I have an op-ed in the Wall Street Journal in which I call for some respect for Congress’s fiscal cliff idea. Congress, back in 2011, couldn’t agree on a budget, so it came up with a way to force the hand of its future self. This idea of forcing one’s own future behavior dates back in our culture at least to Odysseus, who had his crew tie him to the ship’s mast so he wouldn’t be tempted by the sirens; and Cortes, who burned his ships to show his army that there would be no going back.
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Most of us don’t have crews and soldiers at our disposal, but many people still find ways to influence their future selves. Some compulsive shoppers will freeze their credit cards in blocks of ice to make sure they can’t get at them too readily when tempted. Some who are particularly prone to the siren song of their pillows in the morning place their alarm clock far from their bed, on the other side of the room, forcing their future self out of bed to shut it off. When MIT graduate student Guri Nanda developed an alarm clock, Clocky, that rolls off a night stand and hides when it goes off, the market beat a path to her door.
If you follow the economic policy debate in the popular press, you would be excused for missing one of our best-kept secrets: There’s remarkable agreement among economists on most policy questions. Unfortunately, this consensus remains obscured by the two laws of punditry: First, for any issue, there’s always at least one idiot willing to claim the spotlight to argue for it; and second, that idiot may sound more respectable if he calls himself an economist.
How then can the quiet consensus compete with these squawking heads? A wonderful innovation run by Brian Barry and Anil Kashyap at the University of Chicago’s Booth School Initial on Global Markets provides one answer: Data. Their “Economic Experts Panel” involves 40 of the leading economists across the US who have agreed to respond on the economic policy question du jour. The panel involves a geographically and ideologically diverse array of leading economists working across different fields. The main thing that unites them is that they are outstanding economists who care about public policy. The most striking result is just how often even this very diverse group of economists agree, even when there’s stark disagreement in Washington.
Do you want the good news, or the bad news… or the bad news… or the bad news…
Okay, in this post let’s start off on the bright side. At a time when the two parties cannot agree on the menu at the Congressional cafeteria, the Republicans and Democrats have found something they can agree on. After three years of debate and nine temporary stopgap extensions, Congress and the President have enacted new transportation authorization legislation. This bill divvies up the gas tax money, plus some miscellaneous revenue from other sources (more on this later), and funds and regulates the federal surface transportation program for the next 27 months.
In many respects, this is a pretty remarkable achievement. Things could have been worse: on the same day that the transportation agreement was announced, the Supreme Court handed down its ruling on healthcare. Compared to the stark partisanship surrounding that issue, when it came to transportation, John Boehner and Harry Reid held hands around the campfire and sang Kumbaya. Read More »
Our latest Freakonomics Radio on Marketplace podcast is called “Star-Spangled Banter?”
In honor of the forthcoming Independence Day, we take a look at one British tradition that the U.S. might do well to consider adopting: Prime Minister’s Questions (PMQ’s), the weekly Parliamentary session in which the PM goes before the House of Commons to field queries from the Opposition as well as his own party.
I had the good fortune to attend PMQ’s on a couple of recent visits to London. One of the sessions was particularly woolly — in part because Prime Minister David Cameron called Shadow Chancellor Ed Balls a “muttering idiot” (a comment that Cameron was duly asked to withdraw as it was unParliamentary) and also because Cameron had just returned from a G8/NATO summit in Chicago, which provided an extra hour or so of substantial back-and-forthing between the PM, Opposition Leader Ed Miliband, and dozens of MP’s. (Additionally, Greece was cratering, perhaps along with the Euro, and the U.K. had just entered its second recession — so there was plenty to whinge about on all sides of the aisle.)
It is quite a piece of theater to watch (and yes, it is largely theater), but it also struck me that PMQ’s provide the British government and especially the British electorate an opportunity to have what the American government and electorate do not currently have: a real and real-time dialogue (on national television, and on C-SPAN in the U.S.) between members of opposing parties as well as the country’s political leader. Read More »
Hi all! Sorry I haven’t been writing much of late; I’ve been dealing with the minor matters of filing a dissertation and finding myself gainful employment. The first step is complete: I get to call myself a doctor now, though it is a source of considerable disappointment to my friends that after almost eight years of study I’m not the kind of doctor who can prescribe them medical marijuana. The second step is complete too: I’ll be joining the faculty at Clemson University in South Carolina as an assistant professor in the fall. I’m thrilled to be going to Clemson as I think very highly of the department, the setting, and winning college football.
Anyway, I’m going to try to get back in the habit of writing more regularly, this time about my dreams for transportation—which are turning out to be nightmares. Like one of those stories where a genie gives you three wishes and every one of them boomerangs. Or even better, a bad episode of Fantasy Island: Read More »
If I stood in the center of Times Square and said something like “Moses didn’t really part the Red Sea,” or “Jesus never existed,” people would probably keep walking around me, ignoring what I said.
But if I stood there and said, “Going to college is the worst sin you can force your kids to commit,” or “You should never vote again,” or “Never own a home,” people would probably stop, and maybe I‘d lynched. But I would’ve at least gotten their attention. How? By knocking down a few of the basic tenets of what I call the American Religion.
It’s a fickle and false religion, used to replace the ideologies we (a country of immigrants) escaped. Random high priests lurk all over the Internet, ready to pounce. Below are the Ten Commandments of the American Religion, as I see them. If you think there are more, list them in the comments.
Here are some quick thoughts on President Obama’s jobs plan:
- It’s reasonably big, at about 3% of GDP.
- It’s reasonably front-loaded. Goldman Sachs says it will raise 2012 GDP by about 1.5%–before any multiplier effects. Moody’s chief economist Mark Zandi thinks the effect on 2012 GDP will be about 2%. Expect more estimates in the 1-3% range for 2012; smaller for 2013.
- It’s reasonably well targeted. Unemployment insurance extensions will get spent. Infrastructure money gets spent and also builds stuff. as for the payroll tax: Who knows if it gets spent, but the point is to stimulate hiring, rather than spending.
- It’s reasonably well designed. The biggest problem with a payroll tax is that firms get it even for employees already on the books. But this time, the biggest payroll tax cut is only for firms raising their payrolls. This will yield a much bigger bang-for-each-buck. Early analyses have yet to realize how important this is. Read More »
According to a new poll from the Pew Research Center and the Washington Post, more people see raising the debt limit as a bigger risk than not raising it. Though it’s close, and the margin has shrunk over the last two months, 47% say they’re more concerned about the risks that raising the debt limit pose to the U.S. economy than they are over the fallout of failing to do so; 42% see it the other way around.
Sounds like a good time for a Freakonomics Poll: Read More »