Life is graded on the curve. It's not how big you are, how strong you are, how smart you are. It's how good you are at the things that count relative to the people around you.

No society has ever succeeded without a decent government.

If the search is for examples that contradict the predictions of standard economic models, a good rule of thumb is to start in France.

Only the federal government has the power to spend beyond its current revenue. It shouldn't do that when the economy is at full employment. But it's an essential step for an economy mired in recession.

As John Maynard Keynes taught us in the 1930s, in such situations, government is the only entity with both the motive and the ability to boost total spending by enough to put people back to work. As it happens there are long lists of important public projects that cry out to be done.

If top marginal income tax rates are set too high, they discourage productive economic activity. In the limit, a top marginal income tax rate of 100 percent would mean that taxpayers would gain nothing from working harder or investing more. In contrast, a higher top marginal rate on consumption would actually encourage savings and investment. A top marginal consumption tax rate of 100 percent would simply mean that if a wealthy family spent an extra dollar, it would also owe an additional dollar of tax.

Questions like, "Is my suit OK?", or "Is my job performance satisfactory?", are impossible to think about in the absence of a suitable frame of reference. For an interview suit to serve its purpose, it must make you look good relative to other candidates for the job you want. For your job performance to be satisfactory, it must compare favorably with the performance of others who want the same promotion you do. As Charles Darwin saw clearly, much of life is graded on the curve, and conventional economic models completely ignore that fact.