Author Archive for Steve Landsburg

Minimum Logic

The question is often raised: “Why would you ever want to raise the minimum wage when you could raise the earned income tax credit instead?”. In other words, if you’ve got a choice between two ways to increase the effective wage rate, why would you choose the one that reduces employment over the one that increases employment?

Paul Krugman has an answer. He’s argued on numerous occasions that the EITC and the minimum wage are complements, not substitutes — that is, each makes the other more effective. So, according to Krugman, once you’ve raised the EITC, the case for a minimum wage hike becomes stronger, not weaker.

Here’s his argument: When you raise the EITC, more people enter the labor market. The increased supply of labor tends to drive wages down, which transfers some of the benefit from the workers you intended to help to the employers and/or consumers who you presumably care about less. To prevent this perverse consequence, one needs a hike in the minimum wage.

The other day, a colleague (who I’m not naming because I’m not sure whether he’d want to be quoted) pointed out that this argument makes not a shred of sense. Here’s why: Any effective minimum wage (that is, any minimum wage set above the wage rate that would prevail in an unregulated market) suffices to do the job Krugman wants it to do. At best, then, Krugman has made an argument for having some minimum wage, not a case for raising it.

Here’s the picture:

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Innumeracy Watch

Did Stanford university surgeons fail first grade arithmetic? Or do they just assume the rest of us did?

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Dear Old Golden Rule Days

ssyShortly before I started Kindergarten, my mother purchased a book called “Steven’s School Years”, with pockets to store my report cards and school projects, and questionnaires for me to fill out at the end of each school year.

I was not diligent about filling in the questionnaires, and they remain mostly blank. But had I been forced to, I wonder how I would have answered the following question, which was to be answered annually at the end of Grades 1,2,3,4,5, and 6:

(According to my mother, my ambition at age three was to be an electric drill, and sometime after that a rabbit. No other records of my early career inclinations seem to have survived.)

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Seeing Things Differently

Can humans learn to see in more than three dimensions?

What follows is highly speculative (and therefore possibly nonsense), but bear with me. (Or, if you prefer, don’t.)

First, let’s think about how humans learn to see in more than two dimensions. Your visual cortex (at least as I understand it) is pretty much two-dimensional, but apparently your brain is pretty adept at converting two dimensions worth of information into a three-dimensional picture of the world around you.

To accomplish that feat, your brain employs (at least) two tricks. First, it can infer an object’s depth (by which I mean its distance in front of you) from the angle between it and your two pupils:

Second, your brain can infer an object’s depth from the size of the accommodation reflex (change in lens shape, pupillary contraction, etc) needed to focus on it.

Ordinarily, these two methods pretty much agree, and your brain uses that answer to construct its map of the world.

But suppose I could surgically adjust your eyes in a way that breaks that agreement. For example, the angle-method might continue to work just as it does now, but I’d disrupt the accommodation reflex so that your pupils now contract by an amount that depends not on the distance to an object but on, say, its redness, or its squareness, or even just varies randomly. Better yet, suppose I could do this at a very early age, when your brain is still learning how to process visual signals.

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The Ashley Madison Test of College Faculty Cluelessness

Science marches on. Recent developments have made it possible to answer the age-old question: What percentage of your college faculty used their work email addresses to establish accounts at Ashley Madison?

In a sample of 33 highly ranked colleges, the answer ranges from a low of 1.6% at Oberlin to a pretty much unbelievable 22.6% at the University of Minnesota. (The full rankings appear at the bottom of this post.)

I got these percentages by counting the number of unique email addresses ending with, say, “harvard.edu” in the leaked Ashley Madison database, and dividing by the number of Harvard faculty, as reported by the college either on its website or in its Common Data Set filings.

The methodology, is, of course, fraught with peril. First, the majority of academic email addresses belong not to faculty, but to students. But it seems like a good guess that faculty (by virtue of their average age) are both far more likely than students to be trolling Ashley Madison, and far more likely than students to be clueless about acquiring anonymous email addresses. Besides, a quick spotcheck of the email addresses in the Ashley Madison database does indeed confirm that most of them (at least in one small but random sample) belong to faculty members.

There are also, of course, staff, and the staff-to-faculty ratio probably varies a lot from school to school, so weeding out the staff could change the relative rankings quite a bit. But again, my (still small but still random) sample continues to indicate that these are mostly faculty members.

A far more important issue might arise from the fact that some universities have multiple campuses. It’s possible, for example, that the 657 umn.edu email addresses in Minnesota’s numerator came from many campuses, while the 2913 facuty in their denominator represents only the main campus. This will tend to inflate the rankings of the big state schools, and might account for the appearance of Minnesota, Virginia, Michigan and Cornell at the top — suggesting that if the numbers were crunched more carefully, the prize might go to Liberty University. If I were going to use these rankings for anything important, I’d give this issue a harder look.

One might also note that anybody can type anybody else’s email address into Ashley Madison, but I’m inclined to discount the importance of that, because it’s hard for me to see what the motive would be (except, perhaps, as part of a campaign to flood someone’s email box with unwanted replies).

With those caveats, feel free to use these rankings as a measure of your college faculty’s average cluelessness, at least when it comes to maintaining anonymity over the Internet.

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Politics As Usual

paulTo me, the biggest disappointment of this camapaign season has been Rand Paul. I’m sure there will be others.

I just saw Senator Paul on Fox News, where he made four substantive statements, one nonsensical, one innumerate, one economically illiterate, and one evasive to the point of dishonesty.

On the subject of collecting cellphone data without warrants, the host posed a hypothetical situation where a foreign terrorist is identified and we want to know which Americans he’s been talking to for the past six months. Paul’s answer: Get a warrant. The problem, of course, is that not even the US government, even newly armed with a warrant, is powerful enough to gather calling data that vanished into the ether six months ago. When the host pointed this out, Senator Paul ignored it.

On the subject of his tax plan, when presented with estimates that he’d be cutting taxes by 3% for the poor and by 13% for the rich, the senator could either have denied those numbers or defended them. Instead, he patiently explained that if you cut everyone’s taxes by 10%, then of course the rich will get bigger cuts (in absolute terms) than the poor. True, but to think that this was in any way relevant to the question requires a complete abandonment of all knowledge of arithmetic.

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Rearrangements

So apparently I screwed up last night and posted many of my second-debate comments in the first-debate thread. And apparently this confused some readers, who gave up and went away. Others followed my lead and posted their own comments to the wrong thread.

I’ve gone ahead and moved all second-debate-relevant comments off the first-debate thread and onto the second-debate thread. Sorry for all the confusion. I’m sure there will be plenty more opportunities to share your thoughts about these guys.

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The Second Debate in Real Time

This thread is your opportunity to post comments on the second (9PM eastern time) Repbulican candidates’ debate, in real time as the debate occurs. I might or might not find the stomach to participate.

Keep in mind the guidelines I posted yesterday:

I will have zero tolerance for comments that contribute nothing to the enterprise. In other words, anything of the form “Ha ha! I knew so-and-so was an idiot” will be deleted as soon as they appear. Ideally, all comments will contain food for thought. Bonus points for pointing out subtle self-contradictions. If you insist on posting pure insults, they should at least be hilarious.

Now have at it.

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The First Debate in Real Time

This thread is your opportunity to post comments on the first (5PM) Repbulican candidates’ debate, in real time as the debate occurs. I might or might not find the stomach to participate.

Keep in mind the guidelines I posted yesterday:

I will have zero tolerance for comments that contribute nothing to the enterprise. In other words, anything of the form “Ha ha! I knew so-and-so was an idiot” will be deleted as soon as they appear. Ideally, all comments will contain food for thought. Bonus points for pointing out subtle self-contradictions. If you insist on posting pure insults, they should at least be hilarious.

Now have at it.

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Goin’ To the Candidates’ Debate

I might regret this, but…..

Thursday evening (August 6) there will be two debates among the Republican candidates for president, the first beginning at 5PM eastern time and the second at 9PM eastern time.

Shortly before each debate, I plan to open a thread and invite readers to post comments in real time as the debates progress. Each thread will appear on this site ten minutes before the debate’s starting time.

I will have zero tolerance for comments that contribute nothing to the enterprise. In other words, anything of the form “Ha ha! I knew so-and-so was an idiot” will be deleted as soon as it appears. Ideally, all comments will contain food for thought. Bonus points for pointing out subtle self-contradictions. If you insist on posting pure insults, they should at least be hilarious.

I might or might not join the fray myself.

The first post will appear slightly before 5 and the second shortly before 9. I am heading out now to stock up on junk food.

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This Would Be a Great Illustration of Comparative Advantage if It Weren’t Such a Great Illustration of Absolute Advantage

diracPaul A.M. Dirac was a pioneer of quantum mechanics and quantum field theory. His work pervades all of modern physics. He was, by almost all accounts, one of the top 10 physicists of all time, and by many accounts one of the top 2 physicists of the 20th century. And he’s one of my personal heroes.

When Dirac was awarded the Nobel prize in 1933, he was asked to say a few words at the banquet that kicks off the multi-day Nobel celebration — and chose, against tradition, to speak about a subject other than physics. Here is Paul Dirac on the source of all our economic problems:

I should like to suggest to you that the cause of all the economic troubles is that we have an economic system which tries to maintain an equality of value between two things, which it would be better to recognise from the beginning as of unequal value. These two things are the receipt of a certain single payment (say 100 crowns) and the receipt of a regular income (say 3 crowns a year) through all eternity. The course of events is continually showing that the second of these is more highly valued than the first. The shortage of buyers, which the world is suffering from, is readily understood, not as due to people not wishing to obtain possession of goods, but as people being unwilling to part with something which might earn a regular income in exchange for those goods. May I ask you to trace out for yourselves how all the obscurities become clear, if one assumes from the beginning that a regular income is worth incomparably more, in fact infinitely more, in the mathematical sense, than any single payment? In doing so I think you would then get a better insight into the way in which a physical theory is fitted in with the facts than you could get from studying popular books on physics.

True to form, then, Dirac set an agenda that others scurried to follow — the agenda in this case being the exploitation of the Nobel prize as a license to spout economic gibberish. Almost a century later, his program continues to flourish.

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What’s Fair is Fair

Suppose you’ve got 1000 students to assign to two schools, each with 500 slots available. Everyone prefers the Good School to the Bad School. Which of the following is a fair way to decide who goes where?

Method A: Give each student a coin to flip and count on the Law of Large Numbers to insure that just about exactly 500 will flip heads. Those students go to the Good School.

Method B: Randomly assign each student to one of two groups. Then flip a single coin to determine which group goes to the Good School.

Method C: After taking note of the fact that, coincidentally, exactly half the students are white and half are black, flip a single coin to determine which race goes to the Good School.

Method D: Assign all the white students to the Good School.

(There’s also of course Method D-prime, where you assign all the black students to the Good School, but I don’t think we need to consider this one separately.)

I ask this question because economists have been very involved with the design of school-allocation mechanisms, particularly in Boston, and one of the things they worry about is fairness. So it seems important to stop and think about what fairness means in this context.

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Innumeracy Watch

While a team of four has just six interconnections, a team of 16 has 120 interconnections. It is near-exponential growth: n(n-1)/2.

— Rich Karlgaard and Michael S. Malone
Wall Street Journal
July 10, 2015

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News Flash

Today, the Supreme Court ruled that the president of the United States can do any damn thing he wants to, regardless of the law. Where were these guys when Nixon needed them?

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Bosonic Ka-Ching Theory

George Johnson of the New York Times writes that:

In a saner world, where science and the law meshed more precisely, a case like Firstenberg v. Monribot would have been dead on arrival in court.

Arthur Firstenberg, you see, is suing his neighbor, Raphaela Monribot, for bombarding him with photons from her iPhone, her WiFi connection, her dimmer switches and her fluorescent bulbs (all as side effects of her ordinary use of these devices). Mr. Firstenberg believes (or claims to believe) that said photons are damaging his health — a belief with essentially no scientific basis.

Mr. Firstenberg requests $1.43 million in damages, so perhaps we should think of this as an exercise in bosonic “ka-ching” theory. The case has gone on for five years, and might be headed to the New Mexico Supreme Court. Estimated court costs so far exceed a quarter of a million.

It would be easy — in fact, Mr. Johnson of the Times finds it extremely easy — to see this case as nothing but a minor tragedy with comic overtones. But the issues it raises are deeper than that.

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Sweet Talk

Is it only me who is driven crazy by the American Heart Association’s campaign against “added sugars”, and the attendant campaign to label foods for their added sugar content?

Look. I am no expert, so correct me if I’m wrong, but as far as I can tell from a trip around the Internet, sugar is sugar. More precisely, fructose is fructose, glucose is glucose, and so it goes. The fructose in an apple is exactly as bad for you as the fructose in a Cola drink.

Now an apple provides all sorts of good nutrients and fiber that are missing from the Cola drink. But if you want to send that message, the way to send it is to advertise that apples provide all sorts of good nutrients and fiber that are missing from Cola drinks — not to suggest (nonsensically, as far as I can tell) that the “added sugar” in the Cola drink is somehow different from the non-added sugar in an apple. If your main concern is to watch your sugar intake, the distinction doesn’t matter. If your main concern is, say, Vitamin C, then sugar counts are irrelevant anyway. If you care a little about a lot of things, then it’s good to know sugar contents, vitamin contents, and a whole lot more. But I cannot imagine any individual, in any state of the world, who is better off counting added sugar than counting total sugar.

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Life in Baltimore

Christopher Ingraham, writing in the Washington Post, points with alarm to a 20-year gap in life expectancies between the poorest and the richest Baltimoreans. This begs the question of whether that gap is too small or too large, or better yet, what the optimal gap would be. Surely it is not zero, which is to say that longevity is only one of the problems poor Baltimoreans face, that directing more resources to life extension means directing fewer resources elsewhere, and that redirecting enough resources to close a 20-year longevity gap would almost surely leave poor Baltimoreans worse off than they are. Even if we were prepared to spend whatever it takes to close that gap, it’s not implausible that most poor Baltimoreans would rather have the cash.

More striking is Ingraham’s observation, in the same article, that in some Baltimore neighborhoods, life expectancies are lower than they are in North Korea. Poor Baltimoreans are certainly wealthier than average North Koreans, so you’d expect them to live longer. Unless there’s some other variable at play (like, for example, a Korean genetic predisposition to long life), this suggests either that poor Baltimoreans die too young or that North Koreans live too long. It’s not clear which.

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How (not) to Redistribute Income (Warning: High Wonk Content)

I just spent a little while trying and failing to construct a homework problem for my honors class. Although it didn’t turn out the way I wanted it to, I thought it might serve as a good illustration of how economists (often) think about income redistribution.

The idea is that different people are born with different talents, and that if it were possible for us all to meet in a shadowy pre-birth world (what the philosopher John Rawls called “behind the veil of ignorance”), we’d want to insure against landing in the shallow end of the gene pool — so we’d probably agree that the lucky ones — those with a lot of talent — would help to take care of the rest.

The further idea is that because we’d presumably all have voluntarily signed on to such an agreement, there’s at least a plausible case for enforcing it. (I’ve argued elsewhere that this plausible case does pretty much nothing to justify the actual sorts of redistribution that are practiced by, say, the United States government — but for present purposes, that’s neither here nor there.)

The big problem is to figure out exactly what terms we’d have all agreed on. Jim Mirrlees won a Nobel Prize for a major attack this problem. But I don’t want to ask my college sophomores to digest a Nobel-worthy body of work, so my goal is to construct a sort of baby version of the Mirrlees approach — which I hope might also interest at least one or two blog readers.

Now if governments were omniscient and omnipotent, the problem would be pretty easy — you’d take a whole lot from the rich and give a whole lot to the poor, and you’d forbid talented people to respond by working less.

In practice, though, governments face a lot of constraints. The one I want to focus on is that our talents and/or incomes might be at least partially invisible to the government. You can’t “take from the rich” if you don’t know who the rich are.

One solution is, instead of taking directly from the rich, to tax things that only rich people buy.

So my idea was to imagine that everyone has a natural talent, and an associated natural income, ranging from 0 to 1. You can spend all your income on corn (in whatever quantity you can afford), or you can spend part of your income to buy a car, for a price of 1/2. Obviously, only people with incomes over 1/2 can even consider buying a car, and even some of them might prefer not to.

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Those Clinton Emails

Hillary ClintonIf Jeb Bush is elected president and appoints me Secretary of State, the first thing I will do is set up a private server to handle my official email correspondence. This is not because I expect to have anything to hide, but because I expect my email to be important, and I do not want my service to depend on the whims of the sorts of aggressively incompetent nincompoops who, in my experience, tend to populate the IT departments of large institutions.

The University of Rochester, where I work, provides email services to all its employees. I do not use those services. Instead, I own several Internet domains and manage my own email For all I know, the University IT center might currently be 100% nincompoop-free, but all past experience suggests that it’s unlikely to stay that way very long.

Yes, I realize that one is still at the mercy of one’s upstream providers. But I am here to tell you from experience that the frequency of outages and other disasters is now about 10% of what it was in the years when I was at the mercy of the IT managers.

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What Is Larry Summers Thinking?

Larry Summers, writing in the Washington Post, tells us that:

While the recent decline in energy prices is a good thing in that it has, on balance, raised the incomes of Americans, it has also exacerbated the problem of energy overuse. The benefit of imposing carbon taxes is therefore enhanced.

He might have an argument in mind, but he doesn’t seem to have presented it.

The benefit of carbon taxes, as Summers says, comes from “the recognition that those who use carbon-based fuels or products do not bear all the costs of their actions.” In other words, without a tax, people use more oil than they should. I’m with him so far. Now what Summers appears to be thinking is that when the price of oil falls, people use more oil, which increases the gap between what they do use and what they should use. What this overlooks is that when the price of oil falls, there are increases in both the amount people do use and the amount people should use — and hence no particular reason to believe that the gap has grown.

Having made such an argument, one should draw a picture to make sure it’s right. Here are the demand and supply curves for oil. Points on the demand curve show the value to consumers of individual gallons of oil; points on the supply curve show the cost to producers of supplying those individual gallons; points on the social marginal cost curve show the cost to society (including pollution costs) of supplying those individual gallons:

Ideally, oil would be supplied only up to the point where demand crosses social marginal cost and no further. Unfortunately, it’s supplied up to the point where demand crosses supply. Those excess gallons create social losses measured by the skinny rectangles in the left-hand panel (the social loss from a gallon of oil is equal to the social cost of providing that gallon, minus its value to a consumer). These add up to the area labeled X on the right. The value of an appropriate-sized carbon tax is that we’d avoid that social loss. That is, the benefit of a carbon tax is measured by area X.

Now suppose oil becomes available more cheaply. This shifts both the supply curve and the social marginal cost curve vertically downward by the same amount and shifts area X to a new location. As you can see in the picture, there’s no particular reason to think that the area’s gotten any bigger:

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The Egomaniac in Chief

So President Obama finds it remarkable that he’s been mistaken for a valet driver and a waiter.

I have some questions for my readers:

  1. Is there anyone who hasn’t been mistaken for a driver, a Home Depot associate or something of the sort?
  2. When this has happened to you, have you felt terribly insulted by it?
  3. Do you feel that casual strangers owe you more respect than they owe to a valet driver or a waiter?
  4. Do you feel that your social or occupational status is so great that it should be immediately visible to casual strangers that you are not employed as a valet driver or a waiter?
  5. If you answered yes to the previous question, have you sought professional help?

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Trey Gowdy Thinks You’re Stupid

Here we have six and a half minutes of Representative Trey Gowdy badgering Jonathan Gruber while studiously avoiding any form of substance.

There’s a lot Gowdy could have asked, like “So, is it actually the case that a tax on insurers is equivalent to a tax on the insured?” or “Can you explain why those taxes are equivalent?” or “Are there any important ways in which the two policies are not equivalent?” or “Why do you think a tax on `Cadillac plans` was good policy in the first place?”

Instead, all he can think of to ask — over and over and over and over and over and over and over again — is, “Why did you call the American people stupid?”, as if there were anything useful to be learned from the answer.

I see one possible explanation here. Apparently Gowdy believes his constituents prefer mindless bullying to policy enlightenment. In other words, he acts on the assumption that the American voters are fundamentally stupid. Maybe someone should spend six and a half minutes asking him why.

Edited to add: I said this in a comment, but want to add it to the post. It either is or is not important to determine the truth of the matter regarding the issues on which Gruber spoke deceptively — e.g. in what sense are these two taxes equivalent, etc. If these questions are not important, why are we having this hearing in the first place? If these questions are important, then why is Gowdy so uninterested in them?

Edited to add further: I said this also in a comment, but want to add it here. Gruber is lying. Gowdy has a chance to question him. Gowdy can use that chance either to chant the equivalent of “Liar, liar, pants on fire” or to pin him down on the substance of what he’s lying about, e.g. “Do you or do you not stand by the statement that a tax on insurers is equivalent to a tax on the insured?”. I assure you that Gruber prefers the former, and that’s what Gowdy is giving him. Presumably that’s because he thinks voters are too stupid to appreciate the latter.

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Corrections

In yesterday’s post about Eric Garner, I wrote:

Suppose you are a typical street vendor of an illegal product, such as, oh, say, untaxed cigarettes.

Suppose the police make a habit of harassing such vendors, by confiscating their products, smacking them around, hauling them off to jail, and perhaps occasionally killing a few.

I have good news: The police can’t hurt you.

Here’s why: Street vending can never be substantially more rewarding than, say, carwashing. If it were, car washers would become street vendors, driving down profits until the rewards are equalized. If car washers were happier than street vendors, we’d see the same process in reverse. (The key observation here is that it’s very easy to move back and forth between street vending and other occupations that require little in the way of special training or special skills.)

Because police harassment of street vendors has no effect on the happiness of car washers, and because street vendors are always just as happy as car washers, it follows that police harassment has no effect on the happiness of street vendors.

So if you’re a street vendor, the police can’t hurt you. On the other hand, when the police go around putting people in deadly chokeholds, they’re clearly hurting someone. So the question is: Who?

Answer: Not the vendors, but their customers. Fewer vendors means higher prices. That hurts consumers, and the sum total of that harm adds up to the harm that we see in the viral videos.

Several commenters jumped in to question the claims that:

  1. If you’re a street vendor, the police can’t hurt you.
  2. The costs of police harassment ultimately fall on consumers.

I’d like to thank those commenters — particularly David Sloan, Keshav Srinivasan and Eric — for keeping me honest and for persisting when I was initially too quick to dismiss their questions.

With regard to the first point, what I actually should have said was:

  • If you’re a street vendor, the police can’t hurt you more than an eentsy weentsy bit.

That’s because harassment causes street vendors to move into a great many other occupations, one of which is car washing. For every displaced street vendor we get, say, 1/2000 of an extra car washer — bringing wages ever so slightly down in the car washing industry and therefore making both car washers and street vendors ever so slightly worse off.

I do not consider this a significant correction.

With regard to the second point, it would have been more accurate to say this:

  • The greater the harassment, the more of its burden falls on consumers in the harassed industry.

More precisely, if we consider the harassment equivalent to a tax of T, then the burden on producers tends to grow linearly in T while the burden on consumers in the harassed industry tends to grow quadratically in T.

However, here are two points I now realize I’d overlooked:

  1. The linear/quadratic thing is at least partially misleading, because there is a limit on how big T can be — if T grows beyond a certain point, then the first industry disappears entirely. So we’re not looking at arbitrarily large T’s here, making “growth rates for large T” less relevant. Thus workers collectively can in fact — and in contrast to what I said yesterday — bear a substantial burden of the cost.
  2. While consumer surplus in the first industry shrinks quadratically in T, consumer surplus in the other industries grows quadratically in T, and in fact, the total consumer surplus across all industries can increase as a result of the street harassment. Thus it’s possible for workers to bear more than the entire burden of the harassment!

Here’s an explicit model:

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Three Short Essays on Eric Garner

I.

If you asked me to make the best possible argument in favor of the police action that led to the death of Eric Garner, it would go like this:

  1. Cigarettes are taxed.
  2. You can’t have taxes without enforcement. In this case, the enforcers are the police.
  3. Where there are enforcers, there will be confrontations.
  4. When sellers refuse to cooperate, the enforcers have only two options: Walk away, or resort to violence.
  5. Enforcers who walk away soon lose their credibility and their effectiveness. This is more than doubly important for a police officer, who needs that credibility when he confronts far more dangerous criminals.
  6. Therefore, we cannot fault the police for resorting to violence.
  7. Violence is sometimes catastrophic. That’s sad, but it’s not news.

If you asked me to make the best possible counterargument, it would go like this:

  1. You could say exactly the same thing about a protection racket.

That is, every protection racket needs an enforcer. When shopowners don’t pay up, the enforcer has only two options: Walk away or resort to violence. To walk away would sacrifice credibility. Therefore we cannot fault the enforcer for resorting to violence. Sometimes violence gets pretty messy. So it goes.

The force of that reductio ad absurdum depends on the analogy between taxation of cigarettes and the demand for protection money. I think that reasonable people can disagree about the depth of that analogy.

But the lesson remains that every law must occasionally be enforced through potentially catastrophic violence, or, to put this more succinctly, all legislation is deadly. Violence is part of the cost of making laws, and it’s a cost the makers of new laws would be well advised to contemplate.

Continue reading ‘Three Short Essays on Eric Garner’

Two Questions for Bob Murphy

Bob Murphy objects to my recent defense of Jonathan Gruber. I have two questions for Bob.

Suppose a newly elected Republican president wants to exempt all investment income from taxation. There are two ways to do this:

1) Retain the income tax, but exempt all interest, dividends, and capital gains (while also abolishing the corporate and estate taxes).

2) Scrap the income tax and replace it with a national consumption tax.

The president’s chief economic advisor, like all economists, is well aware that these two policies are essentially equivalent in the sense that, once prices, wages and interest rates adjust to the new policies, each individual taxpayer is burdened exactly as much by policy 2) as by policy 1). More precisely, at least following an initial adjustment period each individual taxpayer enjoys exactly the same lifetime stream of consumption under policy 2) as under policy 1).

Let’s suppose also that the chief economic advisor believes that policy 1) is vulnerable to scurrilous class-warfare-themed attacks and therefore cannot be sold to the American people. Policy 2), however, stands a chance of passage. He therefore goes around honestly touting what he perceives to be the clear virtues of policy 2), choosing not to mention that it’s equivalent to policy 1).

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More Thanks

Yes, I’ve already got one Thanksgiving post up. But we should not skimp on gratitude, so here’s another:

Today I am thankful that I live in a time and a place where indictments are handed down (or not) by grand juries that have weighed a wide range of evidence, and not by angry mobs.

I’m thankful too for all my readers. Have the very best of holidays.

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Day of Thanks

This is a slightly revised version of my Thanksgiving post from five years ago. I think it bears repeating:

After the philosopher Daniel Dennett was rushed to the hospital for lifesaving surgery to replace a damaged aorta, he had an epiphany:

I saw with greater clarity than ever before in my life that when I say “Thank goodness!” this is not merely a euphemism for “Thank God!” (We atheists don’t believe that there is any God to thank.) I really do mean thank goodness! There is a lot of goodness in this world, and more goodness every day, and this fantastic human-made fabric of excellence is genuinely responsible for the fact that I am alive today. It is a worthy recipient of the gratitude I feel today, and I want to celebrate that fact here and now.

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Borderline Disorder

Here’s one difference between me and Paul Krugman: He enthusiastically supports President Obama’s new immigration policy, which he calls a matter of human decency. I grudgingly support President Obama’s new immigration policy, which I call a bit less indecent than the policy it replaces.

krugHere’s another difference between me and Paul Krugman: I believe it’s the job of an economics journalist to call attention to unpleasant tradeoffs and offer frameworks for resolving those tradeoffs. Krugman apparently believes it’s the job of an economics journalist to sweep all tradeoffs under the rug in the name of advancing your policy agenda — appealing, if you will, to the stupidity of the American op-ed reader.

Krugman, for example, tells us that he opposes deportations because they’re cruel, but also opposes open borders because they’d make it both economically and politically impossible to maintain the modern American welfare state.

In furtherance of which, he offers this kind of claptrap:

Second, there are large numbers of children who were born here … but whose parents came illegally, and are legally subject to being deported.

What should we do about these people and their families? There are some forces in our political life who want us to … deport the undocumented parents of American children and force those children either to go into exile or to fend for themselves.

But that isn’t going to happen, partly because, as a nation, we aren’t really that cruel

Dammit, I hate this stuff. Krugman says (and I agree with him) that it’s cruel to deport people. He ignores the fact that it’s also cruel to keep other people out. Krugman says (and I agree with him) that letting more people in would put pressure on the welfare system. He ignores the fact that allowing people to stay also puts pressure on the welfare system. Why should we prioritize kindness to those who are already here over kindness to those who are clamoring to get here?

There might be a really good answer to that question, but you’d never know it from reading Krugman. In fact, the takeaway from Krugman’s column is that the cruelty of deportations is unacceptable only because Krugman says so, and the cruelty of closed borders is a necessary evil only because Krugman says that too. So the next time you want to know whether some other policy is unacceptably cruel or not, the only way to find out is to ask Paul Krugman.

And then there’s more:

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Who I Hope We Are Not as Americans

So let me get this straight. We drew this imaginary line in the desert. We’ll no longer use force to move people from this side to that side, but we will still use force to prevent movement from that side to this side.

This is good news for the people who are on this side at the moment, and I share their joy. But it does little for their less fortunate cousins who never made it here in the first place.

The president talks about “who we are as Americans”. I’d have hoped that we as Americans were not so basely hypocritical as to find it imperative that we stop bullying Group A (i.e. those who are here), but equally imperative that we continue to bully the even less fortunate Group B (i.e. those who aspire to be here).

This is a day to celebrate and a day to mourn.

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In Defense of Gruber

Regarding Jonathan Gruber and the Cadillac tax, I think a little historical context will be useful:

1) Our tax system subsidizes employer-provided health insurance. That’s dumb. Pretty much all economists agree that it’s dumb.

2) On the other hand, it’s politically hard to eliminate a subsidy once people get used to it.

gruber3) In 2008, we had an election. The candidates were named Barack Obama and John McCain. Exactly one of those candidates took the politically courageous step of proposing to eliminate the subsidies (and replace them with other subsidies, far more sensibly designed). The other candidate took the low road, leaping to the defense of subsidies he had to know were indefensible, playing to the crowd, and staking all on what could reasonably be called “the stupidity of the American voter” (though I myself would prefer to call it “the inattentiveness of the American voter”). That candidate won in a landslide.

4) Once elected, President Obama’s demagogy came back to haunt him. On the one hand, he knew that you cannot have sensible health care reform without curtailing those subsidies. On the other hand, he’d publicly committed himself to preserving them.

Continue reading ‘In Defense of Gruber’