Category: Uncategorized
Wojciech Kopczuk on wealth taxation
His comment on Saez and Zucman is one of the best pieces of policy economics I have read in the last few years. Many of the main arguments have been debated on Twitter, or expressed by Larry Summers, so here I will stick with a few side points that have not received full attention.
First, if you hate monopoly rents, excess IP income, and the like, you should not be in love with a wealth tax, at least not in the steady state! A wealth tax hits the base and the safe rate of return as well. Ideally the anti-monopoly crowd should most of all favor higher taxes on net income. Not taxes on wealth.
Second, a wealth tax will encourage the shifting of much more production into non-profit institutions, or perhaps even into nationalizations of industry. Lots of hospitals would switch back to the not-for-profit form, not obviously a beneficial development in my view.
As a side note, many more non-profits would hire famous musical acts to play at their donor galas. The quality of champagne and cheese at those events will rise too. There would be much more pressure on non-profits to create private (non-taxed) benefits for their donors. I predict government regulation of non-profits would end up rising considerably as well, and not for the better.
Privatizing government assets such as land or spectrum would become more difficult — people would buy only at much lower prices. So the wealth tax is a recipe for greater statism in more ways than one.
Third, under a wealth tax Jeff Bezos would have lost de facto control over Amazon some time ago.
Those are my words rather than Kopfczuk’s, do read his entire paper.
I would add one final point. I think we are at the margin where advocacy of a wealth tax is more of a performative exercise — “we hadn’t poked rich people in the eye with this rhetorical needle yet, therefore I won’t really speak against it” — than any kind of substantive analytic debate.
Friday assorted links
1. Markets in everything billionaire tears mug.
2. Video of new Peter Thiel speech.
3. Acuity covers contemporary defenders of American big business.
4. Very excited to announce the new Tim Harford podcast Cautionary Tales, affiliated with the Malcolm Gladwell podcast enterprise.
5. Measuring soccer player quality.
6. New or old spire for Notre Dame?
7. States are sealing criminal records and for the better (The Economist).
Thursday assorted links
1. “OK Boomer” escalated rapidly.
2. Blackpink has 31.3 million YouTube subscribers, more than any other musical group. Do you even know who they are? By the way, are they feminist or anti-feminist?
3. Wherein lies Otomí intellectual property? (NYT)
4. Markets in everything cereals that should not exist (Twinkies).
The Google checking account?
Google will soon offer checking accounts to consumers, becoming the latest Silicon Valley heavyweight to push into finance.
The project, code-named Cache, is expected to launch next year with accounts run by Citigroup Inc. C -0.70% and a credit union at Stanford University, a tiny lender in Google’s backyard.
Big tech companies see financial services as a way to get closer to users and glean valuable data. Apple Inc. introduced a credit card this summer. Amazon.com Inc. has talked to banks about offering checking accounts. Facebook Inc. is working on a digital currency it hopes will upend global payments…
Google’s approach seems designed to make allies, rather than enemies, in both camps. The financial institutions’ brands, not Google’s, will be front-and-center on the accounts, an executive told The Wall Street Journal. And Google will leave the financial plumbing and compliance to the banks—activities it couldn’t do without a license anyway.
Here is more from Peter Rudegeair and Liz Hoffman at the WSJ.
Wednesday assorted links
1. Can Republicans afford to be pro-immigrant?
3. Deirdre.
4. Maps of American restaurant quality.
5. NBA-China update.
6. Electricity and structural transmission, tweet version here.
Tuesday assorted links
1. How much did the trade war and health care affect the 2018 election?
2. Amazon to offer a new grocery store separate from Whole Foods.
3. “Matt Hancock, the British health secretary, publicly apologized to a teenager with autism who has spent close to three years in near total seclusion.” Worse than slavery (NYT).
5. ‘Bookshops pass on anything to the right of Tony Blair’.
6. New (expensive) book on the economics of Michael Polanyi.
Television facts of the day
There were 496 scripted TV shows made in the US last year, more than double the 216 series released in 2010. In the past eight years the number of shows grew by 129 per cent, while the US population rose only 6 per cent. The trend is set to deepen, as groups like AT&T’s WarnerMedia commission dozens of new series to convince people to sign up for their streaming services.
…In the span of about six months, Disney, Apple, AT&T and Comcast are launching new streaming services, asking people to pay nothing for some services or up to $15 a month to watch their libraries of films and shows.
Here is more from Anna Nicolaou and Alex Barker at the FT. Yes, you might be tempted to short this sector and perhaps I am too. Still, another possible part of the equilibrium adjustment is simply that the market swallows the content and factor prices fall, a’la music streaming. That would be one way to get all of those costly special effects out of so many movies.
Monday assorted links
1. Unexpected NCAA victories boost scientific output in the relevant universities.
3. Was convict labor used to replace slave labor? A very good job market paper from Malissa Rubio at Gothenburg. don’t just hire from the same old schools, people!
Sunday assorted links
1. Against Updike.
2. Rachel Cusk on Cecily Brown and Celia Paul (NYT). Too wordy, but of interest.
3. Gianluca Russo — an interesting economic history job market candidate from Boston University.
Saturday assorted links
Friday assorted links
1. The excellent Ben Westhoff on Joe Rogan.
2. A Canadian pro experiences the world and management system of Russian hockey.
3. The Cato study on wealth inequality. And why did the UK Labour government abandon the wealth tax idea in the 1970s?
4. Kocherlakota argued in Econometrica that optimal wealth taxes should be zero on average.
5. David McCabe at NYT: “The debate can take on a heated and personal tone. At a conference this spring, the soft-spoken legal academic Tim Wu responded to doubts raised by Tyler Cowen, an economist, about whether America has dangerous levels of corporate concentration by saying it was like arguing with someone who believes the earth is flat.”
6. “An inmate claimed his life sentence ended when he died and was revived.”
7. Megan McArdle on the historical importance of the Church.
Model this dopamine fast
“We’re addicted to dopamine,” said James Sinka, who of the three fellows is the most exuberant about their new practice. “And because we’re getting so much of it all the time, we end up just wanting more and more, so activities that used to be pleasurable now aren’t. Frequent stimulation of dopamine gets the brain’s baseline higher.”
There is a growing dopamine-avoidance community in town and the concept has quickly captivated the media.
Dr. Cameron Sepah is a start-up investor, professor at UCSF Medical School and dopamine faster. He uses the fasting as a technique in clinical practice with his clients, especially, he said, tech workers and venture capitalists.
The name — dopamine fasting — is a bit of a misnomer. It’s more of a stimulation fast. But the name works well enough, Dr. Sepah said.
The purpose is so that subsequent pleasures are all the more potent and meaningful.
“Any kind of fasting exists on a spectrum,” Mr. Sinka said as he slowly moved through sun salutations, careful not to get his heart racing too much, already worried he was talking too much that morning.
Here is more from Nellie Bowles at the NYT.
Did the medieval church make us WEIRD?
A growing body of research suggests that populations around the globe vary substantially along several important psychological dimensions and that populations characterized as Western, Educated, Industrialized, Rich, and Democratic (WEIRD) are particularly unusual. People from these societies tend to be more individualistic, independent, and impersonally prosocial (e.g., trusting of strangers) while revealing less conformity and in-group loyalty. Although these patterns are now well documented, few efforts have sought to explain them. Here, we propose that the Western Church (i.e., the branch of Christianity that evolved into the Roman Catholic Church) transformed European kinship structures during the Middle Ages and that this transformation was a key factor behind a shift towards a WEIRDer psychology.
That is a new piece in Science by Jonathan F. Schulz, Duman Bahrani-Rad, Jonathan P. Beauchamp, and Joe Henrich, try this link too. This one works for sure. Here is Harvard magazine coverage of the piece. Here is a relevant Twitter thread.
The two Jonathan co-authors are new colleagues of mine at GMU economics, so I am especially excited this work is seeing the light of day in such a good venue.
Thursday assorted links
“And what a decade it was”
From Alex X.:
With the decade coming to a close, I would be curious on everyone’s favorite of the decade [gives list of categories]:
Without too much pondering, here is what comes to mind right away:
Film: Uncle Boonmee Who Can Recall His Past Lives, or A Touch of Sin. Might Winter Sleep by next? It was probably the best decade ever for foreign movies, the worst decade ever for Hollywood movies (NYT).
Blockbuster/action film: Transformers 4? Big screen only, live or die by CGI!
Album: Kanye West, My Beautiful Dark Twisted Fantasy.
Single: I don’t see an obvious, non-derivative pick here that really stands out. Kendrick Lamar’s “Alright” probably is the mainstream choice, but do I ever go over to the stereo to put it on? Janelle Monae’s “Make Me Feel” is another option, but is it such a big step beyond Prince? Lorde or Beyonce? LCD Soundsystem seems more about the entire album, same for Frank Ocean. Something from Kanye’s Yeezus? To pull a dark horse option out of the hat, how about Gillian Welch, “The Way It Goes“? Or Death Grips “Giving Bad People Good Ideas“? I’ve spent enough time on Twitter that I have to opt for that one.
TV Show: Srugim, Borgen, The Americans.
Single Season: Selections from same, you know which seasons.
Book Fiction: The Ferrante quadrology and Houllebecq’s Submission.
Book Non Fiction: Knausgaard, volumes I and II.
Athlete of the Decade: Stephen Curry or Lebron James.
What are your picks?