My son Chris, who I have raised to be a good boy, is showing disturbing signs of intellectual independence. (You’ll note that this is a recurring theme in these posts on the joys and futility of fatherhood.)
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| Our budding economist. Will he want to steer markets, or want them set free? |
In his third year studying economics at the University of Chicago, Chris is starting to actually know stuff, so that when we talk about public economic policy, for instance, and I begin railing about some libertarian voodoo economic theory involving low taxes and buoyant growth, he looks at me soberly and says that the studies he has read indicate that raising taxes always depresses GDP.
Darn, I knew I should have encouraged him to go to Berkeley rather than the home of Milton Freidman.
What about the tremendous growth in the U.S. in the 1950s and early 1960s, when the top marginal tax rate was 91 percent (yes, you read that right, 91 percent)? That was a different time, he says. Huge expansion after WW II, both here and abroad. Not comparable to today’s world.
Okay, how about the expansion in the 1990s after Bill Clinton raised taxes? This is about the point when he reminds me of the fallacy of post hoc, ergo propter hoc. (Credit where credit is due: our family got that one from Aaron Sorkin, via Martin Sheen on “The West Wing.”) Just because one thing follows another, it doesn’t necessarily mean that the first event caused (or didn't impede) the second. There are lots of factors that make economies expand and contract. Tax policy is just one of them.
The question, Chris says, is not whether tax increases depress growth, but how to structure the tax system to do its job most efficiently. He favors tax reform that eliminates tax expenditures (targeted deductions and credits), thereby broadening the tax base. A broader tax base would allow a progressive tax structure with lower rates at all income levels.
Another inconvenient truth he let me in on over winter break is that when jobless benefits expire, hiring goes up. Even in a recession. The implication is that, as my conservative friends like to say, people collecting jobless benefits don’t even look for work until the sugar bowl is empty.
All this, of course, makes my bleeding liberal heart palpitate. I want the government to help the needy. So does Chris, by the way. What he is trying to show me, though, is that my knee-jerk reaction to throw money at the problem might not be sound economics.
Chris has always been intellectually patient (part of the reason he’s such a good chess player). He doesn’t jump to conclusions. He likes to have facts and coherent theories. And he looks for them wherever there are good thinkers, whatever their political stripe. He reads Gail Collins and David Brooks with equal interest (and occasional chuckles). He studies John Maynard Keynes side by side with Friedrich Hayek.
The conversations he and I have now remind me of ones I had with my father when I was in law school. My dad was a Goldwater conservative. I wasn’t as liberal then as I am now, but we still had plenty to debate, and debate we did. During one late night extravaganza, he interrupted some point he was making and looked up at me and said he wanted to go to law school. He was a doctor, and a brilliant man, but the legal training I was getting was making me more rigorous analytically, and he wanted that edge too. I never told him so (I wish I had), but I always admired him for that, not for the implicit compliment of my debating skills, but for wanting to get better himself, for wanting to be able to better parse public policy questions.
Like almost everyone else who lives in Nancy Pelosi’s backyard, I am desperately looking for the silver lining of Speaker Boehner, even though orangish-tan, rather than silver, is more the color we associate with him. Maybe, as President Obama once joked, the new Speaker is himself a “person of color” and, as such, will have appropriate empathy for the poor and downtrodden---right after he repeals their health-care benefits. There is this hopeful sign: John Boehner cries as easily as my grandfather after a couple of glasses of sherry, and my grandfather had a big heart.
So the leader of the new Republican majority is a sentimental guy who votes like a prison warden. How do you reach a guy like that? Probably not with tightly reasoned logic and white papers. Probably not with late-night father-son debates. I think we’re going to have to find another way.
Embracing Chris’s willingness to take good ideas wherever he finds them, I suppose it is remotely possible that a Republican House could be good for the country. Certainly the voters thought so. I’ll admit that we Democrats are wusses when it comes to cutting spending. We just don’t have the fiscal discipline to send young kids home after school to an empty house, or their parents to the grocery store with an empty wallet. But spending does have to be cut. Everyone can see that.
Or maybe not everyone. Paul Krugman, the Nobel Laureate economist and New York Times columnist, has been saying for a long time that we need more, not less, government spending, at least temporarily, as starter fuel for the economic engine. He recently criticized President Obama for giving credence to Republican ideas like “belt tightening.”
I admire Paul Krugman, and I agree with him most of the time, but what does it mean if we can’t talk to each other? Giving some credence to the other fellow’s point of view is almost always the best way to start a dialogue. “Few people can see genius in someone who has offended them.” (Robertson Davies)
If we speak only the language of our own ideas, we will be understood only by those who share that language. On my visits to Italy I’ve noticed that slowing down my English, using enthusiastic hand gestures, even adopting a Tony Soprano accent, has not helped me be understood. I have to use their words to get them to see what I am trying to say.
There are common languages we all speak. Love is the big one, of course, and it has a long, stimulating, tradition in politics. Another, more practical, substitute is humor. If Hitler had been funnier, we might all be speaking German.
Darn, I knew I should have encouraged him to go to Berkeley rather than the home of Milton Freidman.
What about the tremendous growth in the U.S. in the 1950s and early 1960s, when the top marginal tax rate was 91 percent (yes, you read that right, 91 percent)? That was a different time, he says. Huge expansion after WW II, both here and abroad. Not comparable to today’s world.
Okay, how about the expansion in the 1990s after Bill Clinton raised taxes? This is about the point when he reminds me of the fallacy of post hoc, ergo propter hoc. (Credit where credit is due: our family got that one from Aaron Sorkin, via Martin Sheen on “The West Wing.”) Just because one thing follows another, it doesn’t necessarily mean that the first event caused (or didn't impede) the second. There are lots of factors that make economies expand and contract. Tax policy is just one of them.
The question, Chris says, is not whether tax increases depress growth, but how to structure the tax system to do its job most efficiently. He favors tax reform that eliminates tax expenditures (targeted deductions and credits), thereby broadening the tax base. A broader tax base would allow a progressive tax structure with lower rates at all income levels.
Another inconvenient truth he let me in on over winter break is that when jobless benefits expire, hiring goes up. Even in a recession. The implication is that, as my conservative friends like to say, people collecting jobless benefits don’t even look for work until the sugar bowl is empty.
All this, of course, makes my bleeding liberal heart palpitate. I want the government to help the needy. So does Chris, by the way. What he is trying to show me, though, is that my knee-jerk reaction to throw money at the problem might not be sound economics.
Chris has always been intellectually patient (part of the reason he’s such a good chess player). He doesn’t jump to conclusions. He likes to have facts and coherent theories. And he looks for them wherever there are good thinkers, whatever their political stripe. He reads Gail Collins and David Brooks with equal interest (and occasional chuckles). He studies John Maynard Keynes side by side with Friedrich Hayek.
The conversations he and I have now remind me of ones I had with my father when I was in law school. My dad was a Goldwater conservative. I wasn’t as liberal then as I am now, but we still had plenty to debate, and debate we did. During one late night extravaganza, he interrupted some point he was making and looked up at me and said he wanted to go to law school. He was a doctor, and a brilliant man, but the legal training I was getting was making me more rigorous analytically, and he wanted that edge too. I never told him so (I wish I had), but I always admired him for that, not for the implicit compliment of my debating skills, but for wanting to get better himself, for wanting to be able to better parse public policy questions.
Like almost everyone else who lives in Nancy Pelosi’s backyard, I am desperately looking for the silver lining of Speaker Boehner, even though orangish-tan, rather than silver, is more the color we associate with him. Maybe, as President Obama once joked, the new Speaker is himself a “person of color” and, as such, will have appropriate empathy for the poor and downtrodden---right after he repeals their health-care benefits. There is this hopeful sign: John Boehner cries as easily as my grandfather after a couple of glasses of sherry, and my grandfather had a big heart.
So the leader of the new Republican majority is a sentimental guy who votes like a prison warden. How do you reach a guy like that? Probably not with tightly reasoned logic and white papers. Probably not with late-night father-son debates. I think we’re going to have to find another way.
Embracing Chris’s willingness to take good ideas wherever he finds them, I suppose it is remotely possible that a Republican House could be good for the country. Certainly the voters thought so. I’ll admit that we Democrats are wusses when it comes to cutting spending. We just don’t have the fiscal discipline to send young kids home after school to an empty house, or their parents to the grocery store with an empty wallet. But spending does have to be cut. Everyone can see that.
Or maybe not everyone. Paul Krugman, the Nobel Laureate economist and New York Times columnist, has been saying for a long time that we need more, not less, government spending, at least temporarily, as starter fuel for the economic engine. He recently criticized President Obama for giving credence to Republican ideas like “belt tightening.”
I admire Paul Krugman, and I agree with him most of the time, but what does it mean if we can’t talk to each other? Giving some credence to the other fellow’s point of view is almost always the best way to start a dialogue. “Few people can see genius in someone who has offended them.” (Robertson Davies)
If we speak only the language of our own ideas, we will be understood only by those who share that language. On my visits to Italy I’ve noticed that slowing down my English, using enthusiastic hand gestures, even adopting a Tony Soprano accent, has not helped me be understood. I have to use their words to get them to see what I am trying to say.
There are common languages we all speak. Love is the big one, of course, and it has a long, stimulating, tradition in politics. Another, more practical, substitute is humor. If Hitler had been funnier, we might all be speaking German.
Everyone loves a good political cartoon skewering some bloated politician. Even though we tend to laugh loudest at jokes made at the expense of our political enemies, we usually see the humor in any really good joke, sometimes with embarrassment. Who hasn’t choked off a chuckle at a particularly funny jab at stereotypes, racial, gender, whatever. I’m not talking about Nazi rants, just the little off-color nuggets that have a recognizable grain of truth. It is that flickering insight into a point of view that might be offensive if presented straight up that might help us learn to speak to one another.
Perhaps we need both Uncle Milties in the House: Freidman and Berle.
Which reminds me. Have you heard the one about John Boehner taking Nancy Pelosi to his favorite bar? The bartender looks a lot like President Obama. Boehner waves to him and says...
(Painless Econ 101. An amusing Keynes v Hayek rap)
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