September 13, 2009

If You Think that Eastern Europe has Problems with Democracy, Think Again!

Tyler Cowen, professor at George Mason University, writes in today's New York Times:

One disturbing portent came over the summer when it was reported that the Obama administration had promised deals to doctors and to pharmaceutical companies under the condition that they publicly support health care reform. That's another example of creating favored beneficiaries through politics.

Dr. Cowen also uses the U.S. banking sector as another example of the American democracy at work. He writes that:

If bankers criticize the Treasury or the Fed, they risk losing their gilded cages and could get a bad deal when the next bailout comes. When major economic sectors can be influenced in this way, are we really very far from the nightmare depicted by Ayn Rand in "Atlas Shrugged"?

Another professor at George Mason University, Robin Hanson, discusses pros & cons of the gag deals. Thus, a democracy is not a perfect system of governance. Log-rolling and lobbying are standard attributes of the modern democracy not only in Eastern Europe but also in North America. If log-rolling and lobbying produce policies that promote economic progress, then ends justify means. However, it is a completely different game if the democracy transfers wealth from voters to ruling elites.

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