by Tyler Cowen
on January 24, 2013 at 12:22 pm
1. What the Europeans will be funding in science?
2. The agricultural revolution for dogs, and should cats be eliminated from New Zealand?
3. Boudreaux and Perry on whether there is middle class stagnation.
4. The periodic table of Twitter.
5. DNA bullets.
6. Japanese ramen bowl with a built-in iPhone dock.
7. The case for eliminating the federal gas tax.
What’s bigger: Federal gas tax revenues or the value of free parking? Why don’t people who drive cars pay the full cost of operating the vehicle?
Because driving a car is one of the most fundamental entitlement programs the American governmental system offers. An entitlement which is almost impossible to change – just ask anyone familiar with trying to get around by foot or two wheels for their opinion.
Ah, so you are against SOME entitlement programs 😉
Social Security is not an entitlement program, if one accepts the idea of generational responsibility, and accepts the legal reality that only those that pay enough into it are enttitled to its benefits. Or, if one prefers, civilized obligation – not everyone feels a need to return the care they were given to allow them to reach an age where they decide this broad responsibility is not theirs.
Because democracy is five wolves and one lamb voting on what to have for dinner.
But how much of that free parking is government provided (and subsidized) rather than privately provided (and therefore unsubsidized)? Already, most state-provided parking is paid except in low-demand areas where it would not be feasible to charge (e.g. where the cost of the meter system and enforcement would exceed the potential revenues).
As I understand it, many governments have regulations mandating minimum amounts of parking that various shops etc. have provide. I.e. instead of taxing and spending the honest, explicit way, these governments are imposing a tax in kind so that some favoured group can enjoy the spoils (those spoils which aren’t just wasted a that is).
As I understand it, many governments have regulations mandating minimum amounts of parking
Because of the collective action problem of insufficient parking. Without the mandated minimum, businesses would have an incentive to provide less parking than they need, and let their customers poach parking space from neighboring businesses and local streets. That’s a cost to those other businesses and local residents. Hence the mandate.
The end result would be paid parking, which would be far less expensive than the system we have now.
Paid parking would increase costs, because of the need to collect fees and exclude non-payers. That’s why most parking is bundled rather than separately priced.
I’m really skeptical that this is a significant factor in parking for new developments — for retail centers, at any rate. The common pattern I see is developers overbuilding the parking lots and then, in follow-on phases, trying to lease the ‘out lots’ for restaurants. I just don’t believe there are a lot of developers pushing to build centers with minimal parking and local governments refusing to permit it. These developers are fully aware that virtually all of their customers arrive by car (not bus, foot, or bike).
Local government parking quotas are not normally negotiable. Yes businesses do fail because they are legally required to over allocate space to parking, but generally this over allocation is imposed upon them against their will.
Yes businesses do fail because they are legally required to over allocate space to parking, but generally this over allocation is imposed upon them against their will.
How do you know it’s “overallocated?” What is the optimal level of allocation? How do you determine that? And how do you know that businesses wouldn’t generally allocate at least the mandated minimum anyway? And how do you know that businesses fail because of the mandate? So many unsupported assumptions in your comment…
Yes businesses do fail because they are legally required to over allocate space to parking,…
Complete nonsense. Business owners know, or should know, the parking requirement before they ever open. If the investment in the business turns out to be unprofitable it is no more a consequence of the parking requirement than it is of anything else the business invested in.
Maybe it was poor planning, or poor execution, or bad luck, or who knows what, that caused the business to fail, but it wasn’t the parking requirement.
>>>How do you know it’s “overallocated?” <<<
The emptiness of parking lots on most days?
Why does that mean it’s overallocated? Most things people own are used for only a few hours a day, if that. The rest of the time, they sit idle and unused. Does that mean they’re overallocated? How many hours a day do you use your shower or your oven or your television?
My town deals with the parking issue in its downtown by charging the merchants in the area a parking surcharge, which is presumably passed on to customers, but having the parking structures and street parking be “free”. It’s worked quite well, and the town’s downtown is significantly easier to deal with than nearby towns that do old-school metered parking.
Should pedestrians have to pay for the use of the sidewalk? If not, why not – it’s a chunk of valuable real estate, paved at state expense, provided for the convenience of people who wish to use a particular mode of transportation and in the process exclude other potential uses, right?
Why don’t people who use public transportation pay the full cost of it?
Right. Gas taxes are the only way states have of collecting revenue from drivers. I guess I’m imagining paying sales tax on my car and paying several hundred dollars every year to register.
My in-laws are probably being scammed when they buy their “city sticker”. And naturally, when there’s some poor schmuck on the side of the road getting dinged a couple hundred bucks for going
5 over, that’s just Canadian Tire Money changing hands.
#6 – O tempura ! O mores !
1: As a computational neuroscientist, can I say in advance that we’re sorry for wasting all that money.
As the significant other of an Italian dev biologist I’m looking forward to a sabbatical in Europe. Get some very nice experience doing cutting edge imaging and possibly convince her to abandon this stinking fetid pool of know-nothings and pseudo-scientists. Why is I suspect you wouldn’t consider it a waste if you could participate? I mean what was the ENCODE project other than a subsidy to Illumina?
They could do more good by just giiving it back to the people who own it.
It does seem to be more money than can be prudently spent on such a project.
Cats should be eliminated from the Americas, too.
Finally, an indirect mention of GRAPHENE, the cure to the Great Stagnation: “The other project, called Graphene, is led by theoretical physicist Jari Kinaret at Chalmers University of Technology in Gothenburg, Sweden. It will develop the potential of graphene — an ultrathin, flexible and conducting form of carbon — along with related materials for applications in computing, batteries and sensors.”
I think the Boudreaux column is an important one, and it is under reported. He has recently on cafe hayek posted on lots of anecdotal examples of this real improvement in living standards – I’m curious as to whether there is any real effort to improve the measurement tools here. The CPI has added some features and improvements over the years and does include quality adjustments but certainly it seems as if something is being left out in a serious way. Here’s a call for a creation of a new and better tool, for it is also true that by just pointing out how washing machines and refridgerators….and ipods and smart devices have benefitted us that is not the same thing as pointing to a scientific measure.
I liked his column where he goes through the Sears catalog from 1974 and talks about how horrible everything is. He’s right, but I don’t think he proves what he wants to prove. So we went from wearing scratchy polyester shirts to wearing cotton shirts, or fancy blends. This is undoubtedly true, and it’s undoubtedly an improvement as far as shirts go.
Then he says that, look, your shirt’s better, your fridge is better, your toaster is better; therefore, you’re better off. But that’s just not how humanity works.
In what ways are we worse off, then? Housing is better, transportation is better, food is better, communications is better, entertainment is better, consumer electronics and appliances are better, health care is better, education is better, vacations are better, we live longer, etc., etc. Where are the losses in the middle-class standard of living that are supposed to have offset all these gains?
“offset all these gains”.
Perhaps all the borrowing that has had to take place. http://www.interfluidity.com/v2/3830.html
Also “the standard deviation of percent changes in household income rose about 30 percent between 1971 and 2008.” http://www.brookings.edu/research/papers/2013/01/household-income-volatility-dynan
Lots of uncertainty coupled with lots of borrowing appear to be the “price”.
But real household net worth has also increased substantially since the 1970s. Increased debt has been offset by a greater increase in assets.
as someone who remembers 1974, complete with three dimensions, smell and living color, I would argue that each of these “better” assertions is wildly wrong, with the exception of the food assertion, which is wrong except with respect to
people who did not care, or could not afford to care, about good food in 1974 – but there are more such people now than there were then, so maybe that is wildly wrong, too. 2012 planes are more like 1974 subways than like 1974 planes, current housing is usually shoddy unless you are very rich or built it yourself, 2012 I and thou communication is obviously worse than the 1974 equivalent, “entertainment” is too vast to be measured, health care is worse measured in result terms of obesity, diabetes, fertility, mental health and ratio of relatively pain free people to people living in pain, although I admit it is better in longevity terms, and the concept of “vacations”, like the concept of entertainment, is way too vast to be measured. I also admit there is less acne, less polyester and less of a few other measurable noxious things, but I fundamentally disagree with your comparisons. Still it would be nice to be pollyannaish, I guess.
You are completely wrong.
2012 planes are more like 1974 subways than like 1974 planes
Huh? Planes today are safer, quieter, more comfortable and more reliable than they were in 1974. In-flight entertainment options are much better. Air travel has become much cheaper, so many more people can afford to fly much more often. There are many more flights and routes, so you are much more likely to be able to find a flight that leaves when you want it to, and less likely to have to waste time making connections and waiting around in hotels or airports. Comparing flights and fares, buying tickets, selecting seats, and checking in can now all be done online, which is a huge gain in time and convenience. Weather forecasting has improved, so airlines are better able to reduce disruptions due to bad weather. And so on.
current housing is usually shoddy
Again, utter nonsense. Houses are bigger and better appointed. Better designed, more bathrooms, better heating and cooling, better insulation, better electrical and plumbing, better appliances, and so on.
health care is worse measured in result terms of obesity, diabetes, fertility, mental health and ratio of relatively pain free people to people living in pain
Health care has improved vastly. Many new drugs, surgical techniques and diagnostic tests. Including pain medication. If rates of lifestyle-related diesases such as obesity have increased, it’s because people are richer and more able to afford a sedentary lifestyle bad dietary habits, etc.
like the concept of entertainment, is way too vast to be measured
Again, nonsense. Music, movies, television, literature, theater, sports, gambling, the internet… There is much more entertainment than there used to be, and it’s much easier to obtain.
“Where are the losses in the middle-class standard of living that are supposed to have offset all these gains?”
What a completely specious article, and comment on top of it. “Housing is better”: oh really? Paying 5X as much as one would have in the 1970’s? And, higher education? SAME POINT. And, health care? Give me a break.
To connect the dots explicitly, each of the above is now an ‘asset class’, exemplifying the financialisation of the US economy. And, they are all things that one NEEDS in the 21stC, not discretionary expenditures.
This is the worst article I’ve seen linked at Marginal Revolution.
In 1974 plane travel had an aspect of randomness which has now been stolen by MBAs – often you could stretch out on several seats. You could meet people besides the poor sap stuck next to you. Yes, you paid more, but you flew less. That is not a problem for the non-greedy traveller. Also, the flight attendants were usually glad to see you, and you actually got a normal meal, almost like you were an actual human being, rather than the poor sap honey roasted peanut consumers who serve the bottom line of the chapter 11 losers who call themselves airlines today.
Houses were made of local or appropriately seasoned wood, with locally focused people who understood local weather, local challenges, and local beauty. They were not made of processed formerly moldy tropical woodstuffs blueprinted out by some Caltech secondrate semi-architect 2000 miles away.(Forgive my poetic license, I do not want to bore people with the ineluctable details of forestry science, but take my word for it, 100 years from now more 1970s middle class homes will be lived in than 2000-2010 home depot crap homes).
If you think health care is anywhere near as good now as it was 40 years ago, all I can say is, do a Judeo-Christian deed and visit an old folks home and talk to an 85 year old doctor and ask him how much he cared about his patients,. But don’t, unless you feel real lucky, tell your current doctor about what you learned. Your current doctor will be offended by the comparison.
Picasso, who wasn’t even a real artist, was the most famous painter of the day. Would you like to compare the most famous arist of 2013 to Picasso? I have no respect for Picasso at all but the answer to that is, at least he wanted to be an artist. Do you think the leading celebrity artists of today (dread words) really want to be artists?
Don’t underestimate the level of suffering caused by unwanted and frequently undeserved obesitiy, diabetes, STDs, and overmedicated mentally ill patients who have been subjected, out or respect for their greater g, to poorly educated and overcredentialed psychaitrists (who have proliferated in the last 4 decades, for reasons easily ascertainable in microeconomic textbooks). That suffering exists today, according to epidemiologists whom I respect, at approximately an order of magnitude more frequently than it did in 1974.
Finally, to change the subject, thanks for your passionate criticism of me, even if it is totally wrong. There is a lot less of truth-seeking passion now than there has been in a long time, and even though you are antagonistically clueless toward me I like to see passion in the youth of America. After all, going forward, it is going to be your country for many more years than it is going to be mine.
You’re just rambling now. None of your complaints make any sense. By any remotely rational evaluation of quality and availability, air travel, housing, health care and consumer goods and services in general have improved enormously over the past 40 years. But instead of acknowledging this, you make bizarre claims about trivial or irrelevant changes that no one cares about (“normal meal,” “appropriately seasoned wood,” etc.) or that are so obviously false as to be laughable (“health care [isn’t] anywhere near as good now as it was 40 years ago”).
Agree 100% that we are objectively better off. However, I don’t think that actually matters. What matters is subjective – whether we *feel* better off.
Think of this hypothetical — someone offers you ten million dollars, contingent on you being miserable every day for the rest of your life. Would you take it? I wouldn’t, even though my material standard of living would drastically, and objectively, improve.
Notice I’m not saying that we actually *are* more miserable than we were in ’74. I have no idea. I’m just saying that comparing fridges and toasters doesn’t even begin to answer that question.
If people generally don’t feel better off than they were in the 1970s (and I doubt that that’s actually true), perhaps part of the reason is the cottage industry of pundits falsely telling them that they aren’t better off.
One other source of anecdotes: just watch any Price is Right or other old game-show rerun from the 60’s or 70’s with prizes and dollar amounts for the prize’s value. Lots of super-expensive and tiny TV’s, home appliances, furniture, etc, with crappy cars as the “grand prizes”.
” But that’s just not how humanity works.
Actually, yes it does.
Thanks for reading my comment. You think you understand what humans long for better than I do – I guess that, objectively, there is a 50-50 chance you are right. You think because I disagree with you that I ramble – comparing my prose style to yours, I would say that rambling is in the eye of the beholder, and I cannot guess, and don’t really care, how many beholders would say you are right. I hope you commit yourself to excellence, stay away from designing medical regimens, houses, and airline amenities, and reconcile your contempt for my (extremely accurate and well-informed, or not) observations, and my reliance on well-known epidemiological numbers some day with a respect for the truth. If you still disagree with me, fine. Finally, not
that I have an eidetic memory or anything, but I spent at most 40 minutes in 1974 watching Price is Right. Almost everybody knew it was a phony show back then. People relaxed differently 40 years ago.
#7 – money quote, “In poll after poll, Americans say they are willing to invest in roads and bridges, as long as it brings about improvements they will use. This isn’t just talk; state and local referendums on raising taxes or issuing debt to pay for transportation projects usually pass.” This one sent me to the floor in a fit of hysterical laughter. This must mean that the American Society of Civil Engineers is wildly off in their estimation on the poor state of American infrastructure and that all the roads are in wonderful shape and able to carry all the traffic that’s out there. Funny that someone living in Northern Virginia would post something like this. Actually, it’s really too sad.
Of course, one would think that the basic functions of government would encompass policing, courts and roads, before you get to all the wonderful income transfers that constitute such a large share of the modern state. I think the states, feds and localities should tend to these basic functions competently before the money is spent on transfers.
The complaints about infrastructure generally are loudest when the states need money. I see bridges and roads that are in need of repair, ones in good repair and ones that are passable. I do not see a general state of disrepair and I would take the ASCE’s recommendation with a grain of salt, as they do have an interest in the matter.
I’m confused, did you read the article or not? He is saying the federal funding creates the problem of insufficient infrastructure spending.
Thanks for the summary – it was just too absurd for me to accept, but the article certainly seemed to support that view.
The issue with 7 is the vagueness about defining transportation. Look the quote Orange14 cites. First, he talks about “roads and bridges,” then about “transportation projects.” How many of those projects are roads and bridges? Roads only get 60 percent of gas tax money. The rest go to transportation projects, which can include bike trails and other uses that don’t directly pay directly for upkeep.
If you want to see what effect the Federal gasoline tax has on revenue, and want to see how cutting or increasing your favorite pet project has on the federal deficit, go to this excellent Wall Street Journal interactive website (highly recommended): http://projects.wsj.com/my-deficit-plan/
Very good link Ray!
3. I find it difficult to believe in middle class stagnation given the rapid growth of restaurants while demand for groceries has grown slowly. If the middle class is so eager to buy $7 burritos, sandwiches, and lattes, either they don’t need to save money or they’re total morons.
The big exceptions to the restaurants vs. grocery stores rule are McDonalds and Whole Foods. What does that tell you.
*I* don’t pay Federal gasoline tax, because I drive an electric car! That being said, I think other taxpayers are getting a raw deal, subsidizing electric car owners. There’s already a $10,000 federal tax credit for these cars. While I gladly take advantage of the tax breaks, HOV lane use, and not paying taxes for our roads, I’m the first to say that it’s not fair.
(Unlike most electric car owners, I at least have the decency to generate my own electricity with solar panels on the roof of my house. Most of the others simply burn coal in someone else’s neighborhood and cluck about how green they are!)
Are you from the future? PV panels on your roof and an electric car? You are the Dork King!
He must have a 20,000 sq ft ranch to power a car.
Or 500 sq ft according to my guesstimate.
On #3 Boudreaux’s argument seems to be that relative gains do not matter. As long as everyone is getting bigger pieces of the pie it doesn’t really matter how big those pieces are. If I previously was eating a crumb and now I am eating a crumb and a speck I should be happier. Don may be great at economics but I think he needs to read some psychology.
Isn’t envy one of the seven deadly sins?
It is. And if you believe in an afterlife probably you should not be worried about the size of your pie slice compared to another’s. If your life is based on logic on the other hand you might wonder why your pie slice has not increased proportionally to your productivity.
It’s not about an afterlife; it’s about how belief systems promote productivity in the here and now: Non-envy promotes productive societies instead of redistribute ones.
So you’re thinking the envy of the middle class for the rich is the cause of the increase in inequality?
If your life is based on logic on the other hand you might wonder why your pie slice has not increased proportionally to your productivity.
Maybe you’re overestimating the increase in the productivity for certain kinds of labor.
Possibly. But Boudreaux’s beef is with the middle class in general. Here is what happened to them:
And to keep with my pie analogy:
That technology has increased does not make inequality go away. No one doubts things are better for the average guy (well maybe Krugman does) but let’s face it things are a LOT better for the rich.
Your chart shows the increase in hourly productivity, but not who is responsible for it. If higher-paid workers are responsible for a larger share of the productivity gains, why don’t they deserve a larger share of the benefits?
There are other problems with this kind of comparison too. Changes in employee compensation may be a poor indicator of changes in standard of living. That’s why you need to look at changes in consumption.
It would be nice if more detailed productivity data is available. My point is all of Boudreaux’s pretty words have nothing to do with inequality. Either the pie slice has increased proportionate to the productivity increase or it hasn’t. We all agree it is nice that the pie tastes better the disagreement is on how it is sliced.
And I was wrong I see a couple of people arguing that things were better in the old days (I thought it was only Krugman). I’m 42 so maybe I haven’t seen enough to know but in my opinion things have improved tremendously.
Louis CK I think puts it well:
Major makes a great point here. If I invent a machine that doubles your productivity, to whom should the gains accrue?
Steve J appears to be assuming they should accrue entirely to the person who’s productivity was improved.
“Steve J appears to be assuming they should accrue entirely to the person who’s productivity was improved”
Yes that is true and I agree that it is a simplistic way of looking at the problem. My claim is Boudreaux is just ignoring the problem entirely. He in essence claims the inequality problem doesn’t exist because technology is improving.
“If I invent a machine that doubles your productivity, to whom should the gains accrue?”
Currently all the productivity gains are going to the capital owners. That is what people are complaining about. That is what Boudreaux is ignoring. This is the the question we should be arguing about. I don’t really care that the Sears catalog from 1960 is not as flashy as today’s.
“If I previously was eating a crumb and now I am eating a crumb and a speck I should be happier.”
The “increasing happiness” meme is ridiculous. It implies that happiness is a linear phenomenon, that technological improvement makes us happier, which also implies that humans at some time in the past were totally unhappy, moping around wishing that they had an Ipad and a condo at Cabo San Lucas and that future humans will be idiotically happy, bouncing around with a perpetual grin on their face. For sure progress has taken much of the drudgery out of day to day life but that doesn’t necessarily translate to increased happiness.
Probably happiness was the wrong choice of word. But I am not exactly sure what Boudreaux is measuring when he compares technology from the 60’s to today. He seems to be implying that we should be satisfied/happier/something with our increased technology even if we have not seen increased relative wages. I realize that my “crumb and spec” analogy is incorrect though. I think the correct analogy is “even though the size of my pie slice has remained the same I should be ?(happier) since it now tastes better”.
The slice tastes better and is also bigger. The quality of goods and services has improved, and we consume more of them.
The slice is not bigger. The whole point of this inequality debate is that wages have not increased for the middle class. You can argue as Boudreaux does that things have improved in other ways but the bottom line is dollars per hour.
No, the slice is bigger. The median real household income has increased. And as I explained, this income growth understates the growth in standard of living.
Is there an explanation for why median household income has increased (slightly) but wages have not? I am guessing/hoping that when household income is reported it is adjusted for the number of people working so that should not be the explanation.
Higher non-wage income, higher rate of employment, higher rate of full-time employment. You keep obsessing over the narrow issue of hourly wages and ignoring Boudreaux’s point that middle-class living standards have improved dramatically.
Hmmm… it sounds like you are saying we are working more. So yes I guess that indeed translates into more household income. My goal however is to work less.
I am not ignoring Boudreaux’s point that living standards have improved. I completely agree. However his comments in no way address this:
Note I’m a programmer who works from home (I am working right now) so trust me I am more than happy with the improvements we have seen. And I’m not in the group who has seen stagnant wages. I am trying to figure out why have wages stagnated and what it means for the future.
Yes, he did address that. He pointed out that wage (and income) data are not reliable indicators of changes in middle-class living standards. He also pointed out that one of the reasons for the slower increase in wages is that a larger share of employee compensation is now in the form of non-wage benefits.
Actually, as Boudreaux mentioned in the article, stagnate average wages are a statistical illusion. The fact is that wages have been increasing for all demographic groups, but the size of each group measured has changed.
Again I am not arguing that living standards have not improved. Thanks to the computer revolution pretty much everything is better. But are you denying that wealth is more concentrated now than it was in 60s? Economic mobility is decreasing. Sure the bottom is getting better but they’d like some chance to get to the top. The more wealth concentrates at the top the harder it is to get there.
I doubt that economic mobility is decreasing. The claims I have seen that it is are based on a very selective reading of the evidence. I also think it’s not at all clear what’s happened with economic inequality. (And please don’t cite *income* data again in an effort to prove otherwise. Economic status is more complicated than just income). And I don’t think increasing inequality is necessarily a bad thing anyway.
Thomas I think you are missing the point of Simpson’s Paradox. The paradox can only happen when you are sampling a population. The data we have for household income is IRS data for everyone who pays taxes. This isn’t a sample. This is everybody.
Major we seem to be having a problem agreeing on the facts. This same problem happened for conservatives on the election polls and they found that they were living in an alternate (and incorrect) reality. This conversation closely matches the first paragraph here:
Since you have conceded that middle-class living standards have improved dramatically, which is Boudreaux’s central point, I’m not sure what disagreement over facts you’re referring to. As for Krugman, he doesn’t actually dispute Boudreaux’s central claim either. He just offers a narrow technical criticism of one piece of evidence cited by Boudreaux (share of income spent on “basics.”) But even that criticism is mostly irrelevant to Boudreax’s point. Given that purchasing power has increased dramatically, the same share of income buys much more and/or much better products and services. That’s why middle-class housing is so much bigger and better, automobiles are so much better, there is so much more variety of food, etc. now than there was in the 1970s.
Well I think you are right it is best to keep in mind we are arguing about first world problems – how to divide up all the riches we have. It’s tough being an American in the 21st century.
Since they let New Zealand go to the Dogs, they might as well get rid of cats.
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