Lee favors rational expectations, or New Classical Economics. There is some legitimacy to the idea that supply-side lacks a certain coherency, but as for the incentives aspect, Lee’s book illustrates that incentive economics suffered neglect under the Keynesian yoke and needed some impetus for rebirth, which supply-side economics undeniably helped to provide. The importance of incentives in economic behavior was well-trod territory. Lee continues: Nor was a new way of looking at the world. Indeed, she criticizes supply-siders for lacking a coherent theory. Indeed, the book excels when Lee explains the results of, as she calls it, big, busy government-such as inflation, high taxes, budget deficits, and regulation, and their commensurate woes.Īs for alternatives to Keynesian activism, Lee is generally friendly toward supply-side economics. Lee accurately identifies Keynesian economics as the source of our economic woes in the late twentieth century and explains some of the many flaws of Keynesian thought. The author wades into economic theory as well, though she leaves the reader wanting more in this particular area. For example, real faces and stories underscore the effects of the 1990 luxury tax and later efforts for a government takeover of the health-care industry. Lee offers anecdotal accounts of businesses and individuals beaten up by misguided economic policies. The remainder of Hands Off fleshes out these points through various means. Once we get that through our heads and our hearts, economic life will be a lot more tolerable. at best, it can create a congenial climate for us to fix things. Then she explains why government cannot fix economic problems: Government activism often results in regulatory gridlock, produces unintended consequences, and/or creates an environment of uncertainty. First, she characterizes economics as a way of interpreting the effect of incentives on behavior. Two points that Lee makes in the introduction set the tone for the entire book. These two gifts combine to make Hands Off: Why Government Is a Menace to Economic Health worth reading. She also lays claim to a rather healthy skepticism of government economic activism. Economist and author Susan Lee possesses a wonderful talent for making economics enjoyable to read.

Hands off government