HispanicPundit + sumner   134

Was Obamacare truly evil, or just a missed opportunity? - Econlib
1. Elimination of all tax subsidies, such as the deductibility of health insurance costs.
2. Radical deregulation, including no barriers to market entry, no quality regulations, open borders for doctors, abolishing the FDA, no barriers on the type of insurance that can be offered.
3. Government healthcare would be provided at the lowest cost possible, even if it meant flying Medicaid patients to Thailand. (It probably would not after open borders for doctors, and no barriers to entry.)

I do favor some role for the government. One idea for overcoming the free rider problem is mandatory health saving accounts and catastrophic insurance. (The alternative is letting people who choose not to be insured simply die when they are sick. Even if that’s the right policy, society is not willing to adopt it—so health savings accounts seem like a good second best policy.)
healthcare  Sumner  ObamaCare 
6 weeks ago by HispanicPundit
What wage mystery? - Econlib
There’s no wage mystery.  When NGDP growth slows, wage growth will usually (not always) slow as well.  If you want faster nominal wage growth, then adopt a more expansionary monetary policy.  If you want faster real wage growth, then deregulate the economy and do tax reforms that encourage saving.  Printing money won’t boost real wages.
wages  Henderson  Sumner 
october 2018 by HispanicPundit
Social democracy isn’t socialism – Econlib
In fact, among students of comparative economic systems, Denmark is famous for its “flexicurity model“, which means companies are relatively free to hire and fire workers, but those who do lose jobs have the security of generous employment compensation problems.  Denmark is often viewed as the world’s leading example of an economy that combines highly free markets with extensive social insurance.  When I researched this topic in 2008, I found that by some measures Denmark had the most capitalist economy in the world, if you exclude the variable of government spending. At the same time, government spending as a share of GDP was among the highest in the world.  The net effect is that (back in 2008) various “economic freedom” rankings put Denmark about even with the US, with its much higher government spending tending to roughly offset its much lower level of economic regulation.
denmark  Krugman  social-insurance  Sumner 
september 2018 by HispanicPundit
What would a scientific cigarette policy look like?, Scott Sumner | EconLog | Library of Economics and Liberty
Actual public policies toward second hand smoke are almost nothing like what the science would suggestion. Conservatives are often criticized for rejecting the scientific consensus on climate change. I believe the criticism is justified. But those conservatives are only rejecting a single scientific hypothesis. Second hand smoking regulations are far harder to justify, as they represent a rejection of two very different types of science:
science  smoking  Republicans  Democrats  Sumner 
february 2018 by HispanicPundit
What can school choice accomplish?, Scott Sumner | EconLog | Library of Economics and Liberty
I have made two arguments for school vouchers. First, a system of private vouchers can reproduce our current crappy test scores at a much lower cost to the government. And second, private schools are likely to provide a somewhat more enjoyable education experience than one-size-fits-all public schools. I hated school and probably would have hated it less if I'd gone to a school full of students with similar interests. I'd guess other students probably feel the same way, regardless of whether they are jocks or nerds.
Vouchers  McArdle  Sumner 
october 2017 by HispanicPundit
TheMoneyIllusion » Poverty does not cause social problems (and the cream rises to the top)
Of course it’s silly to argue that affluence causes addiction—correlation doesn’t prove causation.  But it’s equally silly to suggest that people in West Virginia become drug addicts because they are poor.  There are a billion poor people (by American standards) in China, and very few are heroin addicts.

You often hear a debate about what would happen if everyone suddenly lost everything, and the entire population was equally poor. Liberals claim that people like Bill Gates become rich because they come from upper class families, with all sorts of advantages. Conservatives claim that even if income were made 100% equal, within a few years the rich would regain their position and the poor would fall back. Mao’s China provided a near perfect test of this theory, and we now know that the conservatives are right about this issue. The cream does rise to the top.
Poverty  drugs  crime  Sumner 
september 2017 by HispanicPundit
How much did poverty rise under Reagan?, Scott Sumner | EconLog | Library of Economics and Liberty
So how can the NYR of Books say "it rose under Reagan to approximately 15 percent"? That's because in Reagan's second year there was a very serious recession, and the poverty rate reached 15%. But the NYR of Books creates the impression that it rose during the 8 years that Reagan was in office, which is simply not true. Poverty fell under Reagan. it was Jimmy Carter who presided over a surge in poverty.
reagan  poverty  sumner 
june 2017 by HispanicPundit
TheMoneyIllusion » One small step for deregulation
Outside of a $15 minimum wage, the fast-food industry’s big mortal fear when it comes to labor law is over classifying companies with franchise business models as “joint employers” along with their franchisees. Their fear increased substantially in 2016, following news that President Obama’s Labor Department had issued guidelines recommending precisely this classification. It’s probably no surprise, then, to learn that yesterday the new Labor Department came to those giant corporations’ rescue by deleting the Obama-era guidelines entirely.
TrumpAdministration  regulations  jobs  sumner 
june 2017 by HispanicPundit
TheMoneyIllusion » Let’s focus on some good news—air traffic control privatization
1.  When in doubt, the presumption should always favor the private sector over the public sector.  There is a mountain of evidence that the private sector is usually more efficient.

2.  There may be cases where the public sector is more appropriate.  But even in those cases, an independent government-owned corporation may well be better than a government agency that Congress can easily order around.  I believe some of the European countries use that model.
capitalism  sumner  TrumpAdministration 
june 2017 by HispanicPundit
Avik Roy on GOP health care reform., Scott Sumner | EconLog | Library of Economics and Liberty
Avik Roy has a highly informative article in Forbes, discussing the pros and cons of the recent House health care bill (which is now before the Senate). He suggests that the proposal offers a number of improvements over the current regime (Obamacare), but also some flaws. One problem is the tax credits:
Trumpcare  sumner 
may 2017 by HispanicPundit
Why do so many economists favor fiscal stimulus in Japan?, Scott Sumner | EconLog | Library of Economics and Liberty
The calls for fiscal stimulus in Japan make no sense on so many levels that I'm almost speechless. The assertion seems not just wrong, but preposterous. It would be like claiming that the press doesn't pay enough attention to terrorism, or the Kardashians.
Japan  fiscal  sumner 
march 2017 by HispanicPundit
TheMoneyIllusion » Argentina, Chile and China
Argentina’s an interesting case to think about.  It’s a sort of composite of the worst of Chile and the worst of China.  Chile scores extremely high on economic freedom, the only developing country in the top 10 (unless Estonia is viewed as developing).  Argentina ranks 156 out of 180.  China’s sort of the opposite of Chile.  It ranks pretty low on economic freedom (#111), but (probably) pretty high on PISA scores.  I say “probably” because the scores being reported are for Shanghai, which is definitely smarter than the average Chinese city or village.  Indeed Shanghai scores above any other country in the world, including high achieving city-states like Hong Kong and Singapore.  Nonetheless, based on other studies I’ve seen, I am confident that China would still do pretty well on a more national PISA exam.  Perhaps about at Vietnam’s level.  (Vietnam is roughly comparable to Finland, and far above the US, UK or Sweden.)
Argentina  Chile  China  IQ  sumner 
march 2017 by HispanicPundit
Why I favor taxing subsidized goods, Scott Sumner | EconLog | Library of Economics and Liberty
Recall that a subsidy will tend to increase output and reduce government revenue. A tax imposed on this same good will reduce output and increase government revenue, essentially reversing the effect of the subsidy, and thus moving you back closer to the optimal level of output.
subsidies  taxes  fundamentals  TrumpCare  sumner 
march 2017 by HispanicPundit
Initial thoughts on Obamacare 2.0, Scott Sumner | EconLog | Library of Economics and Liberty
Some libertarians are confused about the "Cadillac tax", which isn't really a tax in the ordinary sense. Rather it essentially removes the government subsidy to health insurance currently provided to the most expensive health care plans. The original hope of reformers was that over time health care inflation would cause this tax to affect more and more health care plans. It was the single best provision of Obamacare, and now the GOP has delayed it until 2025. That tells me that Congress has no intention of ever allowing the tax to be implemented. The delay of the Medicaid reforms until 2020 also leads me to doubt that they will ever be enacted, and in any case they've been greatly watered down, with high spending states now losing only 1/4th of their extra Medicaid spending. This still might be a net plus, but it's a very small one.
TrumPCare  Sumner  healthcare  costs  obamacare 
march 2017 by HispanicPundit
TheMoneyIllusion » Scott Alexander on the Holocaust
Scott emphasizes that the primary blame lies with the Nazis.  They did the murdering.  Nonetheless, the decision not to admit Jewish refugees did have horrendous consequences.  At the time, the “America First” movement was quite popular, somewhat anti-Semitic, and very isolationist.  In fairness, I probably would have been isolationist back then, but I’d hope I would not have been anti-refugee.
jews  USA  history  Codex  sumner 
february 2017 by HispanicPundit
Growth, or jobs for Americans?, Scott Sumner | EconLog | Library of Economics and Liberty
Economic growth can happen two ways: More hours are worked, or more economic output is generated from each hour of labor.

Higher productively often leads to job loss:
jobs  economic-growth  Trump  sumner 
january 2017 by HispanicPundit
Automation and trade, Scott Sumner | EconLog | Library of Economics and Liberty
Trade and automation are largely responsible in the rising living standards for average Americans over the past 50 years. (And yes they are rising; another myth is that they are not.) As I drive down the highway, 95% of the cars I pass are luxury cars, or more precisely cars that would have been viewed as luxury cars in 1966. Automation has made that possible. In another 50 years, lower middle class Americans will drive cars that are better than BMW 700 series cars, or perhaps I should say "riding in" cars that good--I have no idea if they'll be driving them.
free-trade  automation  standardofliving  sumner 
december 2016 by HispanicPundit
Europe has a massive and growing trade surplus, and is hemorrhaging manufacturing jobs, Scott Sumner | EconLog | Library of Economics and Liberty
the decline in the US has been similar to the decline in Europe. Germany has seen the second sharpest decline (after the UK), while Italy has seen the smallest loss of manufacturing jobs. Interestingly, Germany and the UK have two of Europe's healthiest overall job markets, and Italy has by far the worst employment situation of the countries on this graph. Manufacturing jobs don't equate to a healthy job market.
manufacturing  jobs  trade-deficits  sumner  Europe 
december 2016 by HispanicPundit
The Carrier scandal, Scott Sumner | EconLog | Library of Economics and Liberty
January 20, 2017, will be a momentous day for me. For the first time in my life, the US President will no longer be the de facto leader of the free world. (I suppose Angela Merkel will take over that role.)
industrialPolicy  Trump  Summers  sumner 
december 2016 by HispanicPundit
econlog.econlib.org
Now let me anticipate the "yes buts." Some Americans were made worse off. Obviously slave-owners, and less obviously those who were closely connected to the slave economy (bankers who financed them, cotton mills, etc.) But as Fogel showed (in a study of railroads), when thinking about any economy we tend to mentally overrate the importance of any one sector, especially big sectors. So despite the very real losses to a sizable group of Americans, the economy overall did much better as a result of the abolition of slavery.
slavery  history  economics  labor  fogel  yglesias  sumner 
december 2016 by HispanicPundit
TheMoneyIllusion » The New World Order?
Again, it’s far too soon to predict where we’ll end up under Trump. But there’s no doubt we are living in interesting times. For the first time in my entire life the US is no longer the world leader in the push toward globalization.
Trump  sumner 
november 2016 by HispanicPundit
TheMoneyIllusion » Did Trump reshape the GOP?
It turns out that not just in Iowa, but in many other states the GOP has been gaining ground among less educated white voters, for some period of time.  I think it’s a mistake to suggest that Trump is drawing disaffected whites into the GOP, rather disaffected whites have been moving that way for years (Romney won West Virginia by 27%) and instead candidates are now popping up to reflect the new reality of the GOP—a white nationalist populist party.  It’s not just Hillary who thinks that half the GOP are deplorable, I’m pretty sure Jeb and Mitt feel the same way.
republicans  race  sumner 
november 2016 by HispanicPundit
TheMoneyIllusion » Trump and the markets
Explaining the markets (lack of) reaction to the odds of a Trump presidency.
Trump  EMH  sumner 
october 2016 by HispanicPundit
TheMoneyIllusion » Another anti-EMH argument bites the dust
When I started blogging I would occasionally defend the EMH.  A number of anti-EMH arguments were offered in response.  One by one they’ve all fallen by the wayside.  People who predicted the 2008 crash have done poorly since.  Hedge funds were held up as a way of earning excess returns—and they’ve done poorly in recent years.  I was told Australian house prices would crash any day now, and am still waiting.  Bitcoin was a “bubble” when the price hit $30—what’s the price today?  Shanghai house prices were a bubble—now I’d love to buy in at 2009 prices.  Oh wait, “if I just wait long enough, prices will fall”.  Is that so Sherlock?  Highly volatile asset prices occasionally go down?
EMH  sumner 
october 2016 by HispanicPundit
TheMoneyIllusion » The American Dream lives (in Texas)
The Texas Miracle continues, despite the drop in oil prices.
texas  yglesias  sumner 
august 2016 by HispanicPundit
Optimal mutual funds in a world of bubbles, Scott Sumner | EconLog | Library of Economics and Liberty
But let's put that common cognitive bias aside, and consider what the world would look like if bubbles were a real phenomenon. The first thing to note is that the term 'bubble' implies asset mis-pricing that is easily observable. A positive bubble is when asset prices are clearly irrationally high, and a negative bubble is when asset price are clearly irrationally low. If these bubbles existed, then investors could earn excess returns in a highly diversified contra-bubble fund. At any given time there are many assets that pundits think are overpriced, and many others that are seen as underpriced. These asset classes include stocks, bonds, foreign exchange, REITs, commodities, etc. And even within stocks there are many different sectors, biotech might be booming while oil is plunging. And then you have dozens of markets around the world that respond to local factors. So if you think QE has led Japanese equity prices to be overvalued, and tight money has led Swiss stocks to be undervalue
EMH  sumner  buffett 
april 2015 by HispanicPundit
Sympathy for the top quintile, Scott Sumner | EconLog | Library of Economics and Liberty
Paul Krugman often seems more interested in the plight of the America working class than the welfare of much poorer residents of developing countries. For instance, he's argued that lower immigration rates after the 1930s helped the American working class achieve major economic gains, and worries about unrestricted immigration.
immigration  welfare  social-insurance  unions  krugman  sumner 
april 2015 by HispanicPundit
What's wrong with Hong Kong? (Too much government), Scott Sumner | EconLog | Library of Economics and Liberty
If you ever find yourself starting to be persuaded I suggest you visit Hong Kong. I just got back from a trip to Hong Kong (previously I had visited in 1991 and 1999), and marveled at the world class infrastructure. Others seem to have been similarly impressed, as a recent study ranked Hong Kong's infrastructure number one in the world. This in an economy where government spending is 18.5% of GDP, vs. 41.6% in the US.
HongKong  capitalism  sumner 
october 2014 by HispanicPundit
TheMoneyIllusion » A few thoughts on Seattle
Perhaps low wage firms move across the border to the suburbs. Seattle itself has only 634,000 people in a metro area of 3.5 million. Perhaps low wage workers move out with the jobs, as the city itself gentrifies. For remaining low wage jobs in Seattle, unskilled Hispanic workers are replaced with college-educated millennials. The Hispanics move elsewhere.
minimum-wage  jobs  sumner 
june 2014 by HispanicPundit
Illusory Bubbles, Bryan Caplan | EconLog | Library of Economics and Liberty
Now consider a point in time where the asset is selling at $30, and investors have not yet discovered whether it will eventually reach $1000. Should you predict that the price is a bubble? Yes and no. It is likely to eventually look like it was a bubble at $30. Indeed 95% of such assets will eventually see their price collapse. That's "statistically significant." It's also significant in a sociological sense. Those that call "bubble" when the price is at $30 will be right 95% of the time, and hence will be seen as having the "correct model" of bubbles by the vast majority of people. Those who denied bubble will be wrong 95% of the time, and will be seen as being hopelessly naive by the average person. And this is despite the fact that in all these cases there is no bubble, as by construction I assumed the EMH was exactly true.
emh  sumner  caplan 
december 2013 by HispanicPundit
Scott Sumner Has Some Data on Minimum-Wage Legislation
There are nine countries with no minimum wage (Iceland, Norway, Sweden, Finland, Denmark, Austria, Germany, Italy, Switzerland.) Five of the nine have a lower unemployment rate than Luxembourg, the best of the other group. The median country is Iceland, with a 5.5% unemployment rate. The biggest country in Europe is Germany. No minimum wage and 5.2% unemployment.
minimum-wage  germany  europe  sumner  boudreaux 
november 2013 by HispanicPundit
Scott Sumner vs. Peter Schiff on the Kudlow Report
Having confronted Peter Schiff myself along with Mike Konczal on HuffPost Live, I was glad to see Scott Sumner’s detailed rebuttals to Peter Schiff on Larry Kudlow’s show. I do not use the word lightly when I write that Peter Schiff is spouting gobbledygook. But in the words of one of my John Stuart Mill posts, "Let the Wrong Come to Me, for They Will Make Me More Right." Scott Sumner is made very right in this segment.
sumner  sidebar  kimball  monetarism 
august 2013 by HispanicPundit
TheMoneyIllusion » Mistakes were made: Foote, Gerardi, and Willen demolish the “Inside Job” hypothesis
Paul Willen recently presented a paper on the housing crisis here at Bentley University. It might be the best paper I’ve read on the subject. Since it’s not my area, I don’t know if their ideas have already been discussed on the internet, but if not I strongly recommend people take a look. The paper is too long and exhaustively documented to present in a short blog post, but their “12 facts about the mortgage market” provide a hint:
sumner  financialcrisis  sidebar 
may 2013 by HispanicPundit
TheMoneyIllusion » The real problem with Rogoff-Reinhart
Hamilton also noted that R&R have been far more accurate in their predictions of the eurozone debt crisis than Krugman, who pooh-poohed the notion of a widespread sovereign debt crisis in 2009. I notice that Krugman has now begun using phrases like “garbage-in, garbage out” to describe the quality of Rogoff and Reinhart’s empirical research. (OK, he doesn’t mention their name, but does anyone doubt which paper he is referring to.
europe  sumner  debt  krugman  sidebar  rogoff 
may 2013 by HispanicPundit
TheMoneyIllusion » The anti-Friedman
Often Fed announcements are close to expectations, and the market reaction is muted.  But when there is a big surprise, the market reaction is exactly the opposite of what the Cochrane explanation would predict.  Markets are Friedmanites, not Cochranites.  Markets favor monetary stimulus when recent NGDP growth has put the line far below trend.  That’s not to say markets always favor easy money, high inflation hurt stocks in the 1970s.  Rather that they favor easy money when Milton Friedman would have favored easy money.  David Glasner has documented this pattern in a study that examines the time-varying correlation between TIPS spreads and equity prices.
sidebar  sumner  emh  monetary  monetarism  friedman  cochrane 
september 2012 by HispanicPundit
TheMoneyIllusion » Is China a Hayekian success story?
Coase and Wang didn’t exactly call China a Hayekian success story, but that seems to be their message.  Thirty years after reforms began in 1978, China’s economy was about 70% private enterprise and 30% SOE.  That 70% was created in classic Hayekian fashion, with spontaneous experiments all across China, especially among the poorest and more marginalized sectors of society.  By 1988 those marginalized groups had often moved ahead of their richer neighbors, who worked in the urban SOEs.
capitalism  sidebar  sumner  coase  china  books 
september 2012 by HispanicPundit
TheMoneyIllusion » The pitfalls of using common sense
Money illusion is one of my few concessions to the behavioral economists.  I wish it weren’t there—it makes our models much uglier and it causes enormous human suffering.  But wishing it weren’t there doesn’t make it go away. ”The world is as it is.”  Between mid-2008 and mid-2009, NGDP fell about 9% below trend, while wages kept chugging along at roughly trend.  That’s a really big problem.  Although unemployment has since fallen from 10% to 8.2%, wages still haven’t entirely caught up to that massive demand shock.
sidebar  sumner  behavioral  wages  labor  monetary  inflation 
july 2012 by HispanicPundit
Krugman’s Austere Science
Fortunately, Scott Sumner checked some relevant facts.  From data on the 44 major world economies listed in The Economist‘s “Economic and Financial indicators” section, we learn that only two governments had 2011 budget deficits larger (as a percentage of GDP) than Britain’s: Egypt and Greece.

As for actual spending amounts, I logged a few minutes on the Internet to discover that British-government spending – adjusted for inflation – has risen every year since the start of the financial crisis.  This spending in 2011 was 16 percent higher than it was in 2007, and is projected to be even higher in 2012.
sidebar  boudreaux  sumner  krugman  fiscal  britain 
february 2012 by HispanicPundit
Blame Everyone, Bryan Caplan | EconLog | Library of Economics and Liberty
Example: Suppose an alcoholic would stop drinking if the penalty for drinking were 100 years in jail.  The mere fact that he would stop given this punishment shows that stopping is in his budget set.  This in turn shows that stopping is possible.  So if sobriety is morally right, and drunkenness is morally wrong, the alcoholic's drinking is morally blameworthy.
psychology  moralissues  sumner  caplan  sidebar 
november 2011 by HispanicPundit
TheMoneyIllusion » You can’t redistribute income . . .
But the real money here is obviously in the consumption/investment categories.  You can redistribute consumption from the top 1% and give it to average Americans working in a car factory, or a Walmart.  But it’s an illusion to think you can redistribute investment from the top 1%, so that average Americans can have a higher living standard.  Where do people think the car factory comes from?  Or the Walmart building?  BTW, this has nothing to do with trickle-down economics, a theory I reject.  This is simple accounting.  Money put into investment projects isn’t available to boost living standards for the lower classes, unless you don’t do those investment projects.
yglesias  fundamentals  redistribution  liberalism  sumner  sidebar  consumption  inequality 
july 2011 by HispanicPundit
TheMoneyIllusion » “You want more NGDP? Well why didn’t you say so!” (What Krugman doesn’t get about Barro/Fama/Cochrane)
And Paul Krugman keeps making this charge over and over again, despite the fact that it is clearly false (at least for Cochrane and Barro, and probably Fama as well.)  It’s true that you can cherry pick quotations that make it seem like the three deny the possible that fiscal stimulus can work, almost as a matter of logic.  If that was their entire argument, then it would be shockingly uninformed.  But both Cochrane and Barro clearly indicate that they are holding nominal aggregates constant, i.e. any shortfall in NGDP would presumably be fixed by printing money, leaving no role for fiscal stimulus.  Of course that’s also my argument, yet I do believe fiscal stimulus might be able to boost NGDP, because I don’t believe (as a matter of logic) that the Fed would necessarily create the right amount of money.  (I’m skeptical of fiscal stimulus for “likely Fed response” reasons, not as a matter of logic.)
macro  fama  cochrane  krugman  chicago  sumner  sidebar 
july 2011 by HispanicPundit
TheMoneyIllusion » Krugman was wrong about Switzerland
I love the Swiss. They’ve shown that even at the zero bound a determined central bank can hit its macro targets without any help at all from fiscal stimulus. There’s no zero bound on exchange rates. And as Ben Bernanke has repeatedly emphasized, the Fed isn’t even close to being out of ammo–they’ve got lots of tools that they haven’t yet even tried.
monetary  fiscal  krugman  sumner  switzerland  sidebar 
july 2011 by HispanicPundit
TheMoneyIllusion » Are stocks overvalued?
3.  My most important argument is that low real interest rates might be the “new normal.”  The most striking characteristic of the US economy over the past decade is the unusually low level of both nominal and real interest rates.  And it’s not just because of the current “unpleasantness;” rates also fell to very low levels in the early 2000s.  Why have people missed this story?  I believe it’s because they’ve assumed the low rates are some sort of Fed policy, not a free market outcome.  But if the low rates since 2001 were an easy money policy, then why didn’t we see high rates of inflation and NGDP growth?  So money hasn’t been easy, which we should have obvious all along, given that INTEREST RATES ARE NOT THE PRICE OF MONEY, THEY ARE THE PRICE OF CREDIT.  And these low real interest rates should support a higher P/E ratio.
stocks  emh  sumner  sidebar 
july 2011 by HispanicPundit
TheMoneyIllusion » Still not blogging (Comments on Brink Lindsey)
So Denmark isn’t just the most free market economy, and the most egalitarian, and the most civic-minded, and the happiest.  It’s also the most entrepreneurial.  And is has the world’s best restaurant.  Thank God the weather will always be awful.  Oh wait  . . .  global warming is coming.
denmark  entrepreneurs  CATO  sumner  sidebar 
april 2011 by HispanicPundit
Scott Sumner, from the comments — Marginal Revolution
A political conservative is more likely to make this point than to simply focus on the lack of money earned by the poor.  A political liberal is more likely to assume that the rate of strict religiosity can rise only so high, and take that as a background constraint.  Furthermore, under the exogenous thought experiment of many more poor people converting to Mormonism, positive selection bias diminishes and perhaps the religion as a whole becomes less strict.
progressive  taxes  krugman  sumner  cowen  sidebar 
april 2011 by HispanicPundit
TheMoneyIllusion » If you are going to argue that people who make mistakes should be ostracized . . .
It is common knowledge among progressive public finance experts like Peter Lindert that the European tax regimes are able to collect more revenue than ours (as a share of GDP, not in total) by having a more regressive tax system. Mankiw’s link may not be exactly right, but the stylized facts are in the right ballpark. Given that Yglesias is a fan of the European welfare state, I’m surprised he hasn’t read Lindert’s research.
taxes  europe  mankiw  yglesias  sumner  sidebar  progressive 
april 2011 by HispanicPundit
TheMoneyIllusion » Progressive wishful thinking
All this may be true, but progressives can’t point to any European models (except perhaps special cases like Norway and Luxembourg) that raise the sort of revenue they claim the US would raise if we boosted taxes as a share of GDP to European levels. For instance, in Mankiw’s data the Germans raise $13,893/person with taxes of 40.6% of GDP. The US raises $13,097/person, with taxes of just 28.2% of GDP. The progressive denial of the Laffer Curve is an implied claim that if we raised our tax rate to German levels, our GDP would not decline, instead we’d raise an astounding $18,856/person in tax revenue, despite the fact that no other major country with Euro-style tax rates comes close to raising that kind of revenue. Quite a leap of faith.
taxes  europe  deficits  mankiw  Sumner  sidebar 
march 2011 by HispanicPundit
TheMoneyIllusion » Paul Krugman: Ignorant, and proud of it
I find that reading good liberal blogs like Krugman, DeLong, Thoma, Yglesias, etc, sharpens my arguments. It forces me to reconsider things I took for granted. I’d guess that when Krugman tells people at cocktail parties that the post-1980 trend of lower tax rates, deregulation, and privatization was a plot devised by racist Republicans, they all nod their heads in agreement. If he occasionally read a conservative blog he might learn that all those trends occurred in almost every country throughout the world after 1980, usually much more so than in the US.
krugman  blogging  sumner  sidebar 
march 2011 by HispanicPundit
Marginal Revolution: The simple macroeconomics of labor unions
And cartels, like labour unions, just make the problem worse. Because by joining together with similar sellers into a group, the demand curve facing the group is steeper than the demand curve facing the individual, since members of the group no longer compete against each other for buyers. So there is an even bigger difference between the downward-sloping trade-off facing the group of sellers and the horizontal trade-off facing us all.

Unions are bad for the very same reason that recessions are bad.

All New Keynesian macroeconomists have understood the above for the last 20 years. Which is why all New Keynesian macroeconomists are fundamentally opposed to cartels, labour unions, minimum wage laws, etc.. OK. It's why they should be opposed to such things.
unions  keynes  minimum-wage  Sumner  cowen  sidebar 
february 2011 by HispanicPundit
TheMoneyIllusion » Why Wisconsin?
The really interesting message from Wisconsin is that Governor Walker is able to mount this challenge to unions, not whether he “wins” or loses (which I see as an issue of minor importance.) This battle is a symbol that the old Democratic Party that I knew when I was younger is very much weakened. The party of people like Hubert Humphrey, for you older readers. It’s not gone, but it is more and more confined to public sector workers, who work with their minds.
walker  politics  Sumner  sidebar 
february 2011 by HispanicPundit
TheMoneyIllusion » The rich, and the upwardly mobile
In my view taxes tend to have weak short run effects (as people are often settled in a particular area and don’t want to move), and stronger long run effects, as businesses deciding where to locate might choose areas with better fiscal regimes for their employees. But many other factors also matter.
taxes  Sumner  sidebar  california  Texas  newyork 
february 2011 by HispanicPundit
TheMoneyIllusion » Paul Krugman is right
It’s not easy to misplace $60 to $90 billion. That kind of money doesn’t just slip behind the couch cushions. You’ve got to seriously cut staff in cost control to achieve that sort of outcome. Imagine what they could accomplish if we let that same Medicare administration manage 16% of GDP. That’s more than Canada’s entire GDP. I bet they’d achieve even further administrative savings.
medicare  costs  krugman  sumner  sidebar 
february 2011 by HispanicPundit
TheMoneyIllusion » Review of The Great Stagnation
I’m kind of surprised that Tyler Cowen got detoured into the “where will the jobs come from” cul de sac, as it’s usually associated with people who have very different views from Tyler. Indeed I’m so surprised that I assume I must have misread him somewhere along the way. Here’s how I think about jobs. First, what do we want? If those things can be provided with very few workers, don’t despair, ask what we want after we have gotten our first wish granted. And so on, until all the workers are employed.
economic-stagnation  books  jobs  cowen  Sumner  sidebar 
january 2011 by HispanicPundit
TheMoneyIllusion » The typical rich family is a cop married to a nurse
Why do people find it surprising that so few families make more than $150,000? I think I know, because I used to be surprised myself. Then I realized my mistake. I was assuming “families” were people like me, a middle age guy with a working wife and kids. But then I realized a “family” is any adult household. My first 8 years as an adult I was living on my own, supporting myself with part time work will going to college and grad school. Definitely bottom quintile. I was probably technically “poor,” but not poor in a sociological sense. I was a proto-upper middle class guy. Then I spent one year in the second quintile, before shooting into the third quintile, where I stayed for a number of years. Then I got married, then I got lots of raises and promotions, and presto, I’m rich. (Although my neighbors would laugh, they look down on us plebs living in two-family houses.)
middleclass  Sumner  sidebar 
january 2011 by HispanicPundit
Why Scott Sumner is Wrong | Angry Bear
Disputing Sumner on the Reagan and Thatcher revolution.
Reagan  Thatcher  Sumner  AngryBear  sidebar 
december 2010 by HispanicPundit
The Sumnerian Missionary, Bryan Caplan | EconLog | Library of Economics and Liberty
""I don't think conservatives realized it at the time, but I (and a few other quasi-monetarists) had the strongest argument against fiscal stimulus in late 2008 and early 2009. We said; "Yes, stimulus is needed, but monetary stimulus is much more effective and less costly than deficit spending." At the time, most on the left argued that monetary stimulus wouldn't work if rates were near zero. Well rates are still near zero, and many of those same liberals are now insisting that the Fed is responsible for fixing the AD shortfall. They've come over to our side."
fiscalstimulus09  liberalism  government  monetary  sumner  caplan  sidebar 
november 2010 by HispanicPundit
TheMoneyIllusion » Who’s to blame? Follow the money
The public sector bailouts is costing us much more than the private sector - and rising.
bailouts  financialbailout  fanniemae  financialcrisis  financialRegulation  sumner  sidebar 
november 2010 by HispanicPundit
TheMoneyIllusion » Thank God Matt Yglesias is not a Rawlsian
"As an aside, I still think the Conservatives did more to improve Britain. They inherited a country going down the tubes, and made some very painful decisions to shut down a lot of uncompetitive manufacturing and mining. The made the economy more efficient. They ended double digit inflation. These reforms hurt various sectors of the public, but were needed in the long run. In contrast, Labour inherited an economy in very good shape, and left a fiscal train wreck when they left office in 2010. And a bad recession. Notice the data only goes up to 2008—let’s see how it looks in 2 years when we have the full data showing the Labour government’s entire term in office."
Britain  politics  conservatives  liberalism  economy  yglesias  Sumner  sidebar  poverty 
september 2010 by HispanicPundit
TheMoneyIllusion » Income and wealth inequality data: Nonsense on stilts
"I keep running across blog posts showing the inequality of income and wealth in America. In a recent post I already discussed one reason why this data is fatally flawed, capital income is nothing like wage income—rather it is deferred consumption. Counting capital income and wage income is actually counting the same income twice. Here I’d like to discuss some other problems with the data"
inequality  wages  sumner  sidebar 
september 2010 by HispanicPundit
TheMoneyIllusion » Case closed: Milton Friedman would have favored monetary stimulus
"Friedman would have understood that the financial crisis was a special case that led to a rush for liquidity and safety, and a temporary fall in M2 velocity. He would have seen the low interest rates and low TIPS spreads as indicators of tight money. He would have favored temporarily allowing higher M2 growth to offset the low velocity, until the economy was back to normal. Somehow modern conservatives seem to merely recall the bumper sticker message “stable money growth” but overlook the nuanced and highly sophisticated monetary analysis that made Milton Friedman an intellectual giant."
friedman  monetary  financialcrisis  sumner  sidebar 
september 2010 by HispanicPundit
TheMoneyIllusion » Krugman’s lucky to be an American
"In 2005 Paul Krugman called the US housing bubble. A couple weeks ago he reminded us that he called the bubble, and implied only a fool (or a brainy right-wing ideologue?) could have failed to see it. He presented a graph showing that housing prices in the US had been rising rapidly. Interestingly, housing prices had been rising rapidly in lots of countries, but relatively few turned out to have housing bubbles. "
real-estate  financialcrisis  krugman  sumner  sidebar 
september 2010 by HispanicPundit
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