I came across this article from CNN on the current swine flu outbreak. Trying to contextualize the possibility of an influenza pandemic, the author wrote:
"In 1968, a 'Hong Kong' flu pandemic killed about 1 million people worldwide. And in 1918, a 'Spanish' flu pandemic killed as many as 100 million people. Putting those figures into perspective about 36,000 people die from flu-related symptoms each year in the United States, according to the Centers for Disease Control and Prevention."
The first two numbers are world-wide totals, while the third figure is US-specific. Since the US has roughly 5% of the world's population, the yearly world death toll from the seasonal flu would be about 750,000. That would put it close to the 1968 Hong Kong flu and far below the Spanish flu. If you read the paragraph quickly, however you come away with the impression that the 1968 pandemic was significantly worse than the average flu season, while the 1918 pandemic was exponentially worse; in reality, only the latter is true.
Clearly, not all pandemics are equal, ranging from catastrophic to roughly equivalent to a seasonal flu. Either way, if you're going to provide context, it's good to put everything on the same scale.
Ed Glaeser wonders if the new, higher marginal tax rates in New York State will lead to an exodus of the rich:
The problem with a tax on millionaires is that the economic success of a region is closely tied to its ability to attract highly skilled workers. The figure shows that a 10 percent increase in the share of a metropolitan area’s adult population with college degrees in 1980 is associated with a 7 percent increase in that area’s income between 1980 and 2000.
Any policy that makes a place less attractive for workers with high skill and education levels, including millionaire’s taxes, carries risks since localities that are dependent on skilled workers for long-run economic success. If all states simultaneously taxed the rich, then this would be essentially a national policy with little geographic consequences, but if some states raise taxes more than others, then economic activity will respond to those taxes.
All else being equal, people will seek to live in states with lower tax rates. Of course, all else is not equal. Many northeastern states have higher tax rates (New York, New Jersey, Massachusetts), but they also have other amenities that attract highly educated and productive workers. People are attracted to the culture, vibrancy and dynamism of cities like New York and Boston, and probably wouldn't choose Fort Lauderdale just because of the tax rate.
However, as Glaeser points out, if there are lower cost alternatives within commuting distance (such as Greenwich, Conn in the case of New York City), then high income workers may choose to relocate. Given the fact that the rich are more able to afford moving, this is a completely plausible story.
It's a tough spot for cash-strapped states, but they may face situations where raising tax rates will actually lower tax revenues (yes, in very rare cases, supply-side economics does work!). However, if there are no lower tax alternatives within communiting distance, then states might be able to tax the rich without creating an exodus. If Colorado raised its income taxes, high skilled workers in Denver or Boulder will probably not move to Wyoming just to take advantage of the tax break.
Most economists--most people, in fact-- think that one of the roles of government is to provide public goods, such as infrastructure, defense and public health provisioning. So of all the things in the stimulus to criticize, these should have been deemed acceptable to Republicans (via Paul Krugman):
"So Bobby Jindal makes fun of 'volcano monitoring', and soon afterwards Mt. Redoubt erupts. Susan Collins makes sure that funds for pandemic protection are stripped from the stimulus bill, and the swine quickly attack."
While Europe and East Asia are well equipped to manufacture vaccines in the event of a flu outbreak, the US is behind the curve--there's only one factory in the entire country capable of production. No, government is not always the answer; but sometimes it is.
"Until the current crisis hit, Chile's economy was booming, fueled in part by high world prices for copper, its leading export. The government's coffers were flush with cash. (Chile's main copper company is state-owned, which may be a surprise to those who think Chile runs on a free-market model!) Students demanded more money for education, civil servants higher salaries, and politicians clamored for more spending on all kinds of social programs.
Being fully aware of Latin America's commodity boom-and-bust-cycles and recognizing that high copper prices were temporary, Velasco stood his ground and decided to do what any good macroeconomist would do: smooth intertemporal consumption by saving most of the copper surplus. He ran up the largest fiscal surpluses Chile has seen in modern times.
This didn't make Velasco very popular. Last November, public sector workers marched in downtown Santiago, burning an effigy of Velasco.
But by the time the financial crisis hit Chile, Velasco (and the Central Bank governor Jose de Gregorio, another fine macroeconomist) had accumulated a war chest equal to a stupendous 30% of GDP.
The price of copper plummeted 52 percent from Sept. 30 to year-end, and Velasco dusted off his checkbook. In the first week of January, he and Bachelet unveiled a $4 billion package of tax cuts and subsidies... Velasco’s stimulus spending, includ[ed] 40,000-peso ($68.41) handouts to 1.7 million poor families...
The surpluses accumulated during the good years has given the Chilean government unusual latitude in responding to the crisis. As a result, the economy is doing much better than its peers. As Bloomberg reports, 'the country’s economy is expected to grow 0.1 percent in 2009, as the region contracts 1.5 percent, according to the International Monetary Fund.'"
...many protesters implicitly assume that that the deficit has increased solely as a result of Barack Obama's policies. But in fact, the Congressional Budget Office was projecting a deficit of more than $1 trillion this year back in January, before any of Obama's policies had been enacted, and a cumulative deficit of $4.3 trillion through 2019. (CBO made no assumptions about what his policies might be in making its projection.)
It's true that projected deficits have gotten larger since January. But much of this resulted from deteriorating economic conditions that would have occurred even if John McCain were president. Moreover, it is absurd to assume that McCain would not have enacted any stimulus programs had he been elected.
More than likely, McCain would have proposed a stimulus plan of roughly the same size as that proposed by Obama. No doubt, it would have had a different composition--heavier on tax cuts, different kinds of tax cuts, less spending, different spending--but it wouldn't have been all that different from Obama's package given large Democratic majorities in the House and Senate and the pressure to act quickly.
I strongly suspect that many of those that loudly denounced the Obama stimulus package for its impact on the deficit would have cheered the McCain stimulus package even though it would have increased the deficit by about the same amount.
Proof of this proposition is that there were no tea parties during the years when George W. Bush was turning the surpluses of the Clinton years into massive deficits. Indeed, if concerns about deficits are the primary motivation for this week's tax protests, then these same people should have been holding demonstrations of support for Bill Clinton in 2000 when the federal government ran a budget surplus of 2.4% of the gross domestic product--equivalent to a surplus of $336 billion this year.
The truth is that the greatest addition to national indebtedness occurred in 2003 when Bush rammed through the Republican Congress a massive expansion of Medicare to provide drug benefits even though the system was already broke. According to the latest report from Medicare's trustees, the drug benefit added $7.9 trillion to the nation's indebtedness. This should have led to massive tax protests on April 15, 2004. But, of course, there weren't any. Those protesting this week were only protesting because it is a Democrat who has increased the deficit. When a Republican did worse, it's like Emily Litella used to say, "Never mind."
I'm not saying that because a Republican ran up debt, it's OK for Democrats to do it as well. But I think there are some serious misconceptions about how much the Obama administration's policies change the debt situation. First, much of the current increase in the deficit is the result of decreased tax revenues, which are the result of a bad economy. Second, the Bush administration bequeathed a number of policies that would increase the debt far enough after he left office.
We do need to get serious about government debt. But that means getting serious about health care reform, since Medicare will be the biggest cause of rising debt in the future. The current conversations are largely a diversion.
Read the whole Bartlett piece, especially his conclusion:
People should remember that while they have the right to their opinion, they are not entitled to be taken seriously. That only comes from having credibility gained by the correct presentation of facts and analysis and a willingness to be even-handed--criticizing one's own side when it is wrong and not only speaking up when the other party does the same thing.
First he was a socialist. Now he's a fascist. And Obama has only been president for three months.
Fascism seemed to be the metaphor of choice at last week's Tea Party Protests. Consider this guy:
Or this guy:
As always, we can consult the Concise Encyclopedia of Economics to find out what a term like "fascism" actually means:
"Under fascism, the state, through official cartels, controlled all aspects of manufacturing, commerce, finance, and agriculture. Planning boards set product lines, production levels, prices, wages, working conditions, and the size of firms. Licensing was ubiquitous; no economic activity could be undertaken without government permission. Levels of consumption were dictated by the state, and 'excess' incomes had to be surrendered as taxes or 'loans.' The consequent burdening of manufacturers gave advantages to foreign firms wishing to export. But since government policy aimed at autarky, or national self-sufficiency, protectionism was necessary: imports were barred or strictly controlled, leaving foreign conquest as the only avenue for access to resources unavailable domestically. Fascism was thus incompatible with peace and the international division of labor—hallmarks of liberalism."
Of course, this is a terrible and inane metaphor for current policy. There are no plans to cartelize the economy, to set production goals or to dictate wages. The government is not going to take-over large segments of the economy. In fact, the Obama administration has consistently resisted bank nationalization, and has continued the "receivership" status of AIG--a particularly strange piece of legal gymnastics, which allows the government to own 80% of the company, but completely abdicate ownership rights.
The government is increasing expenditures to combat a recession, and is propping up the banks in order to combat a financial crisis. These may or may not be the right policies (I think the Obama administration has been a mixed-bag up to this point). But these policies in no way resemble fascism. Again, from the Concise Encyclopedia:
"Fascism is to be distinguished from interventionism, or the mixed economy. Interventionism seeks to guide the market process, not eliminate it, as fascism did. Minimum-wage and antitrust laws, though they regulate the free market, are a far cry from multiyear plans from the Ministry of Economics."
We are seeing an increase in government intervention in the economy. We are not seeing fascism and we are not seeing socialism. If you look at the definitions of the words, you can see that.
On a side note, it was sad to see the word "fascism" used not only by fringe protesters, but by anchors on Fox News. As a Jew, I think that comparisons to Nazi Germany should be treated with respect. Yes, you may not like the current administration's tax policies. But they are not comparable to the Holocaust. I think conservatives and libertarians would be wise to distance themselves from people who don't get that obvious distinction.
People don't like paying taxes. I get that. I don't like paying taxes either. And it drives me crazy when the government uses its revenue for things other than public goods and providing a social safety net (ie agricultural subsidies). But I think we're going to look back in 20 years and realize that we're not undergoing the kind of radical change that some people fear.
This is all by way of saying that if you do feel that Obama's new tax proposals are onerous and a substantial and unprecedented violation of your liberty, you're not alone. Hundreds, if not multiple hundreds, of people across the country are holding gatherings in the spirit of the Boston Tea Party to let the government know how they feel:
In case you didn't know, "teabagging" refers to a sexual act. If you don't want people to make fun of you, don't call your get-togethers "teabagging parties". Some people may get the wrong idea.
With Iowa becoming the fourth state in the US to legalize gay marriage, it would seem reasonable to assume that the number of married couples (both heterosexual and homosexual) would increase. Unfortunately, when it does, the federal government won't (officially) take notice. The reason for this, is that the Census Bureau--the government's statistical agency--can't legally count these couples as married:
The federal law banning gay marriage bars the agency from counting same-sex marriages, the Census Bureau says, even though they are legal in Massachusetts, Connecticut, and, most recently, Vermont and Iowa.
Last summer, census officials announced that legally married same-sex couples would be reported as unmarried, same-sex partners.
The 1996 Defense of Marriage Act allows states to refuse recognition of gay marriages from other states, and bars the federal government from recognizing gay couples as "married". This means that when legally married gay couples are surveyed by the Census Bureau, their answers to questions pertaining to marital status will be recoded by Census Bureau statisticians.
It's not all that uncommon for research to be subject to political pressures. But the purpose of the Census Bureau is to be the nation's "leading source of quality data about the nation's people and economy". It's hard to fulfill this role when you're legally bound to deny reality.
And it's not as if this issue is going away anytime soon. According to polling and statistics expert Nate Silver, a majority of states could oppose gay marriage bans by 2012. Momentum is on the side of greater freedom and equality and if the Census Bureau wants to accurately measure marriage rates in the US, they will have to count gay married couples sooner or later.
Fortunately, New York Mayor Mike Bloomberg and City Council Speaker Christine Quinn are advocating for equality and for sanity:
"Although we understand that federal law may not recognize same-sex marriages for the purposes of administration of federal benefits programs," they wrote, "we do not believe it prevents the Census Bureau from reporting statistics from the forms of self-identifying same-sex couples married under state law, like all married couples."
I'd like to pose a question to the room, in an economy where more and more jobless flood the market: what's the right blend of networking and promotion for your colleagues, friends and loved ones? As the world becomes increasingly digital and increasing 'linked in' -- I find myself a) struggling to keep up with what everyone I've known since kindergarten is doing and b) finding the time to actually connect the dots between the many worlds I inhabit.
That being said, there are still plenty of occasions when it's easy to shine some light in the direction of someone you know, who is coincidently also doing some pretty cool things. THis week, I've got two fresh bloggers to endorse:
I was relieved to see a lengthy New York Times article today about media groups addressing Google's ongoing plan to claim rights to books and content that have expired copyrights (or orphans) and distribute them online. While the parties contesting Google's right to sole ownership to the material have an immediate interest in protecting their claim to the "up-for-grabs" content -- it's undeniable that for a worldwide readership there is a very tangible benefit to the digital and searchable content of a worldwide library Google Books has proposed (provided it remains affordable).
However, there is a larger debate at stake, more fundamental to a question most Internet publishers are battling with: who owns content? And more importantly, who should be allowed to profit from it? Typically, publishers have been the largest profiteers on content. Afterall they are the ones who have invested in reproducing, publicizing and distributing work. The originators and editors also get a cut, of course. Advertisers and liscensees pay fees to be alligned or become secondary distrubitors of the content.
However, online media models have told a very different story. Most originators and publishers are providing the content for free or remarkably low cost. Thus content has become devalued. Meanwhile, Google and other content aggregators, play a critical role in directing new readers to content but also stand to benefit equally or more from advertising dollars using the content they have not orginated. The market rewards parties that are bring the most use to a system. While content aggregrators are playing an important and monetizable role online, it is only one side of the equation. If we continue to operate an online marketplace that does not reward the people with the most upfront costs - the system will no longer be abe to support itself.
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