February 15, 2013, 10:15 am
Filed under: Uncategorized

Cigarette taxes, the most regressive tax in America.

Some people still refuse to accept the Received Wisdom from Very Smart People that government housing and mortgage policy had no effect whatsoever on either housing prices or mortgage markets.

Accurate description of the function of a Matthew Yglesias in modern politics.

How we were lied to about health care might be more earth-shattering if all these Noble Lies weren’t apparent to everyone – including the ones who uttered them – at the time.

Standard politicized reasoning.

Why has oil become so much cheaper in America than in Europe?

David Henderson is unconvinced default must be avoided at all costs; rightly so (“___ must be avoided at all costs” is almost always false and indeed a bit of a self-contradiction; even at the cost X = [the cost of the thing you’re trying to avoid] x 2?).

What President Obama means by a ‘thriving middle class’.

Canadian social mobility disappoints progressives and defies their baseless assumptions about it: ‘In Canada almost 7 out of 10 sons born to a father in the top 1% of the earnings distribution had a job with the very same employer as their fathers’. My suspicion is we in the U.S. tend to underestimate the corruption and mafia-ness present in Canada. You know, because they’re nice, and because of Degrassi Jr. High, etc.

Noah Smith on David Graeber on debt wonders how exactly lending money to people who don’t pay you back counts as a wealth-extraction scheme. Ditto that.

Arnold Kling calls out some econ bigshots who don’t know what the hell they’re talking about when it comes to mortgages but still felt free to sound off about, and conjure out of thin air, supposedly Smart mortgage policy.

Byran Caplan actually inadvertently hits upon a great idea re: illegal immigration: ‘Hand out green cards to illegal immigrants who turn in their employers for minimum wage violations.’ RTWT; the logic is sound and the feedback effects would be salutary all around.

David Friedman explains why even if global warming is a problem, we aren’t going to do anything about it.

I have just learned that this ‘business cycle’ economists are always jabbering about  is not a cycle. Does ANYTHING economists say make sense?

5 Comments so far
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I remember my 20 year old self having my first notice of the strange inconsistency of lefties back in the early 2000s, working a summer job at a factory. At the time, some media outlet or another was having one of its regular freakouts at how low the cigarette taxes were in KY. But then I noticed that a lot of the people in the factory were smokers, and then that I thought about it, smoking was really a poor person thing, wasn’t it? So why would lefties want to increase taxes on the poor?

Looking back now, it makes me think that political positions like that might not even be ideologies based on thoughts, but rather instinctive reactions based on sentiment. I look at cigarettes and see something that I don’t really like that much, but live and let live and why should anyone pay any special taxes for them? Others look at cigarettes and see something very bad and socially destructive that people should be penalized through the tax code for participating in. In either case it’s not so much a tax position as it is a feeling about cigarettes and smoking that is doing the work.

Comment by Matt

I’m confused – that Noah Smith economist guy wrote several paragraphs about how the business cycle isn’t a cycle, it’s more like an autoregressive process. Of course, as an engineer, I know that an autoregressive process is nothing more than an all-poles IIR filter. The most straightforward method for analyzing an AR process is to take is Fourier transform, in other words, analyze its periodicity.

I think he needs to go back to school to learn about linear systems and transforms.

Comment by Dave

Your fancy IIR poles and whatnot are going over my head, but wasn’t his claim that when you do take the Fourier transform of these AR things as used to model/calibrated to the economy, you don’t see ‘spikes’ in k space i.e. something characteristic of what one would expect of a ‘cycle’? (Which, I don’t know if it’s true.) Maybe I need to reread it.

Of course I would think there’s no reason an economy has to be AR(1) at all and the fact that this or that model doesn’t show large scale cycles doesn’t mean the economy doesn’t. However, it does make it weird that economists have inferred ‘cycle’ via using models that don’t meaningfully indicate them, if that’s what has happened.

The real revelation to me in that post that it sounds like this ‘business cycle’ thing apparently has no meaningful foundations. (Rooted in sociology, or psychology, or generational analysis, or feedback effects, or…something.) For some reason I had assumed that it did.

Comment by The Crimson Reach

I guess the point that I am making is that if the “business cycle signal” has some mass in the frequency domain (in other words, its transform isn’t constant), then that’s the same thing as saying that it can be equivalently represented by some linear combination of complex (as in real and imaginary numbers) “tones”.

In other words, it’s periodic. Plenty of signals are periodic, yet have no obvious Dirac-delta spikes in the frequency domain.

So my point is that the business cycle is a periodic signal, composed of a linear superposition of many different frequencies. The “weight” of each frequency is its own varying function of time. This doesn’t mean that it can be predicted or modeled by an AR(1), but it does mean that the business cycle can be a “cycle”, at least in a very wide sense.

In simple terms, if you were to take Fourier transform of the stock market price (or whatever metric you want) signal over a long period of time, you would see some noisy, blob-like peaks.

Comment by Dave

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Comment by wildlife

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