Ever since the Great Depression, economists have known that demand shortages tend to persist in the wake of severe financial crises like the ones that happened in 1929 and 2008. Bob Frank More Quotes by Bob Frank More Quotes From Bob Frank As the great naturalist Charles Darwin saw clearly, individual and collective interests often coincide, as in the invisible hand narrative. But he also saw that in many other cases, interests at the two levels are squarely in conflict, and that in those cases, individual interests generally trump. That simple observation suggests that market failure is often the result not of insufficient competition (the traditional charge from social critics on the Left), but of the very logic of competition itself. Bob Frank invisible-hand simple two In the long run, greater investment would mean greater productivity and income growth. Bob Frank running long mean A flat tax is roughly the same as a sales tax. Bob Frank flat-tax sales-tax taxes The upshot is that to send its children to a school of even average quality, a family must outbid half of other similar families who are pursuing the same goal. And that's become dramatically more expensive because of the growth in median house size, which was in turn caused by higher spending at the top. Bob Frank average children school Virtually all families in the middle of the earnings distribution aspire to send their children to a school of at least average quality. (We'd think ill of any parent whose aspirations were lower.) The rub is that the best schools tend to be located in more expensive neighborhoods. Bob Frank children school thinking There's no indication that middle-income families feel resentful about the bigger mansions and yachts. But the near-rich, whose social circles intersect those of the rich, are subtly influenced by them. Bob Frank income rich circles Every group spends more when its income grows. Bob Frank income groups grows In almost every instance, air and water quality goals were met more cheaply and quickly when we taxed pollution than when we tried to regulate it directly. Bob Frank goal air water Once firms had to pay to pollute, they became incredibly inventive at figuring out cheaper ways to eliminate their SO2 emissions. Bob Frank firm pay way Prescriptive regulations, such as telling electric utilities what kinds of coal to burn or what kinds of scrubbers to install on their smokestacks, were not only intrusive, they were also grossly inefficient. Bob Frank coal regulation kind Commercial roadways in communities that lack zoning laws, for example, are often an aesthetic nightmare not because of insufficient competition, and not because merchants are stupid or lack taste. Rather, the problem is that any individual merchant's sign won't be noticed unless it's bigger and more garish than those of rival merchants. Bob Frank community stupid law
