tag:blogger.com,1999:blog-17232051.post6275793416033661359..comments2024-03-28T03:16:14.104-04:00Comments on Noahpinion: Tinkering at the marginsNoah Smithhttp://www.blogger.com/profile/09093917601641588575noreply@blogger.comBlogger11125tag:blogger.com,1999:blog-17232051.post-18857487091312020302011-10-02T19:20:04.352-04:002011-10-02T19:20:04.352-04:00Eric wrote:
"Here's the other thing that...Eric wrote:<br /><br />"Here's the other thing that bugs me... middle class wages have been stagnant for 30 years, and the plan is we need to make them lower? Too many economists like to treat labor like any resource, as a cost to be minimized to make the economy as productive as possible."<br /><br />Productivity is great if you can afford the highly productively made goods. With the cost of health care exploding, those who have been losing real income can't.Blixkreeghttps://www.blogger.com/profile/15608414360851482066noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-48352599549286132072011-09-19T01:04:23.209-04:002011-09-19T01:04:23.209-04:00Oh come on. "Any tax on capital income disto...Oh come on. "Any tax on capital income distorts decisions on saving and investment." Well sure, any tax on anything distorts some decision (so we shouldn't have any right?) but this line is always brought out to push changes to help the rich get richer. Look, if the primary concern is making sure businesses are profitable and returns to capital are good, then why are we talking about the economy so much when clearly the recession has been over for some time? This just does not address a problem we have.<br /><br />Here's the other thing that bugs me... middle class wages have been stagnant for 30 years, and the plan is we need to make them lower? Too many economists like to treat labor like any resource, as a cost to be minimized to make the economy as productive as possible. Problem is wages are absolutely essential to making sure an economy actually serves its people, and that will continue to be the case for as long as wages are the primary source of income for most people. Barring a radical change in how our economy works, higher wages ought to be as important of a goal as higher GDP.<br /><br />But even if you don't accept higher wages as an end, the lack of middle class wage growth has been at the root of much of our problems. Increased savings at the top has meant a bigger financial sector, easier credit for the middle class, and stagnant wages have meant more incentive to go into debt. A demand shortfall isn't going to be fixed without restoring the middle class.Eric Lhttps://www.blogger.com/profile/17688525347746547529noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-81020644135165097522011-09-14T23:36:18.272-04:002011-09-14T23:36:18.272-04:00The problem with the Republican talking points is:...The problem with the Republican talking points is:<br />1) The cost of capital is historically low.<br />2) Given that businesses finance themselves in part with effectively tax free borrowing from pension funds and iras the real tax rate they face on new investments is so low that it is unlikely to be a hurdle for new investment.<br />3) When companies would rather invest cash reserves at zero return than invest it at some return and pay 10 to 30% tax on that return you know the problem is lack of opportunities, not the tax rate.<br /><br />The Republicans have been shifting the burden to the middle class for thirty years and it is tearing the US apart.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-82219791851213682652011-09-14T12:48:36.641-04:002011-09-14T12:48:36.641-04:00"Europe has a VAT and a corporate tax rate th..."Europe has a VAT and a corporate tax rate that is 15 percentage points lower than ours, and they don't seem to have made a quick exit from this slump. "<br /><br />IIRC, Europe (depending on what 'Europe' means) has an effective corporate tax rate higher than the USA.Barry DeCiccohttps://www.blogger.com/profile/04735814736387033844noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-47321356158092320752011-09-13T20:14:06.935-04:002011-09-13T20:14:06.935-04:00@Taryn Hart:
Go do yer own work n' let me do ...@Taryn Hart:<br /><br />Go do yer own work n' let me do mine! ;)Noah Smithhttps://www.blogger.com/profile/09093917601641588575noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-1400463349030643772011-09-13T20:09:56.000-04:002011-09-13T20:09:56.000-04:00Oh I thought I could post a link... well, the addr...Oh I thought I could post a link... well, the address is http://socialmacro.blogspot.com.Anonymoushttps://www.blogger.com/profile/14235846531323511190noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-21638909056604203672011-09-13T20:09:00.087-04:002011-09-13T20:09:00.087-04:00Honestly? Free trade and changing from a corporat...Honestly? Free trade and changing from a corporate income tax to a value added tax are going to solve a problem of seriously depressed aggregate demand? If something could be done to accelerate the household debt deleveraging process or there was a seriously large and probably sustained stimulus, that should be able to cure the temporary (but long-lasting) shortfall.<br /><br />I'm trying to develop ideas along this line in <a href="http://socialmacro.blogspot.com/>my own blog</a>.<br /><br />I have my doubts about the relative effectiveness of quantitative easing and certainly the potential for establishing credibility to raise the rate of inflation in the U.S. economy. My main problem with it is that if the financial markets realize that the U.S. is in a liquidity trap, they will realize that the Federal Reserve cannot deliver on the promise of higher inflation in the relative short-term, so there is little reason why they would buy the Fed's promise of higher inflation. I hope I'm wrong and I might be, especially if economic actors have a worse model of the economy functioning in their heads.Anonymoushttps://www.blogger.com/profile/14235846531323511190noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-79126997184434786502011-09-13T19:11:37.949-04:002011-09-13T19:11:37.949-04:00I was struck by the quote: "Any tax on capita...I was struck by the quote: "Any tax on capital income distorts decisions on saving and investment."<br /><br />I can think of lots of things that distort decisions on saving and investment. For example, poverty, lack of education, or having fatal cancer or heart disease but no medical insurance. These things seriously distort nearly every aspect of potentially productive human lives.<br /><br />How about getting rid of corporate income tax, but taxing capital gains, dividends, and interest at the normal income tax rates?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-83502553385212267392011-09-13T16:10:21.648-04:002011-09-13T16:10:21.648-04:00I would've bet you wouldn't make it until ...I would've bet you wouldn't make it until your pre-arranged date (you actually made it longer than I thought you would). And now, you have to finish your dissertation - that was the deal, right?<br /><br />http://plutocracyfiles.blogspot.com/Saphronhttps://www.blogger.com/profile/15522096582024595483noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-36088409006348832862011-09-12T17:30:26.241-04:002011-09-12T17:30:26.241-04:00Thank you! For both taking Mankiw to task and rais...Thank you! For both taking Mankiw to task and raising the point about exchange rate policy.<br /><br />On Mankiw...it's pathetic how he failed to mention the debt overhang in his op-ed. He just talked about how businesses are not spending. What I really can't stand about Mankiw is his faux-centrism (he has to appear centrist to keep milking his textbook cashcow). Barro has always held staunchly right-wing political views on economic issues and a big fan of RE. But Mankiw writes as if he has not a clue of what Rogoff has been drumming on about all this time...except that he does and he even uses the same macro model as Rogoff.<br /><br />On exchange rate policy...I agree that we need to focus on weak dollar, reversing capital flows, and making the savers (Japan, China, Germany, etc) spend and allow the spenders to deleverage and export simultaneously. The question is how do we effectively engage in exchange rate policy. We could place a tariff on China until they have a credible pathway to a floating currency. I don't see it ever happening where the Fed behaves like the BoJ or the SNB in actively seeking to weaken the dollar. Thus, it all comes back to QE3. I say buy out the long end of the treasury curve and push financial capital abroad. That will weaken the dollar, albeit in a backdoor manner.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-82719568487972239092011-09-12T15:37:17.769-04:002011-09-12T15:37:17.769-04:00“The overriding factor was not the business climat...“The overriding factor was not the business climate. And it was not the wages we’re paying today. It was that we cannot afford to have a work stoppage, you know, every three years.”<br /><br />http://www.nytimes.com/2011/04/21/business/21boeing.html?_r=1Anonymousnoreply@blogger.com