Well, they don’t. :-)

There is no such thing as ideological purity, either in politics or economics. Or, put another way, ideological purity will fail every time.

Some examples are in order:

  1. Nobody, I hope, would quarrel with the notion that Sweden is economically liberal. Yet, Sweden’s top tax rate in the early 80’s was over 80%; today, it’s 57%, if memory serves. What happened? Sweden figured out that the 93% rate collected virtually no taxes, as both individuals and their employers figured out ways to legally avoid earning or paying wages which would fall into that bracket. So, they went supply side, lowered taxes (conservative concept, that) which increased compliance, and revenues rose.
  2. And, of course, the unforeseen crisis not having anything at all to do with business we have today, where demand craters, causing corporations to lay off workers to stem the bleeding, requiring government to infuse the corporations with cash to keep them alive and avoid a long lived recession that would persist even after the virus crisis ends.

So, yes, infusing the corporations with cash does not mean anyone has become unmoored from their ideological beliefs; nor did the lowering of those tax rates in Sweden indicate they were moving away from their philosophy of broad social services. There were measures that were taken to respond to the realities on the ground — — course adjustments, if you will, to insure the success of the preferred economic model into the future.

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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