June 03, 2009
May 27, 2009
Conservatives discover happiness
Forget the dumb use Ross Douthat wants to make of the happiness-research literature. The fact that he acknowledges it reflects a substantial political breakthrough.
May 23, 2009
Short-Run and Long-Run Stimulus in a Single Measure
In the short run, we want households to consume more. In the long run, we want them to save more. Passing a progressive consumption tax now to take effect later provides incentives for both.
May 22, 2009
May 21, 2009
Would a Carbon Tax Make Higher Gasoline Taxes Unnecessary?
Its contribution to global warming is only a fraction of the damage done by burning a gallon of gasoline: to that add pollution, congestion, accidents, sprawl, and the vehicle-weight-and-horsepower arms races. So we should tax gasoline specifically as well as carbon emissions generically, and fix the resulting distributional issues with annual rebate checks.
May 20, 2009
Cap and Trade vs. a Carbon Tax
Both good ideas. The differences are more in the optics than in the outcomes.
Cap and Trade vs. a Carbon Tax
Both good ideas. The differences are more in the optics than in the outcomes.
May 18, 2009
May 15, 2009
April 24, 2009
"Steel-wheel interstates"
Why not spend some stimulus bucks on freight rail to protect the environment and reduce highway congestion and traffic fatalities?
March 09, 2009
Human-factors engineering, baby-seat division
If 15 to 25 infants die in parked cars every year because their parents forgot there was someone in the baby carseat, than how about redesigning baby carseats?
January 26, 2009
Just a thought: private jets and airport landing fees
Now that "private jet" is the new "welfare queen," how about making them pay market prices to take off and land at major airports?
December 29, 2008
Obama, Scrooge, and Luxury Fever
The luxury spending of the rich should be regarded as a social drag, not as a contributor to economic stimulus. But it's still pretty Scrooge-like for Paul Krugman to get on Barack Obama's case about taking a nice beach house in Hawai'i for two weeks' vacation between two years of hard work and four or eight years of *really* hard work.
December 25, 2008
Tom Friedman and public goods for the rich
Friedman is just silly to suggest that Chinese live better than Americans because they have faster trains. But it's true that making prosperous Americans better off means primarily providing more of the public goods they crave, not increasing their private incomes.
December 18, 2008
Auto bailout: why hit the workers and not the dealers?
A bankruptcy judge can stick it to the workers and the retirees. But the dealers are just as big a problem, and their racket is protected by state laws, which only Congress could sweep away.
December 17, 2008
Lesley Friedman Rosenthal on arts policy
The arts-policy debate has suffered from a lack of clarity about why public money ought to go to support art-forms that can't pay for themselves out of audience revenues. There are good answers there, but they need to be explicated. (That has long been one of Mike O'Hare's themes.) My long-time friend Lesley Friedman Rosenthal, the General Counsel of Lincoln...
December 16, 2008
Stimulus, science, and the Democrats
Nancy Pelosi wants to spend part of the stimulus money on science. Good!
December 13, 2008
Dealing with risk
Glenn Reynolds admits that some environmental problems justify regulation. Glad to hear it. Now comes the problem of actually designing a system to make the relevant decisions.
December 07, 2008
November 19, 2008
What Populism Is Not
Are cash grants to all rural residents more "populist" than agricultural subsidies? Only if one mistakenly thinks that populism has something to do with equity.
November 18, 2008
A populist substitute for farm subsidies
Take away the subsidies to landowners and make per-capita payments, declining slowly, to everyone in the counties where the subsidies used to be paid. There must be something wrong with this, but I'm having a hard time figuring out what it is.
November 17, 2008
Muzzle all the lobbyists? Not allowed (unfortunately).
Mark says we should prohibit the Big Three from lobbying against the public interest. Sadly, that's almost certainly unconstitutional. Simply firing the executives, not so much.
The auto bailout: a plea for ruthlessness
If there's to be an auto-company bailout, the stockholders and the bondholders ought to take their share of the hit. And the companies should be forbidden to spend any more money buying political influence.
October 27, 2008
Public programs for the prosperous
Just as the private economy has a thriving luxury-goods sector, governments should pay attention to things that rich folks like and that only governments can provide.
September 20, 2008
Paulson channels Cheney
$700 billion worth of absolute and unreviewable power seems rather a lot to entrust to the dying Bush Administration, doesn't it?
September 16, 2008
The AIG bailout, moral hazard, and regulation
The bailout seems necessary to prevent a full-blown financial panic. More or less wiping out the stockholders is good incentive management. The bondholders, too, should remain at risk. But the counterparties in swaps, and the insurance customers, need to be protected. And now that we have discovered that we need to guarantee swaps, we need to regulate the firms that make them.
AIG, insurance reserves, and the "fool-me-once" principle
Bailing out AIG with its policyholders' money looks like bad morals and bad policy.
March 24, 2008
February 25, 2008
Pharmaceutical marketing
It's worse than wasteful. And $70 billion is a lot of money. It wouldn't be necessary if we made physicians keep up with the literature.
February 24, 2008
Economic regulation, safety regulation, social insurance, public services, and torts
To get the benefits of high economic flexibility without the human costs, combine generous provision of public services, a strong social safety net, and tight regulation of conduct that puts health and safety at risk with loose economic regulation and tort reform.
February 22, 2008
December 13, 2007
Concerning feasibility
"Zero energy consumption" as a national goal is a physical impossibility. "Zero energy imports" as a national goal is an economic, political, and administrative impossibility. Social constraints are no less real than physical constraints. Promising the impossible is a form of lying.
December 08, 2007
Rent control v. subsidy for long-term residence
Rent control has evil results. But long-term residents of a neighborhood contribute to social capital. Why not subsidize them?
September 24, 2007
"Education for judgment"
Barbara Nelson: Policy school "is about balancing goods and bads under uncertainty."
September 14, 2007
Small price
John Boehner's right; there are things worth spending $1 trillion on. Any chance he'll notice that not all of those worthwhile expenditures involve killing people?
August 20, 2007
"Military spending is free!"
Jim Henley points to a journalistic convention with major political and policy consequences: politicians can propose huge amounts of military spending (but not domestic spending or foreign aid) without ever being asked by a reporter who's going to pay for it. And Hilzoy notes a similar convention: "hawkish" equals "serious," no matter how crazy the hawkish opinions actually are.
July 30, 2007
July 29, 2007
Why Has Relative Deprivation Always Been a Fringe Concept?
Relative deprivation isn't about envy. It's the natural result of the effect of context on evaluation.
July 13, 2007
Making old, poor smokers pay for children's health care
Elderly smokers damage their lungs. That's not a good reason to make them pay through the nose.
June 26, 2007
Do U.S. consumers support world pharmaceutical innovation?
Probably. That's not a reason not to try to squeeze down on drug prices, but it is a reason to worry about the effects of that squeeze on innovation.
June 25, 2007
Bonds instead of filters for spam control
Sounds like a good idea. But how is someone with a Yahoo email account supposed to post a bond?
May 17, 2007
Efficiency, equality, and education
Is the social return on education below the private return? There's reason to think so.
May 10, 2007
Are our moral intuitions irrelevant?
Mark argued this morning (follow-up here) that it is neither irrational nor morally wrong for Americans to place greater weight on the well-being of their fellow citizens than on that of unknown persons abroad when thinking about the desirability of expanded global trade. This observation will draw fire from consequentialist moral philosophers, who insist that the right course of action...
The scope of the moral community: an exchange
Alex Tabarrok and I discuss the tension between overcoming individual selfishness and avoiding the bad consequences of collective selfishness.
May 09, 2007
Trade and the collective-action problem
No, it's not irrational or morally wrong for Americans to care more about the well-being of other Americans than about the well-being of Belgians, any more than it's irrational or morally wrong for parents to care more for their own children than for other children. Local social capital is valuable, and ought to be tended.
March 06, 2007
The Maher-Cheney flap
Maher owes Cheney an apology. I hate to say it, because I hate to admit that there's anything too mean to say about that sumbitch, but Maher crossed the line.
February 10, 2007
(Bad) benefit-cost analysis and the HPV vaccine
One more silly argument against (quasi) mandating vaccination for the Human Papilloma Virus.
January 20, 2007
Price and cost in health care (cont'd)
Mike O'Hare is right to insist on the distinction between price and cost. But it's also necessary to distinguish average cost from marginal cost, and that's hard. Health care isn't the only way, or even the best way, to improve health, but getting a handle on health-care finance is essential to creating economic security.
January 14, 2007
Nice work, if you can get it
I love the Hacker plan for healthcare: set up a new federal insurance plan like Medicare which anyone could join, and require employers to either offer equivalent coverage or kick in to that plan. But I can't make the numbers add.
December 07, 2006
For fossil-fuel taxation
Gasoline demand is pretty inelastic in the short run, much more elastic in the longer run. And the producers wind up paying some of the tax.
November 12, 2006
Risk-spreading and the entrepreneurial spirit
Social insurance encourages entrepreneurship by making entrepreneurial failure less personally catastrophic.
November 11, 2006
Open up the VA health care system?
Apparently the VA has figured out how to deliver decent-quality service at reasonable cost. Should we let non-veterans pay for access to the VA health care system?
November 10, 2006
CAFE Pile-On
I agree with Mark and Mike that CAFE standards are a terrible tool for the goal of reducing global warming. Global warming is caused by burning carbon-based fuels. Therefore, you want to make burning those fuels more expensive. The simplest way to do so, and the way that also raises money for public programs, is a tax on carbon. Period....
The carbon-for-payroll tax trade
A carbon tax is a nice idea substantively. Pairing it with reducing the burden of payroll taxes might even make it palatable politically.
October 05, 2006
Concerning organizational recklessness
Tom Schelling explains the Enron affair, the war in Iraq, and the Foley Follies: an organization may act recklessly not because it's full of reckless people, but because it's so full of cowards that no one dares say, "We can't get away with this."
September 08, 2006
Why cost-effectiveness is sometimes the wrong decision rule
Federal transit-funding rules embody an elementary blunder in policy analysis: using cost-effectiveness in a situation where there are non-resource costs. The decision to build an elevated rail line to Dulles Airport, rather than tunneling under Tyson's Corner, is an example of how bad analysis leads to bad choices.
May 24, 2006
The rising cost of K-12 education
The schools used to get a massive implicit subsidy in the form of women and African-Americans who couldn't get good non-teaching jobs due to employment discrimination. That's gone. To maintain quality is going to cost more money.
March 28, 2006
Global warming: the case for inaction
As a teaching case, I need a short statement of the case against doing expensive things now to prevent global warming. I've written one up, and am looking for comments as to its accuracy as a statement of the case made by the opponents of taking strong action now.
The Public Fisc
Mark thinks that my public fisc problem can be solved through pay or play. That could be the case, although I have to admit to thinking that employer mandates as a tool for social policy are pretty lousy. There really is no good reason to have health care delivered through private employers in the first place. Not only that, if...
Galt, Kerry, the public fisc, and health care innovation
Jane Galt corrects me: her plan isn't John Kerry's. And Steve Teles is right: giving health care quality and innovation priority over cost control makes sense only if we can unload the health-care burden from public budgets.
Let 'er Rip on Health Care Spending? I Don't Buy It
Just below, Mark quotes Jane Galt to the effect that "health spending is great! What's the problem?" It might be that, in a pure utility maximization sense, health spending is not a problem (although on this I'm not even sure). But we're not in that pure state. First, a large amount of health care is funded by corporations (albeit subsidized...
Jane Galt asks the right question
What do we want to spend our money on that's better than health care?
January 03, 2006
Too poor to keep breathing?
In a market-based society, money conveys lots of advantages. What's wrong with letting money decide who gets kept on life suport and who has the plug pulled? Lots, as it turns out.
January 01, 2006
Paying for vaccines
If we rely on the patent system to finance the development of an AIDS vaccine, either the price of the resulting vaccine will be too high, leading to preventable deaths, or the incentive for research will be too low, leading to preventable deaths. Either the vaccine needs to be developed with public money, or we need to offer a huge prize to whoever invents a vaccine. In either case, the medicine can then be sold at is (probably low) marginal cost of production and distribution.
December 19, 2005
Hedonic pricing and lousy customer service
Jane Galt tells a sad tale about trying to deal with Dell. Doesn't this sort of thing belong in the hedonic price indices?
December 16, 2005
Spending, saving, happiness, and policy
"Jane Galt" channels Robert Frank, without entirely intending to.
December 09, 2005
"Bioethics" vs. common sense
Who could be against a system to match people who need a kidney with people willing to donate one? A bioethicist. Who else?
November 23, 2005
When are tax cuts for the rich bad even for the rich?
When what they lose in public services is more important than what they can buy with the extra cash flow.
November 08, 2005
Nix the first six update:
Nix all eight!
Negotiated discounts on prescription drugs sounds like a good idea. Bypassing the legislative process to legislate by initiative is generally a bad one.
November 07, 2005
October 26, 2005
One more reason
to move to single-payer health insurance
The current system gives employers a strong incentive to discriminate against employees with health problems. Wal-Mart has figured that out. Isn't it odd that conservatives make so much of a fuss about moral hazard (which is a real problem, despite Malcolm Gladwell's skepticism) but never seem to have heard of adverse selection?...
September 15, 2005
The devil in the details
Chester Ford, a second year MPP student at UCLA, explains why my idea about publishing missed-connection data along with on-time performance data probably wouldn't work: To get the information on how many connections are missed included in the delay database would require information on specific passengers. However, the agency charged with collecting the data is not allowed to collect or...
September 13, 2005
Perverse incentives Dep't
Scoring airlines on on-time departures and not on missed connections discourages holding connecting flights. Why hasn't that occurred to someone at the FAA?
September 01, 2005
GWB, gasoline prices, and demagogy
GWB is against "price-gouging." Does he understand that the alternative to rising gasoline prices in the face of a supply shortfall is a physical shortage and either rationing or long lines at the pump? Probably. His cynicism is truly breathtaking.
August 31, 2005
Defying Mother Nature
How should we treat private decisions to live in the path of predictable natural disasters?
August 30, 2005
Katrina and global warming
Yes, New Orleans is being flooded partly because people drive SUV's. Deal with it.
August 05, 2005
Thanks for nothing, FCC
The FCC has moved to create a virtual duopoly in high-speed internet access, by deciding that local phone companies don't have to let competing providers such as Earthlink offer service over phone lines. So your choice will be between your phone company and your cable company, which no doubt will, over time, learn to do the collusive-pricing dance without actually...
July 03, 2005
Housing prices and population growth
Low housing prices go along with rapid population growth because low housing prices attract population. No puzzle there.
June 12, 2005
The TGIF problem
Americans' reluctance to postpone retirement says something about their attitudes toward their work.
May 05, 2005
Cheap talk dep't
No, Mr. President, wishing for oil prices to come down isn't really the same as acting to reduce oil prices.
April 30, 2005
A vaccine against tooth decay?
Looks as if it's feasible. I think we should spend the money to get it done.
April 28, 2005
April 27, 2005
The battle of the bulge as a policy problem
Yes, obesity is a complex problem. But complex isn't the same as nonexistent, whatever the fast-food industry flacks pretend.
April 20, 2005
Tax inheritances as income?
Why discriminate against those who earn their money in favor of those who have it handed to them?
April 17, 2005
Protecting heirs from unearned wealth and sloth
Some thoughts from Berkeley's Mike O'Hare, stimulated by my earlier reflections on the taxation of inherited wealth: Estate and inheritance taxation I don't think there's any tax so few people pay that so many people don't understand. A few years ago artists were in a major huff because their works were valued at paint-and-canvas only when they donated them to...
April 16, 2005
Matt Yglesias, Paris Hilton, the Spirit of '76,
and Section 6166 of the Internal Revenue Code
The estate tax does not force the breakup of family-owned firms and farms, so let's not argue about whether it would be a bad thing if it did.
March 28, 2005
Notes for a talk on status hierarchy and public policy
Reducing status inequality looks like a good idea. But can it be done? Would reducing income inequality help?
March 20, 2005
March 15, 2005
Does everyone want to pay for high-quality medical care?
Focus on health care quality rather than cost? Not a bad idea, if you're prosperous. But if you're poor, money matters more.
March 04, 2005
January 31, 2005
"Mortgage interest deduction loophole?"
What loophole?
Deducting mortgage interest isn't a loophole; not paying tax on the rent you save by owning a house is.
January 26, 2005
Regulating advertising to children
Restricting advertising aimed at children isn't censorship, and liberals should be for it.
January 13, 2005
Freedom and regulation
Sarbanes-Oxley and the ADA may be bad policy. But they don't make the country "less free."
January 12, 2005
Defending the freedom to steal
The Wall Street Journal and the Heritage Foundation think that Sarbanes-Oxley (along with civil rights laws, food and drug labeling, and environmental protection) makes the nation "less free."
January 08, 2005
Poverty, hunger, and obesity
The poor in America are more likely to be obese than hungry. That invalidates some old liberal concerns and remedies without validating contemporary libertarian heartlessness.
January 03, 2005
Drug approvals and removals:
the case for a "sophisticated doctor" rule
Why should physicians and patients who know what they're doing be subject to regulations designed to protect those who don't?
December 28, 2004
More on disaster warnings
Federal employees learn about Federal snow days from the radio; the official notification arrives through channels the next day.
December 13, 2004
October 07, 2004
Besharov on pre-school programs
Universal preschool is a loser. Targeted nurse home visits are a winner.
October 06, 2004
Running short on flu vaccine
If we don't throw away lots of flu vaccine each year, we're not buying enough.
September 28, 2004
(Analytic) sinners in the hands
of an angry Brad
Why boycotting Third World goods is about the nastiest thing you could do to the people who make them.
September 26, 2004
August 19, 2004
(Why) is "price gouging" the name of a problem?
I thought we believed in free markets. Why is the period after a hurricane an exception?
August 02, 2004
Consumption taxes in theory and politics
No, abolishing the IRS isn't a good idea. But a progressive consumption tax still might be.
July 22, 2004
Unbalanced growth and educational technology
How can we make the educational sector technologically progressive?
June 25, 2004
Food, income, and hunger
The world is now producing more than enough food. Hunger results from poverty, not from food shortage.
June 04, 2004
May 20, 2004
May 13, 2004
DeLong on Kerry on health care
John Kerry wants the federal government to pick up the tab for catastrophic health care costs. Brad DeLong explains why that would be a good idea.
May 09, 2004
Science, politics, and the public health
Reflections on why wealth hasn't bought us more health, and related topics.
May 08, 2004
March 09, 2004
Is a new corporate ideology
depressing employment and wages?
Why is employment growing so much more slowly than GDP, and why are wages for the bottom half of the income distribution growing slowly or not at all? I offer some amateur thoughts in search of expert validation in my latest post on The American Street....
February 20, 2004
Public goods contributions as market signals
Last week I taught my undergraduate class the Mancur Olson model of groups and public goods. [Roughly speaking, if you want selfish people to contribute to public goods (projects that everybody benefits from whether he contributes or not), you need to create some private incentive -- something you don't get if you don't give -- to encourage them. Since political...
January 03, 2004
Let's not treat low-wage workers
as badly as Congressmen
Kevin Drum would like to see the minimum wage, whose real purchasing power has been badly eaten away by inflation, raised more often and more generously. I think I agree, but it's hard to know without better quantitative models of the low-wage labor markets than we have. In principle, a higher minimum must elminate some marginal jobs, and no one...
January 01, 2004
Models, predictions, plans, and decisions
Dr. Manhattan links to a post by Tim Blair linking to an essay by Michael Crighton. Crighton's lecture is interesting, complex, and cranky (his romanticized view of the scientific process is in flat contradiction to scientific studies of the actual scientific process). Dr. Manhattan, Tim Blair, and especially Tim Blair's commenters all boil it down to the thought (which I...
November 26, 2003
What's wrong with the Medicare drug plan?
A reader writes in to ask whether I can say in detail what's wrong with the Medicare bill. The truthful answer is that, mostly, I can't. That's what Bush & Co. are counting on: that most people won't study the issue closely enough to figure out what's going on. (As Machiavelli advises his Prince, "Many see, but only a few...
November 09, 2003
What's a great university worth?
The State of California owns and operates three of the twenty most important research universities in the United States (UC Berkeley, UC San Diego, and UCLA), one of the great biomedical research centers (UCSF), and two more campuses (Santa Barbara and Irvine) each of which is substantially better in academic terms than the flagship campus of the average state university...
Why don't we charge for rush-hour freeway access?
Crowded roads are one of the classic examples of "commons problems." If a good is rival in consumption but its use is unlimited, then it tends to get overused to the point where its value to everyone who uses it is diminished, if not extinguished. The solution is as well known as the problem: charge for use of the scarce...
October 27, 2003
And which pharmaceuticals has William Safire been using?
As Poor Richard could have told William Safire, it's better to remain silent and be thought a fool than to open one's mouth and remove all doubt. Safire's column today on prescription drug pricing and the issue of re-imports from Canada betrays a pluperfect ignorance of microeconomics. He seems to think that (1) American pharamaceutical manufacturers could collude to raise...
April 23, 2003
Thomas Schelling and the Titanic
Disagreeing with your guru always creates an interesting situation, especially when you back into it unawares. Blogging has been light of late partly because I've been teaching a big undergraduate lecture class: the introductory course in policy analysis. Having 120 students means I can't even pretend to run a discussion, and therefore I've been doing elaborate lecture notes and a...
March 24, 2003
Back to Bentham?
Richard Layard on the Economics of Happiness
What is the relationship between material wealth and overall well-being? That question is, after more than half a century of being largely excluded from the discourse of academic economics, coming back into fashion. Tibor Scitovsky's The Joyless Economy led the way, but it was so far in advance of its times as to be largely ignored despite the distinction of...
