Category: economics

Republican tax bill opens up drilling in Arctic National Wildlife refuge, lets ministers endorse candidates from the pulpit, eliminates tax deductions for student loan interest, and imposes taxes on grad-student tuition waivers

December 1, 2017 • 8:30 am

I guess I haven’t been paying much attention to the finer points of Republican perfidy, and so discovered three things only last night:

1.) The Republican tax bill in the House (if it passes, it still has to be reconciled with a Senate bill), has a provision that will allow parts of the Arctic National Wildlife Refuge to be opened for oil and gas drilling. The state of Alaska has been trying to get this done for years, but Congress has stood in its way. Now they’re caving. There is no amount of damage to wildlife or the environment that the Trump administration won’t tolerate in the name of capitalism. They’ve already proposed allowing imports of big-game hunting trophies, like elephant heads (though that’s on hold), and have passed a measure allowing hunters to shoot hibernating bears and their cubs, or wolves in their dens. These people have no respect for the lives or suffering of animals. And what does this have to do with taxes? It’s a sneaky add-on!

2.) The new bill will allow ministers to endorse political candidates from their pulpits, though churches still won’t be able to make contributions to political candidates. I agree with these humanists who claim that this now creates an entanglement between church and state (ministers are still allowed to express their private opinion in other places):

The Rev. Barry Lynn, the executive director of Americans United for the Separation of Church and State, said in an email, “The House GOP leadership and President Trump want to turn America’s houses of worship into centers of partisan politics. It’s a reckless scheme that may please Trump’s allies in the religious right, but could spark a blowback since the vast majority of Americans, faith leaders and houses of worship are firmly opposed to it. This is a bad idea that should be immediately dropped.”

Larry T. Decker, the executive director of the Secular Coalition for America, called the proposal in a statement “a brazen attack on the separation of church and state.” And the Baptist Joint Committee for Religious Liberty argued in a statement that inviting politics into the sanctuary is bad for churches, saying the House proposal “threatens to destroy our congregations from within over disagreements on partisan campaigns. … This change has been pushed by a tiny minority and is opposed by the vast majority of Americans and churchgoers, across party lines and faith traditions.”

If they’re gonna do that, then let’s eliminate the tax exemption for churches and pastors. This, too, is a sneaky add-on

3.) Finally, the Congress’s own joint committee on taxation admits that the new tax bill will increase the federal deficit by a trillion dollars over the next decade.

The bill will, of course, drastically slash the corporate tax rate, almost halving it from 35% to 20%, while it’s likely that the tax bill for middle-class Americans will rise. Mortage interest deductions are being slashed, students will no longer be able to deduct the interest on their educational loans from their taxes, and graduate students will have to pay taxes on the tuition waiver they get. Since grad student tuition is often high, but waived for many students, this will hit them with a tax bill that they may not be able to afford. I had such a waiver at Harvard, and I’m not at all sure I could have afforded to pay taxes on that. In the net, this bill is going to hurt American undergraduate education in many ways.

It’s hard to avoid seeing this bill as one aimed at helping the rich at the expense of the poor. I wonder if those poor schlemiels who voted for Trump might start to dimly realize that they didn’t act in their own interest.

U. of Chicago prof wins economics Nobel

October 9, 2017 • 2:32 pm

This is getting monotonously regular, but it’s still a boost for our reputation. Richard Thaler, 72, a professor of behavioral science and economics at our Booth Business School, just won the Nobel Prize for Economics. He wrote the bestselling book Nudge, which I haven’t read, but I’m sure some readers have, so weigh in below. As the New York Times reports,

Richard H. Thaler was awarded the Nobel Memorial Prize in Economic Science on Monday for incorporating a more realistic understanding of human behavior into economic theory, and for using the resulting insights to improve public policy.

Professor Thaler, an economist at the University of Chicago’s Booth School of Business, is a pioneer of the discipline known as behavioral economics, which marries the work of psychologists with that of economists to produce better models of human decision-making.

The Nobel committee, announcing the award in Stockholm, credited Professor Thaler with taking the field from the fringe to the academic mainstream. The committee also noted that his work had driven a wide range of public policy improvements, notably a sweeping shift toward the automatic enrollment of workers in retirement savings programs.

Professor Thaler said on Monday that the basic premise of his approach to economics was that, “In order to do good economics, you have to keep in mind that people are human.”

Asked how he would spend the prize money, he replied: “This is quite a funny question.” He added: “I will try to spend it as irrationally as possible.”

Some of his work:

Professor Thaler’s academic work can be summarized as a long series of demonstrations that standard economic theories do not describe actual human behavior.

For example, he showed that people do not regard all money as created equal. When gas prices decline, standard economic theory predicts that people will use the savings for whatever they need most, which is probably not additional gasoline. In reality, people still spend much of the money on gas. They buy premium gas even if it is bad for their car. In other words:, they treat a certain slice of their budget as gas money.

He also showed that people place a higher value on their own possessions. In a famous experiment, he and two co-authors distributed coffee mugs to half the students in a classroom, and then opened a market in mugs. Students randomly given a mug regarded it as twice as valuable as did the students who were not given a mug. This pattern, which Professor Thaler labeled an “endowment effect,” has since been demonstrated in a wide range of situations. It helps to explain why real markets do not work as well as chalkboard models.

I suspect, but can’t be arsed to look it up, that the University of Chicago has more economics laureates than any other school. It’s almost a requirement for a senior economist at this school to have made the trip to Sweden.

Here’s the announcement from the Swedish Academy of Sciences. If you won the contest (and you’ll have to tell me), email me or post below; as you recall, you had to be the first person to guess one prizewinner in at least two categories.

Richard Thaler

Gender- and race-based ticket pricing in Canada

September 20, 2017 • 12:15 pm

According to yesterday’s Toronto Sun, some Canadian filmmakers are charging people different amounts of money for tickets to see their productions, with the charges based on both race (a social construct?) and sex.

Organizers for the Victoria [British Columbia] premier of “Building the Room” used “justice pricing” when tickets went on sale last week, with white males being charged $20, while others paid $10.

Sid Mohammed, a spokesman for the production, says organizers wanted to address the fact that white males tend to have more purchasing power than other demographics.

But he says they received a “huge amount” of backlash on the pricing, including emailed death threats and accusations that the practice was racist and constituted discrimination.

Organizers have responded by lowering the admission price for white males to $15 and announcing that any profits from the door will be donated to the Native Friendship Centre of Victoria and the Victoria Pride Society.

First, this issue is no reason for death threats. But there’s case to be made that it involves race and gender discrimination.

As the article notes, this isn’t the first time men have been charged more than women, though apparently race didn’t figure in an earlier case in which a feminist vegan cafe in Melbourne, Australia charged men 18% more than women, on these grounds:

The 18% figure comes from a 2016 Australian government Workplace Gender Equality Agency report which found the average difference between a man and woman’s full-time weekly wage is about 18%.

I’m not really down with this because it punishes or rewards entire classes based on averages rather than individual incomes. If a cafe wants to give a poor person a free meal, or charge less for somebody who earns less, I have no problem with that—unless your penuriousness is due to a disinclination to work. Differential charges should be based on differential incomes. But to assume that all men make 18% more than all women (or, in the case of the Victoria theater, twice as much) is to fall into the fallacy that an individual should be treated not on his or her qualifications or salary, but on group differentials.  And really—$20 as opposed to $10?

I’m wondering what readers think of this.  It shouldn’t be dismissed offhand simply because you’re using group averages to deal with individuals because, after all, that’s how affirmative action policies work Regardless of how “privileged” an upper-middle-class black family is, their child will get preferential admission at many American colleges. I still favor this policy as it increases diversity, which is an inherent good, though I recognize the problems with it as well.  But differential ticket and meal pricing does nothing to increase diversity. In fact, I’m not sure exactly what it does, except serve as a demonstration of virtue. If you really wanted to create a level playing field, charge people according to their income. Of course, that wouldn’t work in practice!

And, at least in the U.S., I think it’s illegal. I remember when women brought lawsuits against dry cleaners for charging women more than men to clean essentially the same garment, a practice which is deeply unfair. (I can’t recall the outcomes of those lawsuits.) Women also seem to pay a lot more than men for getting the same haircut, which is also unfair.  At least in America, I don’t think you’d be able to get away with charging people more or less for such things based on either their race or sex. Why isn’t this illegal in Canada?

h/t: Michael

Mrs. Tiggy-Winkle on 50p coin

June 21, 2017 • 3:30 pm

When Grania forwarded me this tw**t, I thought it was a huge joke:

But it’s TRUE! One of my favorite Beatrix Potter characters—unfairly mocked at the end of the book as “she’s just a hedgehog!” after her washerwoman disguise slips— is on a 50p coin issued by The Royal Mint. Sadly, it was issued last year and appears to be unavailable now:

“Only a hedgehog!” A hedgehog who can do laundry! What a stunning bit of species-ism which, for me, ruined the story:

I think there’s a postmodernist, feminist, intersectional Ph.D. thesis to be written on Mrs. Tiggy-Winkle. What would it be called?

p.s. I found the coin for a few bucks on eBay and bought it.

 

Must you be religious to be moral?: A worldwide survey, and its lesson

March 19, 2014 • 8:25 am

A post by C. J. Werleman at Alternet called my attention to a new study by the Pew Research “Global Attitudes Project” that polls people on the perennial (and already answered) question, “Do you need God to be moral”? Pew’s answer, however, is a general “yes,” but that answer is far more common in poorer than richer countries. Here are Pew’s data broken down by country:

PG-belief-in-god-03-13-2014-01

The survey involved 40,080 people.

As you see, the wealthier countries of Europe and Asia have a fairly high proportion of people who don’t think it’s necessary to believe in God to be moral, while sub-Saharan Africa and the Middle East (with the exception of Israel) show a much higher belief that goodness requires godliness. Much of Latin America is also in line with that view.

Note that the U.S. is higher than any surveyed European country in its view that you need God to be moral (53%), while our more sensible Canadian friends are much lower (31%).

Pew also published an interesting plot (divided by country) of the proportion of people who think belief in God is necessary for morality versus the wealth of that country (expressed as per capita GDP). As you see below, the correlation is strong, and undoubtedly highly significant. There are two outliers, though; as Pew notes:

Two countries, however, stand out as clear exceptions to this pattern: the U.S. and China. Americans are much more likely than their economic counterparts to say belief in God is essential to morality, while the Chinese are much less likely to do so.

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What is curious here is that the report leaves out any mention of the correlation between religiosity and the belief that goodness requires Godliness.  For it is certain that there is another factor involved in the relationship shown above: belief in God. Those sub-Saharan African countries, and those in the Middle East, are the most religious countries in the world. The U.S. is the most religious of First World countries, and China, because of its Communist past and general lack of goddy religions, is notably nonreligious. Greece and Poland are more religious than Britain or France, and Canada is less religious than the U.S.

In other words, if you plotted religiosity of these nations versus the goodness-requires-God quotient, you’d get the same kind of relationship, but with a positive correlation.  That’s a no-brainer, because clearly countries that are more religious will have inhabitants that see religiosity as more critical to morality.

Curiously, though, that obvious fact isn’t mentioned, and neither is the finding (from other studies) that religiosity is negatively correlated with average income, and especially with indicators of social dysfunction like income inequality, lack of government health care, and so on. I’m willing to bet that if sociological indices of a country’s well being were applied to sub-Saharan Africa and the Middle East, one would find many of those countries to be deeply dysfunctional.

Pew gives one other finding:

There are also significant divides within some countries based on age and education, particularly in Europe and North America. In general, individuals age 50 or older and those without a college education are more likely to link morality to religion. For example, in Greece, 62% of older adults say it is necessary to believe in God to be a moral person, while just 29% of 18- to 29-year-olds agree. In the U.S., a majority of individuals without a college degree (59%) say faith is essential to be an upright person, while fewer than four-in-ten college graduates say the same (37%).

And, of course, older Americans (I don’t know about Europeans) are more religious than younger ones, while more educated individuals in the U.S. are less likely to be religious.

All these data show, then, is that the more religious one is, the more likely one will believe that having faith is necessary for morality. I don’t know why Pew concentrates solely on average income, age, and education, ignoring a factor clearly involved in these relationships—religiosity.

At any rate, the question about whether one needs God to be moral has already been answered in two ways: philosophically by Plato’s Euthyphro argument, and empirically, by observing that countries that are largely godless, like those of northern Europe, are just as moral—if not more so—than places like the U.S. or Middle East. Further, as the West becomes less religious, it has become, as Steve Pinker argues persuasively, more moral.

I’d like to add some data mentioned by Werleman that confirm my suspicion that what breeds religiosity is social dysfunction. Along with some sociologists, I think that those who can’t get help or security from their government, or from a national ethos that citizens should be taken care of, may turn to God for solace and hope. In that sense, Marx was right to indict religion as the “sigh of the oppressed creature.” But I fulminate; let me instead quote Werleman, who cites data supporting the negative relationship between religiosity and social well-being:

Staying with the U.S., this correlation between a high rate of poverty and high degree of religiosity is supported by a 2009 Pew Forum “Importance of Religion” study that determined the degree of religious fervor in all 50 states. The study measured a number of variables including frequency of prayer, absolute belief in God, and so forth. Led by Mississippi, Alabama and Arkansas, nine of the top 10 most religious states were southern. Oklahoma ruined the South’s clean sweep by sneaking in at number seven.

Not coincidentally, led again by Mississippi, Alabama and Arkansas, nine of the top 10 poorest states are also found in the South, while northern and pacific states such as Wisconsin, Washington, California, New York, New Hampshire, and Vermont are among the least religious and the most economically prosperous.

Well spoken! Werleman concludes:

In an earlier piece, I wrote that the primary reason for abject child poverty in these Southern states is that more than a third of children have parents who lack secure employment, decent wages and healthcare. But thanks to religion, these poor saps vote for the party that rejects Medicaid expansion, opposes early education expansion, legislates larger cuts to education, and slashes food stamps to make room for oil and agriculture subsidies on top of tax cuts and loopholes for corporations and the wealthy. Essentially, the Republican Party has convinced tens of millions of Southerners that a vote for a public display of the Ten Commandments is more important to a Christian’s needs than a vote against cuts in education spending, food stamp reductions, the elimination of school lunches and the abolition of healthcare programs.

. . . While the Republican Party retains its monolithic hold on the South, the rest of America remains deprived of universal healthcare, electric cars, sensible gun control laws, carbon emission bans, a progressive tax structure that underpins massive public investment, and collective bargaining laws that would compress the income inequality gap. In other words, without the South’s religiosity, “America” would again look like a developed, secular country, a country where it’s probable for an atheist to be elected into public office, and where the other 50 million law-abiding atheists wouldn’t be looked upon as rapists, thieves and murders.

He’s almost calling for secession!

While I see no necessary connection between atheism and belief in social reform—the kind of reform that makes people more economically and socially secure, and provides government-sponsored healthcare—it’s starting to seem clear that if we want to eliminate religion’s hold on the world, we have to eliminate those conditions that  breed  religion. In that sense, Marx was right (and now wait for the Discovery Institute to start calling me a Marxist!).

This view, which is mine, differs from that of the so-called “social justice warriors,” who see a necessary philosophical connection between atheism and “social justice”.  I don’t agree—atheism is simply a lack of belief in gods, and has no necessary connection with any social view. The connection I see is a tactical and practical one: if, as atheists, we’re interested not only in our own convictions, but in convincing others to believe (or, in this case, disbelieve) likewise, then we must deal with the factors that promote religious belief. If those include social dysfunction, as I think they do, then eliminating faith will require restructuring society.

Lack of government healthcare and income inequality are good places to start.