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Assorted links
1. Greg Mankiw's very good column on health insurance and marginal tax rates; Greg adds comment.
2. Somerset Maugham: the perfect traveler?
3. Ten smelly foods from Asia.
5. The Lehman failure really was at fault; Arnold Kling adds comment.
6. MR is a start-up, as is Modern Principles.
Posted by Tyler Cowen on November 1, 2009 at 12:15 PM in Web/Tech | Permalink
Comments
Ayn Rand. Oh no...
Posted by: rob at Nov 1, 2009 1:08:21 PM
Browsing all those Ayn Rand links, did you notice how deeply people misunderstand her?
Like from the NYT,
"But Cerf offered Rand an alternative: if she gave up 7 cents per copy in royalties, she could have the extra paper needed to print Galt’s oration. That she agreed is a sign of the great contradiction that haunts her writing and especially her life. ...Giving up her royalties to preserve her vision is something that no genuine capitalist, and few popular novelists, would have done"
WTF?
http://www.nytimes.com/2009/11/01/books/review/Kirsch-t.html?_r=1&em
Posted by: dingbat at Nov 1, 2009 1:13:14 PM
"Whenever Ayn Rand met someone new—an acolyte who’d traveled cross-country to study at her feet, an editor hoping to publish her next novel—she would open the conversation with a line that seems destined to go down as one of history’s all-time classic icebreakers: “Tell me your premises.”"
Made me LOL.
Posted by: jsalvatier at Nov 1, 2009 1:19:25 PM
The list started out good enough, but half of those things don't smell bad AT ALL!
Posted by: Joshua Allen at Nov 1, 2009 1:25:50 PM
"You could only make four pictures, and then you were in the top bracket," Mr. Reagan would say. "So we all quit working after four pictures and went off to the country."
Sounds like a good life, and more actors get a chance to make movies. What's not to like?
Posted by: Brian Slesinsky at Nov 1, 2009 2:16:45 PM
"more actors get a chance to make movies."
oh hey the zero-sum fallacy! been a while...
Posted by: Vernunft at Nov 1, 2009 2:59:33 PM
The link re: Ayn Rand and India was really interesting.
Posted by: Ryan at Nov 1, 2009 3:02:41 PM
There are already a lot of people working for cash and paying no FICA or income taxes.
Posted by: floccina at Nov 1, 2009 3:34:25 PM
Gore Vidal: "For one thing, it is gratuitous to advise any human being to look out for himself."
That would have been the very best possible advice I could have received entering graduate school, that most progressive of institutions. I presume Gore doesn't want people looking out for themselves in the same way that academic departments do not. He's a smart guy.
Posted by: Andrew at Nov 1, 2009 4:30:25 PM
ould someone explain the appeal of Ayn Rand? Clearly she captivates many intelligent people, but I find this incomprehensible. I have trouble believing it is:
1) Her long-winded prose
2) Her original ideas (was there much originality?)
3) The enchantment of her stories and characters
Her capitalist-realism seems every bit as aesthetically offensive as socialist-realism. What is the appeal of propaganda-art as art?
Or is there something else? Is she like Bob Dylan in the sense you either get the aesthetics or you don't, but it's impossible to explain to those who don't?
What is the secret of her success?
Posted by: rob at Nov 1, 2009 5:08:16 PM
Thanks for the wonderful review of Somerset Maugham by Pico Iyer. Definite equivalence to a discreet waft of durian or shrimp paste landing you back with nostalgic bump in the kampung of Malaysia or Indonesia. The eccentricity and delicate tragic romance of expat life also unparalleled in Maugham; even Graham Greene does not really match it. For me, though, the adolescent excitement of discovering Spain was better captured in Laurie Lee’s ‘As I Walked Out One Midsummer Morning’.
Posted by: Michael G. Heller at Nov 1, 2009 5:24:40 PM
I have always thought Rand's greatest appeal was how she drives liberals nuts.
Posted by: Yancey Ward at Nov 1, 2009 7:12:55 PM
Let's see, when Reagan was under studio contract, basically paid a salary, he made 9 films in 1938, 7 in 1939, 7 in 1940, 4 in 1941, 4 in 1942, and only after his last film, King's Row, was he able to negotiate a tripling of his salary.
From the beginning Reagan was very much a union man, joining SAG and becoming active quickly as a member of the board, seeking to cut the workload of the studio contract system, while preserving its salary like structure. He started at $200 a week for at least 19 weeks out of 26.
What cut back the number films generally was the antitrust action that broke up the studio system. The two practices of the studio system were the studios owning most theaters so they charged lower film rents, and they rented films in blocks, typically one A, and four B movies. When they were forced to divest of theaters, they raised the rental rate. And when theaters only rented A movies, the studios produced fewer films, but as their payroll were mostly fixed salary contracts, they had to raise the prices further. Reagan was strictly a studio contract actor, working for a weekly salary for a minimum of 40 weeks of work a year, and he negotiated his salary as hard as he negotiated the SAG contracts he worked on, seeing good pay and reasonable working conditions in the mutual interests of both studios and actors.
What cut back Reagan's film work was the new stars while he was in the service making war films, and his reluctance to be a character actor; in the end his contract wasn't renewed and he had to find a new career. That was as a GE spokesman, introducing the GE Theater as well as making lots of pubic relations appearances.
So, clearly the tax system had no impact on how much he worked; getting paid as much as he could for as little work as possible would better describe his work and salary history. He was known for showing up for work on time and in good humor ready to work.
Posted by: mulp at Nov 1, 2009 8:34:15 PM
The Paper on the importance of Lehman was terrific in my view, since it supports my view. My only quibble with it is in the use of the word "Empirical". In their view, talking to market participants and the viewing the deals that they actually made doesn't seem to be empirical. As near as I can tell, they have a straightforward behaviorist view of the empirical.
So, I'm cheered by their conclusion and results, but disagree with the idea that, until their chosen methods were brought to be on this issue, there was no empirical evidence, or at least strong empirical evidence, for their conclusion. There was plenty, including Robb's work.
Posted by: Don the libertarian Democrat at Nov 1, 2009 10:24:47 PM
About Prof. Mankiw's post, it seems plain to me that if you have a subsidy based on income, the people with higher incomes will pay for the people with lower incomes. There might well be a give and take on the amounts, but the principle remains. As Prof. Mankiw says, there's no "correct" answer to this question. It's a question of political economy.
But, if it is, doesn't the opinion of the fairness and justice of the tax make a difference in what tax rates people will accept? Or do economists simply figure there's an iron rule about how much taxation people will accept?
In my mind, the problem with all plans is that they are having a hard time convincing large numbers of people that they are fair or just. It isn't simply a matter of money. In that sense, whatever happens this round, the problem will remain until there's some kind of consensus on one overall approach. As of today, my favorite plan, which is a variation of Milton Friedman's plan, isn't in play. Since I believe that this approach is the clearest approach featuring universal care and a decent mix of incentives and disincentives, I believe that this plan isn't the end of this issue. But my problem isn't economic. It's rather that I can't convince enough of my fellow citizens of the fairness and justice of my approach.
Posted by: Don the libertarian Democrat at Nov 1, 2009 10:46:56 PM
mulp.
You mean Reagan wasn't being truthful? No! Don't say that.
Posted by: Bernard Yomtov at Nov 2, 2009 12:09:51 AM
@Vernunft: Could you please explain how the zero-sum fallacy applies to movies where every one has an all new cast and therefore all new auditions and hirings? I understand the basics of the fallacy, but it doesn't seem to work for this kind of employment.
Posted by: Dan at Nov 2, 2009 12:11:08 AM
For great taste-test of natto (one of the stinky foods), see http://www.thesneeze.com/mt-archives/000169.php.
Posted by: JW at Nov 2, 2009 12:40:53 AM
Mankiw writes: Behind the healthcare debate is the classic tradeoff between equality and efficiency. Consider the following question, which is not about healthcare per se: Would you favor a substantial increase in marginal tax rates for millions of middle and upper income Americans to provide more resources for those toward the bottom of the economic ladder?
This clearly implies the choice is between increasing the margin tax rates for the poor in terms of their health care costs or their lost productivity due to shorter lifespans, or higher marginal rates on health care professionals who will be forced to eat the cost of uncompensated care.
If efficiency were the priority, the poor and sick would be euthanized to remove them as a burden on the economy. Why can't economists come out and say clearly what they consider to be the best economic solution as a result of applying market solutions to the human ecology?
Posted by: mulp at Nov 2, 2009 1:13:22 AM
Ayn Rand's writing is easy and accessible, with a message that is just bad-ass enough to seem both intellectual and cool. When you read it, you get an uneasy feeling that maybe you're not one of the Supreme Beings that Rand celebrates. But the rest of humanity is portrayed as a fetid vat of quivering jelly, and so you and your friends praise Ayn Rand and scoff at the masses. You do it loudly, pushing away nagging doubts and reassuring yourself and each other that you’re special, soaring together above the ignorance, servitude, and simple-minded naivety all around.
And you’re in high school.
Soon you’ll grow up and read adult books and think adult thoughts.
Or you won’t.
Posted by: slim at Nov 2, 2009 2:54:53 AM
The more I learn about Maugham, the more I like him as a person. I just wish he had been a slightly better writer.
Posted by: David Wright at Nov 2, 2009 2:54:59 AM
The appeal of Ayn Rand is twofold:
1 - It provides you with all the philosophical reasons you need to believe that your life is in your control, that your efforts and responsibilities determine the level of your success, and that the key to all of this is concept formation i.e. correctly assessing reality and acting on it.
2 - The only arguments anyone has ever been able to successfully put forth against her ideas is a snarky dismissal of her without actually addressing the nuts and bolts of the ideas themselves. This would require not just an acceptance of the premises of their own ideas (of which they are unaware), but an actual understanding of them. Basically, liberals can't address Rand's points because they don't like using the language of philosophy, especially not when they have to justify one of their beliefs.
I know, I know. Childish, right? Totally uncool to rely on stuff like logic and praxeology to rationalize human behavior... Wait, what? You mean those things are the bedrock of economics? COULDN'T BE!
Posted by: Ryan at Nov 2, 2009 3:14:20 AM
@rob - If you don't agree with Ayn Rand then you are unlikely to appreciate Ayn Rand. And if you agree with Ayn Rand or at least find her deeply insightful, then you are unlikely to think of her ideas as of interest primarily because they are "original". You think of them as of interest primarily because they are correct or insightful.
"What is the appeal of propaganda-art as art?"
Ayn Rand's novels are arguments for her ideas. They attempt to persuade the reader of those ideas. If this makes Ayn Rand's novels propaganda, then all the works of all the philosophers are propaganda. We don't normally think of Hume's An Enquiry Concerning Human Understanding as propaganda.
George Orwell also wrote fiction that attempted to persuade his reader of certain ideas, political ideas no less - and was fantastically successful in that regard. Gulliver's Travels is another example of fiction that is a serious attempt to persuade the reader of certain ideas.
Posted by: Constant at Nov 2, 2009 3:23:48 AM
slim: When you read it, you get an uneasy feeling that maybe you're not one of the Supreme Beings that Rand celebrates...And you’re in high school...Soon you’ll grow up and read adult books and think adult thoughts.
That may describe your own personal trajectory with Ayn Rand, but the belief that you need to be a superman or else you are worthless is a tragically wrong misreading, not much worse than misreading Animal Farm as arguing that pigs are bad animals.
Posted by: Constant at Nov 2, 2009 3:57:58 AM
Mankiw says:
"The bill moves us closer to much of Western Europe by favoring equality and paying the price of reduced efficiency from much higher marginal tax rates."
Except it really doesn't. He also says:
"If large health insurance subsidies were offered to all Americans, regardless of income, the program’s cost would be exorbitant, requiring substantial increases in explicit taxes."
My understanding is that is exactly what Western European governments do -- they raise a huge percentage of their taxes via a flat VAT (that doesn't have high marginal rates) and then offer the subsidies to everyone. The Western European recipe for big government is, "Tax everybody, subsidize everybody", and that's not what we're talking about with Obama's government expansion.
Obama would probably like to move more in the direction of Western Europe, but has boxed himself in (temporarily at least) with his repeated promises not to increase taxes on anybody but the rich. As he can't possibly get enough money for the rich to pay for his programs, the plan appears to be to pass the programs, run gargantuan deficits, and then find himself 'forced' to impose a VAT in his second term when re-election is no longer an issue.
Posted by: Slocum at Nov 2, 2009 7:13:22 AM
