If there is something wrong with the rules in finance and healthcare and if those rules in some sense have actually grown worse since the 1970s, and these sectors are becoming much larger fractions of GDP, it is conceivable that they are behind some of the broader measures of distress in the economy.
…Remember, we could have had a system like the military that sets the rules. We could have had a system like the Supreme Court. But what we have is a Congress that passes bills and then agencies that implement those bills with regulations. That legislative process may be too vulnerable to manipulation by very well financed entities with an enormous amount of wealth and income at stake. Every dollar of cost savings in healthcare means a dollar in reduced income for somebody in that sector.
Read the whole thing. Choosing an excerpt is very difficult. Note that I disagree with him on the virtues of non-profit organizations and independent technocrats.
Pointer from the the Urbanization Project blog, which seems to be Paul’s latest gig. Brandon Fuller is a player there as well.
I admire Paul Romer’s ongoing efforts, yet question whether he is thinking beyond the organizational deficiencies of the 20th century which continue to limit technological innovation. Much potential technology and innovation continues to pose threats to present hierarchical structures designed to facilitate specific income flows. In a sense, present day profit and non profit structures fall prey to the same problems as to limitations of knowledge utilization. For example, for profit schools may provide greater offerings than non profit but could still be severely limited in some areas lacking incentives to allow individual educational entrepreneurs. Basically my concern is, how much of a role does Paul Romer actually envision for individual knowledge use and skills.