Mankiw Gets It Mostly Right

Matthew Yglesias has basically the right response to Gregory Mankiw's list of new year's resolutions. I would just add a few things.

First, as useless as the penny is, getting rid of it is not really on the same level as freeing trade and eliminating farm subsidies.

Second, I wish Mankiw's last point were true. I'll elaborate later, but basically there are two problems. One is that good government by itself isn't sufficient - we need norms and values that support a commercial, literate, equal society. Another is that the market is prone to certain systematic problems, and in any case doesn't do all the work we want our economy to do.