would have forced the bad actors into compliance. Eventually.

Sometimes, the “invisible hand” of the market needs to be slapped on the wrist, because it is not always promoting the public good.

Sure. But let’s not make the mistake of thinking that the government always promotes the public good, either. Governments are rife with corruption and bribery and lobbying money, and (given the DDT example above) don’t always think problems through very well.

For instance, in the energy sector, if a user has a choice between renewables or fossil fuels to power their home, they may choose fossil fuels because they’re deemed cheaper by the market, even though the true costs are not factored in.

Similar to that, a lot of people bought electric cars, not realizing that when they charged them, they were causing more coal to be burned. So, the “pro-environment advancement” was anything but. Same with ethanol.

This is where regulation comes in. It is precisely the needed “slap on the wrist” that the invisible hand needs in order to ensure that products that are detrimental to society and the environment are not accidentally promoted through misinformed consumer behaviors.

Assuming the government (a) gets it right, and (b) avoids unitended consequences.

Those are rather big assumptions with lots of history that tells us that the government frequently does NOT get it right.

I do find some irony in his words when we consider that more oftentimes it is the corporations that have an interest in deceiving and oppressing the public if it means their business models can survive and the revenues can keep flowing.

I can’t help but think here of the ACA. Virtually every benefit that the law was “sold” to us using turned out to be untrue. People lost their private insurance because of it, health care premiums skyrocketed because of it, and if you didn’t get a subsidy, you couldn’t afford it.

It certainly SEEMED, during the frenzy to pass the ACA, that it was the GOVERNMENT who had an interest in “deceiving the public” all the way down to Pelosi’s famous quote, where she basically tells the public that they can’t know what’s in the bill until Congress passes it.

You have a load more trust in the government and politicians than I do.

Written by

Data Driven Econophile. Muslim, USA born. Been “woke” 2x: 1st, when I realized the world isn’t fair; 2nd, when I realized the “woke” people are full of shit.

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