I enjoy reading Greg Mankiw’s blog, because he does a pretty good job of explaining an opinion that I usually don’t share, thus always giving me something to think about …

He does the same in a recent article in the NYTimes, contributing on the debate whether the Bush tax cuts for the rich should be extended, or whether these taxes should even be increased, as Obama’s administration seems to be planning.

Mankiw argues that taken all taxes and deductions into account, taxation on money he would be earning to pass on to his children 30 years from now is about 90%. And while nonchalantly agreeing that he can bear that burden, he claims that his incentive to work is seriously impaired by that. Which we should care about, because his (and other high earners‘) work could be very valuable to all of us (like, only twisting his own example a little bit, writing articles propagating higher income for himself and his friends…).

Seriously, as usually, he has a point. I think my reply would centre around my assumption that especially high earning people are doing something they like doing, for intrinsic reasons. Maybe I would point to research showing that Mankiw’s differing self-perception might be a result of the very theories he has been learning and teaching (e.g. this or this), thus not being representative of the population of rich people in general. He does point to research showing that rich people respond particularly strongly to incentives, but what I read there seems to be rather contradicting that claim (at least in the sense that he is implying — responding by working more or less):

For lower income groups, labor income accounts for most of their income. Since labor income tax is withheld, the only way to manipulate income is to work more, or less. For higher income groups, capital income is more important, and this is more readily manipulated for tax purposes through asset allocation decisions. The researchers show that taxpayers with itemized returns have particularly high elasticity.

Just some starting points for thoughts here

I just read the „Popular Information“ about this year’s Nobel Prize Winners in Economics and don’t quite know whether I’m shocked or happy. It’s good stuff like that is being discovered. How very sad that it took till the 70s for this to catch on. Here’s the basic discovery:

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… I hope This is me trying to get facebook comments back into my blog to have some consistency there. Hope it works. I’m using WordBooker now, after having the hardest time deciding between this and WPBook, I wasn’t even really able to tell the differences, and both settings are a pain. In the end, setting up a new application for WPBook was what made me go with WordBooker for now…

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Upon happy arrival in Glasgow I had to discover that my favorite news satirist Stephen Colbert cannot be accessed from the UK — wow! Hadn’t expected that he would take making fun of old Great Britain to that level! (actually, of course, this has to do with licensing stuff). I had been tempted to try and use one of the infamous „youtube proxies“, but they never worked for me. Today, through a forum of Colbert fans, I discovered the service „Hotspot Shield“ that actually does.

I’d usually be skeptical of free services like that, but my trust is increased after seeing that the program is also featured by German software site „Chip“. And by that fact that I can see how they make money: by adding ads to videos you watch using them, which I suppose is the de-facto main use for the thing.

By getting rid of the stupid „this content is not available in your country“ notes in youtube and elsewhere, I think this is one important step back to the free web, and to leaving country borders behind you when you log on. At least as long as all content is available in the US…

A month-old NYTimes books review talked about a book with the impressive title „Delusions of Gender“ by Cordelia Fine, and tries to make the point that the differences in male and female brain structure and functioning are by no means enough to account for the differences we believe in in everyday life. Which would imply they are culturally shaped, and potentially changeable.

I can’t tell from the review if the book is an addition to the scientific debate — but the debate is much broader than science anyway, with books recurring to biological differences frequent bestsellers in the last years. So a little bit of polemic from the other side won’t hurt, and this polemic is pretty good.

The criticism about the leap of faith from atomic (and in itself disputable) scientific evidence on neurological differences between sexes to different behavior and abilities makes sense:

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As a long-time fan of Stephen Colbert, I’d like to point you to a video of him „testifying“ in Congress on the issue of immigration. Here’s my favorite line in it:

Apparently, even the Invisible Hand doesn’t want to pick beans. — Stephen Colbert, Opening statement during a hearing of the Subcommittee on Immigration, Citizenship and Border Security (from C-SPAN 9/24/10 coverage)

A NYTimes article about New York’s Mayor Michael R. Bloomberg supporting candidates of both parties across the country is worthy reading for the insights into two opposing political currents that are facing off right now. And that’s not the two parties — it’s a reconciliatory, bipartisan note versus a radical, partisan idea, incorporated most strongly by the Tea Party movement. And I think it’s outcome (partly to be decided already in the upcoming primaries and elections) will be quite influential for the American political climate of the next decade or so. But apart from recommending that read, what I wanted to share here is a quote from Bloomberg, depicting his (and assumedly many of his wealthy Wall Street friends‘) judgement of Obama’s financial politics:

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In the debates about the association between Islam and terror, moderate Muslims are frequently asked to take a stance against the militant extremists sharing their faith. NYTimes Op-Ed contributor Nicholas D. Kristof has taken this message home, by doing just that — apologizing for the freakish stuff directed at Muslims by his fellow American Christians:

Many Americans have suggested that more moderate Muslims should stand up to extremists, speak out for tolerance, and apologize for sins committed by their brethren.

That’s reasonable advice, and as a moderate myself, I’m going to take it. (Throat clearing.) I hereby apologize to Muslims for the wave of bigotry and simple nuttiness that has lately been directed at you. The venom on the airwaves, equating Muslims with terrorists, should embarrass us more than you. Muslims are one of the last minorities in the United States that it is still possible to demean openly, and I apologize for the slurs.

The article goes on with interesting examples of how hypocritical these demands towards Muslims can be. Which doesn’t mean they shouldn’t be made, but — in good Christian practice — you shouldn’t fail to begin with yourself …

Again following pointers by Greg Mankiw, I found an economist criticizing the ideal of efficiency in a NYTimes „Economix“ blog post, and a critical (i.e., pro-efficiency) reply by another economist. So, what do economists traditionally recommend as good public policies?

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I enjoy a read of Greg Mankiw’s blog every now and then, staying aware that his views are an interesting and helpful perspective on the world, but have to be complemented by other, differing views…

In a recent post he wrote about how rent-controlled houses in New York basically help universities evading taxes, by using the (forcedly) cheap rent apartments as additional tax-free benefits for senior staff. A sign of warning, how well-intended laws can backfire. From which I don’t think one should conclude that laws are always bad…