By James Kwak
I received the following this morning and thought it was interesting.
We are writing to ask your help in bringing some empirical measurement to the long-standing question: On matters of economic policy, do liberals understand conservatives better than conservatives understand liberals, or is the reverse true? In response to Krugman’s claim that liberals have the edge in understanding rival views (http://fivebooks.com/interviews/paul-krugman-on-inspiration-liberal-economist), Caplan disagreed and suggested a type of ideological Turing test to measure the ability of individuals to “state opposing views as clearly and persuasively as their proponents” (http://econlog.econlib.org/archives/2011/06/the_ideological.html). Specifically, could it be determined whether one is conservative or liberal through an online question-and-answer exchange?
Although we are unable to conduct the ideal test, we have developed a multiple-choice version of this Turing-like economic policy test. At http://econturingtest.com, we have posted a ten-question economic policy test. Respondents will take the test and then anonymously report some information about themselves. With the statistical results, we hope we can shed some light on this research question.
We have received approval from our Institutional Review Board (approval No. 16-016) to offer this online survey. Now all we need is traffic to the website, and that’s why we’re appealing to you now. We are asking the top 30 economics blogs in 2012 and 2013 according to the Onalytica rankings to post a note for us. When our study is complete, we will be providing results to all who ask and seeking appropriate publication outlets.
Thanks in advance for any help you may be able to offer. If you have questions, please let us know.
William Wood and Angela Smith
James Madison University-Economics
By James Kwak
How about this?
In Georgia, you can get a life sentence for a second or succeeding drug offense.
Right now, there are 375 people serving those life sentences. 369 of them—more than 98%—are African-American.
There’s no population base rate that can explain that discrepancy. One justice on the Georgia Supreme Court found that an African-American with two or more drug priors is 28 times as likely to get a life sentence than a white person with the same record.
By James Kwak
I haven’t been commenting on Republican tax plans this season because, well, it takes a lot to impress me when it comes to absurd tax cut proposals. Ted Cruz has done it.
The major components of Cruz’s plan amount to this:
- A flat 10% tax on individual income (labor and investments)—down from top rates today of 43.4% on labor and 23.8% on capital gains and dividends
- No payroll taxes (15.3% for most people today), corporate income tax (average rate about 13% today), or estate tax
- A 19% value-added tax (16% of gross business receipts, including the tax)
There are two big things that are crazy about this plan.
The first is that it eliminates an enormous amount of tax revenue: $3.6 trillion over ten years, according to the right-wing Tax Foundation’s “static” analysis—that is, before the growth fairy waves her magic wand. To put that in context, that’s more than we plan to spend on the military over the next ten years.
The second is the astonishingly naked handout to the very rich:
60% of the tax cut goes to the top 1%.
That leaves only 40% for everyone else.
By James Kwak
Hillary Clinton is competing for the nomination of a party whose progressive base thinks, with considerable justification, that her husband is to blame for letting Wall Street run amok—and that Barack Obama, under whom she served, did too little to rein in the bankers who torpedoed the global economy. On top of that, she faces a competitor who says what the people actually think: that the system is rigged, that big banks should be restrained, and that people should go to jail.
So she has no choice but to try to appear tough on Wall Street—but she has to do that without simply jettisoning twenty-five years of “New Democrat” friendliness to business and without alienating the financial industry donors she is counting on. So the “plan” she announced yesterday has two messages. On the one hand, she wants to show that she has the right approach to taming Wall Street. Unfortunately, it’s just more of the same: another two dozen or so regulatory tweaks, mainly of the arcane variety, that will produce more of the massive, loophole-ridden rules that Dodd-Frank gave us.
Or, that could be the point. Her second message is a promise to the financial industry that, instead of real structural reforms, she will continue the technocratic incrementalism of the Geithner era—which has left the megabanks more or less the way they were on the eve of the financial crisis. Maybe, for her base, that’s a feature, not a bug.
For more, see my latest column for The Atlantic.
By James Kwak
Larry Lessig is running for the Democratic presidential nomination on a single issue — political equality — and a promise to resign as soon as Congress passes a bill that would help level the electoral playing field, end partisan gerrymandering, make it easier for working people to vote, and reduce the power of money in politics. As I’ve said before, he has my vote(and my money).
The funny thing is, the Democratic establishment seems intent on making Lessig’s point for him by keeping him out of the upcoming debates. To participate in the first debate, candidates have to get at least 1% support in three national polls. Lessig so far has only been included in one qualifying poll — in which he got 1% — but not in any subsequent ones. It’s not entirely clear why, but one factor is that the Democratic National Committee has not officially welcomed him to the race — and the DNC certainly isn’t lifting a finger to help him.
By James Kwak
We have lots of problems: Expensive yet mediocre health care. Lack of retirement security. Out-of-control megabanks. Inequality of opportunity. And, of course, climate change.
At the end of the day, though, there are only two things that matter: early childhood education and electoral reform.
We need smart, motivated, knowledgeable voters. And we need a political system in which all people have an equal say. Without those ingredients, no amount of well-meaning, reasoned, fact-based argument is going to do much good.
Just think about climate change, for example. It’s abundantly clear that the planet is getting warmer because of our greenhouse gas emissions, the process is irreversible at this point, and the downside risks to billions of people are enormous. Yet, in the country that won World War Two, rebuilt Europe and Japan, won the Cold War, and exported most of the technology that makes the modern world modern, we are incapable of doing anything about climate change. Why?
Because our political system is blocked by the fossil fuel industry, politicians dependent on the fossil fuel industry, and ignorant zealots who oppose a carbon tax because it is a “tax” and a cap-and-trade system because it is “regulation.”
That’s why I’m supporting Larry Lessig for the Democratic presidential nomination.
By James Kwak
The front page of yesterday’s Wall Street Journal featured an article claiming that Bernie Sanders wants to increase federal government spending by $18 trillion over the next ten years—an increase of about one-third over that time period. This was apparently supposed to raise some kind of alarm—what kind of maniac is this?—and I’m sure both Republicans and Hillary Clinton are happy the Journal is doing their work for them.
The problem is that a spending figure, even one as big as $18 trillion, is meaningless on its own.
Most of that money—$15 trillion—is the expansion of Medicare to cover all Americans. Yes, that’s a lot of money. But we are already spending a ton of money on health care—with embarrassingly poor results. In 2013, total premiums for private health insurance cost Americans $962 billion, individuals and families paid $339 billion out of their own pockets and “other private revenues” accounted for another $121 billion of health care (data here). That’s $1.4 trillion of health care spending, paid for by families and businesses, most of which would be replaced by Sanders’s plan. Project that out for ten years, add health care inflation, and you’re talking about a lot more than $15 trillion.