Subject: What Thomas Piketty leaves out of “Capital in the 21st Century” (AEI Economics Ledger) If you have trouble reading this message, click here to view it as a web page.

No, it’s not the end of capitalism VIDEO & SLIDES — Kevin Hassett’s critique of Thomas Piketty's new book, “Capital in the 21st Century” An alternative to Piketty’s “terrifying” future. Abby McCloskey: “AEI’s Kevin Hassett provided a pointed critique of Thomas Piketty’s new book on Tuesday, telling an audience at the Tax Policy Center that Piketty’s prediction of a “potentially terrifying” future, in which capitalism collapses under the weight of wealth concentration, doesn’t factor in the actual relationship between capital and labor, existing taxes and transfers, the negative effects of a global wealth tax, and that capitalism has led to a decline of income inequality globally.”

Tax Day has passed, but the need for reform remains How to fairly tax families. Sita Slavov: “Because marriage and childbearing decisions don’t appear to respond much to tax incentives, policy makers should emphasize fairness concerns. . . . There’s a reasonable case to be made for shifting from family-based to individual taxation and for lowering the relative tax burden on low-income nonparents.” Chairman Camp’s bill is a good start. Alex Brill: “A simpler, more efficient, more growth-oriented tax system is feasible if lawmakers are willing to remove or restructure the current array of distortionary tax breaks. Although Chairman Camp, the reform movement's strongest elected ally, will, unfortunately, retire from Congress at the end of 2014, he leaves his successor with a map for carrying the reform effort forward.”

Do liberals really think an 80 percent top tax rate wouldn’t hurt the US economy? James Pethokoukis: “Federal income taxes went up last year, a financial reality becoming ever clearer to many higher-earning Americans as tax day looms. But how much higher can Washington clip wealthier Americans before rising tax rates really weigh on US economic growth?”

ALL IN ONE PLACE — AEI’s research and commentary on tax reform Consequences of the financial crisis Predictions for the recovery were right. Kevin Hassett: “Economists Carmen Reinhart and Kenneth Rogoff warned that the recovery might be a long one because the recession had been preceded by a financial crisis. . . . More than six years after the start of the U.S. financial crisis, with GDP growth still slow and steady and the unemployment rate only recently falling below 7 percent, the early predictions based on the Reinhart and Rogoff data look spot-on.” Q & A with John Makin on inflation and deflation. James Pethokoukis: “Some economists have been worried that inflation has been too low, maybe risking outright deflation. As AEI economist John Makin wrote in a recent report, ‘Inflation is falling in the United States, Europe, and China, suggesting a real threat of impending deflation that could cripple the global economy.’”

• FROM THE ARCHIVES — Now is the time to preempt deflation If you are big and move money, watch out. Peter Wallison: “If bank regulators get their way, much of the U.S. financial system will lose its capacity for risk-taking as well as its dynamism, innovativeness and flexibility. And the U.S. economy would not be any safer.” Worse than Fannie and Freddie. Peter Wallison and Phil Gramm: “By politicizing the allocation of mortgage credit beyond the level that was possible with Freddie and Fannie—and using a new Federal Mortgage Insurance Corporation to force borrowers with good credit to subsidize those with bad credit—the bill proposed by Sen. Tim Johnson (D., S.D.) and Sen. Mike Crapo (R., Idaho) manages to make the affordable-housing provisions of current policy worse.” In other news 10 welfare reform lessons. Robert Doar: “Make no mistake about it: My fellow city workers and I were bureaucrats. But we were bureaucrats on a mission to bring the principles of the 1996 federal welfare-reform legislation to New York City in a way that would help poor New Yorkers improve their station in life. Here are 10 lessons I learned about how programs for the poor should be run.” Give the CBO long-range tools. Alex Brill: “Congress regularly weighs policy reforms that affect our national economic mooring for decades, but the Congressional Budget Office (CBO) is limited in its official scoring to a 10-year budget horizon. It’s time to give the agency tasked with estimating the cost of congressional policy proposals the resources it needs to present long-term budget projections to Capitol Hill.” Current Population Survey changes are not a conspiracy. Michael Strain: “As we all know, the White House reported that over 7 million Americans signed up for private health plans on Obamacare’s newly created and IT-troubled exchanges, and Medicaid enrollment is up by 3 million since October. So can the White House declare victory and exit the battlefield? No. Why? Because we don’t know how many of those 7 million Americans are newly insured.” Is the Federal Reserve a philosopher king? Alex Pollock: “Shortly after the Federal Reserve Board was formed, there arose a dispute about the standing in government protocol of its members. They thought they were not given high enough status in the order in which they would enter formal events. The issue got raised all the way to the President himself. Said Wilson, ‘They can come in after the fire department for all I care.’”

• RECENT EVENT — The Fed: Philosopher king or servant of the Treasury? PODCAST — Is Bitcoin dead? Mark your calendar TODAY: Markets closed for Good Friday 4.24 Jobless claims 4.25 AEI Event: Obamacare’s rocky start and uncertain future Keep up with AEIecon Get up-to-the-minute updates on Twitter @AEIecon. Read more from the American Enterprise Institute economic policy team at www.aei.org/economics. Contact Abby at abby.mccloskey@aei.org if you have questions for the economics team. Sign up for a weekly copy of the LEDGER here. If you were forwarded this message, click here to subscribe to AEI newsletters. Click here to unsubscribe or manage your subscriptions.

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