Re: Robert Frank and the Real Median Wage
I have mentioned two factors in response to your earlier emails and got no response, so perhaps my message didn't go through. One factor regards the question of what they're measuring--money wage versus total employee compensation. The non-wage component of total employee compensation has risen substantially over the past decade or two, primarily in the form of increasing value of medical insurance. The other factor regards the deflator they're using--CPI-U versus CPI-X or perhaps even GDP deflator. Of course we might wonder why real median income per capita has risen even using the CPI-U as a deflator but real median wages have not. I'd start with total employee compensation to answer that question. In a message dated 4/17/07 11:54:34 PM, [EMAIL PROTECTED] writes: In that NY Times article, Frank said that the median hourly wage adjusted for inflation was lower in 2005 than it was in 1980. I looked for data on the median hourly wage over time at the BLS and could not find a series going back to 1980. One person who works there told me they did keep track of it. I did find data on the median real income over time at the Census Bureau website. Here is a link to the data I used in my analysis below http://www.census.gov/hhes/www/income/histinc/p05ar.html From 1974 to 1982, the real median income for males fell 7.7%. From 1982 (maybe the first year Reagonomics may have had an effect) to 1990, they went up 8.8%. For females, in the earlier period, it increased 6.8%. In the latter period, it increased 27.9%. Frank seemed to be saying that trickle down or Reagonomics did not work. These numbers seem to show that it worked well or at least did not do poorly. From BLS data, it appears that the mean real hourly wage from 1980-2005 did not change much. This Census Bureau site shows the real median income for both males and females being higher in the latter year. Anyone know why the discrpeancy? Has the proportion of income earners who are paid by the hour changed? The increase for both men and women means things have gotten better. Anyone know if there is anything wrong with the census data? Cyril Morong, Ph. D. Associate Professor of Economics San Antonio College ** See what's free at http://www.aol.com.
If real median wages have fallen
Journalists and Democrats blame Republican policies, but I don't know which policies and I suspect neither do the journalists or Democrats. Xenophobes blame Mexican immigrants, foreign competition, and outsourcing of phone jobs to people in other countries. Referring to the same claim made by journalists and Democrats about the 1980s, The Heritage Foundation noted that the usual deflator, CPI-U, overstates inflation. When they used CPI-X, carefully crafted to overcome at least some of the overstatement, they found that real wages had risen in the 1980s. I think someone on the list already mentioned the choice of deflator in a generall way, and once again using CPI-U might be the culprit. I tend to regard any CPI as too narrow, and would recommend using a broader measure like the GDP Implicit Price Deflator. Another problem might come from the particular wage series on which someone is basing the claim that real wages haven't risen. The someone might be using money wages instead of total compensation. The tax-free status of fringe benefits, especially health insurance, has led the non-money component of total employee compensation to rise significantly in recent decades. In a message dated 4/12/07 6:00:17 PM, [EMAIL PROTECTED] writes: If real median wages have fallen, especially over a long time, why would that be? ** See what's free at http://www.aol.com.
Re: How to Stop the PlaySation Violence
I was watching the local news last night as they covered Thanksgiving night shopping stories in the DC metro area. Apparently some stores opened last night to start off the Christmas shopping season and hundreds of people lined up at one store for six hours or more. About 50 people showed up right before the store opened and tried to form their own line to go in ahead of the hundreds already there. The store manager had to come out with employees and tell the new people to get into the existing line. It got ugly and they called the police, although apparently the people in the longer line managed to intimidate the newcomers into getting into the original line, so that by the time the cops got there things had settled down. Then the store opened and admitted only a few people at a time. As I watched I thought, Why are there lines? Because the prices are too low. When I lived back in Iowa I ventered out one Thanksgiving night to a store and did some electronics shopping, but there were no Iowans in the store--just me and the employees, all immigrants from India. I guess that means their prices were too high. :-)
Re: Drivers give helmeted cyclists less room?
This suggests that people might include the safety of others in their utility functions. An alternative explanation might suggest that people include a calcuation of the damages they'll have to pay if they injure someone else. Giving women even more space than non-helmeted men raises some interesting questions. Do drivers on average assume that women ride less skillfully and thus have a greater likelihood of falling over into the path of a car as it goes by? Or do drivers on average care more about injuring women than about injuring men?
Re: Average State Age
Dear Tom, Thank you very much for the links. It seems I can find median age, but not mean age. Perhaps nobody calculates the means. David In a message dated 4/27/06 6:07:33 AM, [EMAIL PROTECTED] writes: U.S. Census Bureau is likely to be the best source. Here’s a link to a table from www.census.gov that shows median age by state: http://factfinder.census.gov/servlet/GCTTable?_bm=y-context=gct-ds_name=DEC_2000_SF1_U-mt_name=DEC_2000_SF1_U_GCTP5_US9-CONTEXT=gct-tree_id=4001-geo_id=-format=US-9|US-9S-_lang=en You can probably find average ages as well if you dig around a little; possibly using the same search tool I just used to generate the table above: http://factfinder.census.gov/servlet/DatasetMainPageServlet?_program=DEC_submenuId=datasets_1_lang=en Tom From: ArmChair List [mailto:[EMAIL PROTECTED] On Behalf Of [EMAIL PROTECTED] Sent: Thursday, April 27, 2006 12:34 AM To: ARMCHAIR-L@mail04.GMU.EDU Subject: Average State Age Does anyone know where I can find data on the average ages of US state populations? Also, would anyone know offhand a good scholarly article that discusses the correlation between age and crime rates? Thanks. David Levenstam
Re: Real Wages
In a message dated 11/29/05 11:47:15 AM, [EMAIL PROTECTED] writes: In the inside cover of the principles book by Tollison, Ekelund and Ressler, they show average hourly earnings in 1964 at $11.88. For 2004, they have $15.64. I think they are using 2002 as the base year, but it is not clear (perhaps 2004). This shows about a 31% increase in the real hourly wage. But using the following sites ftp://ftp.bls.gov/pub/suppl/empsit.ceseeb2.txt ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt The nominal wage was $2.53 in 1964 and $15.67 in 2004. The 2004 figure was 6.19 times has high as the 1964 figure. For the CPI, it went from 31.2 in December of 1964 to 190.3 in December of 2004. The 2004 figure is about 6.1 times the 1964 figure. This all seems to suggest just about no increase in real wages. Anyone know why this book shows an increase? The sources listed in the book are The Statistical Abstract of the United States and The Economic Report of the President. Cyril Morong I don't know for sure, but it might depend on whether the consumer index uses CPI or CPIx. The old CPI substantially overstated the rate of decline in the value of the dollar--which it wasn't originally designed to measure anyway--and the CPIx makes a herculean effort to correct for the various problems in the CPI. As I recall using CPI showed real wages growing through 1973 and then grinding to a halt until the 1980s, when they crept up again. Using CPIx to deflate the wages showed a substantial slowing of wages starting in 1973 and moderate growth in real wages starting in the 1980s. I'd thought that I'd seen real wages continue to rise throughout much of the 1990s as well, using CPIx. I'm rather surprised, however, that even with the old CPI you get no growth in real wages at all--that would mean with CPI real wages must have declined in the 1990s.
Re: Katrina and the Evacuation of the Poor and Infirm: Market Failure?
In a message dated 9/6/05 8:50:04 PM, [EMAIL PROTECTED] writes: I'm not sure the premise is entirely correct. About 30% of the (former?) population of New Orleans is below the federal poverty line, yet 80-90% The federal poverty line is just a politically-determined level at one time useful to liberal Democrats for beating middle-income Americans into a state of guilt in which the liberal Democrats could more easily consfiscate more of their income and give it to people who vote for liberal Democrats. The American poverty line today is someone around the (real) median income of Americans in 1950.
Re: Szasz prize
Woo-hoo! Congratulations Bryan! Does this award come with pecunitary compensation? :-D David In a message dated 8/24/05 3:15:24 PM, [EMAIL PROTECTED] writes: I must gleefully report that I am one of the winners of the 2005 Thomas S. Szasz Award for Outstanding Contributions to the Cause of Civil Liberties, largely for my article "The Economics of Szasz: Preferences, Constraints, and Mental Illness." The other prize-winner is individualist feminist Joan Kennedy Taylor. There will be an award ceremony at the Cato Institute on September 21, 6:00-7:30 P.M. The event is open to the public, and a lot of my friends will be coming - probably including some of your favorite bloggers. If you live in the D.C. area, it would be great chance to meet in person. Hope to see you there!
Re: Interest rates and housing
In a message dated 8/16/05 10:24:56 AM, [EMAIL PROTECTED] writes: The last real estate bottom was in 1990, so if this is another 18-year cycle, the next depression would be around 2008. So far, the economy is tracking the cycle right on schedule. In my judgment, the economy is entering the plateau stage. Heh, Fred, I guess you are the only armchair economist left. If government has causes a real estate price bubble by artificially loweringn interest rates, how can it have an 18-year cycle, and why would it be the same under the federal serve system as it was under free banking or the period from the Civil War to the establishment of the Fed? Why does the money go into residential real estate and not into stocks or automobiles or other assets? Thanks, David
Re: Interest rates and housing
In a message dated 8/18/05 11:28:53 AM, [EMAIL PROTECTED] writes: --- Technotranscendence [EMAIL PROTECTED] wrote: there are political cycles too, such as the Presidential cycle. Yet this doesn't line up with 18-years. Yes, there several cycles going on at the same time. There are also random shocks. The 2001 downturn was not caused by real estate, for example. But some have more impact than others, and my analysis of historic cycles indicates that the real estate cycle is the most economically significant one. Fred Foldvary Fred, If the real estate cycle is based on government expansion of money, why does it have an 18-year cycle, any why has it been the same under three or four different monetary systems? David
Re: Interest rates and housing
In a message dated 8/18/05 11:40:59 AM, [EMAIL PROTECTED] writes: If government has caused a real estate price bubble by artificially lowering interest rates, how can it have an 18-year cycle, David Because real estate construction takes years, and recovery from a downturn takes years. An exception is an inflationary boom that is not a real economic recovery, such as the stagflation of the 1970s. That's why there was a real estate peak in 1979. Why does the money go into residential real estate and not into stocks or automobiles or other assets? The money goes into all real estate, not just residential. Of course it also goes into stocks, as with the tech boom of the 1990s, followed by the downturn of 2001, which was not caused by real estate. But the real-estate boom prevented the 2001 recession from becoming major. The big depressions have all followed real estate booms. Fred I don't follow you. Are you saying that there's a real cycle of real estate that takes 18 years from (from peak to peak or from peak to trough?)? That seems different from your initial contention that the current bubble has been caused by monetary growth. Are you saying both things? If so, then do you predict a collapse of real estate prices based on monetary or real factors, or both? David
Interest rates and housing
Are there any armchair economists left? If so, what do you think of the following article? Thanks! David Levenstam George Mason University - Interest rates and housing Bruce Bartlett (archive) August 16, 2005 | Print | Recommend to a friend Last week the Federal Reserve again raised the federal funds interest rate, which now stands at 3.5 percent. When the Fed began tightening monetary policy in June 2004, this rate stood at just 1 percent. Thus far, there is little evidence that the Fed's actions have had any effect either on financial markets or the real economy. Market interest rates, especially for mortgages, remain low, and economic growth continues at a steady, if unspectacular, pace. Given the Fed's actions, economists would have expected interest rates to be higher and growth to be slower. The Fed calls the lack of impact a "conundrum." As a consequence, some analysts are saying that the Fed will have to raise the fed funds rate higher than it originally planned. A majority of forecasters in the Wall Street Journal's latest survey expect it to hit 4.5 percent before the Fed stops. Economists at Goldman Sachs are predicting five percent. The problem is that just because the Fed is raising rates gradually doesn't mean that the impact will be gradual. It could come quite abruptly. Think of a balloon. Whether you blow it up slowly or fast, at some point, it is still going to burst. The same thing oftentimes occurs with monetary policy. It may appear that nothing is going on for a long time and then, suddenly, something dramatic happens to show that monetary policy is working as expected. Another problem is that the Fed's policies always take time before they impact, and these lags vary. So it's very difficult to know precisely when the impact will be felt. Generally speaking, when the Fed tightens, the impact on the economy is symmetrical. That is, whatever sectors went up the most during the easing phase will fall the hardest when it tightens. Stocks went up most during the easing cycle from 1995 to 1998 and fell the most after the Fed tightened in 1999 and 2000. In the latest easing phase, which began in January 2001, the principal impact has been on housing. Over the last five years, housing prices nationally have risen by just over 50 percent. But in some areas, prices have risen much more. Those in California and the District of Columbia are up over 100 percent. Twelve other states have seen increases of over 60 percent. All except Nevada border either the Atlantic or Pacific oceans. However, much of the country has not seen significant housing price increases -- in 32 states they have risen less than the national average. In Utah, prices have gone up just 17.5 percent in the last five years -- little more than the 12.8 percent increase in the Consumer Price Index. Other laggards include Indiana (19.8 percent), Mississippi and Nebraska (both 21.8 percent). Almost all of the below average states are in the nation's heartland. In a recent speech, Federal Reserve Bank of San Francisco president Janet Yellen noted that the ratio of home prices to rents is about 25 percent above its long-term average. In Los Angeles and San Francisco, the ratio is 40 percent above normal. Experience shows that prices will either level off or fall when this is the case, bringing the ratio back to trend. One thing that may be different this time is that the abnormal price-to-rent ratio is being driven partially by falling rents, not just rising home prices. This is because investors are purchasing so many properties in hopes of rapid appreciation, increasing the supply of rental housing. And since much of this real estate has been purchased with interest-only or negative-amortization loans, investors don't need much rent to cover their payments. Negative-amortization loans are especially dangerous, both for borrowers and those making such loans. This type of loan is a bit like a credit card, where the full amount need not be paid every month. As long as a small minimum payment is made, the balance can be rolled over. In this case, the unpaid balance is added to the outstanding mortgage. This reduces one's cash flow expense, but also reduces one's profit at the back end when the property is sold. So unless prices rise fairly rapidly, one can easily get into a situation where the mortgage is greater than what one can clear at closing. Consequently, even if prices simply level off, a lot of investors may find themselves with mortgages they cannot pay back after a sale. Owning one's own home is still the best investment that anyone can make. And if you plan to stay put for a few years, you shouldn't worry about a bust in the housing market. But those buying investment properties on either coast should be very, very careful. It may take a lot longer than they think to make money and they should be sufficiently well capitalized to ride out a market dip. Bruce
Re: Laffer Curve
In a message dated 4/29/05 2:05:25 PM, [EMAIL PROTECTED] writes: David ([EMAIL PROTECTED]) writes: It's funny, during the 1970s people commonly attributed the excellent rates of economic grown in Taiwan and Hong Kong to the "Confusion work ethic" while completely ignoring the poverty of the hundreds of millions of Chinese right next door in Communist China. I usually heard this as an argument against communism -- as in, "Chinese prosper everywhere int he world -- Taiwan, Hong Kong, Singapore, Malaysia, America -- EXCEPT in Communist China. So it's obvious that the problem of poverty in China is with Communism, not with anything inherent in the Chinese people." Of course, there may be some selection bias involved in emigration, but it's still a good point. --Robert Book [EMAIL PROTECTED] Indeed. And thanks also for the material on the luxury yachet (are there non-luxury yachets?) tax from the 1980s. It's remarkable that a 10% rate nearly eliminated the US industry. Imagine what would have happened had my failing memory been accurate, and Congress had indeed passed a 100% tax! David Levenstam
Re: Dickens on the Laffer Curve
In a message dated 4/23/05 4:42:26 PM, [EMAIL PROTECTED] writes: Peter C. McCluskey wrote: Mancur Olson claims in his book Power and Prosperity that the marginal income tax rate was effectively zero. The effective taxes were near 100% of what a typical worker in any given position could produce, but workers producing more than expected kept all the unexpected wealth. That created stronger incentives on each person to work hard than in the west, strong incentives to prevent others from working hard, and some incentives for each industry to deceive the system about what a typical worker can produce. There were few problems with the total amount of economic activity under Stalin. The problems were with the goals which that activity satisfied. Much as I admire Olson, this is crazy. Collectivization didn't just costlessly move resources from agriculture to industry/military production. There was an enormous deadweight cost in reduced production *per farmer*. Not to mention massive destruction of human capital - i.e. death. He has a slightly better case for industry - Stalin did firmly back unequal pay. But a 0% marginal tax rate cuts against everything I've ever read about Soviet economics under Stalin. I'd been wondering how to express the very same thoughts--I do admire Oslon a great deal, and I do find the idea crazy. Is it possible he was employing irony?
Re: Laffer Curve
In a message dated 4/22/05 9:55:30 AM, [EMAIL PROTECTED] writes: Quoting [EMAIL PROTECTED]: istribution. The real question, according to McCloskey, is not why does Germany have only 75% of US per capital GDP, but why does Bangledesh have only 5% of US per capital GDP. People in the countries with the top 10 or 15 per capita incomes in the world are fabulously wealthy even I believe that the reasons the Bangledeshi have been looted is explained largely by this image: http://img.photobucket.com/albums/v387/elkgrovedan/Beetle_Bailey.gif compared to half a century ago, to say nothing about compared to before 1700. People living in the poorest parts of the world, by contrast, are still poor by pre-1700 standards. Sadly, as suggested in Carrol Quigley's epic history tome, Tragedy and Hope: The History of Our World, despotism has persisted in China for nearly 5000 years, though strains of free market are enriching a select few today. Perhaps those on the subcontinent will see the light? The Beetle Bailey cartoon offers a surprisingly good insight. I've never heard any refer to China as a subcontinent, only India. It's funny, during the 1970s people commonly attributed the excellent rates of economic grown in Taiwan and Hong Kong to the "Confusion work ethic" while completely ignoring the poverty of the hundreds of millions of Chinese right next door in Communist China. I've worried about the fate of Hong Kong ever since Britain gave it to the communists. One of my brothers, the Director or International Taxation for Cisco Systems, assures me that Hong Kong has been doing just fine and that the communists have pretty much kept their hands of off the goose that lays the golden eggs. [Metaphor mine, not his.] The Chinese communists seemed to have taken seriously some lessons from their own early experiment with political liberalization in the late 1970s and the Soviet example. In the Chinese case, people who could speak out but not engage in generalized economic activity spent much of their energy simply speaking out against the communists. In the case of the Soviets, people who could speak out and vote but not engage in liberalized economic activity spoke out against the communists and then voted the communists out of power. The Chinese communists in the 1990s seemed to take care to allow some economic liberalization but not political liberalization, with the result that people turned their energies on enriching themselves rather than criticizing the communists. (It's also possible that the Chinese communists took a lesson from the early Soviet Union's NEP, characterized by Bukharin's famous admonition to "enrich yourself," which resurrected the Russian economy after war and War Communism killed it.) I doubt that we'll see free markets in China, since we don't really see free markets anywhere in the world today. I've heard though that in the late 1990s the Chinese communists started reneging on the 99-year farm leases, so I don't know if they'll be able to resist the temptation to use their power to try to control everything. Still, the last I heard, the Chinese economy was still experiencing growth in real per capital GDP exclusive of military spending, so maybe the of Soviet collapse still provides a sufficiently strong lesson in what not to do if you want to stay in power. David
Re: Laffer Curve
In a message dated 4/21/05 1:37:25 PM, [EMAIL PROTECTED] writes: By one measure, there is a big difference, in per capita GDP taking into account purchasing power parity. From the OECD site, in 1999 the U.S. had a per capita GDP of $33,836. Germany, France, UK, Italy were all between $22,000 and $24,000. Yes, the PPP per capital GDP figures for the last 15 years or so have shown a substantial gap between US and western European incomes. For that matter last I saw Canadian per capital GDP it was above European GDPs, and as I understand it, Hong Kong per capital GDP had pushed past Canadian per capital GDP into second place after American by the time the British handed the whole colony (both the leased and the non-leased portions) over to the Chinese communists. As McCloskey likes to point out, however, the gap between any of the countries the top ten or 15, for instance, shrinks into insignificance by comparison between the top 10 or 15 and the bottom 10 or 15, or even middle third of the world's per capita income distribution. The real question, according to McCloskey, is not why does Germany have only 75% of US per capital GDP, but why does Bangledesh have only 5% of US per capital GDP. People in the countries with the top 10 or 15 per capita incomes in the world are fabulously wealthy even compared to half a century ago, to say nothing about compared to before 1700. People living in the poorest parts of the world, by contrast, are still poor by pre-1700 standards.
Re: Laffer Curve
In a message dated 4/21/05 1:38:10 PM, [EMAIL PROTECTED] writes: And I have a sneaking suspicion that more equitable distributions of income lead to less social conflict and rent seeking and lead to higher growth. Unlike you I can point to some theoretical and empirical studies that back my suspicion up (though I wouldn't bet my life on it being true). My point is that any of us can have sneaking suspicions. Dueling sneaking suspicions aren't going to bring us any closer to agreement. You're raising the bar on me. I was just trying to meet your earlier challenge; But there is no reasonable argument (at least none that I've seen) that tax increases in any range we've seen in this country don't raise revenue. Disagree or not, I think my argument about long-term damage to entrepreneurship and the work ethic is a reasonable one. The Annual Reports of the Secretary of the Treasury for the early 1920s show that higher marginal tax rates did at first raise revenue, and then in succeeding years cause revenue to fall in the brackets to which the higher rates applied. People couldn't immediately adjust their much of their activities to avoid the higher rates, but over time did just that. Congress imposed something like a 100% tax on luxury boats (as I recall, as part of the tax hike of 1990), and found that they collected zero revenue from the tax. So we do have empirical evidence that higher marginal tax rates can produce less revenue. We also know that as marginal rates rise, people have more incentive to lobby for special provisions to exclude themselves or their particular activities from the the higher rates, which in turn generates hostility among people with similar incomes from non-excluded activities, generating further lobbying for expansion of the list of excluded activites. Higher marginal rates in general also raise the ire of people who see themselves as getting punished for working harder, giving more incentive to people with high incomes to work less and spend more time in leisure. Thus we had the phenomenon of doctors playing golf more often than seeing patients, etc., before Congress made large cuts in marginal tax rates during the 1980s.
Re: Dickens on the Laffer Curve
In a message dated 4/21/05 12:26:02 PM, [EMAIL PROTECTED] writes: And I have a sneaking suspicion that more equitable distributions of income lead to less social conflict and rent seeking and lead to higher growth. I wonder what the Laffer Curve would have to say about the "tax" rates and "equitable distributions of income" and "lesser or greater social conflict" and "higher or lower growth" etc, that led to and constituted the socialist Wholecaust (of which the Holocaust was a part): 62 million killed in the former Union of Soviet Socialist Republics; 35 million in the Peoples' Republic of China; 21 million in the National Socialist German Workers' Party. http://rexcurry.net/socialists.html The poverty, misery, famine and slaughter were so enormous that Holocaust Museums can quadruple in size and scope as Wholecaust Museums. Taking the example of Stalin's war on the peasantry in general and the Ukraine in particular, we see that massive confiscations of income at marginal rates well in excess of 100% certainly detered economic activity, to put it rather mildly.
Re: Laffer Curve
In a message dated 4/19/05 12:43:11 PM, [EMAIL PROTECTED] writes: For what it's worth, I recall a Treasury study in the late 1980s that concluded that the tax cut of 1984 was 95% self-financing. David Do you have a citation for that study (or a copy)? If "95% self-financing" means what it seems to mean, that would mean tax revenues actually declined, right? --Robert Book [EMAIL PROTECTED] No (thus the "I seem to recall"--actually I read about it on the editorial page of the Wall Street Journal) and yes (tax revenues from the affected items fell, but I don't know over what period). David
Re: Laffer Curve
In a message dated 4/18/05 3:21:40 PM, [EMAIL PROTECTED] writes: I've been reading about Laffer's idea that there is a tendency for revenues to increase with increased taxation up to a point where revenue is maximized. As one of the class notes on Caplan's site indicates, you can derive revenue as a function of the tax rate and assuming that the slopes of the supply and demand curves are constants not equal to zero, you can show that the Laffer effect exists. For example, from Pd = price paid by buyer Ps = price received by seller t = tax per unit = Pd - Ps. R = revenue = tQ Supply curve: Qs = a + bPs Demand curve: Qd = c - dPd You can derive R = t(bc + da - bdt)/(b + d) Still, a lot of people have said that the Laffer curve is bunk. Are there any Laffer detractors here? If so, what must the supply and demand curves for labor look like for R(t) to be an always increasing (or at least never decreasing) function? James For what it's worth, I recall a Treasury study in the late 1980s that concluded that the tax cut of 1984 was 95% self-financing. David
Re: Arthur Laffer
In a message dated 2/7/05 11:46:21 PM, [EMAIL PROTECTED] writes: There's an interesting (to me, anyway) interview with Arthur Laffer here: http://pittsburghlive.com/x/tribune-review/opinion/columnists/steigerwald/s_300457.html --Robert Oh, thank goodness! When I saw the subject line I thought you were goign to tell us that he'd died. I see the basis of his optimism, but still I feel pessimistic. Marginal federal income tax rates have fallen (although they fell lower than they are now and rose again, and actually rise about the statutory 35% Laffer mentions) and we've had little inflation, but the federal register continues to grow by leaps and bounds, federal spending grows faster than at any time since the 1960s, and Bush gave us our first new entitlement since the 1960s, while the old entitlements continue to grow out of control.
Re: Arthur Laffer
In a message dated 2/8/05 1:13:22 AM, [EMAIL PROTECTED] writes: In a message dated 2/7/05 11:46:21 PM, [EMAIL PROTECTED] writes: There's an interesting (to me, anyway) interview with Arthur Laffer here: http://pittsburghlive.com/x/tribune-review/opinion/columnists/steigerwald/s_3 00457.html --Robert Oh, thank goodness! When I saw the subject line I thought you were goign to tell us that he'd died. Gosh, I didn't even think of that! Sorry, didn't mean to scare anybody. I see the basis of his optimism, but still I feel pessimistic. Marginal federal income tax rates have fallen (although they fell lower than they are now and rose again, and actually rise about the statutory 35% Laffer mentions) and we've had little inflation, but the federal register continues to grow by leaps and bounds, federal spending grows faster than at any time since the 1960s, and Bush gave us our first new entitlement since the 1960s, while the old entitlements continue to grow out of control. Didn't the 1996 welfare reform act get rid of the AFDC entitlement? So they aren't ALL growing Also, lots of industries have been deregulated since (say) 1970. Airlines, some types of telecommunications, trucking, etc. I know, we've got a long way to go, but let's not pretend that the past was some unregulated Eden, either. --Robert Ah well, it's probably just me so far as the fear of bad news goes--just my natural pessimism. I always have the same response when my mother sends me an email with just a name in the subject: if it's a particular brother I think he's had another heart attack; if it's my dad I run through a litany of possible ailments that turned fatal. :-) I thought that AFDC still exists and that the welfare reform act of 96 merely limited the time one can spend getting certain federal benefits--which might include AFDC. In toto spending on entitlements has certainly increased, even setting aside the new Medicare prescription drug entitlement, and I understand that Medicaid especially has been growing at double-digit rates and will, even if the Republicans have th stomach to pass the Bush administration's current proposal, still grow at 7% per year. Just how deregulated are the deregulated industries? The federal government might not exercise direct regulation of prices in oil, gas, and transportation, but that doesn't preclude an ever-growing raft of regulation of these and other industries, regulation which indirectly changes the prices underlying literally millions if not billions of transactions. In transportation, furthermore, the federal govenment never degregulated the basic infrastucture--the airports--and with the creation of the Department of Homeland Security they took a step backwards by socializing airport security, which might not be much better at ferreting out terrorists but has taken an impressive leap upwards in its ability to delay and harass l law-abiding travelers. And what about the people thrown in prison for cleaning up junkyards that occasionally flood (supposedly violating the "wetlands regulations" promulgated under the Inland Waterways Act, which actually has nothing to do with wetlands at all), or whose businesses the federal government shuts down for violating the Americans With Disabilities Act, or the local officials imprisoned for refusing to quintuple local taxes to meet federal environmental regulations or other unfunded mandates? I'm not saying that nothing good has happened, but it seems like a case of one step forward, two-hundred steps back. David
Re: personal finances survey
In a message dated 11/12/04 1:42:43 PM, [EMAIL PROTECTED] writes: What's up with question 32? 52% male and 52% female? Well maybe 4 percent of them were hermaphrodites. I see that at the university where I'm teaching (NOT GMU) they're having a seminar on people who aren't 100% male or female.
Re: Now Bush to win 1.5:1
In a message dated 11/3/04 6:54:43 AM, [EMAIL PROTECTED] writes: In the end the important question is comparative - are there any other institutions that on average do better? So far direction comparisons between markets and other institutions in the field have favored markets. And real and play money have come out about the same. But the jury is still out. Robin, In this case, were the markets closer than the polls taken right before the election? Were they closer than the exit polls? The exit polls seemed to systematically inflate the numbers for Kerry, and it looks like the markets' optimism about Kerry early in the day reflected the exit polls. I'm not sure what if anything that says about markets vs. other institutions in this case, but I'd be interested to know what you think. David
Re: lotteries and elections
I've been discussing with my undergradute students the rationality of voting. People might get other benefits from voting besides thinking that their one vote can influence the outcome. Some people feel a civic pride in voting. Others vote to prevent others from telling them they don't have a right to complain, a comment complaint lobbed at people who don't vote. I like the excitement of going to the polls and seeing everyone else all keyed up about the election. Some people pick a candidate and then cheer for him or her, and then feel good about that candidate winning the election the way they would a race horse or a sports team. For some people voting might serve as a social outlet--something to do around other people instead of just staying home. What other reasons might people vote besides believing they can influence the outcome? David Levenstam In a message dated 8/31/04 12:31:37 PM, [EMAIL PROTECTED] writes: Does anyone know if there is a correlation between a person's willingness to buy lottery tickets, and his willingness to vote in large elections (where the chances of any vote being pivotal is tiny)? A simple explanation for both of these phenomena, where people choose to do things with apparently negative expected payoff, is misunderstanding or miscalculation of probabilities. This theory would predict a positive correlation. I'm curious if anyone has done a survey or experiment to test this.
Re: lotteries and elections
In a message dated 8/31/04 8:36:29 PM, [EMAIL PROTECTED] writes: A problem with many of these reasons is that they do partly rely on the illusion that their vote does matter! Expressive voting is not a completely separate issue. Why feel pride in participating in an irrational system? Why not express your political views in a more efficient way than voting? etc. It's irrational only if the cost exceeds the benefit. If someone gains a benefit from voting that exceeds their opportunity cost, then it's not irrational for them to vote. As far as other means, they mostly have much higher opportunity costs and might not actually have much more likelihood of affecting the outcome.
Re: Private urban green space
In a message dated 8/1/04 3:45:57 PM, [EMAIL PROTECTED] writes: Economists are not hostile to public goods. Still, knowledge of economics tends to make you more receptive to the idea of the invisible hand and the possibilities of private economic organization. Hence, it makes you more libertarian. And libertarians are sure hostile to the public goods scene, because there the emphasis is on things that *need* to be solved publicly. While studying economics might tend to make a person more libertarian than he'd be otherwise, studying economics doesn't necessarily make the person libertarian. The old Keynesians tended to have a fair fondness for government intervention, as summarized by Paul Samuelson's Two cheers, but not three, for markets. A Post-Keynesian instructor of mine back in 1990 told me that Post-Keynesians would say One cheer for markets.
Re: insanity vs. irrationality
What about the person, like an alcoholic or schizophrenic, who hates his extreme preferences, as they destroy his life? Setting aside the issue of involuntary treatment for the benefit of others, as we really talking only about a case of extreme preference? David Levenstam In a message dated 3/24/04 12:22:13 PM, [EMAIL PROTECTED] writes: On Mar 24, 2004, at 8:33 AM, Wei Dai wrote The paper makes the point that what psychology views as mental diseases in many cases can be interpreted simply as extreme or unusual preferences, and in those cases involuntary psychiatric treatment can not be justified as a benefit for the patient. Stephen Miller: It seems to me that a clear exception may be where there's an extreme preference to harm others. Depends on where you put the emphasis in Wei's last sentence. This might be an exception to the can not be justified part, but not an exception to the as a benefit for the patient part. In other words, in the case of a preference to harm others, involuntary treatment might be justified as a benefit to others even if it is not a benefit (i.e., is a cost) to the patient. One thing I think is missing from all this is a discussion of how these extreme preference -- or indeed, any preferences -- arise. Normally in economics we tend to take preferences as given and view the formation of preferences as outside the scope of economics. But we also normally assume preferences to be stable, when clearly they can change. Why is this relevant? Well, many psychiatric illnesses appear in previously normal people. If we are going to interpret psychiatric illnesses as extreme or unusual preferences then the onset of the illness has to be interpreted as a change in preferences. So we are necessarily dropping the usual assumption of stable preferences, and it's worth thinking about why these preferences change radically and suddenly. Likewise, for some of these illnesses there are treatments -- in other words, drugs or something that change preferences back to normal, or at least appear to move them back to normal range. Again, it is worth thinking about why these preferences change. --Robert
Re: Women Don't Ask
Um, who says the male libido decreases over the 20s and 30s? :-D David Levenstam In a message dated 1/28/04 3:05:00 PM, [EMAIL PROTECTED] writes: Following the analogy of price control, any evidence that the group advocating aggressive relationship bargining are the same ones who would generally benefit by such a policy? On a related note, do the strength of male/female bargining positions in a long term relationship change as male libido decreases over their 20's and 30's and female libido peaks around 35-38? (Think Battle of the Sexes over several periods...) Wild conjectures welcomed. -- John Morrow
Re: spamonomics
Wow, I was going to respond that I've almost never gotten an email for insurance, and then decided not to clutter up the list. When I checked my new mail again, however, I found an ad for insurance! That reminded me that in fact I have gotten many emails, mostly for cheap health insurance. David In a message dated 1/22/04 11:34:07 AM, [EMAIL PROTECTED] writes: Christopher Auld wrote: . . . Merchants who think I might be keen to see Paris Hilton perform intimate acts are third on the list. Followed closely by offers from extremely respectable officials in Nigeria . . . . For me these days, smut comes after services for insurance brokers.
Re: spamonomics
I've seen almost exactly the same distribution. As a first impression, I wonder if the Nigeria scam doesn't employ the same anonymity (from the other side) that recipients of the first three types of emails value. Tracking down a scam online might well prove more difficult than doing so over the phone, especially in these days of caller ID. The ease of mass mailings might also make email a more effective means of perpetrating a scam. I wonder too if people don't tend to believe what they read over the Internet a bit more than they do other forms of communication. When radio and films were relatively new, people tended to believe what they heard and saw. There seems to have been something of a learning curve for large populations which took them from blind faith in the 1930s to intense skepticism in the 1990s. Perhaps the same sort of thing will happen with the Internet. I know that people often pass along without any sort of verification myriad emails claiming such things as Bill Gates will pay you if you test some software or website, Bill gates will bill you if you use some software or website, Mel Gibson grew up disfigured and in poverty, people will steal your kidneys and leave you in a bathtub full of ice, etc. Perhaps oarge groups of internet users will climb up the learning curve and we'll see a reduction in Nigerian scams. David
Re: spamonomics
In a message dated 1/21/04 3:34:42 PM, [EMAIL PROTECTED] writes: I was so ignorant, until last month I thought Paris Hilton was a hotel in France ;-) Paris Hilton is both a hotel in France AND desert topping! (from an old Saturday Night Live skit it's both a floor wax AND a desert topping!) Seriously though, I had no idea who she was when I first started getting emails offering to let me see her private activities. Not until I caught an episode of that reality how called (I think) The Simple Life featuring Paris and her buddy, Nichole Richie (Lionel Richie's daughter) did I know who she was. At least when they used to send emails offering Pamela Anderson's sex video I knew who she was. David
Re: spamonomics
In a message dated 1/20/04 7:10:03 PM, [EMAIL PROTECTED] writes: AdmrlLocke wrote: People who engage in more sexual activity and alternative sexual lifestyles might feel less embarassed about admitting to auto-erotica than others, so the results might contain a great deal of skew. But should we think that an obvious possible bias would not be accounted for? I would. It happens all the time.
Re: Three Fed tools, which increases money supply over time?
In a message dated 1/14/04 11:16:54 AM, [EMAIL PROTECTED] writes: In my view, there's nothing like real numbers to get your brain juices flowing. Note the $20-30 million that the Fed pays to the US Treasury each year. Exercise for the reader: why does it make that payment? -gil The Depression-era changes to the Federal Reserve Act allow the Fed to keep half the money the Treasury pays to it in interest on the Treasury debt the Fed holds, and pay the other half back to the Treasury. Under the original act the Fed had to pay back all the interest. David
Re: How do I convince New Agers that not everybody should get the same wage?
In a message dated 1/13/04 4:08:31 PM, [EMAIL PROTECTED] writes: What would you suggest? How can I demonstrate, in a relatively short period of time, that imposing equal wages isn't the best way to organize the world? I used to do this all the time with my students in history classes at Iowa. I'd ask them if they really thought a ditch digger without a high school diploma should make as much as a doctor, a veterinarian, a lawyer, or someone else with at least two degrees, or I'd just ask them if they thought that after they graduate and get a job with their degree if they thought they should get paid as little as a ditch digger. I've yet to hear students say yes to either of those propositions. David Levenstam
Re: Oscar Political Business Cycle
Speaking of December 2003 and January 2004, in the spirit of all the predictions made each year at this time by media talking heads I'd like to make the following equally insightful predictions: In 2004, the world will experience an earthquake, a flood, and some sunny days. The US Post Office will lose somebody's mail. Somebody will make a bold peace plan which the media will hail, and which will accomplish nothing. Some people will kill other people. The US will hold a presidential election, and the victor will be either a Republican or a Democrat. Fundamentalist Muslims will hate America, nearly as much as the French and the Democrats do. Iowans will support free markets and demand ethanol subsidies. The Dow Jones Industrial Average will rise, or fall, or both. The news media will find something, somewhere to blame on Ronald Reagan. Happy Old Year, David Levenstam
Re: Why is a dollar today worth more than a dollar tomorrow?
In a message dated 12/7/03 4:03:55 PM, [EMAIL PROTECTED] writes: So the question is, why at the zero rate was there not greater demand to borrow? The answer may well be that the expected future inflation and real interest rates were highly uncertain, and the transaction costs of getting and exiting from a loan were high, and there was a high level of risk aversion. What counts is not just the cost of borrowing but also the expected return on the borrowings, and if business conditions are bad, then the demand for loanable funds may be low because of uncertain earnings or asset appreciation. The inflation part of the nominal interest has to be paid in actual dollars, and so high rates of inflation may well deter demand. A low real rate of interest induces more borrowing, other things equal, but with higher inflation and greater business uncertatainty, other things may not be equal. In other words, a person won't borrow even at a 0% rate of interest if he expects a negative rate of return were he to invest any funds he borrowed? DBL
Re: why aren't we smarter?
In a message dated 12/7/03 12:40:04 PM, [EMAIL PROTECTED] writes: Your story does have a certain plausibility. But you'd need to argue that the huge increase in IQ that has been documented during this last century isn't really an increase in intelligence. And doing that makes it harder to take Jewish IQ as relevant data. American Jews tested below average on Army intelligence tests conducted around the turn of the last century (1900), and a century later American Jews test substantially above the average. Were the Jews who fled the Nazis so much smarter than the Jews who came before that their small numbers could raise our average from below to well above the national average? Or has the national average fallen because of the crumbling public education system or the influx of (name the disfavored immigrant group of your choice). I do wonder about the meaning of IQ tests. I test out in the top 1% of the IQ distribution but have been singularly unsuccessful. Although it's anedotal, I know many other unsuccesful high IQ people as well. Clearly high IQ and success don't automatically go hand in hand. David Levenstam
Re: Real wages constant since 1964?!
In a message dated 12/3/03 1:53:31 PM, [EMAIL PROTECTED] writes: This is completely wrong. The CPI-u is, and the CPI-x was, adjusted for quality changes (see http://www.bls.gov/cpi/home.htm ). The CPI-X doesn't exist anymore. So what price statistic wasn't adjusted for quality changes? They all are. No one (who knew what he was talking about) has ever claimed that they are not adjusted. The common claim is that the adjustments (which are quite complex and differ across different types of goods) are inadequate. - - Bill In fairness I was just summarizing the arguments of Professor Richard B. MacKenzie at U of Cal Irvine, published back in 1994. If his arguments have been superseded, I stand corrected. There's not need for ad hominem attacks, generally a sign that the target has challenged one of the attacker's shibboleths. ;-)
Re: Real wages constant since 1964?!
In a message dated 12/2/03 11:48:08 AM, [EMAIL PROTECTED] writes: If you measure wages in desk calculators instead of dollars, I'm sure they've gone up substantially! ;-) --Robert Yes, the BLS series uses CPI-u to deflate the nominal wage series. Since CPI-u doesn't account for changes in the quality of goods or the market basket, and overstates inflation more the higher the actual rate of inflation, for the inflationary period from roughly 1968-1983 the BLS series understates real wages. Using a better deflator, CPI-x, which accounts for changes in the market basket (though perhaps not for changes in quality) discloses that real wages have indeed risen quite a bit since 1964. If we measure the rise in real wages in terms of desktop computers, would the increase by asymptotic to infinity? ;-) David Levenstam
Re: Why is local currency good or bad or neither?
In a message dated 10/31/03 12:21:31 PM, [EMAIL PROTECTED] writes: So why not just use federal paper dollars for that? Because if you get caught, you'll pay for it. In case of local currency, the tax authorities do not bother as easily because of the cost and the trouble with drawing the line between mutual help and legally taxable transactions. (From the econ standpoint, there's no such line. If we were to be perfectly logical about it, tending to your children is a service to your spouse with a taxable value.) People also often suffer from a confusion between income and money. They tend to think of the two as synonymous, that anything not received in money isn't income and therefore isn't taxable.
Re: Cognitive dissonance
Dear Fred, I have a conservative Christian friend in Iowa who supports the laws against drug use but will that they violate our God-given right to liberty. He says he's just not emotionally prepared to abandon his support for drug prohibition. That seems like a fairly clear cause of conscious cognitive dissonance. David Levenstam In a message dated 10/16/03 5:32:49 PM, [EMAIL PROTECTED] writes: --- Stephen Miller [EMAIL PROTECTED] wrote: do voters or people in general care if their political beliefs are logically inconsistent with each other or their non-political moral beliefs? It seems to me that for most cog-dis, the person does not realize he is holding contradictory propositions. If the contradiction is pointed out and the person reacts by simply denying it, that person may just not believe the accusation, and not want to challenge his thoughts, but still believe they are not contradictory. Does anyone have a clear example of persons who consciously hold contradictory propositions, knowing that two propositions they believe are contradictory yet still believing both? Cognitive dissidence may often be compartmentalization. In one context, one believes A=B, while in another context, one believes A=C, and one also believes that B not = C. That is because they don't move A,B,C to the same mental compartment where the contradiction would have to be confronted. Fred Foldvary
Re: What's Wrong With Blood Feuds?
People probably came to and went from Iceland much more frequently than we might presuppose. People traveled among Iceland and the continent (Norway primarily), Greenland and Vineland quite a bit, according to the available sources, until the Little Ice Age set in during the Middle Ages. Under Icelandic law if the Althing ruled against you in a case between you and a complaintant suing you, you could either submit to its judgement or be declared utlaw (outlaw), at which point you had 6 months to clear out of Iceland before you no longer could count on the legal system to protect you and anyone could come after you, your goods, and your henchment to enforce the Althing's judgement against you. Anyone siding with you became utlaw too. Eirikr the Red, father of Leif the Lucky who founded the Vinland colony, fled Iceland after being declared utlaw and founded the Greenland colony. People sailed back and forth over what at the time were much warmer seas. In a message dated 9/25/03 1:56:51 PM, [EMAIL PROTECTED] writes: I've also just been reading about modern Gypsies; it turns out that some gypsy communities (the ones mentioned were in England and Finland) use blood feud. The authors of the chapter seem to think the level of actual violence is pretty low. Their conjecture is that blood feud was abandoned in gypsy communities that for some reason became sedentary--that a migratory lifestyle made it more workable, because if things got too unpleasant one party could leave. That doesn't fit the Icelandic case--but the Icelandic system was much more developed, with explicit laws and courts, than the gypsy system.
Re: immigration's effect on per capita GDP
In a message dated 9/4/03 11:03:22 PM, [EMAIL PROTECTED] writes: No, this is a very serious point. Republican administrations are by objective measure MORE socialist. Fundamentally, conservatives in this country do not believe more in individual freedom than liberals. They repeatedly seek market interventions where they disagree with market outcomes. The only difference is a superficial anti-communism, which was really an ignorant fear that a Soviet state could out-produce western market economies. Conservatives love socialism, they just call it family values or national security. here I have to disagree with you Steve. :) The Republican party's ideology runs from classical liberal to national socialist, while the Democratic party's ideology runs from national socialist to international socialist. The Republican party may not be very good at implementing the classical liberal ideology of some of it's members, but the Democratic party has no such ideology to implement. Most of the family values, incidently, don't involve government action so much as simply trying to turn back the tide of anti-Christian sentiment which rolls off the television night after night, consistently portraying serious Christians as evil oppressors. I was sitting next to Dan Quayle one might back in Iowa when a social conservative who fits your profile tried to get Quayle to support government censorship of the entertainment media and Quayle very firmly opposed government censorship or content regulation of any sort.
Re: immigration's effect on per capita GDP
Yes, an consciously so. While I think it's clear that Republicans generally push for much less government than Democrats do, I also think you're disinclined to accept what seems manifest to me, and since as you know I haven't slept much for the past 10 days, I don't have the energy to write a lengthy discourse full of evidence that might actually persuade you. :) Maybe if I ever manage to fall asleep again. :) David In a message dated 9/5/03 3:49:52 PM, [EMAIL PROTECTED] writes: That still avoids my distinction between rhetoric and policy. on 9/5/03 3:45 PM, [EMAIL PROTECTED] at [EMAIL PROTECTED] wrote: In a message dated 9/4/03 11:03:22 PM, [EMAIL PROTECTED] writes: here I have to disagree with you Steve. :) The Republican party's ideology runs from classical liberal to national socialist, while the Democratic party's ideology runs from national socialist to international socialist. The Republican party may not be very good at implementing the classical liberal ideology of some of it's members, but the Democratic party has no such ideology to implement. Most of the family values, incidently, don't involve government action so much as simply trying to turn back the tide of anti-Christian sentiment which rolls off the television night after night, consistently portraying serious Christians as evil oppressors. I was sitting next to Dan Quayle one might back in Iowa when a social conservative who fits your profile tried to get Quayle to support government censorship of the entertainment media and Quayle very firmly opposed government censorship or content regulation of any sort.
Re: immigration's effect on per capita GDP
In a message dated 9/4/03 8:38:09 AM, [EMAIL PROTECTED] writes: Illegals knowingly break federal law. Many libertarians say they only break laws that shouldn't exist anyway. But this made me wonder. The overwhelming majority of illegal immigrants do not have libertarians views (to put it mildly). Are they also more inclined to break other laws? A tangentially related question: does a proliferation of laws that people generally don't obey cause people to generally break other laws more easily?
Re: Editors and Media Bias
Or, to quote Hayek, as socialists of all parties. David Levenstam In a message dated 9/3/03 3:57:29 PM, [EMAIL PROTECTED] writes: And with the budget under the Bush Administration outsocializing the socialist Clinton by triple and growing (in social spending alone) it isn't clear that there is any value in knowing whether media people are republican socialists or democratic socialists. Thanks(?) to our current President Hillary the democratic socilalists look as conservative as their so-called alternative. Perhaps they should be referred to only as republican socialists or democratic socialists, or simply all as socialists.
