Month: November 2012
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Does the Minimum Wage Increase Productivity?
This Galbraith article — pointing to Ron Unz’s ongoing good thinking on the topic, got me thinking: If employers are faced with higher wage rates, that gives them more incentive to invest in business capital that 1. makes workers more efficient and productive, and 2. reduces the number workers they need. Is this incentive effect figured…
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The Efficiency of De Ebil Gubmint Man
I’ve pointed out before that in some areas (here, Medicare), government programs are hugely more efficient and well-run than their private counterparts. I don’t know if this qualifies as one of those, but it does make a very important point that I’ve also made before: Government is not the problem. Bad government is the problem.…
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With Charity, Who Needs Taxes?
The idea that contributions to the public good, for provision of public goods, should be voluntary is certainly appealing. But I was curious about the numbers. Like most things libertarian, this notion is utopian and unrealistic. Total charitable contributions by individuals, corporations, and foundations was an estimated $298.42 billion in 2011, up 4 percent in…
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Modeling the Wealth, Income, and “Saving” Effects of Redistribution: More is Better?
Update: More expansive discussion of this model with more graphics, here. Update 2: There is a revised and corrected version of the model and spreadsheet here, with discussion. It has long seemed to me that redistribution is, for some reason, necessary for the emergence, continuance, and growth of large, prosperous, modern, high-productivity monetary economies. No such economy has ever emerged absent…
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The Miasma School of Economics
I’ve been reading Steven Johnson’s The Ghost Map, about the London cholera epidemic of 1854, and one passage reminded me exactly of today’s economics discipline. The sense of similarity was heightened because I also (instigated by Nick Rowe) happened to be reading Mankiw’s micro textbook section on the rising marginal cost of production — a notion that…
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Marginal Rates and Economic Growth: They Go Up Together
With Republicans frantically clinging to discredited ideology and digging in their heels on raising top marginal tax rates, I thought it would be worth revisiting a post from a couple of years ago, showing some excellent long-term evidence that higher marginal tax rates are not associated with slower growth. Quite the contrary, in fact. Here you…
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Screw the Rich to Protect Super-Rich Campaign Contributors?
This item raised my eyebrows when I saw it. Joshua Tucker at The Monkey Cage points out that the Republicans are proposing we do exactly that. The idea (NYT, emphasis mine): …tax the entire salary earned by those making more than a certain level — $400,000 or so — at the top rate of 35 percent…
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It’s No Wonder People Don’t Understand the “Public” Debt
A friend of mine posted this on Facebook: I started to explain it, but realized that the standard usage is wildly screwy and confusing for any normal human, and decided to explain it here instead. The problem is that even in standard economists’ usage, “public” is used in two different ways: 1. “Public” debt: debt…
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Medium of Account vs Unit of Account: Brazil Anyone?
I’d like to interject a very concrete example into the large swirl of quite theoretical, thought-experiment discussion about whether “demand for money” means “demand for the medium of exchange” or “demand for the medium of account.” Scott Sumner and Nick Rowe are, as so often, at the center of this discussion. But before I do, I…
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Jim Manzi: Correlation, Causation, Understanding, and Predicting
Jim Manzi, curious as always (especially about how to evaluate government policies), tries to plumb the problem of causality. Here’s where he begins: Consider two questions: – Does A cause B? – If I take action A, will it cause outcome B? I don’t care about the first, or more precisely, I might care about…
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Engineering a Permanent Democratic Majority
Matthew Yglesias points the direction in his post: the Geographically smallest Electoral College map, which starts with the densest states and works down: If Democrats can bring Indiana, Virginia, North Carolina, and Florida (or even two or three of them) firmly into the Democratic camp, the game is over for the foreseeable future. Those states are…
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Fixing Disaster Relief is Simple! Let Markets Work.
I’ve often commented on how childish, really adolescent, the views of libertarians are. But it’s rare that I see such a stunning example. In a recent NYT “Room for Debate,” Russell Sobel of The Citadel gives us this: Fixing disaster relief is simple: greater use of decentralized markets, and focusing government on its proper role.…