by the Sandwichman
Wendell Berry has an essay in the May Harper's Magazine, "Faustian Economics: Hell hath no limits." The concluding paragraph reads, in part:
"Whichever way we turn, from now on, we are going to find a limit beyond which there will be no more. To hit these limits at top speed is not a rational choice. To start slowing down, with the idea of avoiding catastrophe, is a rational choice, and a viable one if we can recover the necessary political sanity."
I glanced at the title and on the way home, before reading Berry's essay, was thinking about those limits Hell (and growth economics) hath none of. Closest to home for me is the "only so much work to go 'round" of the infamous lump-of-labor fallacy. "Sharing the work" has always only one side of an equation the other side of which was limiting the hours of labor. English factory inspector, R.J. Saunders, observed in 1848, "Further steps toward a reformation of society can never be carried out with any hope of success, unless the hours of labour be limited, and the prescribed limit strictly enforced.
For some reason, something that an English factory inspector had the temerity to suggest 160 years ago, when the condition of the working class left a whole lot to be desired, is something most Americans know they "just can't afford" today. I don't get it. Unless it's a case of that knowledge without wisdom, which, to quote Berry paraphrasing John Milton's Archangel Raphael in Paradise Lost. "is not worth a fart..."
Thursday, April 24, 2008
Back on the Carbon Trail
I’ve started working on a project related to the Western Climate Initiative, a process underway between seven US states and two Canadian provinces to put this scenic portion of the planet on a carbon budget. Because of this, I’ll be posting more frequently on topics related to climate change and how to limit it. Right now, I’m thinking of the decision to commit the WCI as a whole to auctioning only a portion, between 25 and 75%, of the carbon permits they intend to issue, distributing the rest gratis. Isn’t it generous to be handing out free money to the most polluting businesses?
Of course, it’s difficult for the general public to see just what’s going on. To remedy this, I propose the following: auction all the permits. Then take some of the money, between 75 and 25%, and deliver it to the doorstep of firms that emitted the most carbon in the past, preferably in suitcases with unmarked bills.
Maybe if you put the whole operation on YouTube people would get the point.
Of course, it’s difficult for the general public to see just what’s going on. To remedy this, I propose the following: auction all the permits. Then take some of the money, between 75 and 25%, and deliver it to the doorstep of firms that emitted the most carbon in the past, preferably in suitcases with unmarked bills.
Maybe if you put the whole operation on YouTube people would get the point.
Wednesday, April 23, 2008
The PA Catholic white working class vote
I know something about this demographic; they are my relatives: my parents are both Irish catholics from Philadelphia, both first-generation college and thus able to get out. And I'll tell you something about the people they left behind: they're not voting overwhelmingly for Hillary becuse they like her policy ideas. They're voting for her because she's white.
Monday, April 21, 2008
The Joy of Crises: My Short Cathartic Outburst
How is it that the bastards that run the country are able to turn their mistakes into opportunities? Energy shortages demand the elimination of environmental restrictions. Food shortages demand more GE crops. The housing crisis requires tax cuts for corporations.
Nothing for the people who are being plowed under by the crisis. All we have to show for our troubles is Obama and Hillary.
Nothing for the people who are being plowed under by the crisis. All we have to show for our troubles is Obama and Hillary.
The Real Problem with the Last Dem Debate: Iran
I would have signed that letter complaining about the questions asked by ABC's Gibson and Stephanopolous if someone had asked me to. However, they may have done Obama a favor in the end by giving him a dry run with this sort of trivial stuff, which the Republicans will surely hit him on hard in the general election (although it is my understanding that John McCain does not wear flag lapel pins much more than Obama does, although clearly he can get away with that better than Obama).
No, the much bigger problem with the debate was Stephanopolous asserting (in contrast with the US NIE finding unanimously agreed to by all 18 US intel agencies) that Iran is pursuing nuclear weapons and asking the Dem candidates what they would do about it. Neither called him on what garbage this assertion is, especially in light of the fatwa against nuclear weaons by Vilayat-el-faqih and Commander-in-Chief of the Iranian military, Ayatollah Ali Khamene'i. Instead they both declared how much they opposed this by Iran and supported defending Israel on the matter, although Hillary went much further than Obama, proposing a defense shield over all of the Middle East, something beyond anything advocated by either Bush or McCain. I observe that about the only media people to note the extreme nature of this declaration were Rachel Maddow and Patrick Buchanan on Olberman's show. This is far more appalling and serious than all the dreck posed in the first 45 minutes.
No, the much bigger problem with the debate was Stephanopolous asserting (in contrast with the US NIE finding unanimously agreed to by all 18 US intel agencies) that Iran is pursuing nuclear weapons and asking the Dem candidates what they would do about it. Neither called him on what garbage this assertion is, especially in light of the fatwa against nuclear weaons by Vilayat-el-faqih and Commander-in-Chief of the Iranian military, Ayatollah Ali Khamene'i. Instead they both declared how much they opposed this by Iran and supported defending Israel on the matter, although Hillary went much further than Obama, proposing a defense shield over all of the Middle East, something beyond anything advocated by either Bush or McCain. I observe that about the only media people to note the extreme nature of this declaration were Rachel Maddow and Patrick Buchanan on Olberman's show. This is far more appalling and serious than all the dreck posed in the first 45 minutes.
Friday, April 18, 2008
Food: Scarcity or Bubble?
Since climate change and financial meltdown aren’t enough for us, we’ve been handed a third crisis, the explosion in global food prices. Hunger is now, famine looms in the future.
There are two broad views of the problem, epitomized by two of this morning’s readings. Marc Lacey, reporting in the New York Times, tells us that poor Haitians are eating mud, the final link in a chain that begins with rising demand from China and other expanding economies, declining output due to drought and disease and the diversion of cropland to biofuel production. Meanwhile James Hamilton, over at Econbrowser, shows that a basket of commodities, including not only basic foods but also minerals and oil, has been rising more or less in tandem, suggesting that a financial mechanism is at work. Who is right?
Let’s take the mainstream view first. There are three proposed factors, one on the supply side and two that show up on both demand and supply.
Let’s start with supply. It continues to rise overall at the rate of about 2.5% per annum, although there are much publicized crop failures in rice. At least in the case of Australia, the collapse of rice production is the result of drought, presumably attributable to early effects of climate change. Even though this is not a principle cause of the current global crisis, if Schlenker and Roberts are right, we should be very worried about the future. (I should add that my own view, based on long run considerations concerning pest and pathogen evolution, soil quality and water mining, is that industrialized agriculture is still an unproven experiment.)
The uptick in demand is seen as resulting from economic growth and competition between food and biofuels, although both may also show up in reduced supply numbers. The first of these can be described as the conversion of hundreds of millions of formerly poor people, in China, India and parts of Latin America, into middle-class food consumers. Hamilton dumps on this, saying (of commodities in general):
He may be right about other commodities, but, in the case of food, the issue is the shift from direct grain consumption to meat, which has the potential to increase total demand far more than simply piling a little more on the plate. There are important threshold effects at work, so simple linear relationships between aggregate income and meat consumption will not necessarily capture the dynamic. While George Monbiot places great stress on diet, and rightly so, it is also the case, according to the FAO, that use of grains for animal feed is not rising faster than supply. Diversion of land for pasture would be another factor to consider, but it would show up on the supply side.
Competition with biofuels is just beginning and currently has a small effect on global demand, less than 5% of total output based on direct use but not diversion away from cereal production (as in Brazilian cane), which impacts supply. Biofuels are growing very rapidly, however, and may be significant at the margin, since, with inelastic demand in the short run, small shortages can give rise to large price spikes.
Now consider Hamilton’s case, which parallels Jeffrey Frankel. It rests on the following diagram, for which I am very grateful.
If all storable commodities have trended upward, we should look for a common cause and not get bogged down in the individual factors affecting each (which may nevertheless tell us why some are surging faster than others). His candidate: all of them are attractive stores of value in a world in which short term interest rates, in the US at least, have turned negative. This is plausible, although I would add that this argument should be examined in dynamic terms. At any point in time, a movement of real interest rates deeper into negative territory should result in a one-time increase in commodity prices. (This underlies Hamilton’s suggestion that the Fed confound the markets and refuse further cuts in the fed funds rate, which would permit a real-time experiment.) But a continuing trend toward higher commodity prices implies either a continual process of asset switching or a continual increase in funds chasing assets or both. The first, according to Hamilton’s logic, would arise if interest rates were falling over time. The second, which interests me, implies that some of the funds that have previously inflated bubbles in mortgage-backed and other dollar-denominated securities are now finding their way into commodities. I repeat: the sovereign recycling of dollars on the capital account has to find assets, and, since the flows are not based on profit expectations, they will push the prices of the assets they end up in beyond their reasonable fundamentals. (Yes, profit expectations can also be wrong, but sovereign recycling doesn’t even try to be right.) If this is happening with food it is a very, very big deal.
So where are we at? As always, we need more data. The asset-switching hypothesis really does need to be tested, pronto. The biofuel diversion is politically driven and can be stopped in its tracks if Washington and Brussels will it. In fact, I am worried that, as fuel prices increase in the years to come, simply ending biofuel mandates and subsidies will not be enough; we will need to install roadblocks. George Monbiot is right: we should eat less meat and be willing to pay more for it, as meat is shifted to marginal cropland and small niches in the farm production system. Above all, subsistence in a resource-scarce world will always be a problem when global income is distributed so unequally: the Gini coefficient for global income distribution is about .65, higher than in any single country, as Milanovic has shown. The spread of hunger in a world with so much wealth should tell us, in a blunt way, that we have a social justice problem.
In the very short run, the rich of the world should pony up and help feed the poor.
There are two broad views of the problem, epitomized by two of this morning’s readings. Marc Lacey, reporting in the New York Times, tells us that poor Haitians are eating mud, the final link in a chain that begins with rising demand from China and other expanding economies, declining output due to drought and disease and the diversion of cropland to biofuel production. Meanwhile James Hamilton, over at Econbrowser, shows that a basket of commodities, including not only basic foods but also minerals and oil, has been rising more or less in tandem, suggesting that a financial mechanism is at work. Who is right?
Let’s take the mainstream view first. There are three proposed factors, one on the supply side and two that show up on both demand and supply.
Let’s start with supply. It continues to rise overall at the rate of about 2.5% per annum, although there are much publicized crop failures in rice. At least in the case of Australia, the collapse of rice production is the result of drought, presumably attributable to early effects of climate change. Even though this is not a principle cause of the current global crisis, if Schlenker and Roberts are right, we should be very worried about the future. (I should add that my own view, based on long run considerations concerning pest and pathogen evolution, soil quality and water mining, is that industrialized agriculture is still an unproven experiment.)
The uptick in demand is seen as resulting from economic growth and competition between food and biofuels, although both may also show up in reduced supply numbers. The first of these can be described as the conversion of hundreds of millions of formerly poor people, in China, India and parts of Latin America, into middle-class food consumers. Hamilton dumps on this, saying (of commodities in general):
I also find it implausible to attribute the commodity price increase to a surge in demand. The economic news over the last three months has been very convincing that output is slowing, not accelerating.
He may be right about other commodities, but, in the case of food, the issue is the shift from direct grain consumption to meat, which has the potential to increase total demand far more than simply piling a little more on the plate. There are important threshold effects at work, so simple linear relationships between aggregate income and meat consumption will not necessarily capture the dynamic. While George Monbiot places great stress on diet, and rightly so, it is also the case, according to the FAO, that use of grains for animal feed is not rising faster than supply. Diversion of land for pasture would be another factor to consider, but it would show up on the supply side.
Competition with biofuels is just beginning and currently has a small effect on global demand, less than 5% of total output based on direct use but not diversion away from cereal production (as in Brazilian cane), which impacts supply. Biofuels are growing very rapidly, however, and may be significant at the margin, since, with inelastic demand in the short run, small shortages can give rise to large price spikes.
Now consider Hamilton’s case, which parallels Jeffrey Frankel. It rests on the following diagram, for which I am very grateful.
If all storable commodities have trended upward, we should look for a common cause and not get bogged down in the individual factors affecting each (which may nevertheless tell us why some are surging faster than others). His candidate: all of them are attractive stores of value in a world in which short term interest rates, in the US at least, have turned negative. This is plausible, although I would add that this argument should be examined in dynamic terms. At any point in time, a movement of real interest rates deeper into negative territory should result in a one-time increase in commodity prices. (This underlies Hamilton’s suggestion that the Fed confound the markets and refuse further cuts in the fed funds rate, which would permit a real-time experiment.) But a continuing trend toward higher commodity prices implies either a continual process of asset switching or a continual increase in funds chasing assets or both. The first, according to Hamilton’s logic, would arise if interest rates were falling over time. The second, which interests me, implies that some of the funds that have previously inflated bubbles in mortgage-backed and other dollar-denominated securities are now finding their way into commodities. I repeat: the sovereign recycling of dollars on the capital account has to find assets, and, since the flows are not based on profit expectations, they will push the prices of the assets they end up in beyond their reasonable fundamentals. (Yes, profit expectations can also be wrong, but sovereign recycling doesn’t even try to be right.) If this is happening with food it is a very, very big deal.
So where are we at? As always, we need more data. The asset-switching hypothesis really does need to be tested, pronto. The biofuel diversion is politically driven and can be stopped in its tracks if Washington and Brussels will it. In fact, I am worried that, as fuel prices increase in the years to come, simply ending biofuel mandates and subsidies will not be enough; we will need to install roadblocks. George Monbiot is right: we should eat less meat and be willing to pay more for it, as meat is shifted to marginal cropland and small niches in the farm production system. Above all, subsistence in a resource-scarce world will always be a problem when global income is distributed so unequally: the Gini coefficient for global income distribution is about .65, higher than in any single country, as Milanovic has shown. The spread of hunger in a world with so much wealth should tell us, in a blunt way, that we have a social justice problem.
In the very short run, the rich of the world should pony up and help feed the poor.
They're back!!!
For those of you who have missed Giblets, Fafnir and the Medium Lobster over the last nearly two years, the funniest blog ever written is back, and better than ever:
http://fafblog.blogspot.com/
http://fafblog.blogspot.com/
In Memoriam: K. Thomas Varghese
K. Thomas Varghese died this week, my old friend and former colleague from the Department of Economics at James Madison University here in Harrisonburg, Virginia. What is below the fold was written about him. Once upon a time, he really did carry a maybe message concealed in his shoe across a difficult border at considerable personal peril. He was a man of courage and honor, and I and my wife, Marina, will miss him and always remember him with fondness and gratitude. Rest in peace, Tom.
The Maybe Messenger
The maybe messenger with the maybe message
Travels by bus, he travels by plane,
He travels by boat, he travels in the mind
Of the sender of the maybe message.
Why do they wait for the long messages?
They are the ones with no conclusions.
They are not epitaphs nor epilogues,
But the dappled points of the maybe saga.
"It is just a movie," say the children,
Of the maybe saga and its manifestations.
But who is the director, the producer?
Does the State license the studio?
The interior monologuist mumbles his maybes.
The reels clatter in the movie theater of his mind.
It has all been taped and red taped,
And the critics know an unlikely story when they see one.
"There is never enough time," say the actors.
"There is too much time between the time," they say.
Where did they learn their lines?
Was the scriptwriter shot after his many awards?
If he were here he could speak to the nameless committee,
The one that decides on the final editing,
Was the maybe message a script revision?
Or was it merely a small portion of the script?
They attempted to understand in the subcommittees,
They became subconscious of the maybe message,
Perhaps it would be waylaid and misplaced,
Lost in the subconscious subcommittee's sublimations.
Buses break down and planes crash.
Customary entries can be revealing and less.
All of this and more makes the maybe message maybe,
All of the intervening meaninglessness of loss.
But at its core it is not a maybe message
It is only the means and not the ends
That are in dispute, the endless wranglings
Of the subcommittees of the self-appointed.
"They are nice guys who understand love," says one.
"They are omnipotent and omniscient and will get you," says another.
And these would agree in policy, it appears.
The nameless committee leaves the cuttings on the floor.
The maybe messenger treks a pilgrimage from India.
The tears of Moscow mights wash their dreams.
They know the dream of love drives their movie.
The maybe message is a footnote to their waiting.
June 2, 1984
The Maybe Messenger
The maybe messenger with the maybe message
Travels by bus, he travels by plane,
He travels by boat, he travels in the mind
Of the sender of the maybe message.
Why do they wait for the long messages?
They are the ones with no conclusions.
They are not epitaphs nor epilogues,
But the dappled points of the maybe saga.
"It is just a movie," say the children,
Of the maybe saga and its manifestations.
But who is the director, the producer?
Does the State license the studio?
The interior monologuist mumbles his maybes.
The reels clatter in the movie theater of his mind.
It has all been taped and red taped,
And the critics know an unlikely story when they see one.
"There is never enough time," say the actors.
"There is too much time between the time," they say.
Where did they learn their lines?
Was the scriptwriter shot after his many awards?
If he were here he could speak to the nameless committee,
The one that decides on the final editing,
Was the maybe message a script revision?
Or was it merely a small portion of the script?
They attempted to understand in the subcommittees,
They became subconscious of the maybe message,
Perhaps it would be waylaid and misplaced,
Lost in the subconscious subcommittee's sublimations.
Buses break down and planes crash.
Customary entries can be revealing and less.
All of this and more makes the maybe message maybe,
All of the intervening meaninglessness of loss.
But at its core it is not a maybe message
It is only the means and not the ends
That are in dispute, the endless wranglings
Of the subcommittees of the self-appointed.
"They are nice guys who understand love," says one.
"They are omnipotent and omniscient and will get you," says another.
And these would agree in policy, it appears.
The nameless committee leaves the cuttings on the floor.
The maybe messenger treks a pilgrimage from India.
The tears of Moscow mights wash their dreams.
They know the dream of love drives their movie.
The maybe message is a footnote to their waiting.
June 2, 1984
A Different Torture Question
You’ve heard this one: A terrorist is being held captive. He knows where a bomb is scheduled to explode in a few hours, one that would kill thousands of innocent victims. Is it OK to torture him to get the information in time to defuse the bomb? But I don’t want to argue about that one again. Try this:
You are being held captive by a foreign power. Although it is a mistake, your captors honestly believe that you are a terrorist and know where a bomb is scheduled to explode in a few hours. Is it OK for them to torture you? (Cap tip to John Rawls.)
You are being held captive by a foreign power. Although it is a mistake, your captors honestly believe that you are a terrorist and know where a bomb is scheduled to explode in a few hours. Is it OK for them to torture you? (Cap tip to John Rawls.)
Thursday, April 17, 2008
Happiness is a Warm Bit of Relative Income
David Leonhardt's column yesterday discusses a new paper by Wolpers and Stevenson that claims to debunk the Easterlin paradox. The paradox was that despite an association between income and reported happiness in cross-sectional data, in the time series big increases in income did not increase average reported happiness. An obvious interpretation is that people care about relative, not absolute, income. I have to get the paper, but from Leonhardt's account, I wonder if it answers what to me is the larger point of Easterlin and Easterlin-spawned work: that relative income matters.
The column includes a graph that shows a positive correlation between income and happiness across countries. What I want to know - I have to get the paper - is , granting that the correlation is positive for a particular country's time series, not zero, as Easterlin found, whether the correlation in a cross-section is stronger than in the time series - whether relative income matters at all. The idea that only relative income matters, that absolute income matters not at all, was never very plausible.
Got to go: I'm bitter and angry and dodging sniper fire, can't seem to find my flag lapel pin, trying to find a weatherman to see which way the wind blows, and damn if isn't Spring in poor old Northwest Ohio!
The column includes a graph that shows a positive correlation between income and happiness across countries. What I want to know - I have to get the paper - is , granting that the correlation is positive for a particular country's time series, not zero, as Easterlin found, whether the correlation in a cross-section is stronger than in the time series - whether relative income matters at all. The idea that only relative income matters, that absolute income matters not at all, was never very plausible.
Got to go: I'm bitter and angry and dodging sniper fire, can't seem to find my flag lapel pin, trying to find a weatherman to see which way the wind blows, and damn if isn't Spring in poor old Northwest Ohio!
Wednesday, April 16, 2008
3 Takes on Investment in the United States: 1
Floyd Norris's blog discussed the level of stock buybacks. This subject relates to the discussion of the relative importance of savings and investment for the economy.
Norris, Floyd. 2008. "Profits Plunge, Buybacks Don't." (7 April). New York Times Blog
Norris, Floyd. 2008. "Profits Plunge, Buybacks Don't." (7 April). New York Times Blog
The corporate love of buying back stock -- which Wall Street encourages as much as it can -- reached new heights late last year. Standard & Poor's, which has been tracking buyback data for the S.&P. 500 since 1998, reports that in the fourth quarter of last year, companies in the index had net reported profits of $68 billion -- and spent $141 billion buying back stock. That was the first quarter in which the companies managed to spend double their net income in buybacks. The third quarter of 2007 had been the first time that buybacks exceeded profits for the companies.
With that surge, 2007 goes down as the first year in which buybacks exceeded profits for an entire year. The major companies of America, as a group, are acting as if they are in liquidation and have few good investment opportunities.
In the fourth quarter, profits were down 62 percent from a year earlier, and share buybacks were up 35 percent. Howard Silverblatt, S.&P.'s keeper of the numbers reports that over the last 13 quarters, since the buyback boom started in the fourth quarter of 2004, the companies in the index reported net earnings of $2.1 trillion. They paid out $721 billion in dividends and spent $1.4 trillion in buybacks. Their total capital spending came to $1.6 trillion.
Companies -- the non-financial ones, that is -- still have plenty of cash, so Mr. Silverblatt thinks buybacks will continue at a high level, although not as high as in 2007. One reason for buybacks is to avoid dilution of earnings from the exercising of stock options. Another is to boost reported earnings per share.
3 Takes on Investment in the United States: 2
Today's Wall Street Journal also has a piece that mentions the aging of the U.S. airlines' planes. I wrote a book almost 20 years ago that discussed how Keynes neglected replacement investment. Keynes, Investment Theory and the Economic Slowdown: The Role of Replacement Investment and q‑Ratios (NY and London: St. Martin's and Macmillan, 1989). Financialization has greatly compounded the problem. Here is an extract from the article:
Lunsford, J. Lynn. 2008. "Fleet Could Be Just Plane Trouble." Wall Street Journal (16 April): p. B 1.
Lunsford, J. Lynn. 2008. "Fleet Could Be Just Plane Trouble." Wall Street Journal (16 April): p. B 1.
Delta has roughly 119 gas-guzzling McDonnell Douglas MD-88s with an average age of 18 years, and Northwest has a fleet of more than 90 Douglas DC-9s with an average age nearing 40 years old. During the past three years, the bulk of the U.S. airline industry has sat largely on the sidelines while carriers from the rest of the world placed roughly 7,000 orders for the newest, most fuel-efficient jets. As a result, both Boeing and Airbus are largely sold out of planes until at least 2012.
3 Takes on Investment in the United States: 3
Regarding the question savings glut versus investment scarcity, a week ago, I wrote to the Washington Post journalist, Steve Mufson, asking how long he thought that Exxon's stock buybacks exceeded real investment. He told me he thought it was as long as he was covering the subject -- a couple of years. Today, the Wall Street Journal has a nice piece showing the data with a remarkable upward trend in stock buybacks.
All this is further evidence of this corrosive dominance of financialization.
Anders, George. 2008. "Exxon's Stingy Capital Spending May Haunt It." Wall Street Journal (16 April): p. B 2.
All this is further evidence of this corrosive dominance of financialization.
Anders, George. 2008. "Exxon's Stingy Capital Spending May Haunt It." Wall Street Journal (16 April): p. B 2.
In 2007, Exxon spent 5.3% of revenue on exploration and capital outlays, down from 6.5% in 2003. The actual dollar amounts did increase, to $20.9 billion from $15.3 billion. But they didn't keep pace with Exxon's overall revenue growth, let alone soaring oil prices. Crude climbed to about $92 from $34 a barrel during that period. Meanwhile, the Irving, Texas, oil giant poured cash into stock buybacks. In 2007, Exxon repurchased $31.8 billion of its shares, up five-fold from the amount acquired in 2003. That activity helped earnings per share. It didn't increase oil output.
Tuesday, April 15, 2008
Virginia Tech Massacre Anniversary: Guns and Suicide
Tomorrow (April 16) is the first anniversary of the massacre/suicide at Virginia Tech. While moves have been made to restrict access to guns by the mentally disturbed, no other such moves have been made in Virginia. People like John Lott oppose such moves, arguing that allowing people to carry guns on campuses and in other public places reduces homicides (Lott has also been dumping on Obama for his supposedly bitter unhappiness with gun ownership). The data on that is a mixed bag, but another aspect of this is much clearer and a part of the VA Tech story, the very strong link between gun ownership rates and suicide rates within the US. It is just a lot easier to kill oneself if there are lots of guns around, and one does not have a chance to second guess one's intention.
I have done some digging around and guesstimate that if the US as a whole had the gun onwership rates one finds in the lowest states, we would see on the order of 10,000 fewer suicides per year in the US. That is more than the total killed on 9/11 or US military killed in Iraq. Here is a sources on suicide rates: http://www.suicidology.org/displaycommon.cfm?an=1&subarticlenbr=21. Here is a source on gun ownership: http://www.swivel.com/data_sets/show/100359. The five highest states in gun ownership are Wyoming, Montana, South Dakota, West Virginia, and Idaho. The highest states in suicide rates are Montana, Nevada, Alaska, New Mexico, and Wyoming. The five lowest states in gun ownership are D.C., New Jersey, New York, Rhode Island, and Massachusetts. The five lowest states in suicide rates are D.C., New Jersey, New York, Massachusetts, and Rhode Island.
I have done some digging around and guesstimate that if the US as a whole had the gun onwership rates one finds in the lowest states, we would see on the order of 10,000 fewer suicides per year in the US. That is more than the total killed on 9/11 or US military killed in Iraq. Here is a sources on suicide rates: http://www.suicidology.org/displaycommon.cfm?an=1&subarticlenbr=21. Here is a source on gun ownership: http://www.swivel.com/data_sets/show/100359. The five highest states in gun ownership are Wyoming, Montana, South Dakota, West Virginia, and Idaho. The highest states in suicide rates are Montana, Nevada, Alaska, New Mexico, and Wyoming. The five lowest states in gun ownership are D.C., New Jersey, New York, Rhode Island, and Massachusetts. The five lowest states in suicide rates are D.C., New Jersey, New York, Massachusetts, and Rhode Island.
John McCain Proposes More Global Warming and Fiscal Irresponsibility
A hat tip to Greg Mankiw for alerting us to this:
Greg calls this news bad news for the Pigou Club. It certainly represents McCain’s desire to pander to the average Joe. But shouldn’t we remind McCain of something Milton Friedman said: “to spend is to tax”. McCain just wants to have more deferred taxes in the form of continuing high Federal deficits. I know this is the modern GOP playbook to winning elections, but it is a terrible way to run a nation’s finances.
Update: Greg in an update brings us an analysis from Len Burman and Eric Toder that notes that suppliers would capture most of the gasoline tax reduction with little accruing to consumers. Jared Bernstein agrees:
Jared discuss other aspects of McCain’s fiscal proposals that we should really worry about.
John McCain wants the federal government to free people from paying gasoline taxes this summer and ensure that college students can secure loans this fall, a pair of proposals aimed at stemming pain from the country's troubled economy. At the same time, the certain Republican presidential nominee says Democratic rivals Barack Obama and Hillary Rodham Clinton would impose the single largest tax increase since World War II by allowing tax cuts pushed to passage by President Bush to expire." Both promise big 'change.' And a trillion dollars in new taxes over the next decade would certainly fit that description," McCain said in remarks prepared for delivery Tuesday. "All these tax increases are the fine print under the slogan of 'hope:' They're going to raise your taxes by thousands of dollars per year -- and they have the audacity to hope you don't mind." That was a play on the title of an Obama book.
Greg calls this news bad news for the Pigou Club. It certainly represents McCain’s desire to pander to the average Joe. But shouldn’t we remind McCain of something Milton Friedman said: “to spend is to tax”. McCain just wants to have more deferred taxes in the form of continuing high Federal deficits. I know this is the modern GOP playbook to winning elections, but it is a terrible way to run a nation’s finances.
Update: Greg in an update brings us an analysis from Len Burman and Eric Toder that notes that suppliers would capture most of the gasoline tax reduction with little accruing to consumers. Jared Bernstein agrees:
the gas tax holiday is smart politics but lousy policy. As Taplin aptly described, high gas prices are sending an important economic signal and jamming that signal is ill-advised. On the other hand, as one of the commenters points out, this idea could really help some strapped families. The problem is there's absolutely nothing to stop the oil companies from claiming a big chunk of this subsidy by raising the pretax price of gas at the pump. Prices go up in the summer anyway, and I'll bet you a gallon of premium that they go up even more than usual, such that some of that 18.4 cents/gallon ends up back in Exxon's wallet, not yours. Which leaves us with a nice little transfer from taxpayers to oil companies. Nice work, John.
Jared discuss other aspects of McCain’s fiscal proposals that we should really worry about.
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