Catherine Rampell has a nice column pointing out how Republican efforts to block suits against companies that abuse their customers effectively deny customers the opportunity to use the legal system when they are wronged. The argument is well-taken but it doesn't go far enough. Donald Trump and the Republicans are also encouraging waste that will be a drag on economic growth,

The point here is simple, although it always gets lost in the discussion. Good economists assume that people are motivated by money. If you're a reasonably competent lawyer you can write contracts in ways that the typical consumer will either not understand or not take the time to read. If you put in wording in these contracts that screws the consumer, then you make a lot of money for your employer which they will be happy to share with you.

The implication, for people who believe in free markets and economic incentives, is that if we allow people to make money by writing deceptive contracts that screw people, then they will write deceptive contracts that screw people. This means that instead of doing something productive for the economy, we will have many highly educated people devoted their skills to an activity with zero economic value. In fact, their work actually has negative economic value, since consumers will know they have to spend time scrutinizing contracts if they don't want to be screwed.

So the opponents of the Consumer Financial Protection Bureau and related measures to protect consumers are not just arguing for another way to redistribute upward, they are arguing for a policy that increases waste and slows economic growth. But hey, no one ever said that we couldn't get greater inequality without having to sacrifice economic growth.

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