Subject: The Great Society (AEI Economics Ledger) If you have trouble reading this message, click here to view it as a web page.

Looking back, looking ahead

The Great Society at 50. Nicholas Eberstadt: “The Great Society pledge, and the fruit this would ultimately bear, profoundly recast the common understanding of the ends of governance in our country. The address heralded fundamental changes-some then already underway, others still only being envisioned-that would decisively expand the scale and scope of government in American life and greatly alter the relationship between that same government and the governed in our country today.” VIDEO — The Great Society's triumph and tragedy PODCAST — Does economic freedom have a future in America? A Q&A with Arthur Brooks Problems with Piketty A question on Piketty. Andrew Biggs: “Here’s where the puzzlement comes in: pretty much every economics textbook will tell you that r > g, but none of the textbook models take from this that the capital stock will rise endlessly relative to the economy. Most of them hold that it stays pretty constant, and the historical evidence supports that view.” Piketty’s argument hits an iceberg. Stan Veuger: “In 2014, the combined wealth of these people and those who inherited their fortunes is about $212 billion, for a rate of return net of inflation of about 0.5 percent. That is a very low number, much lower than the 7 percent propagated by Piketty.” VIDEO — Kevin Hassett discusses Thomas Piketty’s new book on “PBS NewsHour” Is the labor market broken? The equal-pay debate. Andrew Biggs and Mark Perry: “Some gender discrimination in the labor market certainly does exist. But the best solution isn’t more lawsuits. In fact, the Obama administration’s proposal to shift the burden of proof in gender discrimination cases against employers would make hiring a female employee a potential legal liability for employers, and thus employers would hire fewer women.” Bad idea to destroy jobs. Ramesh Ponnuru: “It’s not just opponents of a higher minimum wage who think it would destroy jobs while a lower one would create some. Almost everyone who has thought about this question believes these claims are true. Most proponents of a higher minimum wage think the trade-off is worth it because the job loss will be small and the benefits to people who will receive the higher wage large.” America’s increasingly irrelevant unemployment rate. Nicholas Eberstadt: “If we want to understand — much less fix — what ails our labor force today, we have to measure its problems first. Unfortunately, our old-fashioned ‘unemployment rate’ has become an increasingly inaccurate barometer for measuring the health of the American labor market and the wellbeing of the American public. Other, better tools exist. We must learn to use them.” Taxes

A tax on public health. Alan Viard and Alex Brill: “Taxing e-cigarettes would threaten public health by penalizing a product that holds the promise of luring people away from the traditional cigarettes that have caused so much death and disease.” A clue about the prospects of tax reform. Alex Brill: “If Congress continues to extend this laundry list of narrow tax breaks and avoid the more difficult task of pursuing an overhaul of the tax code, the code will remain in its current form: complex, distortionary, arbitrary, and unfair. How Congress deals with these policies will serve as a clear signal of its willingness to tackle the broader task of tax reform.” Across the pond Ratings agencies have learned little. Desmond Lachman: “If the rating agencies are to play a useful role in rating the sovereign debt of the European periphery, they must provide an objective assessment of the probability that those countries might default on those debts. They should be providing such an assessment rather than simply following the market as they have done in the past during the downgrading cycle or as they now seem to be doing again in the upgrading cycle.” What Ukraine doesn’t need. Desmond Lachman: “The senators’ proposal that the U.S. Treasury should work with the International Monetary Fund to help Ukraine set up a currency board to stabilize its currency would seem to be wide of the mark. For not only would such a proposal require very large-scale international financial support that would put the U.S. taxpayer at risk. It is also far from clear that in Ukraine’s present circumstances the setting up of a currency board would be in the country’s best interest.” In other news Obamacare has failed to rein in health care costs. Stan Veuger: “We now have the first quarter of 2014 to judge the spending effects of the law, albeit provisionally. According to the Bureau of Economic Analysis, real health-care spending during the first three months of the year jumped by an annualized 9.9 percent. That is a staggering number.” Innovation put on the chopping block. Jim Pethokoukis: “America is plagued by mediocre primary schools, subpar infrastructure, and dysfunctional government. But somehow, this country manages to get at least one big, important thing right: innovation.” Mark your calendar 5.20 AEI event: The Great Society at 50: The triumph and the tragedy 5.20 AEI event: The fourth revolution: The global race to reinvent the state 5.21 FOMC announcement 5.22 Jobless claims 5.27 AEI event: Economic liberty and human flourishing: Perspectives from political philosophy 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.

American Enterprise Institute for Public Policy Research | 1150 Seventeenth Street, NW, Washington, DC 20036 | 202.862.5800 | www.aei.org