The painful performance of the American economy in the past decade is not a function of bad luck; it is the product of flawed institutional design. Right now, we are reaping the harvest of efforts to reinvigorate progressive programs of the New Deal, which stress high taxes, large transfer payments, strong labor laws, and major barriers to free trade.
In this compelling Broadside, Richard A. Epstein takes an in-depth look at how this combination of public finance and market regulation has proved to be a potent force for disaster. High marginal tax rates expose the political system to strong factional strife, stifling initiative, adding uncertainty, and reducing overall revenues. A return to the flat tax of the classical liberal tradition is the best way to reinvigorate the markets – and overcome progressive excesses.