Month: August 2008

Find it here, he is called "Dr. Doom."  Paul Krugman interprets.  Nouriel was one member of a stellar Harvard Ph.d. class, including also Abhijit Banerjee and Alan Krueger, among others.

Paul Krugman has good column today on the threat of nationalism to globalization.

Shortly
before World War I another British author, Norman Angell, published a
famous book titled “The Great Illusion,” in which he argued that war
had become obsolete, that in the modern industrial era even military
victors lose far more than they gain. He was right – but wars kept
happening anyway….

…the belief that economic rationality always prevents war is an
equally great illusion. And today’s high degree of global economic
interdependence, which can be sustained only if all major governments
act sensibly, is more fragile than we imagine.

Jason Furman and Austan Goolsbee write:

As even Sen. McCain’s advisers have acknowledged, his health-care plan
would impose a $3.6 trillion tax increase over 10 years on workers.
Sen. McCain’s plan will count the health care you get from your
employer as if it were taxable cash income. Even after accounting for
Sen. McCain’s proposed health-care tax credits, this plan would
eventually leave tens of millions of middle-class families paying
higher taxes. In addition, as the Congressional Budget Office has
shown, this kind of plan would push people into higher tax brackets and
increase the taxes people pay as their compensation rises, raising
marginal tax rates by even more than if we let the entire Bush tax-cut
plan expire tomorrow.

The piece is interesting throughout, for instance:

Overall, Sen. Obama’s middle-class tax cuts are larger than his partial
rollbacks for families earning over $250,000, making the proposal as a
whole a net tax cut and reducing revenues to less than 18.2% of GDP —
the level of taxes that prevailed under President Reagan.

I would look more closely at the implied structure of fiscal commitments over time and what each candidate is likely to actually do (as opposed to promise) when it comes to Medicare and other health care issues.

Wayne, a loyal MR reader, writes to me:

I am going to start tipping based on an estimate of the number of checks
a waiter presents per hour divided into my estimate of what his services are
worth per hour without regard to the amount of the bill.

Of course the way it works now we tip as a percentage of the bill, paying a kind of flat tax unrelated to labor effort.  Was it really that hard to cover over the $100 bottle of wine?

Let’s assume everyone behaves that way.  In essence we would tipping on the basis of how many plates are carried and not how much value is on the plate.  The end result would be better service in poor restaurants and worse service in more expensive restaurants.  People who patronize lower-price restaurants, or order lower-price entrees, would pay more in percentage terms in the form of tips.  To some extent the price of food in these restaurants would fall to compensate and waiter wages in the restaurants would fall too.  Waiters in the fancy restaurants would become more like fixed-price servants and in fact this already has happened in some fancy resorts.

If I wanted to defend Wayne’s view, I would invoke the following claim: maybe we tip the fancy waiters to feel fancy ourselves but could there be a greater potency of tipping at lower price ranges, where waiter quality is harder to monitor?  Note also that more people eat in the lower price ranges, so shifting your tipping convention in that direction might bring a greater positive externality for society as a whole.