Saturday, November 08, 2008

Worries for a new administration

A friend of mine used Krehbiel's Pivotal Politics model to analyze the implications of a Democratic Congress and Presidency. He finds the scene is set for substantial policy change.

That was a good time to reflect on the perils of an Obama administration.

Higher trade barriers (which will mostly hurt the poor in developing countries and the poor Walmart customers in the US), more frivolous lawsuits (something the current administration has been fighting behind the scenes), more wasted bureaucracy, less school choice and school reform, slower growth (see QJE paper by a former classmate of mine), regulation that leads to less home ownership, higher minimum wage (which hurts the poor through more unemployment and increases the prices at places they shop most like walmart). Could be good as well, but I worry. could be quite bad for the people who need help the most.
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