by Tyler Cowen
on August 13, 2009 at 1:11 pm
1. Landsburg on Mankiw on cap-and-trade.
2. Cold climates erode moutain peaks; that's why the very tallest mountains are near the equator.
3. The particle zoo.
4. Brooklyn artists create their own currency.
5. An interesting theory of how some people read fast, and more here.
Gravity is also slightly weaker at the equator than at the poles, or so I’ve heard (since the Earth isn’t a perfect sphere – its spinning flattens it slightly, causing the equator to bulge a bit).
I dunno, but the Himalayas are as close to equator as Texas.
Mankiw doesn’t like it because they’re giving all the proceeds away (by giving the product away).
He wants to collect on the carbon and then offset some other taxes so the program will be tax neutral.
Politicians took the idea and then bastardized it.
Professor, do you speed read (i.e. actively trained yourself to control fixations and
avoid vocalization), or do you just read very quickly? Thanks!
Matt says: “Cap-and-trade with permit giveaway reduces the distortion in the carbon/noncarbon choice, but increases it in the labor/leisure choice. ”
That claim is clearly not true if carbon and non-carbon consumption is additively-separable. Then higher carbon taxes would lead to MORE consumption of non-carbon goods and services and more leisure, on the margin. That’s exactly what we want.
Moreover, it’s not even clear that too little consumption and too much leisure is a real problem in the U.S. I suspect most people would tell you the opposite in their own lives and in America generally.
In fact, Mankiw never comes out and says that the current cap-and-trade bill (even with the give aways) would lower welfare compared to what we have now. It seems to be a case of the perfect being the enemy of the good.
“That claim is clearly not true if carbon and non-carbon consumption is additively-separable.”
Please explain what you mean by this. A carbon tax where the proceeds are burned (or given away to previous bad actors, equivalently) reduces the payoff to labor in real terms. It increases the tax wedge between production and consumption.
“Then higher carbon taxes would lead to MORE consumption of non-carbon goods and services and more leisure, on the margin. That’s exactly what we want.”
Why do we want more leisure? This is precisely the point. We have a tax wedge between labor and consumption. Without this tax wedge we would see higher amounts of labor provided and higher consumption. A carbon tax with no reduction in other components of the tax wedge increases the distortion and reduces efficiency. Whether or not this efficiency reduction is overpowered by the efficiency gain of shifting consumption between carbon intensive and non-intensive activities seems to me to be an open question without postulating the relative sizes of the distortions.
“Moreover, it’s not even clear that too little consumption and too much leisure is a real problem in the U.S. I suspect most people would tell you the opposite in their own lives and in America generally.”
Then they are free to figure out a way to increase their leisure at the expense of their consumption. I have no idea why you think it is that the best way to increase your own leisure time is to reduce the payoff to other people’s labor. This smacks of minding other people’s business.
“In fact, Mankiw never comes out and says that the current cap-and-trade bill (even with the give aways) would lower welfare compared to what we have now. It seems to be a case of the perfect being the enemy of the good.”
No, it’s an open question without empirical evidence as to whether or not the current bill is a good idea even compared to do-nothingism. Mankiw doesn’t state categorically that the bill is worse than nothing because he doesn’t know, and neither do I???
Your arguments so far certainly haven’t done anything to convince me…
Why does the neutron plush toy cost $9.75? It should be free of charge.
That’s a joke. Get it?
I read some articles in the newspaper fast but
I would not wish to bring that method to bear
on, say, “Moby Dick”. Fast is not always better
than slow, in reading as well as many other
But with the current Congress and administration at least, there is absolutely NO prospect that other taxes would be offset and the program would be revenue neutral. Given that, the last thing we want to do is provide a handy way for the government to tap an awesome new gusher of (our) money. The best option would be no bill at all under the current administration and congress. But if we have to have a bill, better that the permits be mostly given away.
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