Tuesday, July 24, 2012

Tuesday, July 17, 2012

Wealth Distribution (Redistribution) In the US

Perhaps the most illuminating quote from this post is this: "The negative 301 percent means that a typical family in the bottom quintile receives about $3 in transfer payments for every dollar earned."

But, the competition is tough from this quote: "the middle class, having long been a net contributor to the funding of government, is now a net recipient of government largess."

Wednesday, July 11, 2012

Perhaps Doctors, Lawyers, and PhD's Should Look Into Fighting Fires (bravely and nobly)

I respect firefighters and police officers.  But paying them the salary of a CEO is backfiring in California.  See this article, this article, and this article.

More.   More.  More.  More.  More.  And, by far the most important HERE!!!!!!!!!!

Here's an excerpt from the last by Steven Greenhut in the Wall Street Journal:
The study also found that lavish pay and benefit packages were a root cause of the city's problems. In Vallejo compensation packages for police captains top $300,000 a year and average $171,000 a year for firefighters. Regular public employees in the city can retire at age 55 with 81% of their final year's pay guaranteed. Police and fire officials can retire at age 50 with a pension that pays them 90% of their final year's salary every year for life and the lives of their spouses.

We could argue that firefighters and police officers are worth every penny they pay, or every raise they give themselves.  But, when a given city is paying up to 75% of its income on public servants, then very quickly that city finds itself near bankruptcy.

What is the answer?  Pay them according to their level of productivity.  Would this work?  What exactly do they produce?  Public safety is somewhat intangible (however it becomes real when your house is on fire or you're getting regulated upon).

Paying police officers and firefighters less is unpalatable to members of either political party.  I imagine there will be many more bankruptcies before a politician works up the courage to make the suggestion.

Thursday, July 05, 2012

Mankiw, Pigou, and You!! A Love Story (not really).

Greg Mankiw, the author of your text, posts fairly often on his blog about the Pigou Club (a group of economists and others that favor using tax policy to curb economic activity with negative externalities).  See this link here

The article gives some good food for thought.  Bauman and Ling Hsu do more than just argue that polluting industries should be taxed heavily, pointing out that the higher carbon taxes can finance lower corporate tax rates which is better for growth.

Monday, July 02, 2012

Beating the Dead Horse on Free Trade

More on free trade from Boudreaux.

I Beat a Regrettably Immortal Horse


No One Should Ever Argue that Free Trade Does More Harm than Good

...still argue that humans should not interact with each other...to trade.  See Don Boudreaux's post What’s Central to the Case for Trade?

Trade comes naturally to children the first time they play together.  One child recognizes that the other child's toys could be enjoyable if only they were to gain access to the toys.  At first, the child follows a primitive notion and snatches the toy, until the parent (negating the need for years of game theoretic interaction) says "No, we share."  The children benefit from each others' toys without having to purchase the toys themselves.  They trade.  They gain.