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Tag Archives: Commentary

Housing hope

There is a tendency in grumpy land to view the world as heading in the wrong direction. But a believer in our system must be optimistic that it is eventually capable of reform, that we will do the right thing in the end if only after we try everything else, as the saying goes.This thought comes to mind in reading the Horrible Housing blunder in the Economist. The Economist calls housing "The west's biggest policy mistake." And, the ray of hope, even the progressive left in California is...

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A chilly Chilean lesson

I have been interested in following the news from Chile.Most recently, I found this very interesting essay by Avel Kaiser in the Jan 1 Wall Street Journal. An excerpt:Latin America’s freest, most stable and richest nation—is in free fall. Public order has collapsed, violence is rampant, and populism is the new creed of the political class. There is a recession, characterized by capital flight and rising unemployment...It took a mere 40 days for the Latin American “oasis”—as...

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Wealth and taxes — Overview

I thought that "wealth and taxes" would be a short blog post. It turned in to a 5 part series. Here's an overview, or table of contents in case the whole thing looks a bit indimidating. The most important one, really I think is Part V, "it's all political." The others build bit by bit, well, this can't be the answer and that can't be the answer, so what is the answer, and Part V finds it.In Part I we met the fact that "wealth" is measured as "capitalized income," Y/r. But only some...

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Wealth and Taxes, Part V

Wealth and Taxes Part V -- it's all about politicsSo what is the question to which measuring wealth distributions and a wealth tax are the answer?To briefly review, in Part I we met the fact that "wealth is measured as "capitalized income," Y/r. But only some kinds of income and with r choices that blew up measured wealth inequality.  In Part II we learned that a big reason wealth inequality widened is that interest rates fell. If r falls, Y/r rises, but it's the same Y.  In...

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Wealth and Taxes, Part IV

This post continues from Part IIIThe Wealth Tax.So, if arguing about the ill-defined and ill-measured distribution of wealth lies in service of the wealth tax, what is the question to which the wealth tax is an answer?Revenue and Redistribution -- good and bad taxesPreamble: Economists have no real professional expertise to object to redistribution, or argue for it. Swallow hard, you may not like it for political, moral or other reasons -- or you may be all for it for those reasons -- but...

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Dudley on reserves

Bill Dudley, ex President of the New York Fed, has an excellent Bloomberg editorial on reserves.Reserves are accounts that banks hold at the Fed. The Fed used to pay no interest on these accounts. Accordingly, banks held very small quantities, as little as $10 billion in all, and they managed that quantity very carefully against legal reserve requirements, and having just enough around to make payments. To control interest rates, the Fed used to change the supply of reserves, and then watch...

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State support for nuclear power

Tyler Cowen responded with an interesting  post to my query,"I don’t see just why nuclear power needs “state support,” rather than a clear workable set of safety regulations that are not excuses for anyone to stop any project." (Tyler, originally wrote,"State Capacity Libertarians are more likely to have positive views of infrastructure, science subsidies, nuclear power (requires state support!), ...," I interpreted "state support" as  massive subisdies to be added to...

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Wealth and Taxes, Part III

(This post follows part I and  part II)So, why do we care about the distribution of wealth? -- Especially,  as we learned in part I that wealth is poorly defined and poorly measured, and we learned in part II that much of the distribution of "wealth" reflects higher market prices for the same assets, which do not increase their owner's ability to consume over a lifetime? Why so much anger, even from commenters on this blog?Why wealth inequality not income inequality or...

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Wealth and Taxes, part II

(This is a continuation of Wealth and Taxes, part I.)A second asset pricing perspective helps us to digest "wealth," its distribution, and whether we should care.   Here is another Smith, Zidar and  Zwick  graph showing the top 0.1% share of wealth (as they define and measure wealth). (Reminder. The game here is to start with selected income streams, then divide them by a rate of return to produce large wealth numbers. $100 income / 0.01 interest rate = $10,000...

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(Adjective) Libertarianism

Libertarianism consists of many different ideas, and is clearly in need of some adjectives. Tyler Cowen, in an interesting new-Year's reflection, offers "State-Capacity Libertarianism."  The guts of it is, I think, that the State must exist, and do competently and effectively its crucial tasks.The best bit, I think:5. Many of the failures of today’s America are failures of excess regulation, but many others are failures of state capacity.  Our governments cannot address climate...

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