Monthly Archive for October, 2011

Happy Birthday, Baby Seven Billion

baby7Happy birthday to our 7 billionth fellow earthling, who, according to most estimates, is due to be born today.

Welcome to the earth. Congratulations on being born in the 21st century, where the odds are excellent that you’ll live a richer, more prosperous and more fulfilling life than almost any of the 100 billion or so who preceded you — and paved the way for your prosperity with their investments and their inventions. Would that there had been more of them.

As you go through life, you will almost assuredly contribute to the world’s stock of ideas, diversity and love in ways your parents never contemplated — which is why the rest of us are a little sad that you might be their last child.

There’s certainly such a thing as a population that’s too large. Nobody disputes that. The interesting question is: Given the incentives faced by parents, it the population size we actually get too large or too small? And there are good reasons to think it’s too small.

In fact, population growth is a lot like pollution in reverse. Polluters don’t care about the damage they impose on strangers, so they pollute too much. Parents and potential parents don’t care about they joy and prosperity their chidren bring to strangers, so they reproduce too little.

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How the Death Tax Hurts the Poor

Here is my piece on the death tax in this morning’s Wall Street Journal (subscription probably required); viewers of this video will find the arguments eerily familiar.

Here’s the one passage the WSJ didn’t have room for; one day our children will look back in wonder on an age when the length of an argument was constrained by anything so archaic it could be measured in square inches:

I know you’ve heard it said that spending is good for the economy. That might be true during a recession, if you subscribe to a broadly Keynesian view of the world. But the death tax encourages overspending year in and year out, which is not a good thing no matter what your point of view.

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Paul Krugman in a Nutshell

By way of background: Obama says that Republicans favor dirtier air and water. Paul Ryan calls that a petty characterization of an honest policy disagreement. Paul Krugman says that some Republican policies would lead to dirtier air and water (presumably in exchange for some offsetting benefits) and Ryan ought to be man enough to say so.

This is a fair point, I think. There is nothing dishonorable about believing that under current regulations we overclean our air and water, and if that’s Ryan’s view he should own it. Though perhaps Ryan would prefer to respond — also fairly — that he and/or the GOP favors different kinds of regulation that might not leave the air and water dirtier after all.

In any event, Krugman can never be fair for long. Here he is complaining about Ryan’s rhetorical style and defending his own:

If I say that Paul Ryan’s mother was a hamster and his father smelt of elderberries, that’s ad hominem. If I say that his plan would hurt millions of people and that he’s not being honest about the numbers, that’s harsh, but not ad hominem.

And you really have to be somewhat awed when people who routinely accuse Obama of being a socialist get all weepy over him saying that eliminating protections against pollution would lead to more pollution.

Except that, you see, at least as far as I can tell (and do correct me if I’m wrong) Paul Ryan (whose “weepiness” is the primary subject of Krugman’s blogpost) has never accused Obama of being a socialist. So (unless I’m mistaken) what Krugman’s engaging in here is best characterized as neither harsh nor ad hominem but, well, lying.

Two points:

Continue reading ‘Paul Krugman in a Nutshell’

Note to Continental Airlines

Your inability to construct a functional website does not fill me with confidence about your ability to fly me across the Atlantic Ocean.

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Beauty, Truth and Symmetry

galoisToday is the 200th birthday of Evariste Galois, who did not live to celebrate his 21st, but found time in his short 20 years to develop a circle of ideas that permeate modern mathematics. We know of these ideas because Galois spent the night of May 30, 1832 scribbling them furiously in a letter to a friend, in advance of the fatal duel he would fight the following morning. According to the great mathematician Hermann Weyl, “This letter, if judged by the novelty and profundity of ideas it contains, is perhaps the most substantial piece of writing in the whole literature of mankind.”

(If this were a less serious post, I might suggest that this famous letter was the first example of a Galois Correspondence.)

Now, two centuries later, every first year graduate student in mathematics spends a semester studying Galois Theory, and many devote their subsequent careers to its extensions and applications. Many of the greatest achievements of modern mathematics (for example, the solution to Fermat’s Last Theorem) are, at their core, elucidations of Galois’s 200-year-old insight.

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Death And Taxes

Herewith my remarks about the estate tax (with particular reference to its effects on the very rich, and why we should care) to Congressional staffers, presented a couple of days ago under the auspices of the American Family Business Institute. Here is higher quality video. Here is the even higher quality YouTube version. Here is video of the entire event. I particularly recommend the first talk, by Stephen Entin.

Note that all of my remarks apply equally well to all forms of capital taxation. Entin did a better job of focusing on the particular shortcomings of the estate tax.

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Relatively Speaking

With a hat tip to our occasional commenter Ron….

Remember those faster-than-light neutrinos? The ones that threatened to overturn relativity, and along with it everything we think we know about how the universe works?

Well, it turns out that maybe they weren’t faster than light after all — they might have only appeared to be faster than light because their arrival time was mismeasured. The mismeasurement was (it seems) caused by the researchers’ failure to account for the effects of ….. relativity!

I hear an echo of the great ongoing debate between Einstein and Bohr on the foundations of quantum mechanics. Continue reading ‘Relatively Speaking’

Why Not Bob Dole?

So Mitt Romney wants to exempt capital gains from taxation — but only for taxpayers who earn less than $200,000 a year. In Tuesday night’s debate, Newt Gingrich asked him (I’m paraphrasing) “Why the cap?”. Romney’s answer — that he’s looking out for the middle class because “the rich can take care of themselves” — was as incoherent as anything I’ve heard this election year.

Here’s why:

I interpret Romney’s answer to mean that he wants to cut capital gains rates not on efficiency grounds, not on supply side grounds, and not on philosophical grounds, but on redistributionist grounds. Well, okay, I myself don’t think very much of redistribution as a primary driver of tax policy, but Romney and I can disagree on that one. But where the incoherence comes in is this: If your goal is to redistribute from the rich to the middle class, why on earth would you do it by cutting the capital gains tax, as opposed to lowering income tax rates in the middle and raising them at the top?

To put this another way: If you care about efficiency, you’ll want to cut the capital gains rate to zero for everyone. If you care about fairness, and if you believe fairness mitigates against double/triple/quadruple taxation, you’ll still want to cut the capital gains rate to zero for everyone. If you care about redistribution, you’ll want to juggle the tax brackets. But I can’t think of a single thing you could care about that would lead you to laser in on cutting capital gains rates for middle income taxpayers only.

Now it might be that somewhere in Romney’s 59 point economic plan there’s an answer to this. If so, Herman Cain was surely right when he intimated that Romney himself can’t be terribly familiar with the contents of that plan. Because, when asked a simple question about the justification, Romney wasn’t able to come anywhere close to making sense.

Continue reading ‘Why Not Bob Dole?’

IS-LMic Extremism (With a Postscript on the Nobel Prize)

The IS-LM model is the simplest version of the “old Keynesian” approach to macroeconomics. You don’t hear much about IS-LM in the research literature these days, but it’s been coming up a lot on the blogs. Tyler Cowen tells us what he doesn’t like about the model; Brad DeLong and Paul Krugman rise to its defense; Stephen Williamson takes up the gauntlet, and Scott Sumner weighs in.

None of them, in my opinion, has touched the main issue, which is that IS-LM provides absolutely no framework for policy analysis because it makes no assumptions, and draws no conclusions, about what people are trying to accomplish. If you don’t know what people are trying to do, you can’t possibly know how best to help them.

Suppose, for example, that, as Paul Krugman believes, the current state of the economy is being driven by a “liquidity trap”, which means that people are hoarding money instead of spending it, and therefore consuming less, which is why employment is so low. Two weeks ago on this blog, I posed the following question to the IS-LMers:

Why aren’t you thrilled with the current state of the economy? … Why, as the stock of money continues to grow, shouldn’t the joy of hoarding eventually compensate for the annoyance of not having food on the table?

The IS-LM model provides no answer to that question. A model that can’t decide whether the current US economy is in a state of Nirvana is not a useful model for policy evaluation.

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Double Star!

This one makes me happy!

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(Slightly better video here.)

(YouTube version here.)

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Stopped Clocks

Incidentally, Paul Krugman made an incisive point last week when he wrote:

Here’s a question I haven’t seen asked: If fear of future regulations and taxes is holding business back, as everyone on the right asserts, why didn’t the Republican victory in the midterms set off a surge in employment?

After all, if you really believed that fears of Obamanite socialism were the key factor depressing employment, the GOP victory — with the clear possibility that the party will take the Senate and maybe the White House next year — should greatly reduce those fears. So, where’s the hiring surge?

I even set out to write a blogpost citing this argument with approval — but around the time I was composing it, Krugman followed up with this bit of idiocy, to which a response seemed more urgent.

Now that that’s out of the way, I can come back to the bit about the missing Boehner Boom. It’s a more-than-fair question. How would you respond to it?

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Half Scorpion

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Big News

Last week, the highly distinguished Princeton Professor Ed Nelson announced a proof that the Peano axioms for arithmetic are inconsistent — and hence so is arithmetic itself. If true, this would be much bigger news than faster-than-light neutrinos. It would be bigger news than a discovery that the South had won the American Civil War. It would be far, far bigger news than a discovery that all life on Earth was intelligently designed.

There are, after all, multiple proofs that Peano Arithmetic (that is, the fragment of arithmetic described by the Peano axioms) is consistent. Among those, the simplest and most convincing (to the overwhelming majority of mathematicians) is this: The axioms of Peano Arithmetic, and therefore the theorems of Peano Arithmetic, are all true statements about the natural numbers — and a set of true statements cannot contradict itself.

Ed Nelson rejects that argument because (exempting himself from that overwhelming majority) he doesn’t believe in the set of natural numbers — or perhaps even in individual numbers when those numbers are very large. (How do you know that 810000 exists? Have you ever counted to it?)

Continue reading ‘Big News’

There He Goes Again

Paul Krugman’s latest venture into self-parody starts with a recent paper on the cost of air pollution, which finds that said costs are big and heavily concentrated in a few industries. Krugman then links to a New York Times article surveying Rick Perry’s past clashes with the EPA. With no further argument, he concludes that

Today’s American right doesn’t believe in externalities, or correcting market failures; it believes that there are no market failures, that capitalism unregulated is always right. Faced with evidence that market prices are in fact wrong, they simply attack the science.

Where to begin?

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