Assorted Links (5/8/2012)

Here’s a list of articles that I have been reading and videos that I have been viewing lately:

‘Fair Trade? Its Prospects as a Poverty Solution’

“Fair Trade is an enormously popular idea in Christian and secular circles alike. Who, after all, could be against fairness? Victor V. Claar, however, raises significant economic and moral questions about both the logic and economic reasoning underlying the fair trade movement. In this monograph, Claar suggests that, for all its good intentions, fair trade may not be of particular service to the poor, especially in the developing world.”

xkcd: Every Major’s Terrible

Humor alert: xkcd provides us with a clever cartoon essay concerning how “Every (college) major is terrible”; he suggests that his essay be sung to the tune of Gilbert & Sullivan’s “Modern Major-General’s Song” from their 1879 comic opera The Pirates of Penzance (go to for a listen…); apparently someone has already taken xkcd up on his suggestion (see…

Supermoon: the perigee moon of 2012

Here’s the Big Picture’s photoessay about Supermoon – photos from all over the world!

Why Colleges Don’t Teach the Federalist Papers

“In The Wall Street Journal, Peter Berkowitz writes that at America’s top schools, graduates leave without reading our most basic writings on the purpose of constitutional self-government.”  The extent to which public education as well as “higher” education has been dumbed down during the course of a generation is remarkable. I attended a rather “average” public high school back in the 70’s and recall reading the Federalist Papers as part of a required course in “Civics”…

‘Paycheck Fairness’ Will Mean a Pay Cut for Men

“In The Wall Street Journal, Carrie Lukas writes that wage discrimination is already illegal—but so what? Get ready for another phony debate about the ‘war on women.’”

Don’t Worry (About GDP), Be Happy

“In The Wall Street Journal, James Bovard writes that with the economy slow and joblessness high, the feds want a new way to measure well-being.”  This is sort of the academic equivalent of “Economists Gone Wild”…

Hollande’s European Reality Check

“In The Wall Street Journal, Matthew Kaminski writes that despite its election of a Socialist president, expect France to keep its commitment to Germanic discipline when the chips are down.”

Of Course 70% Tax Rates Are Counterproductive

In today’s WSJ article entitled “Of Course 70% Tax Rates are Counterproductive”, Cato’s Alan Reynolds is quite critical of the Fall 2011 Diamond and Saez Journal of Economic Perspectives article entitled “The Case for a Progressive Tax: From Basic Research to Policy Recommendations” (available from It all comes down to a rather technical discussion concerning the reliability of econometric estimates of the elasticity of taxable income (ETI), which refers to the sensitivity or responsiveness of taxable income to changes in marginal tax rates. As Reynolds points out in his article, you can pretty much drive a Mack truck through the range of empirical estimates of ETI as they vary widely. If taxable income is indeed not all that sensitive to increases in marginal tax rates (Diamond and Saez claim an estimate for ETI = 0.25 in their paper), then you can obtain (as Diamond and Saez do) so-called “socially optimal” tax rates of 73%-83% on the top 1% which would raise tax revenues while having a neutral effect on overall economic growth. On the other hand, if ETI is higher than .25, then the Diamond-Saez marginal tax rate recommendations could have the exact opposite effect – i.e., they could potentially cause substantial losses in tax revenue while reducing economic growth. Reynolds notes that compared with other public finance academic studies, the Diamond-Saez ETI of 0.25 represents a “lowball” estimate. In fact, other studies indicate ETI estimates ranging from 0.62 (from a 2004 paper by Saez) to 1.99 (from a 2000 public finance book edited by Michigan economist Joel Slemrod). Selecting the midpoint of this range (1.3), the application of the Diamond-Saez methodology would then imply a substantially different policy recommendation – in that case, the so-called “socially optimal” tax rates would be more like be 33.9% for all taxes, and below 27% for the federal income tax.

After reading these articles, I am reminded of the famous quote “It is better to be vaguely right than exactly wrong.”

To the Class of 2012

“In The Wall Street Journal, Global View columnist Bret Stephens advises graduates: Tone down your egos, shape up your minds.”

It’s All Your Money: Taxpayers may be on hook for US Postal Service losses

Quoting from this article, “The USPS is losing up to $25 million dollars a day. Until now, taxpayers have not been on the hook for its mounting losses, but that could be about to change. A bailout recently approved by the Senate would appropriate $34 billion in federal money.” On an annual basis, this is equivalent to a lost of more than 9 billion per year ($25,000,000 x 365 = $9,125,000,000)…

Paul Krugman and the European Austerity Myth

From Cato Institute, “Notwithstanding claims by Paul Krugman and other fans of big government, government spending hasn’t been “slashed” in Europe. Which is unfortunate since that’s exactly what’s needed.”

EU Voters Nix Austerity, Though It’s Not Been Tried

“Elections in France, Greece and Italy brought new political parties to power that reject budget austerity. Unfortunately, data show there’s been little austerity at all in the EU.”

Obama’s lost cause

“Having lost his ability to inspire, what is Obama’s appeal?”

Paul Ryan’s Cross to Bear

Hat tip to my friend Kevin Stuart for pointing this article out… I particularly like and appreciate the following quote from this article, “…a “serious but respectful discussion” would have to concede… that conservative Republicans advancing market-oriented answers are as serious about their moral case as liberal Democrats are about theirs.”

The 2012 Pelosi GTxi SS/RT Sport Edition

Here’s an advance look at GM’s car of the future – The 2012 Pelosi GTxi SS/RT Sport Edition…

Divider in chief

“Obama stirs fear and resentment to win votes.”

The War Against The Young

“An analysis of recent jobs figures at reveals a disturbing development: the biggest beneficiaries from the economic recovery are Boomers, while everyone else is getting the shaft.”

Julia’s Circle of Life

Here’s Iowahawk’s parody (source: of the Obama-Biden campaign’s narrative entitled “The Life of Julia” (source:…

Rory Sutherland: Perspective is everything

Rory’s TED Talks are highly entertaining, and they also provide important insights into behavioral economics (for more information about behavioral economics, see…

The Case Against the Paycheck Fairness Act

Quoting from this article, “An analysis of more than 50 peer-reviewed papers, commissioned by the (U.S.) Labor Department, found that the so-called wage gap is mostly, and perhaps entirely, an artifact of the different choices men and women make—different fields of study, different professions, different balances between home and work.”

Memo to the Youth Vote

“In The Wall Street Journal’s Wonder Land column, Daniel Henninger asks: Unless they plan to be union lifers, what’s in an Obama vote for young Americans?”

Notable & Quotable

Quoting from this article, “For the better part of 100 years, and especially in the past five, we have socialized the risks of high finance. All too often, the bankers who take risks don’t themselves bear them. By all means, let the capitalists keep the upside. But let them bear their full share of the downside.By all means, let the capitalists keep the upside. But let them bear their full share of the downside.”

‘Press 9 for More Options’

Quoting from this article, “Putting people on hold for five or 10 or 30 minutes is the antithesis of the philosophy that the customer is king. It’s the height of rudeness. It is telling your customers: Our time is more valuable than yours, so we are going to make you wait and wait and converse with a computer. And by the way, stop rubbing salt in the wounds with the intermittent “your call is important to us,” or “you’re a valued customer,” and “we apologize for the inconvenience.” All lies.”

Pastors Call a Truce on ‘Sheep-Stealing’

“In The Wall Street Journal’s Houses of Worship column, Naomi Schaefer Riley writes in Charlotte, churches are cooperating in an experiment to attract twenty-somethings.”

Who the hell is Julia and why am I paying for her whole life?

In the article referenced below, columnist David Harsanyi writes: “What we are left with is a celebration of . . . how a woman can live her entire life by leaning on government intervention, dependency and other people’s money rather than her own initiative or hard work. It is, I’d say, implicitly un-American, in the sense that it celebrates a mindset we have–outwardly, at least–shunned.”

The ‘Crucify Them’ Presidency

“In The Wall Street Journal, Potomac Watch columnist Kimberley Strassel writes that Al Armendariz, the EPA official who resigned in disgrace this week, was no outlier among the Obama administration’s regulators.”

College Grads Need Jobs, Not a Lower Loan Rate

“In The Wall Street Journal, Andrew Biggs writes that young workers who enter the labor force in a recession suffer years of lower wages.”

How to Muddy Your Tracks on the Internet

Good advice from the Personal Tech section of the New York Times… “It’s probably impossible to cloak your online activities fully, but there are steps you can take to make them harder to follow.”

Romney’s Former Bain Partner Makes a Case for Inequality

“A former partner of Mitt Romney’s at Bain Capital argues that more income inequality is good for the economy.”

The Campus Tsunami

“What happened to the newspaper and magazine business is about to happen to higher education: a rescrambling around the Web and online learning.”

How to define a manufacturer: Corporate tax cuts spark controversy

“President Barack Obama wants to drop the corporate tax rate from 35% to 28% and move manufacturing to a special category, with a 25% rate. Reuters columnist David Cay Johnston warns this could cause a rush of “manufacturers” looking to take advantage of the lower rate.” (Hat tip to Greg Mankiw (…

The Scream’ Fetches $119.9 Million

“One of the art world’s most recognizable images, Edvard Munch’s The Scream, sold for a record $119,922,500 at auction in New York City.”

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