Why bother passing a law when the unelected commissioners of the Securities and Exchange Commission can dictate new say-on-pay rules without having to go through all that messy debate on C-Span?

The Wall Street Journal's economics blog has a posting headlined "Trickle-Down Economics Fails to Deliver as Promised" that itself fails to deliver on the headline.The Journal claims that a new paper from the Harvard Kennedy School debunks "Trickle-down economics, a centerpiece of conservative economic thinking for many decades." The Journal explains: "According to this theory, when government policies favor the wealthy — for example, via tax cuts for upper-income classes — the increase in wealth flows down to those with lower incomes. That's because the rich are more likely to spend the additional income, creating more economic activity, which in turn generates jobs and eventually, better paychecks for the less well-off. It's a school of thought that is closely linked to former President Ronald Reagan, and is frequently referred to as 'Reaganomics.' The idea has had enough power to be used as part of a long process to lower tax rates on the wealthiest Americans."

How far has the capitalism-socialism debate shifted? Here is what a defender of capitalism is writing, in today's Financial Times: "although it is not ideal, we should not be too hasty about abandoning the capitalist model. It is less bad than any other system yet invented." How's that for a lukewarm defense of a system that has created immense prosperity, innovation, and freeedom? Can you imagine a money manager, such as the author of the FT piece, writing that in 2006 or 2007?

Just when you think the era of bailouts might be ending and the American economy might be getting back onto its more normal, private, footing, along comes a news item to remind us that it is not going to be so easy to turn back the clock. Freddie Mac says it has received another $6.1 billion from the government, the AP reports. "After drawing the funds, Freddie Mac has now received $51.7 billion from the Treasury Department and still has access to an additional $149.3 billion to help it finance operations," the wire says.

Writing in the Wall Street Journal, George Newman makes some intelligent points about health care, but he also falls victim to the same logical flaw for which he faults his opponents. Mr. Newman faults proponents of an expanded government role in health care for arguing both that there are uninsured without health care and also that the costs of care for the uninsured are being shifted: "So on Monday, Wednesday and Friday we are harangued about the 45 million people lacking medical care, and on Tuesday and Thursday we are told we already pay for that care. Left-wing reformers think that if they split the two arguments we are too stupid to notice the contradiction." It's a good catch. But in the next breath, he argues that universal insurance coverage will increase the cost of care because "Suppose you are in an apple market with 100 buyers and 100 sellers every day and apples sell for $1 a pound. Suddenly one day 120 buyers show up. Will the price of the apples go up or down?"

The Riverside Church in Manhattan is mobilizing to "fight Harlem gentrification" at the same time that it was paying its senior pastor a compensation package whose value reportedly exceeded $600,000 a year. The New York Times reports that said pastor has now resigned, thus doing his own part to fight Harlem gentrification. Earlier this month, the church hosted Noam Chomsky, who railed against capitalism at an event that, according to this Web page, was "made possible with public funds" from the New York City Department of Cultural Affairs, and the "Folklife Program of the New York State Council on the Arts, a state agency."

Real GDP growth also leads to job creation, says Okun's Law, named after Arthur Okun, an economist in the Kennedy administration. But forecasters now predict increasing growth paired with increasing unemployment. Has Okun's Law broken down? The Federal Reserve Bank of Dallas explores some possible answers and explanations.

In an earlier post I suggested that one reason Canada has avoided the worst of America's financial crisis is that in Canada, if a homeowner defaults on a mortgage, the lender can go after assets other than the house. Now John Hempton has a post about the Australian economy noting that while real estate in Australia is "overpriced," in the case of defaults lenders there (as in Canada, but not in America) have "recourse" to the other assets of individuals.

A document prepared in advance of next week's G8 summit and "expected to be endorsed" by the heads of the G8 governments claims that "a re­thinking of the framework of the global economic and financial system is critical," the Financial Times reports. The FT says the report recommends a "global standard" on "executive pay, corruption, banking, corporate governance, taxation and markets." This is risky stuff, as many of the issues seem to be matters better left to either shareholders and directors of individual companies or voters and elected representatives in individual countries, rather than unelected and unaccountable international bureaucrats of the sort the FT article suggests would take the lead in setting specific policies. Any "global standard" would have to include a bunch of unfree countries. The G20 that the FT says will also play a role in this process includes Saudi Arabia and China. Does America really want the same corruption and corporate governance standards as China and Saudi Arabia?

"Obama adviser not yet ready to back a second stimulus," is the headline over a wire dispatch on Yahoo! News. That headline sure packs in a lot of meaning. "Not yet" suggests that the adviser eventually may come around. "Second stimulus" is a judgment that yet another round of federal spending should not count as a third stimulus, after the $152 billion "Economic Stimulus Act of 2008" signed into law by President Bush in February 2008 and the $787 billion American Recovery and Reinvestment Act signed into law by President Obama in 2009. There's got to be a point at which if something isn't working one stops repeating it, but it's not yet clear that we are at that point.

The Wall Street Journal weighs in with an editorial this morning on the biofuel subsidies that were the subject of a post here on June 18.

The Financial Times's Clive Crook has a scathing assessment of President Obama's performance to date. "The president has cast himself not as a leader of reform, but as a cheerleader for 'reform' – meaning anything, really, that can plausibly be called reform, however flawed. He has defined success down so far that many kinds of failure now qualify." As for his aides, "On the main domestic issues, they are not designing policy; they are working the phones, drumming up support for bills they would be deploring if they were not in the administration."

Thomas Friedman has a column today with some good ideas in it, emphasizing innovation rather than bailouts, calling for more open immigration, and seemingly agreeing with a source who suggests we lower the corporate tax rate and "revamp Sarbanes-Oxley so that it is easier to start a small business." There's an irony that seems to escape him, though. He suggests that America require a high-school diploma to get a drivers' license. Then he concludes, "Lately, there has been way too much talk about minting dollars and too little about minting our next Thomas Edison, Bob Noyce, Steve Jobs, Bill Gates, Vint Cerf, Jerry Yang, Marc Andreessen, Sergey Brin, Bill Joy and Larry Page." But Thomas Edison never got a high school diploma. Some of America's great entrepreneurs and innovators haven't taken too much to formal education. And linking a high-school diploma to the driving privilege would probably mainly have an effect akin to "social promotion," with high schools shuffling unqualified graduates along rather than flunking them out because the schools wouldn't want to effectively impose a lifetime driving ban on a student for, say, failing to master trigonometry.

In reviewing Senator Jim DeMint's new book, I wrote that "perhaps the most interesting aspect" of his analysis was his observation that "more than 50% of Americans now receive a significant portion of their incomes from government programs." Now Donald Marron has a chart making a similar point, showing the climbing share of government transfers as a percentage of personal income -- it's up to a record 18%, from about 6% fifty years ago.

Discussing the idea of a "public option" as part of President Obama's health care reform, Harvard economics professor Gergory Mankiw writes in the New York Times, "Consumer choice and honest competition are indeed the foundation of a successful market system, but they are usually achieved without a public provider. We don't need government-run grocery stores or government-run gas stations to ensure that Americans can buy food and fuel at reasonable prices." But that is hardly a sound argument about the lack of a need for a public health insurance plan. In fact the government intervenes in the food and fuel markets in all kinds of ways to assure Americans access at "reasonable prices." On food, there is a food stamp program on which the federal government spends roughly $37 billion a year, the WIC progam at roughly $5.5 billion a year, and school lunch and breakfast programs on which the federal government spends about $14.6 billion a year. On fuel, there is a $5.1 billion a year Low Income Home Energy Assistance Program, as well as a strategic petroleum reserve that the government can fiddle around with to affect the price of oil and gas. America has a significant military presence in the Persian Gulf in part to assure that Americans can get fuel at reasonable prices, and you'd better believe a good deal of U.S.-Saudi diplomacy focuses on just that issue.