However, in checking my (physical) mail today, I decided that a good first step would be a carbon tax on junk mail, the production and delivery of which increase carbon emissions and reduce the number of natural carbon scrubbers (trees) in the world. There is no citizen lobby on behalf of junk mail--everyone hates it. And as in the case of telemarketing calls, public disdain for junk mail probably trumps the business lobby.

While feasible administration would seem a barrier to a junk-mail tax, if you really think about it, you receive virtually nothing but junk mail from banks and other junk mailers. It would be easy enough to set-up a system that separates junk from non-junk for the purposes of taxation, and the tax would be levied by way of a higher price of postage.

The big problem, of course, is that Congress would no doubt debate endlessly over what constitutes "junk" and how to establish either an opt-in or opt-out system. There also would be great debate over whether to earmark the revenue for "green" government programs. Nonetheless, targeting junk mailers would be the easiest segue into general carbon taxation, I think.

Why not let local residents decide what kind of high school to buy? According to the Boston Globe, Mr Cahill explains his position as follows:

One community should not be able to provide better opportunities for kids versus another community just because they have the money.

In essence, Mr Cahill does not want the residents of Wellesley--a group with higher-than-average income--to spend their own money on their children.

Aquí tenemos a uno de los economistas más famosos del mundo, Gregory Mankiw. Ex-asesor de la administración Bush, actualmente profesor de Harvard, autor de manuales universitarios de referencia y creador de este blog.

El dilema al que se enfrenta en su blog es que el distrito en el que vive, compuesto por familias de clase alta, quiere construir un instituto PERO la autoridad superior no quiere financiarlo ya que considera que ese instituto es demasiado avanzado y que provocaría desigualdad de oportunidades respecto a otros distritos más pobres.

A colación de este conflicto me gustaría expresar la injusticia de la educación privada con sus propios destinatarios. En el caso de Mankiw, si sus hijos fuesen a ese gran instituto probablemente tendrían más probabilidades de llegar a ser, al igual que su padre, eminentes profesores de Harvard, pero nunca estarían seguros de si lo conseguido es fruto de su esfuerzo personal o simplemente de una herencia familiar.

El privilegio, la educación privada y la desigualdad de oportunidades no son sólo un injusto castigo para aquellos que comenten el delito de nacer pobres, sino también la condena de los ricos a vivir sin orgullo por lo que puedan conseguir en sus vidas. A fin de cuentas, siempre les quedaría una eterna pregunta: ¿lo hubiese conseguido sin la ayuda de papá?

I found this link through Greg Mankiw's blog. As an economist, I love him. As a political citizen, I have no idea how he could have worked for Bush.

The article is spot-on, up until the last point. I don't love the biofuels movement, and won't until it demonstrates itself as sustainable. At this point, we're just looking at another commodity as a silver bullet. And one that isn't as stable as oil, at that! I'd be with Honda on hydrogen power, if it didn't cost over $100,000 to make a $50,000 vehicle.

Also, I toootally figured out how to make links! Learn something new every day!

- Vi kan ikke høre på synspunktene til en elite som alltid vil gjøre ting verre for et stort flertall av amerikanerne.

Dette er det samme som FrP gjorde i gamle dager (nå går de litt stillere i dørene offentlig). Etter at de gang på gang rettmessig ble kritisert av økonomer, ble økonomene nedsettende kalt vever- og skredderøkonomer, hvilket selvsagt overhodet ikke var positivt ment. Interessant i denne saken er det at professorene Greg Mankiw og Paul Krugman mener akkurat det samme. Det skjer cirka en gang hvert skuddår. Interessant, men ikke overraskende, forslaget må være et av de dummeste i hele valgkampen.

Det er feil type skattekutt, det er å gi bort penger til diverse regimer i Midt-Østen, det gir fryktelig lite nytte og det er skrekkelig lite miljøvennlig. Men det går sikkert hjem hos mange velgere.

I've decided it's time for another Economics related club.  I hereby found the Pritchett Club, after Lant Pritchett.  The club will restrict its membership to enlightened individuals who realize that if rich countries allowed more open immigration policies, the gains to the world's poor would be enormous.

Let me begin by accepting Bryan Caplan.  He blogged earlier today about a quick, effective fix for Haiti's food shortage.

The Pope is also currently under consideration.

Charleton Lamb  in The Harvard Crimson, suggests 15 speech traces, e.g.:

1) In order to close the federal deficit, marijuana will be legalized and taxed. Even with the tax, it will be cheaper than what you’re paying in Central Square. 

3) Instead of a speech, he will actually hover over the Yard in a helicopter and drop fistfuls of cash. 

4) The government will seize half of the Harvard endowment under the authority of The Patriot Act. 

5) He will give everyone a free lunch just to stick it to Mankiw. 

6) He will debut his new reality show, in which he and Chuck Norris solve the mortgage crisis by breaking every jaw on Wall Street. 

9) Harvard will merge with Bernanke’s other alma mater—MIT. He swears it’s more economical this way. 

11) The new $20 bill will have a four-color depiction of the moment when Jim told Pam he loves her. 

14) He’s already admitted that the Fed caused the Great Depression, so now he’ll reveal that the Fed killed party grants  too.

P.S. Search "party grants" on Google: you'll find out, always on The Harvard Crimson (ranging FD Roosevelt and J Kennedy among past writers), what's  the trouble about party grants uncertainty at Harvard.

• All economists from Adam Smith to his own Harvard freshmen know that free trade is a no-brain win for all constituencies
• Stupid Americans don't understand free trade benefits because they prefer Lou Dobbs to economic literature
• McCain is a sensible free-trade candidate while Democratic anti-trade rhetoric is pandering to aforementioned stupid Americans

The article is worth a read if you're craving a healthy dose of:

1. Elitism: Mankiw even refers to a caricature of working class Americans as "Joe Sixpack"
2. Authoritative hand waving: within three paragraphs, Mankiw equates free trade with "greater overall prosperity"

It turns out that if blue collar workers did prefer economics literature, they would surely find some fuel for the anti-trade flame, although you'd never know it from glib public experts like Mankiw. Dani Rodrik, another very powerful Harvard economist has raised a flag. Rodrik argues that establishment economists' public enthusiasm for trade ignores the nuanced economic literature and empirical evidence that show real disadvantages for some constituencies.

Professor Dean Baker's recent trade paper provides an excellent and accessible review of existing studies. Specifically, we learn that American blue-collar workers have lost between $1,000 and $2,900 in yearly salary to free trade. Trade may be a large reason that blue collar wages have not kept pace with inflation for the past thirty years, despite high economic growth.

Of course there have also been winners from trade (note: this post treats costs and benefits in America, leaving important benefits to workers in developing countries for another discussion): specifically white collar workers and the owners of capital (rich people) have benefited. These are the "haves and the have-mores," whom Bush famously addressed: "Some people call you the elite. I call you my base." Mankiw has served as a top Bush adviser. As a consequence, Mankiw's idea of "greater overall prosperity" may mean something different than it does for "Joe Sixpack."

Ironically, this entire discussion supports a fundamental postulate of market ideologues like Mankiw: people act in their own self interest. Perhaps the majority of Americans are against free trade not because they are incapable of a lesson taught to Harvard freshman, but because it is against their self-interest. Perhaps some public economists ignore the disadvantages and nuances of empirical work on trade because of their position in society.

Personally, I tend to favor free trade, although I'm learning that there are many questions. We must challenge Mankiw and other econ 101 ideology. Most of all, economists need to speak up about mixed empirical evidence for the unfettered market fervor that has swept elite policy debate over the past twenty years.

[NYT]

"Economic View

My birthday wish is for all of us to stop asking what the government can do for us today. Instead, we should focus on what we can do together to prepare the economy for our children and grandchildren. That means getting ready to care more for ourselves in old age, perhaps by retiring later, perhaps by saving more. I hope that when I celebrate my 100th birthday in 2058, my descendants won’t look upon Grandpa and his generation as the biggest economic problem of their time.

Indeed.

Perhaps I have too much Harvard pride, but I'd really prefer to see a professor from Harvard take over the post. Feldstein's work over the years has been really amazing. I've been in the NBER a few times now, and Feldstein - even in casual conversation - is completely aware of the latest releases, studies, and papers written. I'll definitely miss that resource.

Listen Now [3 min 47 sec] add to playlist

Morning Edition, December 20, 2007 · A so-called carbon tax would put a price on any carbon released into the atmosphere. But even for the greenest voters, a tax increase that would help the environment is likely to be a hard sell. "There's no question that, politically, tax is a four-letter word. But we have to really convince voters that this is not an overall tax increase; it's really a tax shift," said Gregory Mankiw, an economist and former chairman of President Bush's Council of Economic Advisors.

Mankiw, who supports a tax, speaks with John Ydstie.

mankiw's op-ed in nytimes 16 sept. 2007:

Those vying for elected office, however, are reluctant to sign on to this agenda. Their political consultants are no fans of taxes, Pigovian or otherwise. Republican consultants advise using the word “tax” only if followed immediately by the word “cut.” Democratic consultants recommend the word “tax” be followed by “on the rich.”

Yet this natural aversion to carbon taxes can be overcome if the revenue from the tax is used to reduce other taxes. By itself, a carbon tax would raise the tax burden on anyone who drives a car or uses electricity produced with fossil fuels, which means just about everybody. Some might fear this would be particularly hard on the poor and middle class.

But Gilbert Metcalf, a professor of economics at Tufts, has shown how revenue from a carbon tax could be used to reduce payroll taxes in a way that would leave the distribution of total tax burden approximately unchanged. He proposes a tax of $15 per metric ton of carbon dioxide, together with a rebate of the federal payroll tax on the first $3,660 of earnings for each worker.

A summary:

1. The right sees large deadweight losses associated with taxation and, therefore, is worried about the growth of government as a share in the economy. The left sees smaller elasticities of supply and demand and, therefore, is less worried about the distortionary effect of taxes.
2. The right sees externalities as an occasional market failure that calls for government intervention, but sees this as relatively rare exception to the general rule that markets lead to efficient allocations. The left sees externalities as more pervasive.
3. The right sees competition as a pervasive feature of the economy and market power as typically limited both in magnitude and duration. The left sees large corporations with substantial degrees of monopoly power that need to be checked by active antitrust policy.
4. The right sees people as largely rational, doing the best the can given the constraints they face. The left sees people making systematic errors and believe that it is the government role’s to protect people from their own mistakes.
5. The right sees government as a terribly inefficient mechanism for allocating resources, subject to special-interest politics at best and rampant corruption at worst. The left sees government as the main institution that can counterbalance the effects of the all-too-powerful marketplace.
6. There is one last issue that divides the right and the left—perhaps the most important one. That concerns the issue of income distribution. Is the market-based distribution of income fair or unfair, and if unfair, what should the government do about it? That is such a big topic that I will devote the entire next lecture to it.

I strongly disagree with #2. See my post from yesterday. I think both parties benefit equally from market intervention. While historically, a "conservative" believes in a non-interventionist theory of market control, I do not think politicians generally follow this rule. I think they advocate intervention when it benefits them politically or personally - regardless of theory.

Curious to hear more feedback.

given that there is a MARKET FOR TEXTBOOKS THAT PROFESSORS CHOOSE, maybe reveaud should rethink his argument.

International Student Edition
Author: N. Gregory Mankiw (Harvard University)
Year of publication: 2007
Publisher: Thomson South-Western
Features/Description:
Book is in good and clean condition with unmarked pages. Suitable for both 'A' Level students or undergraduates.

Interested Buyers:
Please contact seller at yyee_ying@yahoo.com.sg to negotiate terms of purchase.

Offered Price: $30.00

Thus, as a first approximation, the plan increases the progressivity of the tax code by redistributing income from the very rich (e.g., CEOs, hedge fund managers, superstar athletes and actors) to the upper middle class (e.g., doctors, lawyers, congressmen).