Assorted links

1. Did the Irish have any choice?  I am still waiting to hear about the preferred Keynesian alternative, beyond "the Germans should pay for it."

2. NYT symposium: what does a recovery look like?  Is this it?

3. Todd Henderson update, and another update.

4. The ongoing stall of high-speed rail in the U.S.  

5. Patriotism and tax compliance.

Comments

Abstract of the "We study the effects of patriotism on tax compliance. In particular, we assume that individuals feel a (random draw of) warm glow from honestly paying their taxes. A higher expected warm glow reduces the government's optimal audit probability and yields higher tax compliance. Second, individuals with higher warm glow are less likely to evade taxes. This prediction is confirmed empirically by a multivariate analysis on the individual level while controlling for several other potentially confounding factors. The findings survive a variety of robustness checks, including an instrumental variables estimation to tackle the possible endogeneity of patriotism. On the aggregate level, we provide evidence for a negative correlation between average patriotic warm glow and the size of the shadow economy across several countries."

By this standard, Timothy Geithner and Christine O'Donnell are 'unpatriotic'. Of course, this raises the question of whether patriotism (i.e., loyalty to a particular nation state) is a good thing.

So Todd Henderson deleted his posts under the guise of seeking privacy, but just announced to the world he spent his summer in the NICU???

I suspect "privacy" would not have been an issue if people hadn't uniformly rejected his sniveling piece.

I hope Todd Henderson is able to cry himself to sleep tonight.

Eric,

Todd's main failing was an ignorance over how many dirtbags there are on The Left.

Although Todd complains about taxes, he and his wife are both supported by taxpayers. The Federal Government subsidizes his and his wife's jobs through government grants and student loan subsidies.

Because of the government's interference with the high education market, Todd is able to receive an artificially high salary. His wife, too, no doubt works in facilities funded by taxpayer grants.

He thus has no moral superiority on the issue, since he's a recipient of taxpayer largess.

It took decades for the world to realize that communism's faults were centered on the arrogant, intrinsic belief that one person or one government could predict and supply the aggregate demand of the people of an economy.

We have spent countless dollars researching economics only to admire the unsustainable growth model of a country with no labor standards, a marginally flexible currency, and an information black-hole that restricts market information to the people they are trying to manipulate into working in their economy.

When are we going to realize that we do not need to admire any other economy because our capitalist and market economy is the only long-term strategy to sustained growth. The USA ended up in our current recession (in real terms, "deflation") because of the market manipulation that the government imposed/allowed in the housing market. Just ask yourself, without the US government why would people have houses they couldn't afford?

At one time I had a mortgage deduction. Now I have no moral authority to argue against mortgage deductions! Nonsense.

"At one time I had a mortgage deduction. Now I have no moral authority to argue against mortgage deductions! Nonsense."

You used a policy to enrich yourself. Now that you no longer need that policy, you want it taken away. Outside of the University of Chicago or George Mason, you do indeed lack moral authority.

how did "warm glow" make it into the highest levels of the abstract for the tax evasion paper? i thought there would be a more technical term for it!

"What people seem to be repulsed by is the audacious claim that he is like normal Americans - as in, one of those "let them eat cake" gaffes."

That you and the rest of your morally superior ilk see this as a "let them eat cake" gaffe is profoundly telling, and instructive as to why there can be no rational - rational - discussion on any number of political, social or economic issues today.

No Mike, I bought a smaller house so that now I am not getting enriched. As usual, you are bass ackwards, not even considering how destructive the mortgage deduction has proven to be. The government doesn't even give people the money for the loans. They just provide the idiotic guarantee system that is going to fail just like their housing shenanigans did.

And as for Henderson, they have about $200k in student loans and pay probably $100k in taxes each year. Even if you say they owe all their cost of education to government I'd say they earned their moral authority on that issue a few years ago. No, just because the government does a little here and there doesn't mean that we owe them anything. We're even. The sad thing is, a lot of people assume that the government is helping them out because their life is pretty good- but not for long.

I know your side doesn't get it Mike, they haven't got it in 200 years so I'm not holding my breath, but expanding debt for education or houses doesn't really help people...other than bankers and bureaucrats that is.

I oppose the mortgage deduction. I am also not left wing.

I am right wing, and as such, recognize that the government's manipulation of the higher education and medical markets makes Todd a recipient of federal largess.

Basic economic question: What would happen to the higher education market if the government stepped out of it? You will not hear many on-the-take professors raising that issue, will you?

Yes, and Mike, if the Government becomes involved in everything, does that mean noone can complain any longer?

I actually think that what they are trying to do to dupe people who think that is logical. Of course that is what they are trying to do. And you buy it.

Mike you bought the line that we owe whatever the government says we owe because they made us who we are (this is what education also tries to con us with).

We are in this discussion not because of professor Henderson but because the government has to increase taxes because they have not given us our best aspects, but because they have royally screwed us.

'Will the hobgoblin of high-speed rail never stop stalking this fair land?'
Nope - but then, that is because it seems like the U.S. simply isn't capable of it.

On the other side of the Atlantic, another air route is being opened up to competition - between London and Frankfurt. Using, to a major extent, French nuclear power - the ICE / TGV systems don't require oil in any significant sense to transport people with roughly the same travel times as aircraft.

http://www.guardian.co.uk/world/2010/sep/19/london-frankfurt-train-high-speed

And do note this quote from the article - 'But rail experts expect it to open up Britain to a new market for rail travel and put downward pressure on Eurostar fares.' Competition not only between rail and air, but between rail companies. Which follows this - 'Eurostar, the Paris and Brussels service that operates from St Pancras, has been a success since its 1994 debut, now carrying more than 9 million passengers and taking three-quarters of the air and rail market between London and the French and Belgian capitals.'

And to close - 'It's not only journey time that's important. European high-speed trains typically achieve punctuality of 90-95% on time or within 15 minutes, whereas European airlines struggle to reach 63-68%. And with WiFi and power sockets for laptops, a train journey is often more productive.

As air travel gets slower, rail gets faster. New high-speed lines have made rail a serious player on routes such as Paris-Amsterdam (3 hrs 20 minutes), Paris-Frankfurt (3 hrs 55 minutes), Barcelona-Madrid (2 hrs 40 minutes) and Milan-Rome (3 hrs).'

Well, at least Americans can comfort themselves with the fact that just because Europe, Japan, and most likely China can create functional high speed rail networks, there is no reason to compare the U.S. with first class nations when it comes to state of the art technology. After all, the U.S. gave up competing in the real world roughly around the time it elected a B-movie actor to play the role of president.

And any day now, I'm sure, Boeing will actually begin delivering its most appropriately named Dreamliner - only a piddling 3 or so years behind schedule for the first delivery of a working aircraft. While the A380 flies between high speed rail serviced markets like Frankfurt and Tokyo, Americans can keep making excuses about how impractical both high speed rail and superjumbos are. It isn't as if anyone actually using them cares much about American opinions at this point.

Although Todd complains about taxes, he and his wife are both supported by taxpayers. The Federal Government subsidizes his and his wife's jobs through government grants and student loan subsidies.

Because of the government's interference with the high education market, Todd is able to receive an artificially high salary. His wife, too, no doubt works in facilities funded by taxpayer grants.

He thus has no moral superiority on the issue, since he's a recipient of taxpayer largess.

This is absurd. In order to obtain proper moral standing to complain Todd should give up working in higher education because government supports it through no choice of his own? His wife should abandon the health care field because government money finds its way into this sector as well, again through no choice of her own?

By this logic -- a term I use loosely -- a small business owner probably can't complain either as they may well have received a few dollars from someone who spent part of their government-provided unemployment check there. The possibilities are endless.

I'll grant you hypocrisy if either Todd or his wife are out actively lobbying for more government money, but I have no reason to think this is the case. Your position is completely unreasonable.

Andrew,

they have about $200k in student loans and pay probably $100k in taxes each year

IIRC the actual figure is close to $500K.

And by what logic does paying taxes equal to one's student loans earn one moral authority?

Could it be that you are suggesting that the loans were a wise investment by the government, because the increase in the Hendersons' productivity and tax payments more than made up for the cost? I'd buy that argument easily, but I'm surprised to hear you (or Henderson) make it.

Okay, $200 or so each. Doesn't change my point.

"And by what logic does paying taxes equal to one's student loans earn one moral authority?"

When a bank says "you owe us," you pay them what you owe and you pay them back, you don't owe them anything. Noone in their right mind would say that a borrower has no moral authority to object to an increase in the interest rate after the loan is paid. Noone in their right might would say the same about Henderson. Partly because he wasn't even complaining. He was making a point about economic stimulus, which people were to blood-lusted to actually see, or too cynical to address the argument.

Mike was implying that the government provided them their education, and therefore, the only reason they are making the money is because of the government gift. It's not true.

Of course, the government doesn't grant the education, only some grants, loans and loan guarantees. The government doesn't even provide the full amount of the loan, so you don't owe your entire station in life to the government. And that's if you think that all the spending on higher ed is a good thing. I don't because so much of it is for status and signaling. We can't all get ahead and this ain't Lake Woebegone.

And yet, we have people arguing that the government did just that, and has the right to take it away, in fact the obligation to take it away. So, these people who think the government grants status and riches wants to extract more riches from its beneficiaries so that it can redistrubute to the poor. If this were true, it would be simpler to just not give the state status and riches granting power. But, of course it isn't really true.

So, does the government really create rich people at the expense of others? If so, stop it.

I'm actually shocked that Professor Henderson didn't see this coming. Cats like Krugman get threatened all the time; such is the blogosphere. But beyond blogging, has everyone forgotten Jake Desantis? Cindy Sheehan? The Dixie Chicks? Indeed, the reaction he received is precisely what I would have expected.

To his point, however, I do need to ask this: when he predicts the rich to simply evade the tax increase via tax shelters, is he referring to SIV's or simply an account at UBS? Is the insinuation that the rich will find creative yet legal ways to evade, or simply to cheat?

Of course, the government doesn't grant the education, only some grants, loans and loan guarantees.

Without which the education might well be unavailable.

Maybe by "gifting" people like Henderson with education, the government is actually increasing productivity.

That happens to be what I think.

Well, in that case, the lefties need to explain why Henderson's considerable salary would not be enough incentive for someone, if not him, to obtain that education.

Because we prefer to live in a society where it is not necessary to be able to write quarter-million dollar checks in order to become a lawyer or doctor? Because Henderson was, at some level, deemed to have greater potential productivity than the person who would have gotten his slot instead? Because over the long run it's not actually zero-sum?

What is the most fascinatng thing about the Henderson et al discussion is taxes as propose by Obama are lower than the taxes specified by the bills signed by Bush and Obama in the years 2001 through 2009 which temporarily cut taxes. As passed by Congress and signed by two presidents, the taxes return to the taxes signed into law by Clinton in 1993 and 1997.

Personally, I would much rather be paying the Clinton taxes, higher than today's with the economy of the 90s, including the recession of 90, than the crummy economy of the past decade. I would rather have had the higher than today's taxes signed by Reagan in the 80s and the economy of the 80s including the recession Reagan caused by boosting Treasury borrowing knowing the Fed wouldn't monetize his deficits. I would rather have had the even higher taxes of the 70s and the energy crisis from the oil embargo, the recessions it caused, the inflation from monetizing the deficit distorted by wage and price controls. The even higher taxes of the 60s, the over crowded schools, the Vietnam War, and other troubles of the time related to cold war and civil rights violation, was still a better economic decade than the past decade.

The Bush tax cuts failed to create a better economy. The deregulation failed to create a better economy. And what I find odd is that with each round of deregulation over the past four decades, every problem that came up, the real estate bubble and S&L crisis of the 80s, the financial crises of the 90s, the return of the 80s bubble and financial crisis in the past decade is blamed ever more strong on high taxes and government regulation.

Tax cuts and deregulation seem to be like going from heroin to coke to meth - the reasons we feel bad isn't the drugs, but just bad drugs that are cut with rat poison, but the next score will make things right if the narcs don't get in the way.

Being aware of the effect of the economy on the white educated class for five decades, the past decade was the worst as of 2006, and I thought it couldn't get any worse.

What prior_approval said on rail travel.

On Henderson: sociologically speaking, I find interesting the much greater interest devoted to Henderson over the "suck it up" comments by Munger.

http://www.bloomberg.com/news/2010-09-20/berkshire-s-munger-says-cash-strapped-should-suck-it-in-not-get-bailout.html

Apparently Munger thinks Henderson should suck it up. Munger doesn't look like much of a leftie, does he? So I guess if you earn less than Henderson and complain about his complaints, you're wrong, and a moral misfit. But if you earn more than Henderson and tell him to suck it up, then - well no matter.

Bernard,

Here's a couple key concepts that need to be understood on more than one level, and I'm only being a tad snarky here.

1. Loans get paid back
2. Debt doesn't create resources

RE: Todd Henderson, can we please put a moratorium on referring to situations like these as a "lynch mob"? Or at least visit this website first (http://withoutsanctuary.org/main.html) and then decide whether getting lots of angry or ridiculing replies to something you say in public warrants an analogy with lynching.

Holy crap, Andrew has really been handing it to that straw man! If there were a human being that actually espoused all the things Andrew thinks "leftists" (what?) all do, they would be devastated by the strength of his rejoinders, I'm sure.

You used a policy to enrich yourself. Now that you no longer need that policy, you want it taken away.

Bill Clinton benefitted from racism in the south. He later fought for that racism to be ended. WHAT A HYPOCRITE!

And finally, their taxes were a hell of a lot lower.

When? The total the Federal government siphons off us has been around 19% of GDP since 1951.

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