Sunday assorted links
1. Why is Switzerland so peaceful?
2. Is there a white flight from football?
3. More on Dau, the Russian mega-film.
4. Most financial anomalies don’t replicate.
5. Are events the new magazines? (NYT) A weird but interesting piece that just barely makes sense.
*Timefulness: How Thinking Like a Geologer Can Save the World*
Still more incredible is the fact that one person almost single-handedly created the first maps of two-thirds of the planet yet is unknown to the average citizen of Earth (while Amerigo Vespucci, whose cartographic credentials are suspect, has two continents named for him). The unsung mapmaker Marie Tharp, who earned a master’s degree in geology from the University of Michigan, worked briefly for an oil company, and then in 1948 became a drafter for a new oceanographic project led by Maurice Ewing at Columbia University. For years, Ewing’s all-male team of graduate students collected sonar soundings of the ocean floor while Tharp laboriously transformed the linear strings of depth readings into three-dimensional topography.
Here is the Wikipedia page for Marie Tharp. Here is a biography of Marie Tharp, which I just ordered. Timefulness is by Marcia Bjornerud and you can order it here.
How easy is it to administer a wealth tax?
A third issue is logistical. A wealth tax would be like an estate tax levied every year. Figuring out the tax owed on large estates is complicated, costly and time-consuming. The Internal Revenue Service gives estates a year to file a return, but even then, executors often have to file extensions. And on the other end, auditors go through the returns, which can take years before an estate is settled.
The process requires not just lawyers and accountants but valuation experts who assess the worth of assets like closely held family businesses.
“It would be a highly cumbersome tax return to prepare on an annual basis,” said Jeff Moes, executive vice president and chief fiduciary officer at FineMark National Bank & Trust, which serves high-net-worth clients. “Every federal estate tax goes through an audit, and presumably this would go through an audit as well. They’d have to figure out if the valuation methodology is correct.”
“A billionaire would have a return that would be literally three feet high,” he added. “Our $100 million clients own multiple closely held businesses. All of them would require an expert valuation and five-year financials.”
And then the government would need to have enough auditors to verify everything that was submitted. In 2018, for example, an estimated 4,000 estate tax returns will be filed, with tax owed on 1,900 of them. That’s a tenth the number of tax returns that would be filed under Ms. Warren’s wealth tax plan.
Here is more from Paul Sullivan at the NYT.
Saturday assorted links
1. Engineering Philosophy podcast with me, by Jeffrey Meyerson.
2. “Empörung über geplanten Umzug von Bratwurstmuseum auf früheres KZ-Gelände.” Die Kultur that is Thüringen.
3. Are female presidents less popular?
4. French organ master Jean Guillou passes away (NYT).
5. Forbes covers Pioneer and Daniel Gross.
6. For Ayn Rand’s birthday, a redux of my old post on whether she is important.
New Zealand facts of the day
All of New Zealand’s major cities were rated as “seriously” or “severely” unaffordable, with a house in the least expensive city, Palmerston North, priced at five times the median income.
Mr. Pavletich, one of the report’s authors, said smaller markets like Tauranga, a coastal city on the North Island with a population of 128,000, had seen an influx of people who had left Auckland in search of more affordable housing. Average property values in Tauranga had risen to $497,000 from $304,000 in the last five years, and Demographia now rated it among the 10 least affordable cities in the world — along with famously expensive locales such as Hong Kong, San Francisco, Sydney and Vancouver, British Columbia.
People, I have been to Palmerston North (though not Tauranga, which seemed too empty and remote, now the fifth largest urban cluster in a country of 4.8 million), way back in the 1990s, and I recall a feeling of dullness above all else. If you had asked me whether this outcome was possible, I sooner would have thought Donald Trump would be elected president.
Here is the full NYT story by Charlotte Graham-McLay. P.s. they haven’t built enough homes.
The politics of a wealth tax
That is the topic of my latest Bloomberg column, here is the end sequence:
Besides which — a fact that is getting too little notice — the U.S. already has what is in essence a wealth tax: Tax rates on capital gains are not indexed for inflation. With this nominal-based tax system in effect, it is harder to accumulate wealth over time, and the nominal-based tax erodes the real value of the asset base.
Whether or not you think this capital-gains policy is a good idea (I do not), it is striking how few Americans understand that it serves as a wealth tax. It is not marketed or proclaimed as such. And I don’t expect Republicans or Democrats to counter Warren by saying, “Don’t worry, we already have a wealth tax.” Isn’t this a sign that voters simply are not yearning for a wealth tax?
The other major form of wealth taxation in the U.S. is of course the property tax, which is paid by large numbers of Americans and used to finance local services, rather than being primarily directed against the wealthy. It is seen as a way of making local government accountable to those who vote and pay for it, not as an engine of wealth redistribution. If anything, by maintaining the quality of school districts in wealthy communities, its net distributive effects are anti-egalitarian. That system seems to be a permanent part of the American political landscape.
Finally, think about politics in the broadest possible terms. What Americans really want is for their lives, their jobs, and society in general to get better — an admittedly ill-defined but nonetheless instantly familiar concept. Americans also want their leaders to deliver such outcomes with the considerable resources already at their disposal. Is that so unreasonable?
Anyone promoting a wealth tax is in essence saying that there aren’t many ways of improving society within current resource constraints. That is a brand of pessimism which Americans voters have not often rewarded.
File under: the Twitter reactions are self-refuting. But if you would like the opposing point of view, here is Eric Levitz.
Friday assorted links
2. Loss aversion in professional golf.
3. Women in economics, from Journal of Economic Perspectives, here, here, and here.
4. Economists in tech companies.
5. The university as sting operation.
6. “Today they’re priced at -$.05!
California Tortilla (@caltort) Tweeted:
BRR, IT’S COLD! This Thursday, warm up by paying the #windchill temperature for chips and #queso 🧀 For example, if it’s 8 degrees, the price will be 8 cents for the day. And if it’s -12 degrees, we will pay you 12 cents when ordering. Stay tuned for the price tomorrow morning! https://t.co/R1CM9aPYjHhttps://twitter.com/caltort/status/1090721328280285189?s=17
San Francisco fact of the day
San Francisco has more drug addicts than it has students enrolled in its public high schools, the city Health Department’s latest estimates conclude.
There are about 24,500 injection drug users in San Francisco — that’s about 8,500 more people than the nearly 16,000 students enrolled in San Francisco Unified School District’s 15 high schools
Here is more, via an MR reader.
California fact of the day
UCLA students call about 11,000 Uber and Lyft rides that never leave campus every week, raising concerns about the environmental impact of unnecessary trips.
Here is the article, via Jessica Roberts. I can’t say I am crazy about the framing however — have you tried walking across UCLA campus? You could just as soon write an article criticizing the people who don’t do bulk shopping, thereby creating unnecessary car trips to the store. Students who live on campus hardly seem like the worst environmental offenders or anywhere close to it.
Markets in everything those new service sector jobs
Advansun, 39, is a full-time “sleep writer” in Toronto. He writes with one goal in mind — to lull people off to la-la land.
Advansun publishes his bedtime stories for adults on the popular app Calm.com, where they are voiced by famous actors like Matthew McConaughey.
Calm.com says its roster of 120 sleep stories has been listened to more than 100 million times.
“I think we are putting a modern take to something that’s pretty timeless,” he says. “We are giving grownups permission to drift off to sleep to a story, and that’s not something a lot of people have thought about before.”
Advansun says the key is to get the attention of the listener and then “hold it gently” without ever jostling them awake. He maintains this is a tough balance to achieve … especially since Advansun is trained as a screenwriter (think plot twists, car chases and explosions).
“I certainly didn’t set out to write stories that put people to sleep,” he jokes. “I have sort of fallen into it, and I adore it. It’s not only quite rewarding, it is a great challenge as a writer.”
Here is the full story, via Michelle Dawson.
The Impact of the Affordable Care Act: Evidence from California’s Hospital Sector
The Affordable Care Act (ACA) authorized the largest expansion of public health insurance in the U.S. since the mid-1960s. We exploit ACA-induced changes in the discontinuity in coverage at age 65 using a regression discontinuity based design to examine effects of the expansion on health insurance coverage, hospital use, and patient health. We then link these changes to effects on hospital finances. We show that a substantial share of the federally-funded Medicaid expansion substituted for existing locally-funded safety net programs. Despite this offset, the expansion produced a substantial increase in hospital revenue and profitability, with larger gains for government hospitals. On the benefits side, we do not detect significant improvements in patient health, although the expansion led to substantially greater hospital and emergency room use, and a reallocation of care from public to private and better-quality hospitals.
That is from a new NBER working paper by Mark Duggan, Atul Gupta, and Emilie Jackson.
Thursday assorted links
1. Church forests in south Gonder.
2. What is it like to live without Google?
3. Classical liberalism in Venezuela.
4. Price theory summer camp at University of Chicago.
5. The welfare effects of social media, a new paper by Hunt Allcott, Luca Braghieri, Sarah Eichmeyer, and Matthew Gentzkow. (On the road, have not had a chance to read it yet.) And the NYT summary. My guess is this is the best paper on social media/Facebook so far.
IQ economics > behavioral economics
We use administrative and survey-based micro data to study the relationship between cognitive abilities (IQ), the formation of economic expectations, and the choices of a representative male population. Men above the median IQ (high-IQ men) display 50% lower forecast errors for inflation than other men. The inflation expectations and perceptions of high-IQ men, but not others, are positively correlated over time. High-IQ men are also less likely to round and to forecast implausible values. In terms of choice, only high-IQ men increase their propensity to consume when expecting higher inflation as the consumer Euler equation prescribes. High-IQ men are also forward-looking — they are more likely to save for retirement conditional on saving. Education levels, income, socio-economic status, and employment status, although important, do not explain the variation in expectations and choice by IQ. Our results have implications for heterogeneous-beliefs models of household consumption, saving, and investment.
That is from a new NBER working paper by Francesco D’Acunto, Daniel Hoang, Maritta Paloviita, and Michael Weber.
Me on wealth taxes from 2013
I don’t usually like to rerun material, but every now and then it seems appropriate. Here is the opening paragraph from my NYT column from six years ago:
If you’d like to know where American political debates are headed, the data suggest a simple answer. The next major struggle — in economic terms at least — will be over whether taxes on personal wealth should rise — and by how much.
There is much more at the link.
Does “putting yourself in the shoes of others” reduce attitude change?
From Rhia Catapano, Zakary L. Tormala, and Derek D. Rucker:
Counterattitudinal-argument generation is a powerful tool for opening people up to alternative views. On the basis of decades of research, it should be especially effective when people adopt the perspective of individuals who hold alternative views. In the current research, however, we found the opposite: In three preregistered experiments (total N = 2,734), we found that taking the perspective of someone who endorses a counterattitudinal view lowers receptiveness to that view and reduces attitude change following a counterattitudinal-argument-generation task. This ironic effect can be understood through value congruence: Individuals who take the opposition’s perspective generate arguments that are incongruent with their own values, which diminishes receptiveness and attitude change. Thus, trying to “put yourself in their shoes” can ultimately undermine self-persuasion. Consistent with a value-congruence account, this backfire effect is attenuated when people take the perspective of someone who holds the counterattitudinal view yet has similar overall values.
Yes, yes the replication crisis. Still, this may be a useful countertonic against the notion that trying to understand other people always yields high returns. Perhaps the better approach is simply to drain yourself of values when considering the perspectives of other people.