February 26, 2003
Synchronicity on the Consumption Tax

Synchronicity: Today Vaguely Right writes: According to Bruce Bartlett:  a) "Liberals are opposing [the move from income taxation to consumption taxation] because it would benefit the rich too much." Yesterday, I had the following conversation: Him: "All this talk of the consumption tax seems to be just another way to justify not taxing the rich. Aren't there already enough ways to not tax the rich in this world?" Me: "Yes, a consumption tax is another ideological justification for not taxing the rich. But this reason for not taxing the rich does have desirable long-run efficiency properties......

Posted by DeLong at 01:05 PM

July 08, 2002
Brink Lindsey Says: The Human Race Has Been Dealt a Winning (and Invisible) Hand

"I think you're wrong," said one of the barons of the center-left Washington, DC thinktanks. "Cato's biggest problem isn't that its day-to-day stuff is too carefully crafted to be politically useful to those factions of the Republican Party that it approves of. Cato's biggest problem is that it doesn't have a deep enough analytical bench. In fact, it has only one young full-time truly-heavy intellectual hitter."* "Brink?" "Yes, Brink Lindsey. Very smart. Very knowledgable. Very thoughtful. And--which is very unusual--very willing to entertain the possibility that he might be wrong." Now Brink Lindsey has written a book: Brink Lindsey (2002), Against the Dead Hand: The Uncertain Struggle for Global Capitalism (New York: John Wiley: 0471442771). The purpose of the book is to celebrate the end of one of what Lindsey sees as one of the great obstacles to human progress. The obstacle is "the dream of centralized, top-down control over the course of economic development" (p. 2). In Lindsey's mind, whether the policies were the bloody collectivization of agriculture by Stalin, Mao's command that peasants smelt steel in their backyards, French bureaucrats providing indicative guidance to enterprises for capacity expansion, the UK Labour Party nationalizing the "commanding heights" of...

Posted by DeLong at 06:34 PM

June 12, 2002
Fallout From Bush Protectionism

There has long been a fear that one large country's move toward protectionism will trigger other countries to make similar moves. In the case of the Ukraine, at least, this fear appears to be coming true: From: "ChrisD(RJ)" <chrisd@russiajournal.com> To: 'lbo-talk@lists.panix.com' <lbo-talk@lists.panix.com> Subject: Ukraine's steel industry faces millions in losses from U.S., worl d trade barriers Date: Wed, 12 Jun 2002 12:23:58 +0400 Sender: owner-lbo-talk@lists.panix.com Reply-To: lbo-talk@lists.panix.com Ukraine's steel industry faces millions in losses from U.S., world trade barriers KIEV, Ukraine (AP) - Ukraine's steel industry faces huge losses caused by the U.S. decision to hike import tariffs and the Ukrainian government fears growing European protectionism will trigger even more, an official said Tuesday. The Ukrainian government estimates that steel producers face annual losses of up to dlrs 220 million because of U.S. President George W. Bush's decision in March to slap steel imports with 30 percent higher tariffs to protect U.S. steel industry, news reports said. Ukraine's steel exports to the United States plummeted by about $ seven million to 1,500 tons (1,650 short tons) in April- 12 times less than the same period last year, according to the Interfax news agency. However, Ukrainian officials are more alarmed by...

Posted by DeLong at 11:12 AM

June 10, 2002

The Washington Post's Steven Pearlstein reveals himself to be a Europessimist: Europe's structural rigidities coupled with the approaching demographic crisis of the social insurance state give it a bleak future--unless it can reform itself. I still don't know what I think of this argument. The contrast between the United Kingdom today and over the past decade and the major states of continental Europe lends force to the claim that continental Europe must reform or stagnate. However, the contrast between Scandinavia (including Ireland) and the major states of continental Europe seems to me to teach different lessons. I wish I knew what those different lessons were... washingtonpost.com: Golden Moment Eluding Europe Golden Moment Eluding Europe: Resistance to Reform Stymies Bid To Become Economic Rival of U.S. By Steven Pearlstein Washington Post Staff Writer Tuesday, June 4, 2002; Page E01 In Italy, an economist working on a government proposal to allow companies to lay off employees in select instances was gunned down in front of his home in Bologna. When the government announced it would move ahead with its plan anyway, unions in April shut down the country in the first day-long general strike in 20 years....

Posted by DeLong at 01:52 PM

June 06, 2002
PEIS--Notes on Reform...

For my sins, I have wound up as chair of an interdisciplinary studies major, Political Economy of Industrial Societies, here at Berkeley. The major has lots of eager and enthusiastic students--those who want to do interdisciplinary work are, in my experience, the most eager and enthusiastic, and often very capable as well. The major has next to no money. Therefore we survive through exploitation: paying lecturers $7000 a pop to teach courses, thus taking advantage of the large excess supply of academics in history, political science, and related disciplines that have--in an appalling failure of workforce planning--been pumped out of America's universities over the past decades. I had coffee with one of my lecturers yesterday. Jesse Goldhammer, a guy who has just moved to Berkeley from Austin, a newly-minted Berkeley Ph.D. in political science, a political theorist, with a just-completed dissertation (and, hopefully, soon a book contract) on French political thinkers' conceptions of violence as both foundation-making and foundation-breaking for political regimes. We have him slotted to teach one course--PEIS 101, Modern Theories of Political Economy--this summer, and two courses next spring. He is--as are all of our lecturers--smart, enthusiastic, a very good teacher, intellectually curious, and convinced at some...

Posted by DeLong at 10:54 AM

June 05, 2002
A Truly Loathsome Toad

So I stopped by Andrew Sullivan's weblog this morning to see what's what, and was confronted with a short item which read, in its entirety: SELF-PARODY WATCH: "Special Report: Zambian Copper," - a headline from this week's Economist. At first, I genuinely didn't get the joke. You see, I'd read the Economist's Zambian copper story. It was one of the most interesting (and depressing) articles in this week's edition: the failure of privatization in southern Africa, 15000 workers who may lose their jobs, a mining complex that once produced 10 percent of the world's copper so damaged by two decades of neglect during nationalization that now there appears to be no way--not even if the mineworkers of Zambia work for free--that the mines can produce more in value than they take in, the fact that Zambia has little else worth exporting besides copper, whether the key flaw lay in the decades of nationalization or in the transformation of the privatization program into a "looting exercise." Why, I wondered, does Andrew Sullivan consider this--interesting and important--story to be a big joke? But then I began to imagine what the inside of Andrew Sullivan's mind must be like... Look! The Economist thinks...

Posted by DeLong at 09:22 AM

May 01, 2002
Three Cheers for the Private Sector!

From an economist's point of view, this is an excellent example of just why it is that private-sector businesses are so much more efficient on average than public-sector or non-profit-sector bureaucracies...

Posted by DeLong at 03:25 PM

April 15, 2002
April 15: Tax Day

Of course, if you can find someone else willing to pay my share, so that I can keep my $91,000, have 'em give me a call...

Posted by DeLong at 03:49 PM

February 15, 2002
The Partnership Dance Between Government and Business

For at least two centuries, if not longer, it has been clear that modern economies can be successful only if they are mixed economies. For at least two centuries businesses and governments have performed a complicated partnership dance, at times switching parts of their roles, watching each others' spheres of influence expand and contract. Now we are about to enter another measure of this partnership dance. One thing, however, remains clear: it is a partnership, for neither business nor government can flourish without the other. In the absence of private business government cannot fulfill its promise to citizens to create and guard prosperity. In the absence of government, and its regulatory and supervisory role, business simply cannot function. We today know that modern industrial economies can be successful only if they are mixed economies because of the history we have lived, a history in which the extremes have proven so unpleasant. Socialism-as-we-knew-it produced either too many meetings or too little freedom. Over time it led to extraordinary low levels of efficiency as the absence of hard budget constraints for organizations meant that there were no effective counterpressures to bureaucratic stagnation. On the other side, attempts to diminish the role...

Posted by DeLong at 10:12 AM