Plain Sense Economics

In both my principles of micro course and my freshman seminar we have been discussing the appropriate role of government in our economy. Stephen Dubner and Steven Levitt of Freakonomics fame, contributed an article in the New York Times Sunday Magazine today – on unintended consequences.

When the Federal government imposes a luxury tax, intended to raise revenue from wealthy Americans, but finds that small business owners (builders of yachts) bear a large burden, or when city governments consider rent control, only to see the supply of affordable apartments diminish we see how hard it is for government to intervene in markets – even with laudable social goals. Dubner and Levitt add some grist for this mill.