"Econ 102" with Noah Smith and Erik Torenberg The New Axis, Neoliberalism, and Germany [Mailbag]
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Sep 5, 2024 In this lively discussion, listeners hear about the surprising vibrancy of Poland's economy and its cultural spirit. The hosts dive into the reliability of economists as predictors and China's evolving industrial strategies. They explore complex geopolitical dynamics, including potential US-China conflicts and the advantages for smaller nations. The dialogue extends to the challenges of drug pricing and taxation in the U.S., as well as Germany's energy policies and the legacy of neoliberalism, sparking ideas for new economic frameworks.
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Taxing Unrealized Gains
- Repealing the step-up basis, which wipes capital gains at death, is simpler than taxing unrealized gains.
- Taxing unrealized gains could incentivize the wealthy to consume more, potentially exacerbating consumption inequality.
China's Industrial Strategy
- China's industrial strategy aims to harness economies of scale, but its primary focus is technological progress and productivity.
- Smaller nations facing Chinese subsidies should ideally cooperate through agreements like the Trans-Pacific Partnership.
The New Axis
- China, Russia, Iran, and North Korea form a loose alliance, cooperating against the US as a common adversary.
- This "new axis" is driven by shared dislike of American influence and the desire for regional dominance.